California's Business Judgment Rule Applied to LLCs
Jennifer Weaver, who co-leads Holland & Knight's Healthcare & Life Sciences Industry Group, authored an article featured in Los Angeles Lawyer examining the California Court of Appeal's decision in Tuli v. Specialty Surgical Center of Thousand Oaks LLC. She explains how the ruling underscores the robustness of California's business judgment rule, which refers to the presumption that corporate directors make business decisions on an informed basis, in good faith and with the honest belief that they are acting in the best interests of the company. The piece highlights the rule's importance in safeguarding limited liability companies (LLCs) and other closely held businesses from insider threats if actions are taken for a rational business purpose and in accordance with the LLC's operating agreement.