WHEN IS A MEMBERSHIP IN AN LLC A SECURITY?

By , January 20, 2017 9:05 am

Anytime any of the members of an LLC you are forming for your clients are non-managers or otherwise significantly passive as to LLC management, you have to be concerned about possible federal and state securities law issues.  The post under the link below discusses a 10th circuit December 2016 case on this issue.  Here’s the link:

http://www.lexology.com/library/detail.aspx?g=492c7caa-1251-4acd-bfcd-ff7b6f436d71&l=7TFZC3H

HOW TO PROTECT DOMAIN NAMES

By , January 19, 2017 2:39 pm

A key intellectual property issue for many start-up and existing LLCs is the issue of how to protect their domain names.  The post under the link below provides brief but very useful guidelines concerning this issue.  I intend to share the post with many of my clients.  You may want to do the same.

Here is the link:

http://www.corpcounsel.com/id=1202770195713/The-Art-of-Protecting-Domain-Names?kw=The%20Art%20of%20Protecting%20Domain%20Names&et=editorial&bu=Corporate%20Counsel&cn=20161019&src=EMC-Email&pt=Daily%20Alert&slreturn=20160919075641

THE FEDERAL ARBITRATION ACT AND LLCS

By , January 18, 2017 5:49 pm

Many multi-member LLC  operating agreements contain arbitration provisions that are rooted in the Federal Arbitration Act (the “FAA”).  The decision summarized in the post under the link below is by the Nebraska Supreme Court, but it is relevant in all states.  In essence, it holds that the FAA applies even if the dispute in issue does not directly involve interstate commerce.

Here’s the link:  http://arbitrationnation.com/nebraska-real-estate-and-nebraska-borrowers-but-federal-arbitration-act-applies/

DELAWARE CASE REGARDING THE FIDUCIARY DUTY OF DISCLOSURE

By , January 17, 2017 6:26 pm

The duty of entity managers to disclose critical information to entity owners concerning their entities is a key component of the duty of loyalty under the law of Delaware and other states.  This duty is the central focus of the January 4, 2017 decision by the Delaware Chancery Court discussed in the post under the link below.  The entity owners in that case were corporate shareholders and the fiduciary breach in question involved a short-form merger.  However, the broad fiduciary principles in the case apply equally to LLC members and to non-merger matters.

Here’s the link:

https://delawarechancery.foxrothschild.com/mergers-and-acquisitions/chancery-dismisses-complaint-alleging-breach-of-duty-of-disclosure-regarding-short-form-merger/?utm_source=Fox+Rothschild+-+Delaware+Chancery+Law+Blog&utm_campaign=6a85ff6c81-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_86821ff155-6a85ff6c81-70733165

CHANGES IN FIDUCIARY PROVISIONS OF CALIFORNIA LLC ACT

By , January 13, 2017 6:30 pm

Under the link below is an excellent new post about recent changes in the fiduciary provisions of the California LLC Act.  The post will, of course, be of interest above all  to California LLC lawyers, but it will also be useful to non-California LLC lawyers about fiduciary issues critically important to LLC formations under all LLC acts.

Here’s the link:  http://www.lexology.com/library/detail.aspx?g=5b796059-e1b1-4f05-bf79-63cc92a89c5a&l=7T7RSDM

TREASURY FINAL REGULATIONS ADDRESSING USE OF US LLCS TO DISGUISE BENEFICIAL OWNERSHIP

By , January 12, 2017 5:47 pm

The post under the link below concerns new Treasury final regulations addressing the use of U.S. single-member LLCs to disguise foreign beneficial ownership of the LLC and its assets.

Here is the link:  http://www.lexology.com/library/detail.aspx?g=1d2a521d-d225-4cfe-a58a-9d610bdb2101&l=7TAYUBB

TOP 10 2016 BUSINESS DIVORCE CASES

By , January 11, 2017 6:38 pm

If, like me, you’re a fan of Peter Mahler’s remarkable weekly bog posts on business divorce cases, you’ll find his most recent post, under the link below, a useful review of his past year of posts.  It’s about his choice of the top ten 2016 business divorce cases.

Here’s the link:

http://www.nybusinessdivorce.com/2016/12/articles/annual-top-10-cases/top-10-business-divorce-cases-2016/

NEW TREATISE ON BUSINESS DIVORCE

By , January 10, 2017 5:34 pm

A business divorce is a break-up of a closely held LLC or other closely held business entity because of irreconcilable differences among the owners.  The post by Peter Mahler under the link below summarizes an outstanding new treatise on business divorce by three Delaware lawyers.  Drafting LLC operating agreements to prevent business divorces is among the most important functions of LLC lawyers in forming multi-member LLCs.  I intend to obtain a copy of the new treatise ASAP.  Should you?

Here is the link:

http://www.nybusinessdivorce.com/2017/01/articles/dissolution-basics/announcing-must-treatise-business-divorce-litigation/

NY CASE ABOUT RIGHT OF SHAREHOLDERS TO INSPECT RECORDS OF CORPORATE SUBSIDIARY-SIGNIFICANCE FOR LLCS

By , January 6, 2017 4:03 pm

Under the link below is a post by Peter Mahler about a recent decision by a New York appellate court holding that the shareholders of a NY corporation had a common law right to inspect the books and records of a wholly owned subsidiary of that corporation.  Not just in NY but also in other states, this case is likely to be useful to LLC lawyers whose clients want to inspect the books and records of single-member LLCs and other subsidiaries of multi-member LLCs of which these clients are members.

Here is the link:

http://www.nybusinessdivorce.com/2016/10/articles/access-to-books-and-records/ruling-upholds-shareholders-right-inspect-subsidiarys-books-records/

EXCEPTIONS TO LIABILITY SHIELD OF FLORIDA LLCS

By , January 5, 2017 5:22 pm

The article cited below will be of particular interest to Florida LLC lawyers, but the legal concepts addressed in it are likely to relevant to LLC lawyers in many other states as well.

90-NOV Fla. B.J. 26
Florida Bar Journal
November, 2016
Column
Business Law
JUDICIAL EXCEPTIONS TO LIMITED LIABILITY PROTECTION PROVIDED BY FLORIDA LLCS