Limited Liability Company

News & Analysis as of

IRS Clarifies Benefit Coverage Requirements for Employees of Tax-Exempt Disregarded Entities

The Internal Revenue Service (IRS) recently issued General Counsel Memorandum 201634021 (Memorandum), clarifying benefit coverage requirements for employees of a disregarded LLC wholly owned by a single member tax-exempt...more

Proposed Regs May Limit US Estate Plan

On August 2, 2016, the US Treasury issued long-awaited pro- posed regulations under Code section 2704 that make comprehensive and very significant changes to the valuation of interests in many family-controlled entities for...more

Treasury Targets Tax Deferral in Leveraged Partnership Structures with New Regulations

The Treasury issued new final, temporary and proposed regulations that take aim at, and significantly reduce the effectiveness of, leveraged partnership structures intended to achieve tax deferral to the contributing partner....more

Federal Contractors Be Aware: Rule on Tax Delinquencies and Felony Convictions Finalized

The U.S. government finalized on Sept. 30, 2016, regulations amending the Federal Acquisition Regulation (FAR) that will affect an estimated 350,000 federal contractors. These new regulations were promulgated as a result of...more

Filing an Entity Income Tax Return Does Not Constitute a Check-the-Box Election

A single member limited liability company (SMLLC) is treated by default under the check-the-box rules as a disregarded entity. If a Form 8832 is filed, the owner can elect to treat it as a corporation/association....more

New Federal Contracting Requirements for Reporting Tax Liabilities and Felony Convictions

Federal acquisition officials recently finalized an interim rule intended to remove contractors with federal tax liabilities and felony convictions from the federal contracting arena. The interim rule, which took effect...more

What Are Fiduciary Duties Between Members In An Arizona LLC?

A few years I wrote an article named Are There Fiduciary Duties between Members in an Arizona LLC? At the time, there were no published decisions in Arizona on this issue. However, a bankruptcy judge had dismissed my...more

Employee Benefits Developments - September 2016

Final IRS Regulations Eliminate Requirement to File 83(b) Election with Tax Return - Under Section 83(a) of the Internal Revenue Code (the “Code”), if property is transferred in connection with the performance of...more

It's Time For Your Buy-Sell Checkup!

Shareholders, Partners and/or LLC members of any closely-held or family-held company should check the buy-sell formula contained in their Shareholder Agreement (sometimes called a Buy-Sell Agreement), Partnership Agreement or...more

Saudi Arabia Update - September 2016

As per the new Companies Law that came into effect on 2 May 2016 and which we have described in previous updates, single owner LLCs may be formed – whereas previously a minimum of two shareholders was required....more

Proposed regulations will significantly impact the valuation of interests in many family-controlled entities

New rules have been proposed by the Internal Revenue Service (IRS) which would regulate the valuation of transfers of business interests between family members. Based upon recent interpretation, it appears that the IRS is...more

Valuation Discounts to Family-Controlled Entities in Peril Under Proposed IRS Regulations

On August 4, the Internal Revenue Service finally issued much anticipated proposed regulations under Section 2704 of the Internal Revenue Code, which regulations are intended to significantly limit taxpayers' ability to apply...more

Changes to PA Business Corp. Law may affect the way Commercial Real Estate is owned in PA

For decades owners of commercial real estate in Pennsylvania took title in limited partnerships, not necessarily because it was the best entity to own and manage property, but because it minimized the effect of the Capital...more

Proposed Tax Regulations Limit Availability of Valuation Discounts to Family Business Owners

For family business owners who desire to transfer ownership of part of their business to the next generation, the valuation of the business interest is often an important factor to consider. This is especially true for family...more

IRS Proposes New Rules Designed to Restrict Valuation Discounts in Family Transfers

Partnerships and LLCs are common choices of entity for family-owned businesses, due to their flexibility and the many uses to which they can be put – including pooling of family assets, succession planning, asset protection,...more

The Importance of Buy-Sell Agreements

When business partners form a company and get started in their new venture, optimism and opportunity are usually in full supply. At that point, it is only natural to avoid thinking about some difficult questions about the...more

New Case Addresses LLC Member Expulsion in New Jersey

The New Jersey Supreme Court has decided a new case addressing what it takes to expel a member from an LLC in New Jersey. The applicable statute in New Jersey (42:2C-46(e)) has three subsections dealing with expelling a...more

Tennessee Business Court Accepts “Bad Faith Defense” to Dissolution of Dysfunctional LLCs

The Tennessee Business Court, a pilot project (1) (2) (3), has continued dealing with the resolution of business disputes, many of which involve fractious arguments between LLC members. Some disgruntled members pursue damages...more

Canadians Who Invested in U.S. LLPs and LLLPs Need to Rethink Their Choice of Entity

Historically, Canadian investors in U.S. partnerships benefitted from an extremely efficient income tax structure – i.e., a single level of tax, credit against Canadian taxes for taxes paid in the U.S., and an ability to...more

Proposed Treasury Regulations Regarding Valuation Discounts for Transfers of Family-Controlled Entities, if Enacted, Would Apply...

After years of anticipation, the U.S. IRS recently issued Proposed Treasury Regulations that would, if enacted in their current form, substantially eliminate most valuation discounts for family-controlled entities and result...more

Series LLCs in PA – Uncertainty Lessens

September 7, 2016 Publications Series LLCs are gaining traction across the country and, although Pennsylvania does not (yet?) permit the formation of Series LLCs, it has taken a major step in solidifying their acceptance...more

IRS Says Employees of Disregarded Single-Member LLC May Participate in Parent’s 403(b) and 457(b) Plans

Seyfarth Synopsis: A recently published IRS memorandum provides that employees of a single-member LLC treated as a disregarded entity must be allowed to participate in a section 403(b) plan sponsored by its parent 501(c)(3)...more

The End of Valuation Discounts in Estate Tax Planning?

Families with interests in closely held entities have long benefitted from reduced estate and gift tax exposure due to valuation discounts. If regulations proposed by the Internal Revenue Service are adopted in their present...more

What To Do If Filing Shareholder Dispute Litigation Might Potentially Harm The Company

To negotiate – or to sue? That is the question when the decision to sue might potentially hurt the company. A minority shareholder (or LLC member) in New Jersey is often faced with a difficult choice. Confronted with...more

Family-Controlled Businesses -- Tax Targets Again: Newly Proposed 2704 Regulations and Presidential Candidates' Positions

It's August of an election---year, and not just any election---year, a presidential election year. So, in less than 80 days, we'll all go to the polls and elect a new president. While Benjamin Franklin might have been right...more

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