Agency Outline

Professor Grey
Fall 2004
There are three ways to convey authority to represent another in a legal relationship.
1. Law
2. Unilateral Judicial Acts of Procuration
3. Contracts
A. Mandate
B. partnership
Representation / Mandate
1. A mandate is a contract by which by which the principal confers authority on the
mandatary to transact one or more affairs for the principal. (2989)
2. A mandate contract is not required in any particular form. However, when the
law prescribes a certain form for an act, a mandate authorizing the act must be in
the same form required by law. (2993 or Equal Dignity Rule)
Agency Authority
A. Limits of Principals Authority (Implied)
a. The principal may confer on the mandatary general authority to do
whatever is appropriate under the circumstances. (2994)
b. The mandatary may perform all acts that are incidental to or necessary for
the performance of the mandate (2995)
c. All ordinary part of profession or calling or all acts from the nature of the
profession or calling need not be specified. (2995)
(If a person profession requires specific acts, those acts do not need
to be specified.
d. Summer v. Knigton
i. Authority is not implied, if the acts are not of the usual course of
the profession or calling.
e. Clinton Feed v. Pipes
i. When an agent is appointed to manage, supervise or oversee a
particular business for his principal, the agent has the implied
authority to bind his principal for the purpose of carrying on the
business in the usual and customary way.

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B. Express Authority
a. (2996, 2997) Express authority is required for the follow:
i. Alienate (Transfer of property right to another), Acquire,
Encumber (lien or mortgage), or Lease a thing
ii. Inter vivos donation
iii. Accept or reject a succession
iv. Contract a loan, acknowledge the debt, become a surety
v. Health care decision
vi. Draw or endorse a note and negotiable instruments
vii. Compromise or arbitration
b. Von Wedel v. Mc Grath
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i. To authorize a gift of an asset by an agent, the agent must have
such a power expressly and clearly conferred
c. Succession of Buford Augustus Aucoin
i. La. C.C. 2997 contains a list of six activities for which authority
must be given express. The first is the power to make an inter
vivos donation. Where immovable property is involved, a
donation inter vivos must be by a written notarial act. (1536). The
Contract of mandate authorizing that act must also be in that form.
(2993)
d. Mid South Environment Services v. The estates of Andrew E. Sandidge
i. A succession representative did not have the power to obligate the
succession to sell property at a private sale without obtaining
court approval and that obtaining after-the-fact court
authorization to sell did not make the previously unauthorized
agreement enforceable.
e. Toledano v. Klingender
i. A broker, who is employed to negotiation a matter between two
parties, is mandatary of both parties. The mandate ends at the
completion of the transaction. Any other work of the broker must
be continued by a separate mandate by either party for that party
specifically. (3000)
ii. (NOTE: if a mandatary representing both parties than the other
party must be informed of the representation.)
Principal-Mandatary Relations
C. Fiduciary Duty (A duty to act in good faith)
i. The mandatary is bound to act with prudence and diligence. The
mandatary is responsible for all losses on his failure to perform
with prudence or diligence. (3001)
ii. When a mandate is gratuitous, the court may reduce the mandatary
liability. (3002)
iii. The mandatary is bound to provide information and render an
account of his performance at the request of the principal or
whenever the circumstances require. The notification must be
without delay. (3003)
iv. The mandatary is bound to give the principal everything he
receives by virtue of the mandate (duly or unduly). However, the
mandatary may retain sufficient property to pay the mandatarys
expenses and remuneration. (3004)
v. The mandatary owes interest to the principal of any money used
for the mandatary personal use. (From the Date of use) (3005)
vi. Texana Oil and Refinig Co. V. Belchic
1. The employee is duty bound not to act in antagonism or
opposition to the interest of the employee.

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2. The mandatary must be loyal and faithful in the interest of
such as in respect to such business or purpose.
3. He cannot lawfully serve or acquire any private interest of
his own in opposition to the principal. This is the rule of
common sense and honesty
a. The agent is not entitled to avail himself of any
advantage that his position may give him to profit
beyond the agreed compensation for his service.
b. He may not speculate for his gain in the subjectmatter of this employment
c. He may not use any information that he may have
acquired by reason of his employment either for the
purpose of acquiring property or doing any other
act, which is in opposition to his principals
interests.
d. He will be required to account to his employer for
any gift, gratuity, or benefit received by him in
violation of his duty, or any interest acquired
adverse to his principal without a full disclosure,
though it does not appear that the principal has
suffered any actual loss by fraud or otherwise.
4. There does not need to be a showing of fraud or loss for the
principal to show a breach of the fiduciary duty as stated by
the Supreme Court.
5. If he takes any gift, gratuity, or benefit in violation of his
duty or acquires any interest adverse to his principal,
without full disclosure, it is betrayal of his trust and a
breach of confidence, and he must account to his principal
for all he has received.
vii. Gelfand v. Horizon Corp.
1. A fiduciary that has violated his obligation of loyalty by
making it possible for others to make profits, can himself
be held accountable for that profit regardless of whether he
has realized it.
2. The court is not obligated to compel a fiduciary to
reimburse the beneficiary for third party profits. Thus, the
authorization for such a remedy is discretionary.
viii. Half Moon Hotel
1. The basic vice is the existence of a personal interest
(mandatary) entangling their private claims with those of
their beneficiaries, thus creating the danger of biased
judgment and opening the way to fraud and wrong. This is
sufficient to brand this conduct as a breach of fiduciary
obligation.
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D. Substitution
i. The mandatary is bound to fulfill the mandate himself unless
otherwise specified in the agreement. However, when unforeseen
circumstances prevent the mandatary from performing and he
cannot communicate the event to the principal, the mandatary may
appoint a substitute. (3006)
ii. When authorized to appoint a substitute, a mandatary is
responsible for the acts of the substitute when the mandatary fails
to exercise diligence in selecting the substitute or in giving
instruction. (3007)
iii. When unauthorized to appoint a substitute, a mandatary is
answerable to the principal for the acts of the substitute as if the
mandatary performed the mandate himself. (3007)
iv. The principal have recourse against the substitute whether
authorized or not. (3007)
v. Buisson v. Potts
1. Exception to the general rule that the mandatary is bound to
fulfill the mandate himself are:
a. Unforeseen circumstance and the mandatary is
unable to communicate with the principal and it is
reasonable necessary for the protection of the
principal.
b. An emergency where the mandatary become
disabled.
vi. Hum v. Union Bank of Louisiana and Coon v. Monroe Scrap
Material Co.
1. Under the normal course of business, if a principal knew or
should had known that his agent needed a subagent in order
to perform the mandate, the principal implied consent is
assumed; thus the principal is liable for the agent and
subagent
E. Ratification
i. The consent by the principle to be bound by an obligation
purportedly incurred on his behalf by an agent but not
previously..
ii. Rule(3008)
1. The mandatary is answerable to the principle for resulting
loses when he exceeds his authority.
2. The principle is not answerable for the loses of the
mandatary if he exceeds his authority.
3. However, the principle is only answerable to the
mandatary if he ratifies the action.
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iii. Rule(3009)
1. Multiple mandataries are not solidarily liable to their
common principal
2. However, multiple mandataries are solidarily liable to their
common principal if the mandate provides otherwise.
iv. Rule(3010)
1. The principal is bound to :
a. Perform the obligation that the mandatary
contracted for if the mandatary acts within the limits
of his authority.
b. The mandatary for obligations contracted for after
termination, if the mandatary does not know that the
mandate has terminated.
2. The principal is not bound to :
a. The mandatary if the mandatary exceeds his
authority unless the principal ratifies the act.
v. Rule(3011)
a. The mandatary act within the limits of his
authority when he fulfills his duties in a manner
more advantageous to the principal.
vi. Watson v. Schmidt
1. 3 things must be present for ratification to occur
a. silence of principal
b. to be fully informed of all material facts
surrounding an act or transaction(principal)
c. acceptance of the benefits or any profits by the
principal
vii. Dempsey v. Chambers
1. The principal is liable for the tortuous act (intentional or
negligence act) of the mandatary acting outside his duty if
the principal ratifies the act.
viii. Richoux
1. A principal who employs an agent to do a legal act is not
liable in damages for any illegal act of the agent.
F. Indemnitiy
i. Rule(3012)
1. The principal is bound to the mandatary when the
mandatary is w/o fault:
a. to reimburse the mandatary for expenses and
charges he had incurred.
b. to pay the mandatary remuneration that he is
entitled.
c. to reimburse and pay the mandatary if the
mandatary is not responsible for the mandate not
being accomplished .
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ii. Rule(3013)
1. The principal is bound to the mandatary when the
mandatary is w/ fault:
a. To compensate the mandatary except for the loss
caused by the fault of the mandatary.
iii. Rule(3014)
1. The principal owes interest on sums expended by the
mandatary in performance of the mandate from the date
of the expenditure.
iv. Rule(3015)
1. Multiple principals for an affair common to them are
solidarily bound to their mandatary.
v. Howe v. Erie Railroad
1. The principal has an implied obligation to indemnify an
innocent agent for obeying his order,
a. Where the act would have been lawful in respect to
both the mandatary and the principal.
b. Where the principal really has the authority which
he claims. AND
c. Where the mandatary acts in good faith and
reasonably believes that the principal possesses the
authority.
Prin. Mandatary TP Relations
1. Art. 3016. Disclosed mandate and principal (Disclosed Agency)
a. A mandatary who contracts in the name of the principal within the limits
of his authority does not bind himself personally for the performance of
the contract.
b. Elements
i. 3rd party knows that the mandatary is acting on behalf of principal
ii. 3rd party knows the identity of the principal
c. Principal is liable
2. Art. 3017. Undisclosed mandate (Undisclosed Agency)
a. A mandatary who contracts in his own name without disclosing his status
as a mandatary binds himself personally for the performance of the
contract.
b. Elements
i. 3rd party does not know that the mandatary is acting on behalf of
principal
ii. 3rd part y does not know the identity of the principal
c. Both the mandatary and principal are liable
d. The 3rd party can sue either for the whole.

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3. Art. 3018. Disclosed mandate; undisclosed principal (Partially Disclosed
Agency)
a. A mandatary who enters into a contract and discloses his status as a
mandatary, though not his principal, binds himself personally for the
performance of the contract. The mandatary ceases to be bound when the
principal is disclosed.
b. Elements
i. 3rd party knows mandatary is acting on behalf of the principal
ii. 3rd party does not know identity of principal
c. mandatary is liable until principal identity is disclosed; then the mandatary
will not be liable
d. Mandatary is liable until identity of principal is disclosed
e. Principal is liable.
4. Art. 3019. Liability when authority is exceeded
a. A mandatary who exceeds his authority is personally bound to the third
person with whom he contracts
i. Except unless
1. that person knew at the time the contract was made that the
mandatary had exceeded his authority or
2. The principal ratifies the contract.
5. Meisel v. Natal Homes, Inc. (Disclosed Agent)
a. To avoid personal liability to a third person, an agent has the burden of
proving he contracted not individually but as an agent, by disclosing his
capacity and his principal's identity to the other party.
b. Express notice of the agent's status and the principal's identity is
unnecessary, however, if acts and circumstances surrounding the
transaction demonstrate affirmatively that the third person should be
charged with notice of the relationship.
6. Frank's Door & Bldg. Supply, Inc. v. Double H. Const. Co., Inc. (undisclosed
Principal)
a. a principal and an undisclosed agent are solidarily liable for a debt.
Although the agent's liability is based upon his failure to disclose his
principal and the principal's liability is imposed by law on the basis of the
relationship (Article 3021), both are obliged to the same thing (to pay the
debt owed to the third party)
b. Note when solidarily liable, always sue all liable parties. Whenever the
court render a judgment against one party; he may pursue the original suit
against the other.
7. J. T. Doiron, Inc., v. Ed. Lundin
a. Express notice of agent's status and principal's identity is unnecessary if
facts and circumstances surrounding transaction, combined with general
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knowledge that persons in that type of business are usually acting as
agents, demonstrate affirmatively that third person should be charged with
notice of the relationship.
b. When notice is not express, the agent has to show that he was acting on
behalf of the principal. (burden of proof)
8. Pesson v. Kleckly
a. Three way a mandatary sign on behalf of the principal.
i. P, by A, is a agent
ii. A as agent for P
iii. COMPANY (include INC, LLC, etc) by A, TITLE (Vice
President)
b. For a third party to hold a principal liable under the doctrine of apparent
authority it must be shown that:
i. the principal made some form of manifestation to the innocent
third party; and,
ii. that the third party relied on the purported authority of the agent as
a result of the principal's manifestations
9. Woodlawn Park Ltd. Partnership v. Doster Const. Co., Inc.
a. Can an undisclosed Principal sue the 3rd Party?
i. Yes, an undisclosed Principal can sue the 3rd Party.
Principal Third Party Relations
1. Art. 3020. Obligations of the principal to third persons.
a. A principal, whether disclosed or undisclosed, is bound to perform the
contracts that the mandatary, acting within the limits of his authority, made
with third persons.
2. Art. 3021. Putative mandatary.
a. When a principal causes a third person to believe that the agent is his
mandatary, the principal is bound to the third person who in good faith
contracts with the putative mandatary.
b. Spruell v. Ivey
i. Elements of Apparent Authority
1. The Principal must act to manifest the authority of the
alleged agent to an innocent third party
2. The third person reasonably relied on the manifested
authority of the agent.
c. Davis v. Amereda Petroleum Corp.
i. When the mandatary claim that the principal manifested the
authority to an alleged agent, the mandatary must provide proof of
the principals manifestation
d. Cartinez v. Reliable Amusement Co.
i. A third party can not blindly rely on the assertions of an agent to
establish an apparent agency relationship.
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e. Gizzi v. Texaco, Inc.
i. In order for the third person to recover against the principal, he
must have relied on the indicia of authority originated by the
principal, and such reliance must have been reasonable under the
circumstances.
ii. The manifestation of the principal may be made:
1. Directly to the third person or
2. to the community (sign, advertisement, newspaper,
letterhead..etc)
f. AAA Tires & Export, Inc. v. Big Chief Truck Lines.
i. The concept of apparent authority only comes into play when the
agent has acted beyond his actual authority (express or implied)
and has no permission whatsoever from his principal to act in such
a manner.
g. Hoddeson v. Koos Bros
i. Apparent authority can not be given to an unknown or undisclosed
(imposter) person.
h. Sherif Y. Boulos v. Lou Morrison
i. 3rd Party must prove reasonably rely
ii. If facts and circumstances raise question about authority and good
faith; then, 3rd Party can not rely on reasonable rely
i. Yoars v. New Orleans Linen Supply Co.
i. Generally,
1. the principal is responsible for fraud committed by the
Agent (by given authority to the agent, the principal made
the fraud possible)
ii. Exception
1. When the Fraud could had been easily detected, the 3rd
party is regarded as the proximately cause of the loss.
a. The elements:
i. The agent was not acting in the scope of
employment
ii. The principal is not liable for the fraud of
his agent when the 3rd party was in the best
position to prevent the fraud.
3. Art. 3022. Disclosed mandate or principal; third person bound.
a. A third person who contacts with a disclosed principal or disclosed
mandatary is bound to the principal for the performance of the contract.
4. Art. 3023. Undisclosed mandate or principal; obligations of third person.
a. A third person who contracts with an undisclosed principal or undisclosed
mandatary (do not know the capacity of the mandatary) is bound to the
principal for the performance of the contract unless the obligation is
strictly personal or the right non-assignable.
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b. The third person may raise all defenses that may be asserted against the
mandatary or the principal.
Termination of Agency
1. Art. 3024. Termination of the mandate and of the mandatary's authority
a. The mandate and the authority of the mandatary terminate upon the:
i. Death of the principal or of the mandatary.
ii. Interdiction of the mandatary.
iii. Qualification of curator after interdiction of principal
b. Succession Zatarain
i. The mandate of an attorney named in a will to handle the testators
estate differs from the usual mandate inasmuch as it commences
rather than ends with the death of the principal, it does not confer
upon the agent the power to delegate his authority to a subagent.
2. Art. 3025. Termination by principal
a. The principal may terminate the mandate and the authority of the
mandatary at any time.
b. A mandate in the interest of the principal, mandatary, or third party, may
be irrevocable,
i. if the parties so agree,
ii. for as long as the object of the contract may require.
3. Art. 3026. Incapacity of the principal
a. In the absence of contrary agreement,
i. The contact nor mandate may be terminate due to the principal's
1. incapacity,
2. disability,
3. other condition that makes an express revocation of the
mandate impossible or impractical.
4. Art. 3027. Reliance on public records
a. A revocation or modification of a recorded mandate is ineffective
i. until filed for recordation

5. Art. 3028. Rights of third persons without notice of revocation

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a. The principal must notify 3rd person of the termination of mandate
i. Otherwise, the principal is bound to perform the obligations that
the mandatary has undertaken.
ii. George v. Sandel
1. if the Principal want to terminate the mandate it must be
before the completion of the mandate
2. The Principal can terminate the agency at any time but
most notify 3rd Party and agent otherwise he is bound to
the mandate to the 3rd Party.
6. Art. 3029. Termination by the mandatary
a. A mandate terminates upon the mandatary notifying the principal of his
resignation or renunciation of his authority.
i. Class note: if injury to the principal, mandatary is liable.
7. Art. 3030. Acts of the mandatary after principal's death
a. The mandatary is bound to complete an undertaking he had commenced
b. at the time of the principal's death
c. if delay would cause injury.
8. Art. 3031. Contracts made after termination of the mandate or the mandatary's
authority
a. If the mandatary does not know that the mandate or his authority has
terminated
b. and enters into a contract with a third person
i. who is in good faith,
c. the contract is enforceable.
9. Art. 3032. Obligation to account
a. The mandatary is bound to account for his performance to the principal
b. Upon termination
c. Unless the principal express otherwise.
PARTNERSHIP

Partnership Principles

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1. Art. 2801. Partnership; definition
a. Is a Juridical Person, distinct from its partners
i. An entity that is given personality by law
ii. Separate from partners
iii. Partnership can sue and be sued
b. Created by:
i. Written Contract
ii. Oral Contract
iii. Inadvertently: by persons action depending on the facts and
circumstances
c. Between two or more persons
i. Natural &. Natural
ii. Natural & Juridical
iii. Juridical & Juridical
d. Agreement to Combine Efforts and Resources in Determined Portions
e. Agreement/Collaboration of Mutual Risk for Their Common Profit or
Commercial Benefit
i. Share debts
ii. Share Profits
2. Art. 2802. Applicability of Rules of Conventional Obligation
a. Partnership is governed by the rules of Conventional Obligation

3. Art. 2803. Participation of Partners

a. Each partner participates equally in:
i. Profits
ii. Loses
iii. Assets
iv. Benefits
b. Each partner participate proportionally in contribution to capital
c. Both (a) and (b) are true unless otherwise specified by the parties.

4. Art. 2804. Participation In One Category Only

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a. There is a presumption that if the partners agreement sets the participation
for only one category (profits, benefits, assets, or loses) and is silent as to
the others the same participation applies to all categories.
b. An exception is made regarding distribution of capital contribution
i. Proportional participation is always presumed.
5. Art. 2805. Name of the Partnership
a. A partnership may be adopted with or without the names of some or all
the partners.
b. If no name is adopted, then it is presumed that all the names of the parties
are included.
6. Art. 2806. The Ownership of Immovable Property
a. In order for a partnership to own immovable property, the partnership
must be in writing at the time of acquisition.
i. If the contact of partnership was not in writer at the time of
acquisition, then the individual partners, not the partnership, own
the immovable property.
b. If the partnership is later put into writing, this act does not transfer
ownership of the immovable property to the partnership; there must be a
separate act.
c. As to third parties, the individual partners own the immovable property
until the contract of partnership is filed in the registry with the secretary
of state.
i. If partnership is in writing and is not filed, then the subsequent
filing and registration of the partnership automatically vest the
ownership of the immovable property in the partnership (No
separate act is needed)
7. Art. 2807. Decisions Affecting the Partnership
a. Unless otherwise agreed, unanimity (total consensus) is required to:
i. Amend partnership agreement
ii. Admit new partners
iii. Terminate the partnership
iv. Permit a partner to withdraw without just cause if the partnership
has a term
b. Unless otherwise agreed (stipulated), only a majority vote is needed for
decisions affecting:
i. Management of the partnership or
ii. Operations of the partnership
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8. Medline/Johnson (Oral Test)

a. To establish the existence of a partnership without a written agreement,
the plaintiff has the burden of proving
i. The parties must have mutually consented to form a partnership
and participate in the profits which may accrue from the property,
skill, or industry, furnished to the business in determined
proportion by them
ii. All parties must share in the losses as well as the profits of the
venture
iii. The property or stock of the enterprise must form a community of
goods in which each party has a propriety interest
9. Hassiepen (Inadvertently Test)
a. The existence of a partnership is based upon all the facts and
circumstances surrounding the formation of the relationship at issue. The
formalities of a written partnership agreement are unnecessary to prove
the existence of a partnership. A partnership arises when
i. Parties join together to carry on a venture for their common
benefit
ii. Each party contributes property or services to the venture, and
iii. Each party has a community of interest in the profits of the
venture
10. Porter v. Porter (prerequisites for establishing a partnership)
a. In order to establish the existence of a partnership without a writing, there
must be a showing that all the parties intended such a relationship.
11. Simpson
a. The court listed the following factors to distinguish a partnership from a
position as employee:
i. Investment in the firm
ii. Exposure to liability
iii. Partial ownership of firm assets
iv. Voting rights
v. Participation in profits and losses
vi. Position under the partnership agreement
vii. Position under partnership law.
12. Martin v. Peyton
a. A partnership does not require a written agreement
13. Placke v. Norris
a. Immovable property acquired in the name of a partnership is owned by
partnership if, at the time of acquisition, the contact of partnership was in
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writing. If the contact of partnership was not in writing at the time of
acquisition, the immovable is owned by the partner.
b. Directs that the contact of partnership shall be field for registry with
the secretary of state in accordance with the provisions of this Chapter to
affect third persons as provided by cc art 2806 The required
content of the contract for registry purposes is state in 3403.
c. A contact of partnership filled for registry with the secretary of state shall
contain the:
i. Name of partnership
ii. Municipal address of its principal place of business in this state
iii. Name and the municipal address of each party, including partners
in commendams (properties held by partner in limited
partnership), if any.
d. Although the partners must agree that they will share profits and losses to
establish a partnership as defined CC Art. 2801, the omission from a
written or oral partnership agreement of the details of how they will share,
does not render the agreement invalid. See C.C. Art. 2803, which
expressly provides that the partners participate equally in profits and
losses unless they have agreed otherwise.
Obligations and Rights of Partnerships Toward each other and toward the
Partnership.
1. Obligation of partner to contribute (2808)
a. Each partner owes the partnership all that he has agreed to
contribute to it.
2. Fiduciary duty; activities prejudicial to the partnership (2809)
a. A partner owes a fiduciary duty to the partnership and to
his partners.
b. He may not conduct any activity,
i. for himself or on behalf of a third person, that is
contrary to his fiduciary duty
ii. And is prejudicial to the partnership.
c. If he does so,
i. he must account to the partnership and
ii. To his partners for the resulting profits.
d. Grand Isle Campsites, Inc. Cheek
i. General
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1. The partners have a fiduciary relationship in character and
is imposed upon all the participants the obligation of
loyalty to the join concern and on the utmost good faith,
fairness, and honest in their dealings with each other with
respect to matter pertaining to the enterprise.
ii. Individual or Private advantage
1. A joint venture forbids one for accruing or retaining for
himself, any private or secret advantage in connection with
the common enterprise.
2. Profit wrongfully diverted are subject to a constructive
trust and any profit realized belongs to the venture.
iii. Misrepresentative as to cost
1. a partner, who obtains a profit by misrepresentations as to
the cost of property related to the partnership, has breached
the fiduciary relationship and must account to his associate
for such profit.
e. Jansen
i. A partnership owes a fiduciary duty not to conduct
any activities for himself unless there are
1. Full notice and Full disclosure; and
2. Agreement
3. Other rights not prejudiced (2810)
i. The rights of the partnership against a partner are
not limited to the recovery of profits resulting from a
partners breach of his fiduciary duty. (The partner
can recover damages for any harm suffered.)
4. Partner as creditor of the partnership (2811)
a. A partner who acts in good faith for the partnership may
be a creditor
i. for sums he disburses,
ii. obligations he incurs, and
iii. Losses he sustains thereby.
b. There is no right of reimbursement for services rendered
by a partner, unless the partnership agreement so
provides.
5. Hobbs

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a. Overall, if the partner is acting as a prudent administrator
(In good faith on behalf of the partnership)
b. And he incurred any debts, losses or liability
c. The other partners are responsible for their share of
losses, debt or liability,
d. Thus the partner is acting as a creditor and has
indemnification.
e. Although such act or omission should injudicious and
injurious to the partnership
6. The sharing of a partner's interest with a third person (2812)
a. A partner may share his interest in the partnership with a
third person without the consent of his partners,
b. But he cannot make him a member of the partnership.
c. He is responsible for damage to the partnership caused by
the third person as though he caused it himself.
7. OConnor
a. A partner may share his interest with third party;
however, he may not grant partnership to the third party
without written consent of the majority of the partners.
b. Third party with whom member of partnership shares
partnership interest, but who is not member of
partnership, has no right to assert claim against remaining
partners, or partnership.
c. A partnership is an indispensable party to a suit.
8. The right of a partner to obtain information (2813)
a. A partner may inform himself of
i. the business activities of the partnership and
ii. may consult its books and records,
b. Even if he has been excluded from management.
c. A contrary agreement is null.
d. He may not exercise his right in a manner that unduly
interferes with the operations of the partnership or
e. Prevents other partners from exercising their rights in this
regard.
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Relationship of the Partnership and the Partners with Third Person

1. Partner as mandatary of the partnership (2814)
a. A partner is a mandatary of the partnership for all
matters in the ordinary course of its business
i. except
1. alienation
2. lease, or
3. encumbrance of its immovables.
b. If the provision stipulates that a partner is not a
mandatary, it does not effect a third persons who in good
faith transact business with the partner
i. Except as provided in the articles of partnership,
1. any person authorized to execute a mortgage
or security agreement on behalf of a
partnership
a. shall, for purposes of executory
process, have authority to execute a
confession of judgment in the act of
mortgage or security agreement
b. without execution of the articles of
partnership by authentic act.
2. Effect of loss stipulation on third persons (2815)
a. A provision in the contact that a partner shall not
participate in losses, does not affect third persons.
i. Note: This article renders the provision ineffective
only with regard to third person. As between the
partners, the provision would not be effective.
3. Contract by partner in his own name; effect on the
partnership (2816)
a. An obligation contracted for the partnership by a partner
in his own name
i. binds the partnership
1. if the partnership
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a. benefits by the transaction or
b. the transaction involves matters in the
ordinary course of its business.
b. If the partnership is so bound,
i. it can enforce the contract in its own name.
4. Partnership debts; liability (2817)
a. A partnership as principal obligor
i. is primarily liable for its debts.
b. A partner is bound for his virile (proportion) share of the
debts of the partnership
i. but
1. may plead discussion of the assets of the
partnership.

Murphy
Casten
Rapier
Nu-Lite
Brackley
Koppers
Cessation of Membership

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1. Art. 2818. Causes of cessation of membership
a. A partner ceases to be a member of a partnership
upon:
i. his death or interdiction;
ii. his being granted an order for relief under
Chapter 7 of the Bankruptcy Code;
iii. his interest in the partnership being seized
under a writ of execution and is not release
within 30 days (Can negotiation release of
interest). The cessation is retroactive to the
date of seizure (2819);
iv. his expulsion from the partnership
1. A partner may be expel for just caused
from the partnership by a majority of the
partner unless otherwise provided in
agreement (2820)
v. his withdrawal from the partnership
1. with term, (2821)
a. a partner may withdraw without the
consent of his partners prior to the
expiration of the term
b. provided he has just cause
i. arising out of the failure of
another partner to perform an
obligation
2. without term, (2822)
a. a partner may withdraw from the
partnership without the consent of his
partners at any time,
b. provided he gives reasonable notice in
good faith at a time that is not
unfavorable to the partnership.
vi. A partner also ceases to be a member of a
partnership in accordance with the provisions
of the contract of partnership

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2. Art. 2823. Rights of a partner after withdrawal
a. The former partner,
b. his successors, or
c. the seizing creditor
i. is entitled to an amount equal to the value that
the share of the former partner had at the time
membership ceased.
3. Art. 2824. Payment of interest of partner
a. If a partnership continues to exist after the
membership of a partner ceases,
b. Unless otherwise agreed,
i. the partnership must pay in money the amount
that equal to the value that the share of the
former partner had at the time membership
ceased
ii. as soon as that amount is determined
iii. together with interest
1. at the legal rate from the time
membership ceases.
4. Art. 2825. Judicial determination of amount
a. If there is no agreement on the value of the
partnership
i. any interested person (former partner,
successor, or seizing creditor may seek a
judicial determination of the amount and
ii. a judgment ordering its payment.

Partnership Termination
1. Termination of a partnership; causes (2826)
a. General Partnership
i. Unless continued as provided by law, a partnership
is terminated by:
1. the unanimous consent of its partners;
2. a judgment of termination;
3. the granting of an order for relief to the
partnership under Chapter 7 of the Bankruptcy
Code;
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4. the reduction of its membership to one
person;
5. the expiration of its term; or
6. the attainment of, or the impossibility of
attainment of the object of the partnership.
b. General and Limited
i. A partnership also terminates in accordance with
provisions of the contract of partnership.
c. Limited Partnership
i. A partnership in commendam terminates
1. by the retirement from the partnership, or the
death, interdiction, or dissolution, of the sole
or any general partner
a. unless the partnership is continued with
the consent of the remaining general
partners. The right to do so must be
stated in the contract of partnership OR
b. if, within ninety days after such event,
all the remaining partners agree to
continue the partnership in writing and
the partners may appointment one or
more general partners if necessary or
desired.
2. Continuation of a partnership (2827)
a. A partnership may be
b. expressly or tacitly continued
c. when its term expires or its object is attained, or
d. when a resolutory condition of the contract of partnership
is fulfilled.
e. If the object becomes impossible, the partnership may be
continued for a different object.
f. Unless otherwise agreed,
i. a partnership that is expressly or tacitly continued
has no term.
3. Continuation for liquidation; sole proprietorship (2828)
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a. When a partnership terminates,
i. the business of the partnership ends except for
purposes of liquidation.
ii. If a partnership terminates because its membership
is reduced to one person,
1. that person is not bound to liquidate the
partnership and
2. may continue the business as a sole
proprietor.
3. If the person elects to continue the business,
a. his former partners are entitled to the
equal value of their shares at
termination, and
b. they have the right to demand security
for the payment of partnership debts.
Note *** - if you can not perform 3a or 3b, then former partner may
force liquidation.
4. Change in number or identity of partners (2829)
a. A change in the number or identity of partners does not
terminate a partnership unless the number is reduced to
one.
5. Effects of termination; authority of partners (2830)
a. When a partnership terminates,
i. the authority of the partners to act for it ceases,
except with regard to acts necessary to liquidate its
affairs.
ii. Anything done in what would have been the usual
course of business of the partnership by a partner
acting in good faith,
1. who is unaware that the partnership has
terminated,
2. binds the partnership as if it still existed.

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6. Termination of the partnership; rights of third parties (2831)
a. The termination of a partnership,
i. for any reason,
1. does not affect the rights of a third person in
good faith who transacts business with a
partner or
2. a mandatary acting on behalf of the former
partnership.
7. Creditors of the partnership; preference (2832)
a. The creditors of the partnership must be paid in
preference to the creditors of the partners.
1) Monroe
a) The partners power to bind his copartners, by note or
acknowledgment, or to use the social name, ceases with
dissolution.
b) Any subsequent power is derived, not from previous relations of
the parties as partner, but from a new contract.
c) After the dissolution of the partnership, neither partner has
authority, without special mandate so to do, to bind his former
partners, either in the renewal of a partnership debt, either in
the renewal of a partnership debt, the imposition of a new
obligation on it, or in any manner vary the form or character of
the obligation already existing.
d) The partner can not bind a partner after dissolution.
e) After the termination of a partnership, no admission or
acknowledgment, by one of the partners, of the correctness of
an account, made before the dissolution of the partnership, is
legal evidence against the other members of the firm.
f) Admission or acknowledgment, by one of the partners, of the
correctness of an account, made before the dissolution of the
partnership, is legal evidence against the other members of the
firm.
g) A liquidator has not other authority except that which is
conferred on him, expressly or implied, by his copartner, and
that did not include the authority to bind them by the giving of
notes

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2) K. Carr
a) After termination of partnership, you must seek dissolution and
liquidation.
3) Sharplin
a) For termination of partnership, a factual pleading is required
b) Termination is not a formal declaration, but is simply the
occurrence of factual grounds which compel formal liquidation of
the affairs of the partnership.
c) A true deadlock constitutes impossibility of attainment of the
object of a partnership.
d) A 50% percent partner is an interested party who may force
the liquidation of the partnerships affair because of the alleged
impossibility of attaining the partnerships object.
e) When one of the cause for termination occurred.

4) Dantzler
a) A partnership is primarily liable for the debts; the partners are
secondarily liable
b) If a partnership terminates, it nevertheless retains its juridical
personality for the purpose of liquidation.
c) A partnership has the procedural capacity to be sued in its
partnership name
d) A partnership is not resolved until all debits are paid and a full
liquidation of the asset
e) A partnership is a separate entity.
i) A partnership continues on as a separate entity for all
purpose until after the dissolution and liquidation.
f) A partnership although are two individuals are an entity of its
own and a partnership does not dissolved after termination until
dissolution and liquidation and all assets and liability are
satisfied.
5) J. Carr
a) Can not use the name of the partnership until after dissolution
of the partnership
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6) Triangle
a) One, who acts in such a manner as to induce others to believe
that he is member of a certain partnership, makes himself liable
to them as a partner.
b) A person knowing that he is held out as a partner should do all
that a reasonable man would do under similar circumstances to
assert and show that he is not a partner, thereby preventing
innocent persons from being misled.
c) When a person holds himself out as a partner, that person must
give notice to the 3rd Party to inform that he is not a partner.

7) Skannel v. Taylor
a) A specific notice (not a general printed notice (newspaper)) of
partnership dissolution is required for a person who previously
dealt with the partnership.
i) Even if special notice is given, accompanied with the
notification that certain person will carry on the business, and
settle that of the late commercial firm, these person will be
considered as agents oft his form for the settlement of its
indebtedness
b) A partnership not substitute a subsequent partnership b/c the
partnership ot maintain that there was a novation of the debt
i) This debt is to be held as having been drawn on his agents by
his authority
8) Bagnetto v. Bagnetto
a) Dissolution occurs after all liabilities and debts are satisfied, thus
any debit incurred in order to continue to run the partnership
until full termination belongs to the partnership.
Dissolution of Partnership
1) Division of the partnership assets (2833)
a) The creditors of a partnership shall be paid in the following order
of priority:
i) secured creditors in accordance with their security rights;
ii) unsecured creditors who are not partners;
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iii) unsecured creditors who are partners.
b) If any assets remain after the payment of all secured and
unsecured creditors,
i) the capital contributions shall be restored to the partners
ii) Finally, any surplus shall be divided among the partners
proportionally based on their respective interests in the
partnership.
2) Liquidation of the partnership (2834)
a) In the absence of contrary agreement,
i) a partnership is liquidated in the same manner and according
to the same rules that govern the liquidation of corporations.
b) A partnership retains its juridical personality for the purpose of
liquidation.
3) Art. 2835. Final liquidation
a) The liquidation of a partnership is not final
i) until
(1) all its assets have been collected and
(2) applied to its obligations and its remaining assets,
(3) if any, have been appropriately distributed to the partners.
4) Claiborne & Mather vs. Their Creditors
a) The partnership asset should be applied to the debit of the
partnership first. Individual partners debit are collected
secondary to the partnership debit and is equal to partner share.
5) Carter Brothers & Co. vs. Galloway & Burns.
a) A partner

6) Succession of Chas. M. Pilcher

a) The debts of the partnership must be paid prior to any of the
partners debts.
b) The partnership of property is liable to the creditors of the
partnership in preference to those of the individual partner, but
the share of any partner may, in due course of law, be seized
and sold to satisfy his individual creditors, subject to the debts
of the partnership.
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7) Smith v. Senecal
a) When money is loan to a partner for the capital contribution of
the partnership; the partner and not the partnership is liable to
the creditor.
b) A partner does have a cause of action for the reimbursement of
the capital contribution.
8) Gueringer vs. His Creditors
a) Individual Partners are secondary liable to the partnership
creditors; however, partnership creditors (after dissolution of
partnership share (discussion)) and individual creditors are
equal to a share of the partners assets.

Partnership in Commendam

1. Art. 2837. Partnership in commendam; definition

A. A partnership in commendam consists of
i. one or more general partners who have the
1. powers,
2. rights, and
3. obligations of partners,
ii. and one or more partners in commendam, or limited
partners, whose
1. powers,
2. rights, and
3. obligations are defined in this Chapter.
2. Art. 2838. Name; designation as partnership in
commendam
A. For the liability of a partner in commendam to be limited
as to third parties,
i. the partnership must have a name that appears in
the contract of partnership;
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ii. the name must include language that clearly
identifies it as a partnership in commendam,
1. such as language consisting of the words
a. "limited partnership" or
b. "partnership in commendam"; and
iii. the name must not imply that the partner in
commendam is a general partner.
3. Art. 2839. Name of partner in commendam; use
A. A partner in commendam becomes liable as a general
partner
i. if he permits
ii. his name to be used in business dealings of the
partnership
iii. in a manner that implies he is a general partner.
B. If the name of a partner in commendam is used without
his consent,
i. he is liable as a general partner only if
1. he knew or should have known of its use and
2. did not take reasonable steps to prevent the
use.
C. If the name of the partner in commendam is
i. the same as that of a general partner or
ii. if it had been included in the name of a predecessor
business entity or
iii. in the name of the partnership prior to the
admission of the partner in commendam,
1. its use does not imply that he is a general
partner.
4. Art. 2840. Partner in commendam; liability; agreed
contribution
A. A partner in commendam must agree to make a
contribution to the partnership.
B. The contribution may consist of
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i. money,
ii. things, or
iii. the performance of nonmanagerial services.
C. The partnership agreement must describe
i. the contribution and
ii. state either its agreed value or a method of
determining it.
D. The contract should also state the
i. time or
ii. circumstances upon which the
1. money or
2. other things are to be delivered, or
3. the services are to be performed, and if it fails
to do so, payment is due on demand.
E. A partner in commendam is liable for the obligations of
the partnership only to the extent of the agreed
contribution.
F. If he does not make
i. the contribution, or
ii. contributes only part of it,
1. he is obligated to contribute money, or
2. other things equal to the portion of the stated
value that he has failed to satisfy.
G. The court may award specific performance if appropriate.
5. Art. 2841. Contract form; registry
A. A contract of partnership in commendam must be in
writing and filed for registry with the secretary of state as
provided by law.
B. Until the contract is filed for registry,
i. partners in commendam are liable to third parties in
the same manner as general partners.
6. Art. 2842. Restrictions on the right of a partner in
commendam to receive contributions
A. A partner in commendam may not receive,
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i. directly or
ii. indirectly, any part of the capital or undistributed
profits of the partnership if to do so would render
the partnership insolvent.
B. If he does so,
i. he must restore the amount received together with
interest at the legal rate.
C. If the partnership or the partners do not force the partner
in commendam to restore the amount received,
i. the creditors may proceed directly against the
partner in commendam to compel the restoration.
7. Art. 2843. Restrictions on the partner in commendam with
regard to management or administration of the
partnership
A. A partner in commendam does not
i. have the authority of a general partner to bind the
partnership,
ii. to participate in the management or
administration (or control) of the partnership, or
iii. to conduct any business with third parties on
behalf of the partnership.
8. Art. 2844. Liability of the partner in commendam to third
parties
A. A partner in commendam is not liable for the obligations
of the partnership
i. unless
1. such partner is also a general partner or,
2. in addition to the exercise of such partner's
rights and powers as a partner,
a. such partner participates in the control
of the business.
ii. However, if the partner in commendam participates
in the control of the business,

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1. such partner is liable only to persons who
transact business with the partnership
reasonably believing,
a. based upon the partner in commendam's
conduct,
b. that the partner in commendam is a
general partner.
B. A partner in commendam does not participate in the
control of the business within the meaning of Paragraph A
of this Article solely by doing one or more of the following:
(a) Being a contractor for or an agent or employee of the
partnership or of a general partner.
(b) Being an employee, officer, director, or shareholder of a
general partner that is a corporation or a member or
manager of a general partner that is a limited liability
company.
(c) Consulting with and advising a general partner with
respect to the business of the partnership.
(d) Acting as surety for the partnership or guaranteeing or
assuming one or more specific obligations of the
partnership.
(e) Taking any action required or permitted by law to bring
or pursue a derivative action in the right of the
partnership.
(f) Requesting or attending a meeting of partners.
(g) Proposing, approving, or disapproving, by voting or
otherwise, one or more of the following matters:
(i) The continuation, dissolution, termination, or
liquidation of the partnership.

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(ii) The alienation, exchange, lease, mortgage, pledge,
or other transfer of all or substantially all of the
assets of the partnership.
(iii)

The incurrence of indebtedness by the

partnership other than in the ordinary course of its
business.

(h) A change in the nature of the business.

(i) The admission, expulsion, or withdrawal of a general
partner.
(j) The admission, expulsion, or withdrawal of a partner in
commendam.
(k) A transaction involving an actual or potential conflict of
interest between a general partner and the partnership
or the partners in commendam.
(l) An amendment to the contract of partnership.
(m)Matters related to the business of the partnership not
otherwise enumerated in this Paragraph, which the
contract of partnership states in writing may be subject
to the approval or disapproval of partners.
(2) Liquidating the partnership.
(3) Exercising any right or power permitted to partners in
commendam under this Chapter and not specifically
enumerated in this Paragraph.
ii) The enumeration in Paragraph B does not mean that the
possession or exercise of any other powers by a limited
partner constitutes participation by such partner in the
business of the partnership.

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9. Barksdale
A. General Partner owes fiduciary duty to the limited partners and to the
partnership.
B. A partner has not a right to prefer his own interest to that of the firm, not
deprive the partnership of a profitable bargain by taking to his own
account
C. The rule is especially true when considering a general partners duty to its
limited partners since the general partner has complete authority to deal
with the partnership business.
D. The general partner acting in complete control, stands in the same
fiduciary capacity to the limited partners as a trustee stands to the
beneficiaries of a trust.
10. Manheim
A. A partnership in commendam consists of tone or more general partners
who have the powers, rights, and obligation of partners.
B. A general partner, unlike a partner in commendam, may bind the
partnership, participate in management or administration of the
partnership, and conduct any business with third parties on behalf of the
partnership.
C. A partnership in commendam terminates by the death of the General
Partner unless it was continue with the consent of the remaining general
partners or unless, within ninety days of his death, all the remaining
partners agreed in writing to continue the partnership and appoint at least
one general partner
11.La Chomette
A. A partner in commendam is responsible for the capital contribution
promised in regard to debt and liability.
B. A partner in commendam can not withdraw capital contribution until all
partnership debt are paid.
12. Black Coll.
A. A line of credit from the limited partner can be considered as a capital
contribution. The withdrawal of the line of credit is considered the
withdrawal of the capital contribution.
B. Limited partners can not withdrawal capital contribution until partnership
is insolvent.
13. Marshall
A. If a partner withdraws from a partnership, and yet suffers his name to
continue and stand as part of the firm, he will be held liable
notwithstanding his retirement.
B. If a name is used in the partnership and the one of the partner withdrawal
from the partnership and an article is probably advertise in the newspaper
of the partner withdraw, the withdrawal partner is no long liable.

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Limited Liability Partnership
1. 3431. Nature of partner's liability in ordinary
partnership and in registered limited liability partnership
A. Notwithstanding any other provisions of law to the contrary
contained in Civil Code Article 2817,
a. a partner in a registered limited liability
partnership shall not be
i. individually liable for the liabilities and
ii. obligations of the partnership arising from
1. errors,
2. omissions,
3. negligence,
4. incompetence,
5. malfeasance, or
6. willful or intentional misconduct
iii. committed in the course of the partnership
business by another partner or a
representative of the partnership.
B. Nothing in this Section shall be construed as being in
derogation of any rights which any person may have
by law against a partner in a registered limited liability
partnership because of any fraud practiced upon him,
or because of any breach of professional duty or other
negligent or wrongful act by such partner, or in
derogation of any right which the registered limited
liability partnership may have against any such partner
because of any fraud practiced upon it by him.
C. Subsection A of this Section shall not affect the liability of a
partner for his virile share of liabilities and obligations of the
partnership arising from any cause other than those specified
in said Subsection A.
D. Subsection A of this Section shall not affect the liability of
partnership assets for partnership liabilities and obligations.

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E. A partner, which by reason of Subsection A of this Section is
not subject to liability, is not a proper party to a proceeding
by or against a registered limited liability partnership, the
object of which is to enforce the liabilities and obligations
described in Subsection A of this Section.
1. 3432. Registered limited liability partnerships
A. To become a registered limited liability partnership, a
partnership shall file with the secretary of state an
application stating the name of the partnership, the
address of its principal office, the number of partners,
and a brief statement of the business in which the
partnership engages.
B. The application shall be executed by a majority in interest of
the partners or by one or more partners authorized by a
majority in interest of the partners.
C. The application shall be accompanied by a fee of one
hundred dollars.
D. The secretary of state shall register or renew any
partnership that submits a completed application with
the required fee.

E. Registration is effective for one year after the date the

registration is filed, unless voluntarily withdrawn by filing
with the secretary of state a written withdrawal notice
executed by a majority in interest of the partners or by one
or more partners authorized by a majority in interest of the
partners.
F. The secretary of state may provide forms for application for
or renewal of registration.
2. 3433. Name of registered limited liability partnership
a. A registered limited liability partnership's name
shall contain the words "registered limited liability
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partnership" or the abbreviation "L.L.P." as the last
words or letters of its name.
3. 3434. Restrictions on distributions
a. A partner that is not liable under R.S. 9:3431(A) shall not
be individually liable for the return of a distribution from
the partnership to satisfy the liabilities and obligations
described in said Subsection A except to the extent that
the partner is required to return the distribution in a
revocatory action brought in accordance with Chapter 12
of Title IV of Book III of the Civil Code.
4. 3435. Provisions applicable to registered limited
liability partnerships
5. A registered limited liability partnership is a partnership as
defined in Article 2801 of the Civil Code, and the provisions of
Title XI of Book III of the Civil Code apply to registered limited
liability partnerships to the extent that they are consistent with
the provisions of this Chapter. Upon lapse or termination of
registration, the affected registered limited liability partnership
shall continue as a partnership under Title XI of Book III of the
Civil Code, but without application of this Chapter.

Limited Liability Companies

LA R.S. 12:1301 Limited Liability Companies
Definition - As used in this Chapter, unless the context otherwise
requires:
1. "Articles of organization" means documents filed under R.S.
12:1304 for the purpose of forming a limited liability
company and those documents as amended or restated.
2. "Business" means any trade, occupation, profession, or other
commercial activity, including but not limited to professions
licensed by a state or other governmental agency whether or
not engaged in for profit.

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3. "Capital contribution" means anything of value that a person
contributes to the limited liability company as a prerequisite
for, or in connection with, membership, including cash,
property, services rendered, or a promissory note or other
binding obligation to contribute cash or property or to
perform services.
4. "Constituent entity" means each limited liability company,
partnership, partnership in commendam, limited partnership,
or corporation which is party to an agreement of merger or
consolidation pursuant to R.S. 12:1358.
5. "Corporation" means a corporation formed under the laws of
this state or a foreign corporation as defined in R.S.
12:1301(6).
6. "Foreign corporation" means a corporation formed under the
laws of any state other than this state or under the laws of
any foreign country.
7. "Foreign limited liability company" means a limited liability
company formed under the laws of any state other than this
state.
8. "Foreign limited partnership" means a limited partnership
formed under the laws of any state other than this state or
under the laws of any foreign country.
9. "Foreign partnership" means a partnership formed under the
laws of any state other than this state, or under the laws of
any foreign country.
10. "Limited liability company" or "domestic limited liability
company" means an entity that is an unincorporated
association having one or more members that is organized
and existing under this Chapter. No limited liability company
organized under this Chapter shall be deemed, described as,
or referred to as an incorporated entity, corporation, body
corporate, body politic, joint stock company, or joint stock
association.
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11. "Limited partnership" means a partnership in commendam

formed under the laws of this state or a foreign limited
partnership as defined in R.S. 12:1301(8).
12. "Manager" or "managers" means a person or persons
designated by the members of a limited liability
company to manage the limited liability company as
provided in its articles of organization.
13. "Member" means a person with a membership interest in a
limited liability company with the rights and obligations
specified under this Chapter.
14. "Membership interest" or "interest" means a member's rights
in a limited liability company, collectively, including the
member's share of the profits and losses of the limited
liability company, the right to receive distributions of the
limited liability company's assets, and any right to vote or
participate in management.
15. "New entity" means the entity into which constituent entities
consolidate, as identified in the agreement or certificate of
consolidation provided for in R.S. 12:1360.
16. "Operating agreement" means any agreement, written or
oral, of the members as to, or in the case of a limited liability
company having a single member, any written agreement
between the member and the company memorializing the
affairs of a limited liability company and the conduct of its
business.
17. "Partnership" means a partnership formed under the laws of
this state or a foreign partnership as defined in R.S.
12:1301(9).
18. "Person" means a natural person, corporation, partnership,
limited District of Columbia, or the Commonwealth of Puerto
Rico.
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19. "Surviving entity" means the constituent entity surviving a
merger, as identified in the agreement or certificate of
merger provided for in R.S. 12:1360.
20. Paragraphs A(2), (10), and (16) of this Section shall apply to
all limited liability companies regardless of date of
organization.
A. Cases
a. Advance
i. The certificate of organization shall be conclusive evidence of the
fact that the limited liability company has been duly organized
ii. A capital contribution does not have to be in the form of cash, and
that he made capital contributions to advanced via his past
experience, good will, services rendered and equipment he
contributed, which assisted this business in its infancy.
b. F&G Invmts
i. A member of an LLC is not personally liable (same protection as
corporation)
c. Rossi Article
i. The individual is tax and not the LLC.
ii.
d. Hamilton
i. Piercing LLC veil (limited exception)
1. Where the shareholders acting through the corporation
commit fraud or deceit on a third party
2. Where the shareholders have failed to conduct the business
on a corporate footing.
a. The shareholder disregard the corporate formalities
to such an extent that the shareholder and the
corporation became indistinguishable or
b. Such unity existed that separate individualities
cease and the corporation was operated as the alter
ego of the shareholder
ii. The determination of whether to allow piercing of the corporate
veil is made by considering the totality of the circumstance
1. failing to follow statutory formalities for incorporating and
transacting corporate affairs,
2. undercapitalization
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3. failing to maintain separate bank accounts and
bookkeeping records
4. failing to hold regular shareholder and director meetings
iii. Have allowed a piercing of the c operate veil, there exists one
majority stockholder, either an individual or a corporation, which
is found to be operating the corporation as its alter ego or as an
instrumentality of the shareholder
e. Sage
i. Laws that are classified as interpretative or procedural, however,
can not be applied retroactively if so do so would run afoul foul
constitution prohibitions against, laws that impair the obligation of
contracts. c

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