Limited Liability Companies

News & Analysis as of

Texas appeals court: LLCs and partnerships are not "corporations" against which attorneys' fees can be awarded

The Fourteenth Court of Appeals in Alta Mesa Holdings, L.P. v. Ives, No. 14–14–00739–CV, 2016 WL 1534007 (Tex. App.—Houston [14th Dist.] Apr. 14, 2016) has reversed an award of attorneys’ fees granted by a trial court...more

Treasury Announces Beneficial Ownership Legislation; Proposes Foreign-Owned Single-Member LLC Regulations

Recently, the Treasury Department announced that it is sending Congress legislation that would require companies formed within the United States, or “that [use] the mail, wire, or any facility in interstate or foreign...more

Practice Pointers on the Up-C Structure

In a structure commonly referred to as an “up-C,” an existing limited liability company or other partnership form (referred to here for convenience as “LLC”) undertakes a public offering through a newly formed corporation,...more

PRACTICING WITHOUT A NET: Protecting Your Firm By Agreement

Attorneys come to us when contemplating the creation or expansion of their firms, when they want to leave their firm, or are dealing with the fallout of another member leaving. While many law firms have taken advantage of...more

Does An LLC Maintain Its Records At Its Designated Office When They Are In The Cloud?

Section 17701.13 of the California Corporations Code requires that a limited liability company designate and continuously maintain in California both an office and an agent for service of process. The office need not be a...more

Partnership Audit Changes and Their Effect on Operating Agreements

On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015. The Bipartisan Budget Act of 2015 contained several significant changes to the procedural rules for federal income tax audits and the...more

Form 5472 Reporting by Foreign Owned Disregarded Entities Established in the U.S. - Coming Soon!

Presently, a domestic single member LLC, and other similar single owner entities, absent a check-the-box election to the contrary, are disregarded for almost all U.S. tax purposes. Presently, a foreign owner of such...more

Partnerships: IRS Extends Prohibition on Treating Partners as Employees

Employees of partnerships, LLCs or their disregarded entity subsidiaries who receive equity in such entities may be treated as “self-employed” for tax purposes. On May 3, 2016, the US Treasury Department (Treasury)...more

FinCEN Finalizes Beneficial Ownership Identification Rules

As part of the U.S. Treasury Department's ongoing efforts to prevent bad actors from using U.S. companies to conceal money laundering, tax evasion, and other illicit financial activities, the Financial Crimes Enforcement...more

Be Careful How, And With Whom, You Associate

Attorney associations are valuable means to reduce overhead and expenses, and provide support for sole practitioners. However, casually creating an association can give rise to issues, including increased exposure to...more

Cheat guide to setting up shop in the United Arab Emirates

In the last decade, the UAE has become an increasingly popular destination to do business and opportunities abound for many. But alongside the hard work of setting up a business in the UAE, there are a number of legal...more

US targets the use of LLCs to disguise foreign beneficial owners

The United States Department of Treasury issued proposed regulations that, if promulgated, would impose new disclosure obligations on domestic disregarded entities wholly owned by foreign persons (i.e., single-member limited...more

IRS Shuts Down Work Around for Treating a Partner as an Employee

The IRS has long taken the position that a partner cannot also be an employee of the partnership. The prohibition also applies to persons that hold equity in a limited liability company ("LLC") that is taxed as a partnership...more

Court Rules Attorney-Client Privilege Ceases To Exist When Corporation Ceases To Exist Without Successor

The LLC May Well Be The Platypus Of Business Organizations - What happens to the attorney-client privilege when a corporation dissolves? Magistrate Judge Sallie Kim recently answered that question in Virtue Global...more

Neither a Partner nor Employee Be: Treasury and the IRS Issue Regulations Clarifying the Employment Tax Treatment of Partners in...

The Treasury Department (Treasury) and the Internal Revenue Service (Service) have issued temporary regulations (Regulations) clarifying the federal employment tax treatment of the owners of partnerships and other entities...more

New Regulations Squash Planning Tool for Avoiding Self-Employment Tax and Related Employee Benefit Issues

Tax practitioners often face this issue: client is a limited liability company taxed as a partnership for federal income tax purposes (“LLC”), and it wants to issue equity to a current employee (“Individual”) without...more

Partnerships Must Respond to New Audit Rules

The recently-enacted Bipartisan Budget Act of 2015 includes a far-reaching overhaul of the rules applicable to IRS partnership audits and tax adjustments. This will be significant for partnerships and limited liability...more

Tax Review - April 2016

We are proud to present the next edition of our Tax Review which contains a selection of rulings and interpretations that were issued or published in March 2016. We hope that you will find in it information that may prove...more

The Tennessee Business Court Clarifies Fiduciary Duties of LLC Members

In a recent opinion, decided 12/22/15, the Tennessee Business Court clarified the circumstances under which members of a Tennessee limited liability company owe fiduciary duties to one another. In Ewing v. Miller, Case No....more

IRS Withdraws Controversial Pronouncement on “Bad Boy” Guarantees

In a client advisory dated February 25, 2016, we described a legal memorandum released by the Office of Chief Counsel of the Internal Revenue Service (the “Memorandum”) which took the position that a typical “carve-out” or...more

Delaware Law Updates - Delaware law on advancement of fees incurred by former officers and directors

In a recent Delaware Court of Chancery case - Hyatt v. Al Jazeera America Holdings II, LLC, C.A. No. 11465-VCG - Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery took on a “familiar” issue with a “twist”:...more

Bankruptcy Court Chips Away at Bankruptcy Remoteness of Special Purpose Vehicles

A Chicago bankruptcy court declined to dismiss the Chapter 11 case of a “bankruptcy remote” limited liability company even though the debtor failed to obtain the unanimous consent of its members as required by its operating...more

Alert: United Kingdom; New Beneficial Owner Disclosure Requirements; The PSC Register

New UK laws, which came into force on April 6th, impose an obligation publicly to disclose the ultimate beneficial owners or controllers who have "significant control" over UK incorporated companies. The UK is the first...more

New Partnership Tax Audit Rules

The Bipartisan Budget Act of 2015 establishes new rules (the “New Partnership Audit Rules”) for the conduct of federal income tax audits of partnerships and the assessment and collection of income taxes resulting from such...more

Critical Tax Considerations When Structuring A Family Office

A wealthy family may create a family office to achieve a wide range of objectives. These objectives may include realizing the benefits of pooled capital in order to maximize the universe of available investment opportunities...more

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