On November 20, 2015, John Cunningham will teach a one-day webinar on how to use LLCs to protect client assets. For further information about this webinar, click here: http://www.nbi-sems.com/enbi/email/71023LVWC.htm?ctname=NBI-Email_ES_71023_LVWC_2-023_1115&affil=NBI.
Many large businesses engage in business disaster planning. See the link below. Many smaller businesses, including smaller LLCs, might also benefit from this planning.
LLC lawyers are often handle the statutory conversion of state-law business corporations to LLCs. These procedures are tax-free if they are “reorganizations” within the meaning of IRC Section 361(a)(1)(F). The IRS has just released final F reorg regs. If you handle conversions of state-law business corporations to LLCs, you need to study these new regs.
The new (and excellent) blog post by Peter Mahler of the Ferrell Fritz law firm under the link below addresses the issue of whether an LLC operating agreement can be enforced against a member who didn’t sign it. This is an issue that arises all too often in LLC practice.
For NY members of this blog and those who serve persons investing in NY state, here is a useful current post in the Farrell Fritz law firm’s blog on the taxation of closely held businesses:
Those of you who have access to ALI course materials through WestLaw or otherwise may want to download and study the recently released materials cited below:
VCXB0903 ALI-CLE 1
The American Law Institute Continuing Legal Education
ALI-CLE Course Materials
September 3, 2015
FLPs Under Attack: What’s New & Pending in the IRS Arsenal
UPDATE ON PLANNING FOR CREATING, OPERATING AND UNWINDING FAMILY LIMITED PARTNERSHIPS AND LIMITED LIABILITY COMPANIES
Kostelanetz & Fink, LLP
New York, New York
New York University School of Law
New York, NY
Here is a corporate horror story, but it could as well be about LLCs:
Here is the cite to a newly published article on family LLCs:
Evan Michael Purcell, THE FAMILY LLC: A NEW APPROACH TO INSURING DYNASTIC WEALTH, 8 J. Bus. Entrepreneurship & L. 499 (2015)
Under the link below is a very recent and excellent blog post by Lou Vlahos of the Ferrell Fritz firm addressing NY tax rules affecting investment in NY real estate. I’m posting the link here in the hope that it will be useful to at least a few NY members of this blog.
Here’s the link:
THE SIX PARTS THAT OPERATING AGREEMENTS FOR MULTI-MEMBER LLCS SHOULD NORMALLY CONTAIN; WHEN TO USE EXHIBITS IN OPERATING AGREEMENTS
An operating agreement for a multi-member LLC should normally have the following six parts in the following order:
- A properly worded title page;
- A summary table of contents;
- A detailed table of contents;
- A table of exhibits (if the agreement includes one or more exhibits);
- A “body”—i.e., a part that contains the terms and conditions of the agreement;
- A part containing any relevant exhibits.
The first three of the above six parts have been discussed in previous practice tips in this series.
An operating agreement for a single-member LLC whose member is an individual should have all of the above parts except a summary table of contents. This is because operating agreements for single-member LLCs normally contain far fewer provisions than operating agreements for multi-member LLCs.
Three types of exhibits should normally be included in an LLC operating agreement:
- The first type consists of any relevant documents other than the agreement itself—e.g., the LLC’s certificate of formation and any key agreements with third parties. Obviously, these documents can’t be included in the body of the agreement.
- The second consists of detailed contractual terms that are too lengthy and complex to include in the body of the agreement except by brief reference. These may include, for example, terms concerning the determination of member buy-out prices and non-price terms.
- The third consists of exhibits consisting of examples that illustrate and clarify specific terms in the body of the agreement that will enable readers to better understand these terms. These might include exhibits consisting of illustrations that help to explain required tax boilerplate terms such as terms for qualified income offsets or for allocations of profits or losses from LLC dispositions of contributed property; or lists of LLC members coupled with information concerning their contributions and the terms governing individual contributions.