News & Analysis as of

Limited Liability Company (LLC)

Grecian Magnesite: Tax Court Finds Reliance on a US Tax Advisor Establishes Reasonable Cause

On July 13, 2017, the Tax Court, in Grecian Magnesite, Industrial & Shipping Co., SA v. Commissioner, 149 T.C. 3 (2017), rejected Internal Revenue Service (IRS) arguments that, in order to establish good faith reliance, the...more

Court Declines To Impose Alter Ego Liability On LLC’s President

by Allen Matkins on

In general, the debts, obligations, or other liabilities of a California limited liability company do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a...more

Newsflash: Tax Court Reverses IRS Revenue Ruling

by Dechert LLP on

A recent U.S. Tax Court case, Grecian Magnesite (149 T.C. No. 3, July 13, 2017), has declared invalid the long-standing U.S. government position that a non-U.S. person’s sale of an interest in a partnership (in this case, a...more

Employee Loan Or Compensation?

by Farrell Fritz, P.C. on

Everyone recognizes the importance of debt financing to a business. The business needs liquidity to purchase or improve assets, or to pay expenses. It borrows the necessary funds from an institutional lender that requires...more

Alert: New Tax Court Decision Opens the Door for Tax Planning for Non-US Investors into US LLCs

by Cooley LLP on

On July 13, 2017, the US Tax Court issued a decision which may provide non-US investors more flexibility and potentially better tax outcomes with respect to structuring their investments into US LLCs and partnerships....more

Will Your Family-Owned LLC Be Required to Pay the Fair Value of a Withdrawing Member’s Interest?

by Murtha Cullina on

Family-owned businesses that are organized as limited liability companies typically reflect the terms of the company’s governance, along with the members’ financial rights and obligations, in a written operating agreement....more

Episode 013: Interview with Justice Carolyn E. Demarest (Ret.) on Business Divorce Litigation

by Farrell Fritz, P.C. on

During her many years as Presiding Justice of the Brooklyn Commercial Division, New York Supreme Court Justice Carolyn E. Demarest (Ret.) decided some of the most important and challenging business divorce matters including...more

Developments in FICA and self-employment tax affect partners and S corporations

by Thompson Coburn LLP on

I was recently honored to serve as a guest columnist in the June 2017 “Shop Talk” column in WG&L’s Journal of Taxation. The article, “Developments in FICA and Self-Employment Tax Affect Partners and S Corporations,” tied...more

Holding the Bag: Update Your Operating Agreement or Face the Tax Consequences

by Partridge Snow & Hahn LLP on

New Law – Direct Assessment of LLC Tax Liability - The Tax Equity and Fiscal Responsibility Act (“TEFRA”) has governed the procedures for auditing partnerships since 1982. Under TEFRA, if the IRS audited an LLC taxed as a...more

Important Changes To The Illinois LLC Act

by Fox Rothschild LLP on

Changes to the Illinois Limited Liability Company Act that took effect on July 1, 2017 may impact either your current Illinois LLCs or your future ventures. The changes generally conformed Illinois law more closely to a model...more

New Legal Requirements For GmbH-Shareholders' List

by Reed Smith on

On 26 June 2017, the Act on the Implementation of the Fourth EU Anti Money Laundering Directive entered into force. One of the key points of the Act is the establishment of an electronic Transparency Register, which is...more

Exculpatory Provisions Under Delaware Law: Say What You Mean And Mean What You Say

Exculpation provisions in operating agreements must be carefully crafted in order to protect members, managers, directors and officers for breaches of fiduciary duties...more

Delaware Law Updates - TransPerfect’s Controversial Business Divorce Continues, Illustrating The Need For LLC Operating Agreements

by McCarter & English, LLP on

Many have heard of the highly publicized litigation involving TransPerfect Global, Inc. ("TransPerfect" or the "Company"), a Delaware corporation and one of the world’s leading providers of translation and litigation support...more

July 2017 Federal Tax Alert – New Partnership Audit Regulations

The U.S. Treasury Department and the Internal Revenue Service (“IRS”) recently reissued 277 pages of proposed regulations and a preamble (REG-136118-15) regarding the new centralized partnership audit rules enacted as part of...more

California Supreme Court Confirms: Pony Up the Documentary Transfer Tax

by Nossaman LLP on

The California Supreme Court just dealt a blow to taxpayers who transfer interests in real estate-owning LLCs and other entities. In 926 North Ardmore Avenue, LLC v. County of Los Angeles (Cal. S. Ct. No. S222329, June 29,...more

Commercial Division Flags Novel Issue of Reasonable Reliance In LLC Member Battle

In PMC Aviation 2012-1 LLC et al. v. Jet Midwest Group, LLC et al., No. 654047/2015, BL221447 (Sup. Ct. Jun. 21, 2017), Commercial Division Justice Shirley Kornreich denied a motion to dismiss a fraudulent inducement claim by...more

In Dispute Over Partnership’s Conversion to LLC, Court Finds No Duty to “Spoon-Feed” Sophisticated Investor

by Farrell Fritz, P.C. on

Pay attention to your K-1s or they may come back to bite you, is the lesson of Bruder v Hillman, Docket No. A-5055-15T1 [N.J. Super. Ct. App. Div. June 27, 2017], decided last week by a New Jersey appellate panel which...more

Important Changes To Illinois LLC Act Take Effect July 1

by Fox Rothschild LLP on

Changes to the Illinois Limited Liability Company Act set to take effect on July 1, 2017 may impact either your current Illinois LLCs or your future ventures. The changes generally serve to conform Illinois law more closely...more

The Arbitrability of German Shareholder Resolutions: Limited Partnerships Now also Covered

by White & Case LLP on

The German Federal Court of Justice (Bundesgerichtshof – "BGH") recently clarified that disputes over the validity of a limited partnership's shareholder resolutions may be submitted to arbitration ("Arbitrability III"...more

IRS gets upper hand in S corporation compensation audits

by Thompson Coburn LLP on

Any compensation the owner receives is subject to FICA tax, which imposes an equivalent burden. And the IRS frequently attacks owners who receive cash distributions from an S corporation, arguing that the distributions were...more

Special Purpose Vehicles’ Authority to File for Bankruptcy Revisited

by Dechert LLP on

In order to file for bankruptcy in the United States, a company needs to secure the appropriate corporate authorizations as required by its governing documents. What happens when a debtor does not obtain appropriate...more

Reissuance of Proposed Regulations on Partnership Audit Rules

by Dechert LLP on

The U.S. Treasury Department and the Internal Revenue Service (the “IRS”) have re-issued proposed regulations (the “Proposed Regulations”) on the new centralized partnership audit rules enacted as part of the Bipartisan...more

IRS Reissues Proposed Regulations for Centralized Partnership Audit Regime

by Morrison & Foerster LLP on

The new rules represent a complete overhaul of partnership audit, assessment, and collection procedures. Taxpayers should review and potentially amend partnership agreements before the new rules are scheduled to take effect...more

Is Your Partnership Ready For IRS Audit Changes?

Businesses across the nation are buzzing about Congressional action on tax reform - action that may not even occur. And yet, many partnerships and limited liability companies (LLCs) have not yet delved into significant IRS...more

What the New Kansas Income Tax Bill Will Mean for Individuals and Businesses

by Stinson Leonard Street on

The saga of Kansas income tax law changes concluded earlier this week when Kansas lawmakers overrode Gov. Sam Brownback's veto of a bill that dismantled the governor's signature tax cuts. With the state facing an estimated...more

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