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Can an LLC file a lawsuit without consent of all its members (owners)?

San Francisco, CA |
Filed under: Starting an LLC

Assume an LLC has more than one member, and one member wants to file a civil lawsuit with the LLC as Plaintiff. The lawsuit is contesting a business agreement between the LLC and the Defendant in the lawsuit. In order for the LLC to file the lawsuit:

1. Is a formal meeting or notification of all LLC members required?
2. Is an affirmative vote of the members required in order to proceed?
3. Must all the members consent? If not, must there be a majority in favor of proceeding? What if there are only two members and one wants to sue and one does not?
4. If any or all of the above is required, what proof must the LLC present to the court and to defendants to show that the LLC members have followed the procedures?

Any Civil/Corporate code references would be greatly appreciated!

Attorney Answers 3


  1. "1. Is a formal meeting or notification of all LLC members required?
    2. Is an affirmative vote of the members required in order to proceed?
    3. Must all the members consent? If not, must there be a majority in favor of proceeding?
    any or all of the above is required, what proof must the LLC present to the court and to defendants to show that the LLC members have followed the procedures?"

    An LLC's operations are dictated by the Operating Agreement and the CA Corporations Code. You don't say whether your LLC is member or manager managed, or how many membership shares the one who wants to sue has, or how decisions are made, so no one on Avvo can guess what your Operating Agreement says.

    Generally, LLCs don't need meetings, and don't need to document operations, and lawsuits need NOT be decided by unanimous vote of the members - only things like LLC disolution or sale or merger need unanimity. But if members of your LLC dissent, then documentation is a good idea, amd since lawsuits are also NOT "the usual way" of business, and commit the LLC's resources, so your LLC Operating Agreement should require more than one member and at least an affirmative vote of the majority of shares. See Corporations Code sections 17000 et seq linked below.

    See a business lawyer to properly document your LLC Operations, and hire a business litigator for the lawsuit.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.


  2. I agree with Ms. Koslyn's answer and will add the following:

    The Manager(s) normally has / have the power and the responsibility to run the LLC's business, including making the decision whether to file a lawsuit. In my experience, it would be unusual for an Operating Agreement to specify that such a decision must be put to a vote of the members.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.


  3. I agree with both answers, and would provide the following analogy to Mr. Shultz's comment -- in the corporate context, the officers of the corporation decide when the corporation will file a lawsuit, not the shareholder of the corporation. An LLC's members are like the shareholders, and the managers are like the officers. Therefore, is your LLC member-managed or manager-managed and if it is member managed, who among the members can manage it (this should be partially documented because the California Secretary of State requires that you put this in the Articles of Organization). If you are both 50% managers, then you may be able to block it.

    Legal disclaimer: The above information is not legal advice and should not be relied upon as legal advice. No representations are made in the above communication nor may any information contained herein be used in a court of law as a representation upon which you may rely.

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