Surety Bond in Suit for Dissolution of an LLC §17707 (California)

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Bond Penalty: Court Discretion

The California Corporations Code §17707 addresses the requirement of a surety bond for limited liability companies (LLCs) in California upon forced dissolution. Specifically, (c)(2) addresses the circumstances in which a member or manager of an LLC may be required to post a bond. "In any suit for judicial dissolution, the other members may avoid the dissolution of the limited liability company by purchasing for cash the membership interests owned by the members so initiating the proceeding, the 'moving parties,' at their fair market value. In fixing the value, the amount of any damages resulting if the initiation of the dissolution is a breach by any moving party or parties of an agreement with the purchasing party or parties, including, without limitation, the operating agreement, may be deducted from the amount payable to the moving party or parties [...]"

The court has sole discretion to determine the surety bond penalty, upon consideration the circumstances of the case and the potential risks to parties that might be prejudiced by the court's order. The amount is generally sufficient financial assurance to compensate for any damages or losses that may result from the member's or manager's actions. A surety bond under section §17707 is not automatic but imposed at the discretion of the court based on the specific circumstances of the case. The court will evaluate factors such as the nature of the LLC's business, the potential harm that may be caused by the member or manager, and the interests of the LLC, its members, and its creditors when determining whether to require a California Corporations Code surety bond.

Underwriting of surety bonds for LLC dissolution actions and other miscellaneous judicial bonds are best accomplished by a surety bond expert with knowledge of this class of court bond obligation, and the specific style required by the courts. A surety bond must follow the specific statutory requirements or may be held insufficient. California surety bond leader, Surety One, Inc. specializes in judicial bonds for all district, superior, family, supreme and appellate courts. Surety bond submissions are reviewed and responded to within one hour of receipt. We are the most agile court bond underwriter in the United States. Call (800) 373-2804, email us at or click here if you would like to chat live with an underwriter about your California judicial bond need.

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Additional Attachments

  • Copy of Complaint and Order