Limited Liability Companies

News & Analysis as of

Another Bankruptcy Proofing Strategy Bites the Dust, or Does It?

In an effort to minimize the risk of loss in connection with a loan default, lenders often employ creative means to make it difficult, if not impossible, for a borrower to file bankruptcy....more

Court of Appeal Holds Transfer Tax Applies to Legal Entity Changes in Ownership

In 926 North Ardmore Avenue, LLC v. County of Los Angeles, the 2nd District Court of Appeal held that Proposition 13 changes in ownership prompted by transfers of legal entity interests should also be characterized as “realty...more

Court Of Appeal Embraces De Facto LLC Dissolution

Under the former Beverly-Killea Limited Liability Company Act, a limited liability company was dissolved upon the first to occur of any of the following three events...more

Disregarded Entity May Select Different Accounting Method than its Owner

In a recent Chief Counsel Advice (“CCA”), the IRS determined that a disregarded entity for federal income tax purposes (the “LLC”) operated a separate and distinct trade or business from that of its owner (the “Company”) and...more

IRS: Investment Fund Managers are Subject to Self-Employment Tax

The Office of Chief Counsel of the Internal Revenue Service (the "IRS") recently issued internal guidance in the form of a Chief Counsel Advice (the "CCA") indicating that the IRS has taken the position that the "limited...more

Joint Venture Critical Issues: Formation, Governance, Competition And Exits

The joint venture is a vehicle for the development of a business opportunity by two or more entities acting together, and will exist if the parties have: (1) a community of interest in the venture, (2) an agreement to share...more

IRS Considers Whether Management Fees of an LLC Are Subject to Self-Employment Tax

A recent response by the Internal Revenue Service Chief Counsel (CCA) to an inquiry from one of its field office agents addressed the question of whether management fees earned by an investment manager organized as a limited...more

The Florida Revised Limited Liability Company Act Action may be required by Florida LLCs by December 31, 2014

In 2013, the Florida Legislature adopted the Revised Florida Limited Liability Act. The Revised LLC Act restates the Florida laws governing LLCs in an entirely new Chapter 605, which succeeds the prior LLC Act found in...more

Corporate and Financial Weekly Digest - Volume IX, Issue 37

In this issue: - Council of Institutional Investors Issues Report on Board Evaluation Disclosure - FINRA Revises Proposal to Adopt Consolidated FINRA Rule 2231 - IRS Considers Whether Management Fees of...more

The Waters of March -The Benefits of Owning Life Insurance within a Cascading Charitable Lead Annuity Trusts (CLATs)

...I recall hearing Bossa Nova as a ten year old at my neighbor’s house in the Panama Canal Zone – Sergio Mendes and Brazil 66. The Waters of March is one of many great songs written by Antonio Carlos Jobim and sung by Elis...more

The Mergers & Acquisitions Review: Eighth Edition: Chapter 17 - Cyprus

I GENERAL INTRODUCTION TO THE LEGAL FRAMEWORK FOR M&A - Since Cyprus’s accession to the EU, the legislation regulating M&A activity in Cyprus has been closely aligned with Europe-wide practices. Prior to...more

Personal Responsibility for PA Tax Assessments

Under Pennsylvania law, there are important exceptions to the general rule that officers, employees and owners of a corporation or limited liability company have no personal liability for the business’s unpaid tax...more

Oregon Limited Liability Companies: Do I Need An Operating Agreement?

Limited liability companies (“LLCs”) have become a common choice of entity in Oregon in the 20-plus years since adoption of the Oregon Limited Liability Company Act (“Act”). LLCs are formed by filing Articles of...more

August 2014 Estate Planning Update: Protecting Investment Properties

Investment properties can be subject to lawsuits by other creditors because they are not protected by Nevada’s homestead law. Under Nevada homestead law, many classes of assets are automatically protected from creditors. ...more

Personal Liability In Business Ownership/Operation

Common practice for well advised business owners is to operate the enterprise through a chartered corporation or other limited liability entity recognized in the state(s) in which the business will be operated. The main...more

Protecting your real estate assets

When preparing an estate plan, asset protection for real estate is particularly challenging, because it’s the only asset that can’t be moved. Gifting it is one option, but this leaves the property exposed to creditors. This...more

Venture Capital Firm Liable For "Aiding And Abetting" Breach Of Fiduciary Duty

A recent case in the California Court of Appeals underscores the dangers that await venture capital firms brave (or foolish) enough to fund companies in the midst of internal disputes. In American Master Lease LLC v Idanta...more

Real Estate Tip - Keep It in The Family?

Using a will to give a commercial building to a loved one, a business partner or even a charitable organization is not ideal planning. Adverse tax consequences, the public probate process and operational difficulties aside,...more

Hotel Reassessment Invalid When LLC Owning Hotel Sells 100 Percent Membership Interest But No Person Or Legal Entity Obtains More...

The rule set out in California Code of Regulations Title 18 Section 462.180(d)(1)(B) provides there is a change in the ownership of real property owned by an LLC, "when any corporation, partnership, LLC, or any person… obtain...more

Editorial: Fla. Sets Strict Standard For Direct Shareholder Claims

Florida recently clarified the limited circumstances in which a corporate shareholder or limited liability company member has standing to bring a direct claim for damages relating to the company. On July 9, in Dinuro...more

FTB Issues Legal Ruling Addressing Filing And Franchise Tax Obligations of LLCs And Their Members

I’ve written several posts on discussing the meaning and ramifications of “doing business” for California tax purposes. See, e.g., Why Your LLC May Be Doing More Than You Think In California Even When It’s Doing Nothing, 60...more

Limited Liability Companies (LLC): The Basics

The limited liability company (LLC) is a form of business organization which in recent years has rapidly gained popularity in the United States. A properly structured LLC offers its owners (referred to as “members”) the...more

Corporate & Business Alert: Minnesota Adopts New Limited Liability Company Act

On April 8, 2014, Governor Dayton signed into law the Minnesota Revised Uniform Limited Liability Company Act – new Chapter 322C of the Minnesota Statutes (the “New Act”). The New Act will become effective on August 1, 2015,...more

Florida Appeals Court Clarifies Law On Derivative And Direct Shareholder Lawsuits

On July 9, 2014, Florida’s Third District Court of Appeal issued a landmark opinion in the case of Dinuro Investments, LLC vs. Felisberto Figueira Camacho, et al., 3D13-1242 & 3D13-1246, (July 9, 2014). In Dinuro, the Court...more

Delaware Court of Chancery Rejects Indemnification Sleight of Hand

In Branin v. Stein Roe Inv. Counsel, LLC, C.A. 8481-VCN, 2014 WL 2961084 (Del. Ch. June 30, 2014), the Delaware Court of Chancery held that a vested right to indemnification may not be rescinded by a subsequent amendment to...more

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