Do you have questions about LCC Members, Fiduciary Duty, and Breaches? Here is what LLC members should know about fiduciary duty to one another and how to handle breaches in this situation. As a manager or a member of a limited liability company, there are certain duties that you need to uphold with regards to your responsibilities. These are known as duties of trust and fiduciary duties to the LLC. It is important to be able to trust and rely upon individuals who serve in a management role in an LLC. This means that the manager must be willing to promote the interests of the LLC above and outside of their own interests.

Fiduciary Duties

Whether or not a person maintains a fiduciary duty to the LLC, and the members of that LLC, depends on whether or not that person has the responsibilities for running or managing the organization. Certain LLCs are managed by members meaning that all members have a responsibility for management of the LLC. Others are managed by a manger meaning that the LLC members will appoint another individual to run the business.

A member’s fiduciary duty to the LLC depends on whether the structure is manager-managed or member-managed. The primary fiduciary duties for an individual in an LLC are duty of loyalty and duty of care. Duty of loyalty refers to a manager or member’s willingness to put the benefits of the LLC above any individual or personal advantages. The individual is responsible for acting honestly in any dealings related to the LLC.

Fiduciary duty of care outlines that owners or members need to act in good faith and exercise as much reasonable care as possible in carrying out the direction of their activities and their obligations to the LLC. In the event that someone else has breached the duty of an LLC, this is an important time to return to the managing documents to discuss what options are available.

Breaches of Duty

An individual who has breached his or her duty can do significant damage to the LLC as well as the members inside. This is why it is imperative that your governing documents outline how such a breach can be handled and what opportunities members have to remedy the situation as quickly as possible.

Consulting with a knowledgeable Arizona business litigation attorney can be crucial during this time. Working with someone to help you structure your LLC documents as well as handle ongoing disputes can be very advantageous towards reaching an efficient and effective conclusion.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding LCC Members, Fiduciary Duty, and Breaches, or any other litigation issues,  please feel free to contact us at 480.461.5300, log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.