WEST virginia legislature

2019 regular session

Introduced

Senate Bill 258

By Senators Trump and Tarr

[Introduced January 11, 2019; Referred
to the Committee on the Judiciary]

A BILL to amend and reenact §31B-3-303 of the Code of West Virginia, 1931, as amended, relating to establishing that the intent and policy of the Legislature is the common law corporate “veil piercing” claims may not be used to impose personal liability on a member or manager of a limited liability company.

Be it enacted by the Legislature of West Virginia:

ARTICLE 3. RELATIONS OF MEMBERS AND MANAGERS TO PERSONS DEALING WITH LIMITED LIABILITY COMPANY.

§31B-3-303. Liability of members and managers.

(a) Except as otherwise provided in §31B-3-303(c) of this code, the debts, obligations, and liabilities of a limited liability company, whether arising in contract, tort, or otherwise, are solely the debts, obligations and liabilities of the company. A member or manager is not personally liable for a debt, obligation or liability of the company solely by reason of being or acting as a member or manager. It is the intent and policy of the Legislature that common law corporate “veil piercing” claims may not be used to impose personal liability on a member or manager of a limited liability company, and that the West Virginia Supreme Court of Appeals decision in Joseph Kubican v. The Tavern, LLC, 232 W.Va. 268, 752 S.E. 2d 299 (2013) be nullified.

(b) The failure of a limited liability company to observe the usual company formalities or requirements relating to the exercise of its company powers or management of its business is not a ground for imposing personal liability on the members or managers for liabilities of the company.

(c) All or specified members of a limited liability company are liable in their capacity as members for all or specified debts, obligations or liabilities of the company if:

(1) A provision to that effect is contained in the articles of organization; and

(2) A member so liable has consented in writing to the adoption of the provision or to be bound by the provision.

NOTE: The purpose of this bill is to the intent and policy of the Legislature that common law corporate “veil piercing” claims may not be used to impose personal liability on a member or manager of a limited liability company. The bill nullifies the West Virginia Supreme Court of Appeals decision in Joseph Kubican v. The Tavern, LLC, 232 W.Va. 268, 752 S.E. 2d 299 (2013).

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.