Category: Resources

WHEN SHOULD LLCS HAVE A CORPORATE MANAGEMENT STRUCTURE?

By , March 19, 2018 2:18 pm

Under the link below is an excellent article in the ABA’s Business Law Today about the use of corporate management structures in multi-member LLCs.

Here’s the link:

https://businesslawtoday.org/2017/03/its-a-bird-its-a-plane-no-its-a-board-managed-llc/

NON-PROFITS AND SINGLE-MEMBER LLCS

By , March 7, 2018 8:37 pm

Below in italics are the citation, title and author’s synopsis of a new law journal article about the use of single-member LLCs by non-profits.

52 Real Prop. Tr. & Est. L.J. 153

Real Property, Trust and Estate Law Journal

Fall, 2017

Ellen P. Aprill

Copyright © 2017 by American Bar Association; Ellen P. Aprill

SECTION 501(C)(3) ORGANIZATIONS, SINGLE MEMBER LIMITEDLIABILITYCOMPANIES, AND FIDUCIARY DUTIES

Author’s Synopsis: Tax-exempt organizations, including section 501(c)(3) organizations and their donors, use single member limited liability companies (SMLLCs) for a variety of purposes. Exempt section 501(c)(3) nonprofit organizations–to be referred to as charities–that have a number of facilities, such as schools, hospitals, or real estate investments, may form a separate SMLLC for each of them, primarily to protect other assets from liability. Charities may wish to place an activity with a high risk of environmental or tort liability, such as an overnight summer camp, in its own SMLLC. SMLLCs may be used to isolate unrelated business activities from related activities or risky investments from more traditional ones. They may also be used to isolate risky investments from more conservative ones.

An SMLLC leads a schizophrenic existence. Although an entity under state law, it is disregarded for most purposes under federal tax law. Furthermore, the leading theoretical approaches to LLCs and to nonprofit organizations stand in sharp contrast to each other, particularly regarding the ability to rely on contract. These very different sets of applicable law and theory allow for regulatory arbitrage, which involves taking advantage of inconsistencies between the applicable rules.

LLCs, including SMLLCs, have the choice of being member-managed or manager-managed. To ensure the greatest liability protection, the member of an SMLCC may choose for it to be manager-managed. Some LLC statutes, most importantly Delaware’s statute, permit the SMLCC to waive fiduciary duties. Charities, however, cannot waive fiduciary duties. This divergence in applicable rules regarding fiduciary duties could lead to conflict between the member charity and its SMLCC, such as pursuing activities inconsistent with the charity’s exempt purpose or engaging in campaign intervention. To avoid such conflict, this Article recommends that the IRS issue *154 guidance requiring control of the SMLCC by the charity, as it has done in the context of charitable contributions to a charity’s SMLCC.

ABA BUSINESS LAW TODAY–NOVEMBER 2017 EDITION

By , December 12, 2017 3:55 pm

The November 2017 edition of the ABA’s Business Law Today has just appeared.  For a table of its contents, click here:

https://www.americanbar.org/groups/business_law/publications/blt/2017/11.html

As you’ll see, the November 2017 edition contains many articles relevant to LLC lawyers.

 

PETER MAHLER’S LATEST BLOG

By , December 5, 2017 3:04 pm

As I think all of you know, I view Peter Mahler’s blog on business divorce to be among the best of all blawgs, and indispensable for LLC lawyers.  His latest post, under the link below, provides his reflections on the tenth anniversary of the launch of his blawg.  It’s fascinating in itself but also for people like me, who have our own specialized blawgs; and it will be fascinating for you if you are considering launching a blawg of your own.

Here’s the link:  https://www.nybusinessdivorce.com/2017/12/articles/uncategorized/reflections-ten-years-blogging/

MEETING OF ABA LLC COMMITTEE

By , October 30, 2017 2:48 pm

For those interested:  The Committee on LLCs Partnerships and Unincorporated Entities of the Business Section of the American Bar Association will hold its annual meeting in Alexandria, Va. this coming Thursday and Friday.  The subjects to be addressed at the meeting will be as follows:

LLC PUNCH LIST

By , May 22, 2017 1:56 pm

The post under the link below contains an excellent “punch list” of things you should do after forming your LLC.

http://www.lexology.com/library/detail.aspx?g=4e4e2c83-abe6-44f3-b2af-8a062d87e2de&l=7UT9XK2

RECENT ARTICLES ABOUT LLCS IN ABA BUSINESS LAW TODAY

By , May 15, 2017 5:45 pm

The  March 2017 issue of the ABA’s Business Law Today contains several important articles about LLC law and tax.  Here’s a link to the table of contents:

http://www.americanbar.org/publications/blt/2017/03.html

WHAT EVERY BUSINESS OWNER SHOULD KNOW ABOUT PRIVATE FOUNDATIONS

By , May 3, 2017 1:44 pm

The post under the link below provides basic information that business owners should know about private foundations.

Here’s the link: http://www.taxlawforchb.com/2017/04/private-foundations-a-primer-for-the-business-owner/

BUSINESS LAW TODAY

By , April 5, 2017 4:12 pm

The current issue of Business Law Today consists mainly of articles about LLC law and tax. They are all fine articles. Here is the link of the table of contents of BLT: http://www.americanbar.org/publications/blt/2017/03.html

RIGHT OF CONDOMINIUM OWNERS TO CONDO ASSOCIATION BOOKS AND RECORDS

By , March 3, 2017 3:48 pm

Many clients of LLC lawyers own condos through LLCs; they either live in these condos or they rent them to third parties.  This post from Peter Mahler under the link below discusses cases addressing the issue of the right of condo owners to inspect and copy records of their condo associations.  As the former president of a condo association, this issue is of substantial interest to me, but it may also interest many other readers of this blog.

Here’s the link:

http://www.nybusinessdivorce.com/2016/11/articles/access-to-books-and-records/courts-expand-books-records-access-condo-owners/