UNEXPECTED LOSS OF BUSINESS OWNER

By , July 31, 2015 3:53 pm

The post under the link below briefly but helpfully discusses how to plan for the unexpected loss of a business owner—meaning, in the case of an LLC, a member.

Here’s the link:

http://www.lexology.com/library/detail.aspx?g=88dbcb03-551a-4756-8037-62120c0d1e6b&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2015-07-30&utm_term=

TRADE SECRETS

By , July 30, 2015 1:21 pm

LLCs, like all other business entities, have to be aware of all of the trade secret issues potentially relevant to them under their operating agreements and otherwise.  Here is a link to a recent post with a good introductory discussion of the subject of trade secrets:

http://www.lexology.com/library/detail.aspx?g=bf2dd05f-d676-4b70-95e8-d251fa0df3b4&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2015-07-29&utm_term=

DEFERRED COMPENSATION

By , July 29, 2015 12:04 pm

The new FarrelFritz blog post under the link below on the subject of deferred incentive compensation won’t be useful to LLCs taxable as sole proprietorships or partnerships, but it may be very useful to those taxable as S or C corporations.

Here’s the link:

http://www.taxlawforchb.com/2015/07/deferred-incentive-compensation-first-times-the-charm/?utm_source=Tax+Law+for+the+Closely-Held+Business&utm_campaign=2a5cb3c836-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_4d5d267118-2a5cb3c836-73367009.

WHAT IS AN OPERATING AGREEMENT?

By , July 28, 2015 1:28 pm

The attached recent post by a leading Kentucky law firm in an excellent legal blog called Lexology seeks to answer the above question.  The link is:

http://www.lexology.com/library/detail.aspx?g=40cd7098-38d7-4938-8136-4a1bd4e78200&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2015-07-24&utm_term=

NH TAXES

By , July 24, 2015 4:37 pm

For those of you who follow New Hampshire tax developments, here is an excellent current overview by Tax Notes concerning current negotiations between New Hampshire’s governor and the New Hampshire Legislature concerning New Hampshire business taxation as applicable to LLCs and other entities.

http://www.taxnotes.com/state-tax-today/budgets/new-hampshire-governors-budget-compromise-includes-corporate-tax-breaks/2015/07/24/14943551

REDUCED BUY-OUT WHEN MEMBER IS EXPELLED FOR MISCONDUCT

By , July 23, 2015 2:32 pm

The new post by Peter Mahler under the link below discusses the above subject.  In my view, all well-drafted LLC operating agreements should provide that if a member is expelled from the LLC by the other members for misconduct, the buy-out price paid to the expelled member, if any, should reasonably reflect any decrease in the value of the LLC caused by the misconduct.  All of the model operating agreements in my Wolters Kluwer LLC book so provide.  However, Peter’s post makes clear that any such provision must be carefully drafted and may generate litigation.

Here is the link:

http://www.nybusinessdivorce.com/2015/07/articles/buyout/the-hidden-cost-of-a-devalued-buyback-upon-termination-for-cause/

JUNCTION BOX STATUTES

By , July 22, 2015 2:43 pm

A growing number of states are adopting “junction box statutes” which provide uniform cross-entity rules for all of the various types of entities available under their laws with respect to entity transactions such as name reservations, mergers, conversions and interest exchanges.  Pennsylvania has just adopted such a statute, effective July 1, 2015.  Here’s a link with a post from the law firm of McCarter & English about the new statute:

http://www.lexology.com/library/detail.aspx?g=651ef321-cc0f-41e8-bfd4-ba4740330701&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2015-07-15&utm_term=

IMPLIED COVENANT

By , July 21, 2015 1:14 pm

The implied contractual covenant of good faith and fair dealing is a rule of contract interpretation that underlies and governs every LLC operating agreement.  The link below is to a recent post in the Morris James LLP Delaware litigation blog about an LLC case called Charlotte Broadcasting LLC.  This post should make it clear to drafters of operating agreements in Delaware (and perhaps in many other states) that giving an LLC member or manager “absolute discretion” in handling LLC matters specified in an operating agreement won’t override the implied covenant.

Here’s the link:

http://www.lexology.com/library/detail.aspx?g=3bfdb20b-b849-430d-8ed1-2e86cec46c05&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2015-07-14&utm_term=

DISCOUNTS

By , July 20, 2015 3:21 pm

Under the link below is a brief but interesting current blog post about the history of discounts and about current alleged threats to their continued validity.  The first post in the blog is the relevant one, but you may also find that the older posts are also of interest to you.

Here’s the link:

http://www.taxlawforchb.com/?utm_source=Tax+Law+for+the+Closely-Held+Business&utm_campaign=20869b4beb-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_4d5d267118-20869b4beb-73367009

 

ARTICLE ABOUT GENERAL PARTNERSHIPS VS. LLCS

By , July 17, 2015 3:55 pm

I’ve just published the article under the link below in a number of New Hampshire journals, and the law governing the general partnerships and LLCs discussed in the article is New Hampshire law.  However, I think the main points under the article apply in most or all other U.S. jurisdictions.

The basic point in the article is this:  If you’re operating your business as a general partnership, convert it to an LLP or an LLC.

Here’s the link:

http://www.nhbr.com/July-10-2015/War-of-the-worlds-partnerships-vs-LLCs/