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by Jennifer Villier, JD | Business Law Faculty, WealthCounsel

LLCs are indeed flexible business structures, but LLC members and managers must be careful not to confuse “flexibility” with “informality.” A recent case out of the U.S. Court of Appeals for the 8th Circuit illustrates the danger in loosely documenting transactions and failing to maintain adequate records in the context of a two-member LLC.

So what does this mean for you?

Practitioners representing LLCs must ensure that clients understand that proper LLC governance is an ongoing responsibility, and one that is not mitigated simply by virtue of an entity’s size or the pre-existing relationship of its owners.

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