Ali is a member of a member-managed LLC.While Ali is driving to a client's office to handle the LLC's business,he hits an old man and severely injures him.The man sues the LLC and recovers $3 million in damages.The court however determines that Ali was ordinarily negligent and that the accident was caused by the uneven terrain of the road.Which of the following is true of the given scenario?

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As a member-managed LLC, all members have the authority to manage the LLC's business. Therefore, Ali was acting within his authority when he was driving to handle the LLC's business. However, the court determined that the accident was caused by the uneven terrain of the road, and that Ali was only ordinarily negligent. As a result, Ali is not personally liable to the LLC for any losses caused to the LLC by the $3 million damages award. The LLC itself is responsible for the payment of the damages, but the members may need to contribute funds to the LLC to cover the payment.

Ali Is a Member of a Member-Managed LLC