2020 Georgia Code
Title 14 - Corporations, Partnerships, and Associations
Chapter 11 - Limited Liability Companies
Article 3 - Agency; Management; Duties; Liability
§ 14-11-303. Liability to Third Parties

1. A person who is a member, manager, agent, or employee of a limited liability company is not liable, solely by reason of being a member, manager, agent, or employee of the limited liability company, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company, including liabilities and obligations of the limited liability company to any member or assignee, whether arising in contract, tort, or otherwise, or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company, whether arising in contract, tort, or otherwise. Notwithstanding the provisions of this subsection, a member, manager, or employee may be personally liable for tax liabilities arising from the operation of the limited liability company as provided in Code Section 48-2-52.
2. Notwithstanding the provisions of subsection (a) of this Code section, under a written operating agreement or under another written agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations, and liabilities of the limited liability company.

(Code 1981, §14-11-303, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 1997, p. 1380, § 5; Ga. L. 2001, p. 984, § 3; Ga. L. 2009, p. 108, § 4/HB 308.)

- For article commenting on the 1997 amendment of this Code section, see 14 Ga. St. U. L. Rev. 57 (1997). For article, "2008 Annual Review of Case Law Development," see 14 (No. 6) Ga. St. B. J. 28 (2009). For article, "The Georgia LLC Act Comes of Age," see 16 (No. 1) Ga. St. B. J. 20 (2010). For note on the 2001 amendment to this Code section, see 18 Ga. St. U. L. Rev. 294 (2001).

JUDICIAL DECISIONS

No liability of members for debt of LLC.

- In a lender's suit against a limited liability company (LLC) and two individuals, it was error to find the individual defendants liable to repay the loan. The money was paid to the LLC, not to the individual defendants; even if the individuals were members of the LLC, the individuals were not liable for the LLC's obligations solely by reason of being members. Gardner v. Marcum, 292 Ga. App. 369, 665 S.E.2d 336 (2008), cert. denied, 2008 Ga. LEXIS 938 (Ga. 2008).

Members of the limited liability corporation (LLC) were not personally liable for the arbitration debts of the LLC because the members did not execute a written agreement to personally guaranty the LLC's debts and liabilities. Am. Arbitration Ass'n v. Bowen, 322 Ga. App. 51, 743 S.E.2d 612 (2013).

- Noncompetition clause in parties' agreement did not bar members of a limited liability company that sold a childcare facility from opening another daycare center as the members were not parties to the agreement and were not bound thereby; further, a member's signature was as a disclosed agent. Primary Invs., LLC v. Wee Tender Care III, Inc., 323 Ga. App. 196, 746 S.E.2d 823 (2013).

- Senior partners of a law firm could not be held liable for negligent supervision solely by reason of their positions, and the complaint lacked allegations that any lawyers had a tendency to engage in malpractice or that the senior partners knew or should have been aware of such tendencies. Hays v. Page Perry, LLC, F.3d (11th Cir. Oct. 5, 2015)(Unpublished).

- Reliance of signatory to contribution agreement on O.C.G.A. § 14-11-303 was misplaced because signatory's liabilities arose from signatory's contractual obligations as a party to the contribution agreement and as guarantor of an employment contract, not on account of signatory's interest in a limited liability company. Ervin v. Turner, 291 Ga. App. 719, 662 S.E.2d 721 (2008), cert. denied, 2008 Ga. LEXIS 773, 774, 794 (Ga. 2008).

- Condominium purchasers could not pierce the corporate veils to hold two limited liability company (LLC) members accountable for the acts of the LLC because the members were not proper parties solely by being members of the LLC and the purchasers failed to present any evidence that the members abused the forms by which the LLC was maintained as a separate entity. Lokey v. FDIC, F.3d (11th Cir. Apr. 13, 2015)(Unpublished).

Cited in Winzer v. EHCA Dunwoody, LLC, 277 Ga. App. 710, 627 S.E.2d 426 (2006); Milk v. Total Pay & HR Solutions, Inc., 280 Ga. App. 449, 634 S.E.2d 208 (2006); Internal Med. Alliance, LLC v. Budell, 290 Ga. App. 231, 659 S.E.2d 668 (2008).

RESEARCH REFERENCES

ALR.

- Construction and application of limited liability company acts - issues relating to liability of limited liability company for acts of its members, managers, officers, and agents, 46 A.L.R.6th 1.

Construction and application of limited liability company acts - issues relating to personal liability of individual members and managers of limited liability company as to third parties, 47 A.L.R.6th 1.