Legal Question in Business Law in California
is using funds from one LLC for another LLC even if the owners are the same, misappropriation of funds, if the other owners did not give consent?
Asked on 10/30/12, 3:18 pm
2 Answers from Attorneys
Terry A. Nelson
Nelson & Lawless
Unless legally and properly documented as loans, approved by both company's boards and shareholders, someone could end up in prison.
Answered on 10/30/12, 3:32 pm
Bryan Whipple
Bryan R. R. Whipple, Attorney at Law
Yes, I think it is; just because both companies have the same owners doesn't mean the two companies have the same creditors! If I were doing business with ABC, LLC in reliance upon its good credit rating and history of prompt payment, then suddenly all of its liquidity was transferred over to XYZ, LLC, with the same owners, I'd holler fraud! at the top of my lungs.
Answered on 10/30/12, 3:54 pm
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