Business Associations
Scope
Agency, partnerships, LLCs, and corporations under Kansas statutes, with emphasis on authority, fiduciary duties, and liability shields.
Core rules
- Agency: actual authority may be express or implied; apparent authority arises from the principal's manifestations to a third party; ratification can bind the principal.
- Partnerships: under the Kansas Uniform Partnership Act, each partner is an agent for carrying on ordinary business, and the partnership is liable for a partner's wrongful acts. Partners owe loyalty and care.
- LLCs: Kansas LLC Act, K.S.A. 17-76,101 et seq., generally shields members from personal liability for company debts; management may be member-managed or manager-managed.
- Corporations: Kansas General Corporation Code, K.S.A. 17-6001 et seq.; directors owe duty of care and loyalty; shareholders generally are not liable for corporate debts absent piercing the veil.
- Piercing the corporate veil requires abuse of the corporate form, such as commingling or undercapitalization, causing injustice.
Worked example
A member signs a contract on behalf of LLC without authority. The LLC is bound if the member had apparent authority from the LLC's manifestations; otherwise the member may be personally liable for exceeding authority, but mere member status does not make all members liable.
Traps
Treating an LLC member as a partner with unlimited liability; finding apparent authority from the agent's own statements; ignoring Kansas's statutory filing requirements; and piercing the veil on undercapitalization alone.