News & Analysis as of

Members

Reflecting The Parties’ Intentions In Operating Agreements: Reminder On Silent Terms

by Cole Schotz on

Does your operating agreement reflect your intentions? New Jersey’s Revised Uniform Limited Liability Company Act (the “RULLCA”) became effective on March 18, 2013. As noted in a post we authored in 2014, although initially...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

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

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

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

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

It’s Never Too Late to Gain Allies in Business Divorce Litigation

In closely-held businesses in New Jersey with multiple owners, it seems fairly obvious that the more co-owners you can recruit to your side in a business divorce litigation, the better. You don’t need a lawyer to tell you...more

The Limited Liability Company Agreement That Has No Name

by Allen Matkins on

Practitioners under California’s Revised Uniform Limited Liability Company Act will be familiar with the concept of an “operating agreement” (Cal. Corp. Code § 17701.02(s)). Indeed, I expect that nearly every LLC formed...more

Court Holds That Members of LLC May Owe Each Other Fiduciary Duties

by Winstead PC on

In B Choice v. Epicentre Development Associates, the federal district court affirmed a magistrate’s recommendations concerning whether members of an LLC owe fiduciary duties to each other in Texas. No. H-14-2096, 2017 U.S....more

Episode 4: John Cunningham Interview on Avoiding LLC Deadlock

by Farrell Fritz, P.C. on

A huge percentage of limited liability companies consist of two co-equal, 50% members, which poses the danger of management deadlock and dysfunction leading to dissolution or other litigation. In this episode, you'll hear my...more

Just How Much Power Does Your LLC’s Manager Have?

In a recently published decision — Western Surety Co. v. La Cumbre Office Partners LLC — a California Court of Appeal tackled the issue of LLC managerial authority from a different angle. The central issue in the case was...more

Tax court finds no self-employment tax for passive LLC member

by Thompson Coburn LLP on

Self-employment (SE) tax is one of the driving forces when a tax advisor recommends what type of entity to use for one’s business. This article describes SE tax, lists some common exceptions, explains the suggestion that an...more

WTO Appellate Body Report: Russia – Pigs (EU)

by White & Case LLP on

Decision: The WTO Appellate Body has affirmed that the Russian Federation violated its WTO obligations by imposing an EU-wide ban on live pigs and pork products, in breach of the WTO Agreement on the Application of...more

NJ Supreme Court Clarifies Standard for Member Expulsion under LLC Act

One of the features of the Revised Uniform Limited Liability Company Act (RULLCA) that has been adopted in Minnesota and many other states is that it allows for an LLC to expel a member by judicial order under certain...more

Court of Appeals Grants Leave to Appeal in Partnership Dissolution Case

On January 10, 2016, the New York Court of Appeals decided to hear a case that has significant consequence in the field of partnership dissolution. The case, Congel v. Malfitano,[1] concerns the allegedly wrongful...more

When Partnership “Members” Are Employees

by Allen Matkins on

Last week, I wrote about how AB 2883 changes the definition of “employee” vis-a-vis corporate directors. See Is A Corporate Director An Employee Subject To Workers’ Compensation? AB 2883 also rewrites the definition of...more

Sole Owners of Close Corporation and LLC Discover They're Not So Sole

by Farrell Fritz, P.C. on

What makes a shareholder a shareholder? What makes an LLC member a member? The simplicity of the questions belies the difficulties and endlessly unique fact patterns encountered in case after case involving close...more

MoFo New York Tax Insights - Volume 7, Issue 8

by Morrison & Foerster LLP on

ALJ holds that a Retailer Must File on a Combined Basis with a Related Intellectual Property Licensing Company - A New York State Administrative Law Judge has held that a retailer must file combined corporate franchise...more

Supreme Court Rules that Citizenship of a Real Estate Investment Entity is Based on Citizenship of its Members, Which Includes...

by King & Spalding on

On March 7, 2016, the U.S. Supreme Court (the “Supreme Court”) ruled that the citizenship of a Real Estate Investment Entity (“REIT”), for purposes of federal diversity jurisdiction, is based on the citizenship of its...more

Americold Realty Tr. v. ConAgra Foods, Inc.: Citizenship of Maryland REITs

by Miles & Stockbridge P.C. on

In Americold Realty Tr. v. ConAgra Foods, Inc., 136 S. Ct. 1012 (2016), the Supreme Court held that, for purposes of federal diversity jurisdiction, the citizenship of a Maryland real estate investment trust (formed pursuant...more

Leaving Real Estate Investment Trusts in the Cold: How the Americold Case Could Preclude Establishing Diversity Jurisdiction in...

The Supreme Court’s most recent citizenship opinion, Americold Realty Trust v. Conagra Foods, Inc., could make removing or keeping a case in federal court based on diversity more difficult for a statutory trust with a...more

Supreme Court Reinforces Strict Rule On Citizenship of Unincorporated Entities for Diversity Jurisdiction to the Detriment of...

Article III of the U.S. Constitution extends the jurisdiction of federal courts to “[c]ontroversies … between Citizens of different States.” U.S. Const. art. III, § 2, cl. 1. “This rule is easy enough to apply to humans, but...more

U.S. Supreme Court Reaffirms that Only “Humans and Corporations,” Not Unincorporated Entities Like a Trust, May Assert Their Own...

by Genova Burns LLC on

In a unanimous March 7, 2016 opinion authored by Justice Sotomayor, Americold Realty Trust v. Conagra Foods, Inc., et al., , the U.S. Supreme Court affirmed an oft-confused holding relating to diversity jurisdiction: the...more

Third Circuit Challenges Supreme Court to Reconsider Whether an LLC’s Citizenship Should Be Based on Its Members

by Blank Rome LLP on

Action Item: An LLC’s state of organization and principal place of business are legally irrelevant for purposes of determining diversity jurisdiction in the Third Circuit. Despite the practical difficulties this law imposes...more

WTO General Council Approves Kazakhstan's Accession; Liberia Progresses Toward Accession

by King & Spalding on

In the run-up to the World Trade Organization's (WTO) Ministerial Conference in December 2015 in Nairobi, Kenya, the Organization's Accessions Division has been particularly active. While twenty-two accession negotiations are...more

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