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Operating Agreements

Navigating the Lifecycle of an Eponymous Brand (Part 2)

In this three-part series, we identified at least three distinct seasons in the lifecycle of an eponymous brand: (1) Choosing the Brand, (2) Commercialization, and (3) Legacy of the Brand. In Part 1, we discussed "Choosing...more

New District of New Jersey Case Shows Importance of Requiring Drivers to Form Corporate Entities in Misclassification Cases

by Genova Burns LLC on

Late last month, District of New Jersey Judge Robert B. Kugler partially granted FedEx Ground Package Systems Inc. (“FedEx”)’s Motion to Dismiss in a trucking misclassification case. The court dismissed several claims but...more

Business Divorce Nation: Five States, Five Cases

by Farrell Fritz, P.C. on

It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to state. But it’s also true that court decisions in one state can influence courts in other states, and can...more

Episode 4: John Cunningham Interview on Avoiding LLC Deadlock [Audio]

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

Beware Diversity Trap in Federal Court Business Divorce Cases Involving LLCs

by Farrell Fritz, P.C. on

I can count on one hand the number of federal court cases I’ve featured on this blog since I started it almost 10 years ago — and that’s no coincidence....more

Episode 6: Tom Rutledge Takes on LLC Member Expulsion  [Audio]

by Farrell Fritz, P.C. on

Expulsion a/k/a dissociation of an LLC member is a hot-button topic whether it’s pursuant to the terms of an operating agreement or by court order. This episode of the Business Divorce Roundtable features an interview with...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

Unpacking Your LLC: Tax Considerations in Limited Liability Company Liquidations

by Smith Anderson on

Has your LLC lost its luster? Has it outlived its usefulness as an asset management, asset protection, or, dare we say it, wealth transfer vehicle? Are you tired of discussing the company’s operations with the other owners?...more

Business Group News: The Connecticut Uniform Limited Liability Act

by Murtha Cullina on

The Connecticut Uniform Limited Liability Company Act, Public Act 16-97 (the "New Act") will become effective for all existing and new Connecticut LLCs on July 1, 2017. The New Act is more comprehensive, modern and well...more

Court Of Chancery Sanctions Litigant For Fabricating Evidence And Violating Orders In LLC Dispute

by Morris James LLP on

This case involves the unfortunate deterioration of a marriage, as well as the couple’s winery venture, carried on through various LLCs. The decision illustrates the seriousness with which the Court of Chancery views the...more

The New Partnership Audit Rules Are Coming, Have You Checked Your Operating Agreement?

by Dickinson Wright on

At the end of 2015, the Bipartisan Budget Act of 2015, as amended (the “BBA”), was enacted into law, and will be effective for tax years beginning after 2017. Under the BBA, the rules relating to the audit of partnership tax...more

Big Changes in Pennsylvania for LLCs, LLPs, LPs, and GPs

by Barley Snyder on

A major overhaul and modernization of the laws governing unincorporated associations in Pennsylvania took effect Tuesday. Act 170 of 2016, signed into law in November and currently being tracked by Barley Snyder...more

Do You Need to Do Business with Your Co-Owner’s Children? It Depends on the Language of Your Agreements.

by Murtha Cullina on

Owners of closely-held businesses, including family-owned companies, often agree to restrict the owners’ ability to later transfer their ownership interests to third parties. Such restrictions prevent one owner from selling...more

New Law to Govern Pennsylvania Entities

Effective February 21, 2017, Pennsylvania law will change significantly for business corporations, nonprofit corporations, and especially for limited liability companies (“LLCs”), limited partnerships (“LPs”), limited...more

Major Changes to Business Entity Laws in Pennsylvania Beginning February 21, 2017

by Saul Ewing LLP on

Pennsylvania has enacted a comprehensive set of laws (Act 170) modernizing the treatment of unincorporated associations, including limited liability companies, limited partnerships, limited liability partnerships, limited...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

First Department Affirms the Validity of an LLC Operating Agreement Adopted by Majority Members without Minority Consent: ...

In Shapiro v. Ettenson, No. 2849, 2017 BL 19404 (App. Div. 1st Dep’t Jan. 24, 2017), the Appellate Division, First Department recently affirmed a decision by Supreme Court Justice Kelly O’Neill Levy upholding an LLC operating...more

LLC Bound By Agreement Signed By Manager’s Manager

by Allen Matkins on

Justice Kenneth R. Yegan clearly and concisely frames the question in Western Surety Co. v. La Cumbre Office Partners, LLC, 2017 Cal. App. LEXIS 77 (2017)...more

Thinking About Becoming a Minority Member of a New York LLC Without an Operating Agreement? Think Again

by Farrell Fritz, P.C. on

An appellate decision last week sounds alarm bells for minority members of New York LLCs that have no operating agreement and for anyone considering becoming a minority member of an LLC without first having in place an...more

Operating Agreement Trumps Falsified Liquor License Application In Dispute Over LLC Membership

by Farrell Fritz, P.C. on

Oh, the things that can happen when the LLC members identified in the company’s operating agreement differ from those identified in official documents submitted to government agencies....more

Family Businesses Should Carefully Consider Indemnification and Advancement Obligations Included In Limited Liability Company...

by Murtha Cullina on

When a family business operated as a limited liability company brings on professional management, the parties typically focus on items in the operating agreement such as capital contributions, allocations and distributions,...more

Tenth Circuit Affirms Refusal To Compel Arbitration Where Agreements Contained Conflicting Arbitration Provisions

by Carlton Fields on

Mr. Ragab sued two financial companies and a corporate officer for misrepresentation and for violating several consumer credit repair statutes. There were six agreements between the parties, including, for example, a...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

LLC Operating Agreement Does Not Prevent Freeze-Out Merger

On October 24, 2016, Justice Charles E. Ramos of the New York Commercial Division denied a motion by minority members of a limited liability company (“LLC”) to enjoin a freeze-out merger that would cash out the minority...more

Managers of insolvent Missouri LLCs have no fiduciary duty to creditors

by Thompson Coburn LLP on

Two recent federal court decisions establish that managers of financially troubled Missouri limited liability companies do not owe a fiduciary duty to creditors of their troubled enterprises. Imperial Zinc Corp. v. Engineered...more

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