LEGAL CORNER: Do I need a certificate of incumbency to buy property to add to my LLC?

KPLC 7News at Noon - Oct. 16, 2019 - Pt. II - clipped version

LAKE CHARLES, La. (KPLC) - Submit your questions to news@kplctv.com. Civil matters only, please.

Question 1: I want to buy some property and put in my LLC. My bank says I must have a certificate of incumbency. What is a certificate of incumbency and why do I need it?

ANSWER: A certificate of incumbency is a document that is generally filed in the public records, that entails who all are authorized to act on behalf of the LLC. LLC’s, Corporations, Limited partnerships and the like are all legal entities. Legal entities are not real people but are like real people. The civil code calls legal entities juridical persons. Like people with social security numbers, legal entities may be assigned Tax Identification numbers. A legal entity cannot act on its own or sign its own name. The person who acts on behalf of the legal entity must be authorized to do so such as in buying property, making loans, opening bank accounts, and so on.

The certificate of incumbency list the persons whom are authorize to act on behalf of the company.

Question 2: Myself and two of my brothers owned a limited partnership company. All of us are authorized to handle the money for the expenses of the company. One of my brothers has been gambling and using monies from the company operating account. Me and my other brother want him out. How can get rid of him?

ANSWER: A partner owes a fiduciary duty to the partnership and to his partners to act in the best interest of the partnership.

Louisiana Civil Code 2820 provides that “A partnership may expel a partner for just cause. Unless otherwise provided in the partnership agreement, a majority of the partners must agree on the expulsion." So being that two of the three of you all want the gambling brother out, you may vote to have him expelled from the partnership company. Examples of just cause would be when a partner is engaging in activities that prejudice the business partnership, or the willful or repeated breach of the partnership agreement. The partner may be liable for damages he caused the partnership. However, entitled to an equal of his value of share of the partnership upon expulsion.

Louisiana Civil Code Articles 2809-2820.

Question 3: About two months ago, I bought a house in Lake Charles. Recently, we discovered major foundation issues with the home that were not listed or acknowledge in the home inspection we had done. Can the inspection company be liable for the repairs that need to be made?

ANSWER: It depends if the inspection company knew about the defective foundation or should have known due to their skills and experience and perhaps just did a poor inspection job. You may have a cause of action against the seller provided you didn’t waive any warranties that may afford you a viable remedy that listed in Louisiana Civil Code 2520 et. seq.

Louisiana Civil Code provides that a seller warrants the buyer against redhibitory defects, or vices, in the thing sold such as hidden defects. Particularly when such defect depreciated the value of the thing sold such as the defective foundation of your house. I must mind you that there or time limitation to bring such a cause of action. Generally, you have one year from day of delivery of the property provided the seller didn’t know of the defect, to file a civil suit in this matter. You must give the seller notice of the defect, and put it in writing.

Louisiana Civil Code Articles 2520-2548.

Disclaimer: The information furnished in this answer is general and may not apply to some situations. All legal situations are unique. No one should rely to their detriment on these answers. Anyone with a potential legal problem should seek the advice of a licensed attorney before taking any action or inaction. The answers provided are not intended to be specific legal advice and no attorney-client relationship is created between the SWLA Law Center and the viewers of KPLC-TV.LAKE CHARLES, La. (KPLC) -

Copyright 2019 KPLC. All rights reserved.