Can you have a fiduciary duty to your own business? If I am the sole member and manager of an LLC, do I have any fiduciary duty to the LLC? Would there be anything legally wrong with my intentionally wasting the company's money or doing something similarly pointless and harmful to the business, considering I'm the only actual person (as in human, not legal person) who is harmed in any way?
@Rick aptly answers your first question (and I totally agree with his answer including his conclusion that the cited provisions apply to single member LLCs). So, I'll touch on issues associated with your second one. Would there be anything legally wrong with my intentionally wasting the company's money or doing something similarly pointless and harmful to the business, considering I'm the only actual person (as in human, not legal person) who is harmed in any way? If the way you use the money wastefully is considered by a court to be a de facto distribution by the LLC to you, its sole member, and this renders it insolvent (as defined in ORS 63.229 (Limitations on distributions), you could have personal liability for the distribution to the company. See ORS 53.235. Creditors of the company could then garnish that obligation to collect their debts owed to the company from you (a garnishment is technically a right to obtain money or property from someone who owes a debt to a judgment debtor, usually a bank or employer, but not always as in this case). Intentionally wasting the company's money would probably constitute a &quot;fraudulent transfer&quot; on the part of the LLC which could expose you to liability to third-party creditors if those actions left the company unable to pay its debts as they came due, or with assets with a fair market value that was lower than the fair market value of its current and currently anticipated liabilities. This parallel liability would arise under the Oregon Fraudulent Transfers Act and related provisions of Oregon law found at ORS 95.200 to 95.310. If you were anticipating or in the process of divorcing, it could constitute economic waste that could be held against you (treating the wasted assets as if they still existed and were allocated to your in a property division). Likewise, if the waste reduced your income for child support purposes, a court would seriously consider imputing the income you could have had if you had not acting in that matter to the income you actually had, in order to calculate your child support obligation. And, you might be disallowed a deduction for the waste of the company's money, rather than having it treated as an expense, which could increase your income tax and self-employment tax liability. But, to the extent that you are the sole owner of the company, no creditor, spouse or child has rights impaired by your actions, and you don't claim the wasted assets as income tax deductions, there would be no one with standing to complain about your conduct in court.
Note: IANAL Does the placement of a sticker stating, "We accept XYZ credit cards," essentially obligate a business to accept that card? It depends on whether you mean whether they are obligated to provide goods/services to someone who presents the card, or whether, having provided goods/services, they are obligated to accept the card as payment. For the first question, the answer is "no". The credit card brand could theoretically go after them, however, as names of credit networks are trademarks, so claiming to accept a card but not doing so is trademark infringement. For the second, the answer is "pretty much". Since they misrepresented their establishment, there is no mutual assent and therefore no contract. If they try to use "defrauding the innkeeper statutes", those require fraudulent intent. If you fully intended to pay for you meal by a credit card, and it was their choice to refuse payment, then you have no fraudulent intent. The only avenue I can see for them is some sort of equity argument, but that would be problematic, especially if they ask for the retail, rather than wholesale, price, and not worth the hassle of collecting. So, legally, you can just walk out, but in practice if they have a bouncer they might make trouble for you.
Yes Companies can own companies - that’s what subsidiaries are. On a practical level, you know this is true because you actually have an example. Companies House would not have allowed its registration (barring error) if it was illegal. Why can’t it open a bank account? Banks (or any other business) can choose who they will and won’t do business with. Unless it’s discrimination on the basis of a protected characteristic, it’s not illegal. Since juridical persons don’t have protected characteristics (apart from nationality) it’s virtually impossible to illegally discriminate against them.
Its just free enterprise, right? Well ... except when there is a law that says its not allowed. I am unfamiliar with Indian law but the relevant law in Australia is the Trade Practices Act which deals with this under the category of Misuse of Market Power. In a nutshell: A business with a substantial degree of power in a market is not allowed to use this power for the purpose of eliminating or substantially damaging a competitor or to prevent a business from entering into a market. By preferring their products over a competitor's in their search engine they are "... eliminating or substantially damaging a competitor ...".
A business owned by a debtor is not itself liable for the debts of its owners. But, a membership interest in an LLC is one of your assets and is normally not exempt from creditors, so legal process may be used to collect a money judgment obtained by a creditor in a suit against the membership interest owner from this asset. There are several ways of doing this that a creditor can utilize, each of which is discussed below. Charging Orders And Writs of Garnishment The presumptive way for a judgment creditor to collect a judgment from a debtor's LLC membership interest asset to do this is to either garnish any monies the LLC owes to you with a writ of garnishment (so that the LLC would pay the amounts due to the debtor to the creditor instead), or to impose a &quot;charging order&quot; on the LLC interest, which is like a writ of garnishment that remains in force until the full amount of the debt authorizing the charging order is satisfied. The downside of a writ of garnishment or charging order is that the people who control the LLC can often defer distributions to the members indefinitely, which deprives you of the funds that would otherwise have been distributed to you, but doesn't let the creditor have those funds either. Some LLCs require that certain distributions be made to owners and require that the LLC be liquidated under certain circumstances (e.g. the completion of a real estate development project). But, those LLCs are the exception rather than the rule. Normally, an LLC only makes distributions to its members when the people who control that LLC decide to do so by a majority vote of the managers or of the managing-members as the case may be. Writs of Execution Directed To Membership Interests There is a split in authority between states (with many states not having resolved the issue) over whether you can enforce a money judgment against the owner of a membership interest not just by collecting money due to the owner as a result of the membership interest and instead use a writ of execution to seize the membership interest and sell it in a sheriff's sale to whomever bids at the sale (much like someone might seize a parcel of real estate or a car to pay a debtor's debts to a judgment creditor). In most states, even if this is allowed, the buyer at the auction gets the right to distributions from the membership interest seized, but not a vote on how the business of the company is conducted, unless the other members agree to grant the new owner voting rights or the operating agreement of the LLC provides otherwise. All of the remedies so far presume that the asset to be collected out of consists of the ownership interest in the LLC (analogous to shares of stock) rather than the assets of the LLC itself. Reverse Piercing Seizing assets of the LLC itself, rather than merely the ownership interest in the LLC, is called &quot;reverse piercing&quot;. Usually, reverse piercing is not allowed. But, there are some circumstances where reverse piercing is sometimes allowed. Almost all jurisdictions allow reverse piercing in some circumstances, but those circumstances vary considerably from state to state based upon both the language of the relevant LLC statute and the relevant case law. There are four main circumstances that justify reverse piercing. Single Member LLCs One is the case of a single member LLC where the creditor obtains ownership of 100% of the LLC. In these circumstances, courts have allowed creditors to dissolve the LLC and reach its assets, because neither the debtor nor any third party other than the creditor has any legitimate ownership interest in the property. Alter Ego Cases Another is the case where the assets of the LLC and the personal assets of the debtor are co-mingled or there is not clear documentation existing prior to the litigation establishing which underlying assets belong to the LLC and which belong to its owner. In these cases, reverse piercing is allowed because the existence of a company identity has been disregarded and there is no de facto distinction between company assets and personal assets. This justification for reverse piercing is sometimes called an &quot;alter ego&quot; theory. Fraudulent Transfers A third case where reverse piercing is allowed is where the contribution of the asset to the capital of the LLC was a &quot;fraudulent transfer&quot; from the individual debtor to the LLC (e.g. if the $1 million parcel of real estate was sold to the LLC for $100 at a time when the debtor was insolvent or rendered insolvent as a result of the transfer). Contributing an asset to the capital of an LLC in exchange for a membership interest with a capital account in the LLC's books set based upon the fair market value of the asset contributed to the LLC is usually not considered a fraudulent transfer, but could be in particular facts and circumstances where it has the intended effect of hindering creditors or concealing an asset. Equitable Reverse Piercing Based Upon Control Of The Entity A fourth case where reverse piercing is sometimes allowed is where the debtor does not own 100% of the LLC but has the ability to dissolve the LLC or force its assets to be distributed in kind to him, without the assent of the other LLC owners, because the debtor controls the LLC. Whether this is allowed or not is another issue upon which there is a split of authority and in many cases simply an absence of authority which would make such a case one of first impression in a state.
The question of whether a person was acting on their own behalf or that of a company would generally be a question of fact, so if such a case came to court it would be for both sides to present evidence and argue for their interpretation of it. In most cases the context makes it clear. You mention having a company email domain and associated email signature; that is certainly good practice and would go a long way towards creating a presumption that you were acting for a company. Also signing yourself with your job title or role (e.g. "Joe Bloggs, Chief Bottlewasher") makes it clear that you are speaking in your role as an employee. The content of the communication also matters; if you use your company email address to order goods from a supplier that the company has used before then the recipient can reasonably assume that you are ordering on behalf of the company and a court is likely to agree. OTOH if you use the company address to send libellous emails then the recipient would have a much higher bar to claim that this was the company view rather than a personal one.
Yes, company A is liable for that; ignorance is not a defence. For this reason, a prudent company A would put an indemnification clause in their contract with company B so that if A is sues then company B pays. This is, of course, completely useless if company B is out of business at the time of the suit.
If you form an LLC, and then someone later obtains a registered trademark in the same name, the registered trademark would be enforceable everywhere except in the markets and places where the LLC developed common law trademark rights prior to their registration. Your LLC formation would also put a bump in the road in their trademark application. You can, of course, do both, although it is unclear to me why you feel such urgency in the likelihood of an infringement, which suggests that there may be relevant facts that aren't revealed by your post.