Louisiana applies the five-factor Riggins v. Dixie Shoring alter-ego test: commingling of funds, failure to follow formalities, undercapitalization, failure to maintain separate bank accounts, and failure to hold regular meetings. Each factor has a corresponding governance document. The 2010 ORX Resources decision was Louisiana’s first LLC piercing case, applying the Riggins test to find an LLC that hadn’t held a meeting in over a year was the alter ego of its managing member.
Louisiana’s Veil-Piercing Standard
Louisiana’s controlling test was set by the Louisiana Supreme Court in Riggins v. Dixie Shoring Co., Inc. (1991). The five non-exclusive alter-ego factors are: (1) commingling of corporate and shareholder funds; (2) failure to follow statutory formalities for incorporating and transacting corporate affairs; (3) undercapitalization; (4) failure to provide separate bank accounts and bookkeeping records; and (5) failure to hold regular shareholder and director meetings. The inquiry is a “totality of the circumstances” test, and courts are not limited to these five factors.
The veil may be pierced under two exceptional circumstances: (a) where shareholders commit fraud or deceit on a third party through the corporation, or (b) where shareholders fail to conduct business on a corporate footing such that the shareholder and the entity become indistinguishable. The Louisiana Supreme Court in Ogea v. Merritt (2014) signaled that LLC veil-piercing may be governed more directly by La. R.S. 12:1320(D)’s statutory exceptions (fraud, breach of professional duty, negligent/wrongful acts outside member capacity) rather than traditional corporate piercing doctrine.
Louisiana applies Riggins to LLCs in practice. The five-factor structure is helpful for both plaintiffs and defendants because it gives a clear roadmap for the analysis. For LLCs, that roadmap also maps directly to the governance document types Minutes.llc generates.
Real Cases from Louisiana
Riggins v. Dixie Shoring Co., Inc. (La., 1991)
Five-factor framework established
The Louisiana Supreme Court used this case to establish the five-factor alter-ego test that remains the controlling framework for corporate veil piercing in Louisiana. The court found that the shareholder was merely the alter ego of the corporation, considering the totality of circumstances including commingling of funds, failure to follow formalities, undercapitalization, failure to maintain separate bank accounts, and failure to hold regular meetings. The court emphasized that these factors are non-exclusive and that each case must be decided on its own facts under a totality-of-the-circumstances analysis.
What governance records would have changed the outcome: Annual written consents documenting regular governance reviews, banking resolutions establishing and maintaining separate bank accounts, and distribution authorizations documenting proper member draws would have directly addressed factors 1, 4, and 5 of the Riggins test. Single resolutions documenting key business decisions would have demonstrated that the entity followed proper formalities (factor 2) and operated as an entity separate from its owner.
ORX Resources, Inc. v. MBW Exploration, LLC (La. App., 2010)
Veil pierced — first Louisiana LLC piercing
This was the first Louisiana court to apply the alter-ego theory to pierce the veil of an LLC. ORX and MBW had entered a joint operating agreement for oil and gas development. Mark Washauer, MBW’s managing member, signed agreements on MBW’s behalf before MBW was even recognized by the Louisiana Secretary of State. MBW was undercapitalized, commingled personal and LLC funds, lacked separate bookkeeping records, and had not held a meeting in over a year. The court found that Washauer used MBW as a shell to avoid paying a legitimate debt, and applied all five Riggins factors to find that the LLC was merely Washauer’s alter ego.
What governance records would have changed the outcome: Annual written consents documenting regular LLC governance would have addressed the finding that no meetings had been held. Banking resolutions establishing separate accounts and distribution authorizations formalizing any payments between the member and the LLC would have prevented the commingling findings. A single resolution documenting the joint operating agreement and the LLC’s obligations under it would have demonstrated that MBW operated as a separate entity with its own business purpose.
Fausse Riviere v. Snyder (La. App., 2017)
Veil pierced — series of single-member LLCs
The Louisiana First Circuit affirmed a trial court ruling that a series of single-member LLCs should be disregarded because they were the alter ego of the sole owner, John Snyder. The court found that Snyder failed to conduct business on a corporate footing — the separate personalities of the owner and the entities became indistinguishable. Snyder was held personally liable for significant debts of his LLCs. The court applied the two-track analysis: piercing is available where shareholders commit fraud or deceit, or where they fail to maintain the entity as a separate business distinct from themselves.
What governance records would have changed the outcome: For each single-member LLC, an annual written consent documenting the entity’s separate operations, a banking resolution establishing and confirming separate financial accounts, and distribution authorizations for any funds transferred between the member and entity would have established the corporate separateness that the court found lacking. Single resolutions documenting major business decisions for each LLC separately would have further demonstrated that each entity had its own independent purpose and operation.
How to Protect Your LLC in Louisiana
Louisiana’s five-factor framework is unusually well-mapped to specific governance documents. Each factor has a matching record. The defensive playbook is essentially a checklist.
Factor 1 (commingling) and factor 4 (separate accounts/bookkeeping) are addressed by banking resolutions establishing separate authorized signers and distribution authorizations recording any flows between members and the LLC. Factor 2 (statutory formalities) is addressed by annual written consents and single resolutions documenting that decisions are being made through formal LLC processes. Factor 5 (regular meetings) is addressed by annual written consents serving as documented decisions in lieu of meetings — the substantive equivalent. Factor 3 (undercapitalization) is the only factor not directly addressed by a single document type, but annual written consents reviewing the LLC’s financial condition contribute evidence on this factor too.
Without these records, your personal assets are exposed under Louisiana’s totality-of-the-circumstances test. The ORX Resources and Fausse Riviere cases show how quickly the five factors pile up when no governance records exist. Minutes.llc generates the governance documents Louisiana courts examine, signs them with a digital corporate seal, hashes them, and stores them in a private offshore jurisdiction.
Not sure if your Operating Agreement covers these protections? Check your Operating Agreement for free at CheckMy.llc — it takes 5 minutes and shows you exactly which provisions are missing.
Frequently Asked Questions
Does Louisiana require LLCs to keep meeting minutes?
Louisiana LLC statutes do not specifically require meeting minutes. However, factor 5 of the Riggins five-factor test directly examines failure to hold regular shareholder/director meetings. The ORX Resources case pierced an LLC partly because it had not held a meeting in over a year. Voluntary annual written consents create the documentary evidence on this factor.
What is the standard for veil piercing in Louisiana?
Louisiana applies the five-factor Riggins v. Dixie Shoring (1991) alter-ego test: (1) commingling of corporate and shareholder funds; (2) failure to follow statutory formalities; (3) undercapitalization; (4) failure to provide separate bank accounts and bookkeeping records; and (5) failure to hold regular meetings. The inquiry is a totality-of-the-circumstances test. The Ogea v. Merritt (2014) decision signaled that LLC piercing may be governed more directly by La. R.S. 12:1320(D)’s statutory exceptions.
Can a single-member LLC be pierced in Louisiana?
Yes. The Fausse Riviere v. Snyder (2017) case pierced a series of single-member LLCs because the sole owner failed to conduct business on a corporate footing. Louisiana applies the same Riggins five-factor analysis to single-member LLCs as to multi-member entities. Sole ownership combined with informal operations is the typical pattern that triggers piercing.
What records protect an LLC from veil piercing in Louisiana?
Annual written consents documenting regular governance reviews address factor 5 (failure to hold meetings). Banking resolutions establishing and maintaining separate bank accounts address factors 1 and 4 (commingling and separate accounts). Distribution authorizations document proper draws, addressing factor 1 (commingling). Single resolutions documenting key decisions address factor 2 (statutory formalities). Each Riggins factor has a Minutes.llc document type.
Does Minutes.llc provide legal advice?
No. Minutes.llc is a document automation platform, not a law firm. The information on this page is for informational purposes only and does not constitute legal advice. Veil-piercing outcomes depend on specific facts and circumstances. Consult a licensed Louisiana attorney for legal questions specific to your situation.
Related reading: All 50 states — veil-piercing guide · The 7 Risks of LLC Veil Piercing · Why Your LLC Needs a Banking Resolution · Governance Glossary
Five Factors. Five Document Types. One Defense.
Louisiana’s Riggins test maps directly to the governance documents Minutes.llc generates. Annual written consent. Banking resolution. Distribution authorization. Single resolution. One defense per factor.
Create Your Record →This page is for informational purposes only and does not constitute legal advice. The cases described are based on publicly available court opinions and legal analyses. Outcomes depend on specific facts and circumstances. Minutes.llc is not a law firm and does not provide legal advice. Consult a licensed attorney for legal questions specific to your situation.