News & Analysis as of

Limited Liability Company (LLC)

Twist & shout: California appellate court allows reverse veil piercing against LLC

by Thompson Coburn LLP on

The California’s Fourth Appellate District has concluded that “reverse veil piercing” is possible to add a limited liability company to a judgment against the 99 percent owner of that LLC, in a decision that distinguishes...more

District Courts Remain Split on TC Heartland and Waiver of Improper Venue Defense

The Supreme Court’s decision five months ago in TC Heartland v. Kraft Food Group Brands was a sea change in the way courts interpret venue for patent infringement cases. Since the Federal Circuit’s decision in VE Holding...more

Does Your LLC Agreement Have a Purposeless Purpose Clause?

by Farrell Fritz, P.C. on

WARNING: Contractarians may find the following post disturbing. Reader discretion is advised. Now that I’ve got your attention, consider this: Under the standard for judicial dissolution of a New York LLC prescribed in...more

New Tax Court Decision Provides Planning Opportunities for Foreign Investors Investing in U.S. Partnerships

by Mintz Levin on

On July 13, 2017, the U.S. Tax Court issued its opinion in Grecian Magnesite Mining, Industrial & Shipping Co., SA v. Commissioner, in which the Tax Court held that a non-U.S. person who sells an interest in a partnership...more

CA Supreme Court: Entity Ownership Change Can Trigger Documentary Transfer Tax

Many entities are formed for the sole purpose of buying and holding real estate. In this setup, legal title is held by the entity itself (not the entity’s owners), but the entity’s owners have a “beneficial interest” that...more

The French Duty of Vigilance Law: What You Need to Know

As previously noted, on February 21, 2017, the French National Assembly adopted a law establishing a “duty of vigilance” for large multinational firms carrying out all or part of their activity in France. In a subsequent...more

New partnership audit rules can apply to partnerships, LLCs with only a few partners, members

by Thompson Coburn LLP on

Effective in 2018, changes in partnership audit rules may apply the following (and other) consequences to partnerships (including LLCs taxed as such)...more

Inside And Outside Reverse Veil Piercing

by Allen Matkins on

UCLA Professor Stephen Bainbridge has published several posts commenting on my post discussing Curci Invs. v. Baldwin, 2017 Cal. App. LEXIS 698. The issue in Curci was whether reverse veil piercing of a limited liability...more

California Court Green Lights Reverse Veil Piercing Of Delaware LLC

by Allen Matkins on

Courts historically have applied the alter ego doctrine to “pierce the corporate veil” so that a shareholder may be held liable for the debts or conduct of the corporation. California has extended the possibility of alter...more

California Supreme Court Holds that Real Property Transfer Tax Can Apply to Transfers of Entities that Own California Real...

by Bryan Cave on

Under California law, there are two separate tax implications affecting California real estate transfers that result in a “change in ownership” of the real property - a property tax reassessment and a real property transfer...more

Gain Realized By Non-Resident Foreign Partner Upon The Sale Of Its Interest In A U.S. Partnership Is Not U.S.-Source Income Unless...

by Roetzel & Andress on

In Grecian Magnesite Mining, Industrial & Shipping Co., SA, v. Commissioner of Internal Revenue (filed on July 13, 2017), the United States Tax Court overturned Revenue Ruling 91-32 (which had been relied on since 1991) and...more

Overhaul of Illinois LLC Act Provides Modernization, Increased Flexibility

by Holland & Knight LLP on

Significant changes have been made to the Illinois Limited Liability Company Act (the Act) that will impact both existing and new LLCs. These changes, which took effect on July 1, 2017, were designed in part to bring the Act...more

Nevada Supreme Court Holds That Member-Managers Were Not Proper Parties To Negligence Claim Against An LLC

by Allen Matkins on

In an opinion issued yesterday, the Nevada Supreme Court addressed the extent to which a member of a limited liability company is protected in a negligence based tort action against the LLC. Gardner v. Henderson Water Park,...more

Court Of Appeal Holds LLC’s Former Counsel May Represent Insider Defendants In Derivative Suit

by Allen Matkins on

Derivative actions can be somewhat confusing. Although the entity is essentially the plaintiff, it is named as a defendant. Initially, one might question why must the corporation be named as a party? I can think of at...more

Books and Records Case Illustrates Crucial Importance of Pre-Suit Demand

by Farrell Fritz, P.C. on

The third time definitely wasn’t a charm for the plaintiff in Austin v Gould, 2017 NY Slip Op 31494(U) [Sup Ct NY County July 13, 2017], in which the court dismissed ill-pleaded claims for “unfettered and unlimited access to...more

Foreigner’s Sale of Partnership Interest: Not Taxable

by Farrell Fritz, P.C. on

Coming to America- Whether they are acquiring an interest in U.S. real property or in a U.S. operating company, foreigners seek to structure their U.S. investments in a tax-efficient manner, so as to reduce their U.S....more

AFRICA - A Legal Guide for Business Investment and Expansion: Egypt

1 .What role does the government of Egypt play in approving and regulating foreign direct investment? Egypt has traditionally been a leader in the Arab world in the political, cultural, and economic spheres. Due to recent...more

U.S Tax Court Bounces Rev. Rul. 91-32: Sales of Partnership Interests by Foreign Partners May Not be Subject to U.S. Tax

by Dickinson Wright on

The practice of tax law is an exercise of statutory interpretation. A recent opinion of the U.S. Tax Court, Grecian Magnesite Mining, Indust. & Ship. Co. v. C.I.R., 149 T.C. No. 3 (July 13, 2017), is illustrative. Grecian...more

Piercing The Corporate Veil In Texas

by Fox Rothschild LLP on

Texas has long been one of the best locations to start a business, and a big reason for this is the liability protection afforded by the business-friendly Texas courts. Most business owners seek to limit their personal...more

Tenth Circuit Upholds Confirmation Of Arbitral Award In LLC Dissolution Dispute

by Carlton Fields on

The Tenth Circuit recently affirmed a district court’s confirmation of an arbitration award in a dispute regarding the dissolution of Knowledge Strategy Solutions, LLC (“KSS”). KSS was a partnership between the professional...more

U.S. Tax Court Bounces Rev. Rul. 91-32: Sales of Partnership Interests by Foreign Partners May Not be Subject to U.S. Tax

by Dickinson Wright on

The practice of tax law is an exercise of statutory interpretation. A recent opinion of the U.S. Tax Court, Grecian Magnesite Mining, Indust. & Ship. Co. v. C.I.R., 149 T.C. No. 3 (July 13, 2017), is illustrative. Grecian...more

Big Tax Court Win for Foreign Investors in U.S. Partnerships

by Alston & Bird on

A foreign investor, not engaged in a U.S. trade or business, can sell stock in a U.S. corporation without fear of U.S. tax liability (with the notable exception of stock in certain U.S. corporations heavily invested in U.S....more

Charging Orders

A “charging order” allows a judgment creditor to receive a debtor’s share of distributions from a limited liability company (LLC) or a partnership. With the proliferation of LLCs in the last 20 years, understanding “charging...more

Court Finds That Breach Of Fiduciary Duty Claims Is Preempted By Trade Secrets Claim

by Winstead PC on

In Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, a Texas entity that distributes produce throughout the United States filed suit against another Texas entity that imports foreign grown produce into the United States and...more

It’s a Partnership! No, It’s an LLC! No, It’s Both!

by Farrell Fritz, P.C. on

In 1981, three partners formed a general partnership to own and operate a rental property. Their partnership agreement fixed a 30-year term, to 2011. In 2003, the partners formed a new LLC maintaining the same ownership...more

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