SLS 20RS-570 ORIGINAL
2020 Regular Session
SENATE BILL NO. 315
BY SENATOR ROBERT MILLS
LIABILITY. Provides relative to liability to third parties of members and managers.
(8/1/20)
1 AN ACT
2 To amend and reenact R.S. 12:1320(D) and to enact R.S. 12:1705, relative to business
3 organizations; to provide relative to limitations of liability; to provide for exceptions;
4 and to provide for related matters.
5 Be it enacted by the Legislature of Louisiana:
6 Section 1. R.S. 12:1320(D) is amended and reenacted and R.S. 12:1705 is enacted
7 to read as follows:
8 §1320. Liability to third parties of members and managers
9 * * *
10 D.(1) Nothing in this Chapter shall be construed as being in derogation of any
11 rights which any person may by law have against a member, manager, employee, or
12 agent of a limited liability company because of any fraud practiced upon him,
13 because of any breach of professional duty or other negligent or wrongful act by such
14 person, or in derogation of any right which the limited liability company may have
15 against any such person because of any fraud practiced upon it by him.
16 (2) For purposes of this Section, the term "professional" shall not include
17 any person solely because such person is licensed by the state, a parish, a
Page 1 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 315
SLS 20RS-570 ORIGINAL
1 municipality, or any agency, board, commission, or other governing authority.
2 * * *
3 §1705. Limitations on liability; business organizations
4 A. No action for damages shall be brought against any business
5 organization for the purpose of making that business organization responsible
6 for the obligations or liabilities of another business organization.
7 B. The provisions of Subsection A of this Section shall be subject to the
8 following exceptions only:
9 (1) Obligations or liabilities expressly authorized in another Section of
10 this Title.
11 (2) When a business organization agrees by conventional obligation to
12 be responsible for the obligation or liability of another business organization.
13 (3) When law justifies disregarding the separate juridical personality of
14 a business organization as between the business organization and a natural
15 person.
16 (4) When a business organization uses another business organization as
17 its instrumentality for the purpose of perpetrating, and did perpetrate, an
18 actual fraud on a third party primarily for the direct benefit of that business
19 organization.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Margaret M. Corley.
DIGEST
SB 315 Original 2020 Regular Session Robert Mills
Present law provides the liability of members, managers, employees, or agents, as such, of
a limited liability company organized and existing under present law shall at all times be
determined solely and exclusively by present law.
Present law provides for exceptions.
Proposed law provides that for purposes of present law, the term "professional" shall not
include any person solely because such person is licensed by the state, a parish, a
municipality, or any agency, board, commission, or other governing authority.
Proposed law provides that no action for damages shall be brought against any business
organization for the purpose of making that business organization responsible for the
obligations or liabilities of another business organization.
Page 2 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 315
SLS 20RS-570 ORIGINAL
Proposed law provides for the following exemptions:
(1)Obligations or liabilities expressly authorized in present law.
(2)When a business organization agrees by conventional obligation to be responsible
for the obligation or liability of another business organization.
(3)When existing law would justify disregarding the separate juridical personality of a
business organization as between the business organization and a natural person.
(4)When a business organization uses another business organization as its
instrumentality for the purpose of perpetrating, and did perpetrate, an actual fraud
on a third party primarily for the direct benefit of that business organization.
Effective August 1, 2020.
(Amends R.S. 12:1320(D); adds R.S. 12:1705)
Page 3 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.