2000 Limited Liabilities Companies: Planning and Compliance for Today's Practitioner with CDROM

by James C., III Thomas; Alan S. Gutterman; Robert L. Brown

• ISBN13: 9780156060875
• ISBN10: 0156060876
• Edition: 99th
• Format: Paperback
• Copyright: 1999-06-01
• Publisher: Harcourt

Table of Contents

Preface	p. xii
About the Authors	p. xv
About the Electronic Files	p. xvi
Disc Contents	p. xx
Introduction to Limited Liability Companies
What Is a Limited Liability Company?	p. 3
Partnership Treatment	p. 3
Corporate Treatment	p. 5
Use of a New Form of Entity	p. 5
Characteristics of a Limited Liability Company	p. 6
Limited Liability Company Statutes--Statutory Rules	p. 7
Limited Liability Company Statutes--Default Provisions	p. 7
Limited Liability Company Statutes--Creditors and Other Third Parties	p. 8
Limited Liability Company Statutes--Mandatory Provisions	p. 9
Limited Liability Company Statutes--Diversity and Uniformity	p. 9
Drafting the Operating Agreement	p. 10
Emergence of Limited Liability Companies	p. 11
Notes	p. 12
Business Law Aspects of Limited Liability Companies
Formation of Limited Liability Companies	p. 21
Contents of the Articles of Organization	p. 22
Operating Agreement	p. 22
Number of Members Required	p. 23
Names of Limited Liability Companies	p. 24
Registered Agent and Office	p. 24
Amendment of Articles of Organization	p. 24
Purposes of Limited Liability Companies	p. 25
Powers of Limited Liability Companies	p. 25
Capital Structure
Default Rules Governing Sharing of Distributions and Profits	p. 26
Form and Amounts of Contributions	p. 26
Liability for Contribution Obligations	p. 27
Distributions by Limited Liability Companies	p. 28
Rights to Distributions	p. 28
Sharing of Distributions	p. 28
Restrictions on Distributions of In-Kind Property	p. 29
Wrongful Distributions	p. 29
Management and Control of Limited Liability Companies	p. 30
Management--Power to Govern the Limited Liability Company	p. 30
Member-Managed Limited Liability Companies	p. 30
Manager-Managed Limited Liability Companies	p. 31
Election of Managers	p. 32
Ability of Members to Bind a Member-Managed Limited Liability Company	p. 32
Ability of Managers and Members of a Manager-Managed Limited Liability Company to Bind the Limited Liability Company	p. 33
Ownership of the Limited Liability Company and Its Property	p. 34
Ownership of Limited Liability Company Property	p. 34
Members' Interests in a Limited Liability Company	p. 34
Rights of Members' Creditors	p. 34
Certification of Member's Interests	p. 35
Liability of Members and Managers	p. 35
Member Liability for Unpaid Contributions and LLC Distributions	p. 36
Application of the Doctrine of Piercing the Corporate Veil	p. 36
Contractual Guarantees by Members of a Limited Liability Company	p. 37
Litigation Involving Limited Liability Companies	p. 37
Suits By and Against Limited Liability Companies	p. 37
Derivative Lawsuits	p. 38
Individual Lawsuits	p. 38
Indemnification	p. 39
Fiduciary Duties of Managers and Members	p. 39
Fiduciary Duties in Member-Managed Limited Liability Companies	p. 40
Fiduciary Duties in Manager-Managed Limited Liability Companies	p. 41
Waiver of Fiduciary Duties	p. 42
Securities Law Implications of Limited Liability Companies	p. 43
Are Interests in Limited Liability Companies Securities?	p. 43
Analysis under Federal Law	p. 43
Analysis under State Laws	p. 45
Use of Limited Liability Companies Outside the Jurisdiction of Formation	p. 46
Qualification of Foreign Limited Liability Companies	p. 47
Notes	p. 47
Tax Aspects of Forming a Limited Liability Company
Classification of the Limited Liability Company as a Partnership for Tax Purposes Under the "Check-the-Box" Regulations	p. 57
Structuring the Limited Liability Company to Achieve Classification as a Partnership for Tax Purposes (A Historical Perspective)	p. 59
Introduction	p. 59
Analysis of Corporate and Non-Corporate Characteristics	p. 61
Summary	p. 72
IRS Rulings	p. 72
Tax-Free Formation of a Limited Liability Company	p. 73
State Tax Treatment of a Limited Liability Company	p. 80
Notes	p. 80
Tax Aspects of Operating the Limited Liability Company
Basic Flow-Through Taxation	p. 89
Limited Liability Company Distributions	p. 90
Basis	p. 92
Allocations of Profits and Losses	p. 98
Application of Passive Activity Loss Provisions	p. 103
Method of Accounting	p. 105
Compensation Issues	p. 107
Self-Employment Taxes	p. 108
Employee Benefits	p. 110
Transfers of Interest in LLC	p. 110
Mergers and Conversions	p. 111
Dissolution and Liquidation	p. 113
Limited Liability Companies Not Taxed as Partnerships	p. 114
Election Out of Partnership Tax Treatment Under [section] 761	p. 114
Election Out of Partnership Tax Treatment Under "Check-the-Box" Regulations	p. 115
Notes	p. 116
Fundamental and Structural Changes
Transfers of Limited Liability Company Interests	p. 127
Rights and Obligations of Assignee of Financial Interest	p. 128
Assignors' Rights and Obligations	p. 128
Voluntary Withdrawal and Dissociation of Members	p. 129
Voluntary Withdrawal	p. 129
Dissociation of Members	p. 130
Rights of Dissociating Member upon Withdrawal	p. 130
Dissolution of Limited Liability Companies	p. 131
Continuation of an LLC after Dissolution	p. 132
Winding up the Affairs of an LLC	p. 132
Distribution of Assets upon Termination of an LLC	p. 133
Conversion to the Limited Liability Company Format; Merger and Consolidation	p. 133
Tax Treatment of Conversion	p. 134
Incorporation of a Limited Liability Company	p. 135
Notes	p. 136
Use of Limited Liability Companies in Particular Situations
Professionals	p. 143
Cash Method of Accounting	p. 143
Status of Professionals under Limited Liability Company Statutes	p. 144
Use of Limited Liability Companies by Accountants	p. 144
Use of Limited Liability Companies by Lawyers	p. 144
Real Estate Transactions	p. 145
Venture and Growth Businesses	p. 146
Corporate Joint Ventures	p. 147
Estate Planning	p. 148
What Entity Should Be Used?	p. 149
Notes	p. 150
Comparison of the Limited Liability Company to Other Entity Choices
Comparison of the LLC to a General Partnership	p. 155
Nontax Comparisons	p. 155
Tax Comparison	p. 156
Comparison of the LLC to a Limited Partnership	p. 157
Nontax Comparisons	p. 157
Tax Comparisons	p. 158
Comparison of the LLC to a C Corporation	p. 158
Nontax Comparisons	p. 158
Tax Comparisons	p. 160
Comparison of the LLC to an S Corporation	p. 161
Nontax Comparisons	p. 161
Tax Comparisons	p. 162
Limited Liability Partnerships	p. 164
Introduction to Limited Liability Partnerships	p. 164
Liability Distinctions	p. 164
Choice-of-Entity Matrix	p. 166
Notes	p. 171
Appendixes
LLC Formation Checklist	p. 175
Limited Liability Company Statutes	p. 181
State Income Tax Classification of Limited Liability Companies	p. 193
Sample Articles of Organization	p. 201
Sample Operating Agreements	p. 203
How to Network with Attorneys to Build Your Practice	p. 315
Sample Letters	p. 321
The Limited Liability Company: A New Answer to the Choice of Entity Question	p. 327
Continuing Professional Education	p. 347
Index	p. 367
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