Limited Liability Company & Partnership Answer Book, Fourth Edition

This easy-to-read, Q&A resource includes 300+ answers to help you custom design an LLC or LLP, weigh the pros and cons of converting your business to an LLC or LLP, capitalize on the advantages of converting to an LLC or LLP, ensure IRS compliance and avoid "double taxation" of revenues; also includes a state-by-state listing of statutory provisions regarding structure and organization; registration procedures and filing fees; a comparison chart of the LLC, LLP, regular and S corporation, limited partnership, and general partnership; with model operating agreements. By Alson R. Martin, Esq.

For most companies, doing business as a limited liability company or partnership offers significant benefits. Limited Liability Company & Partnership Answer Book's easy-to-read Q&A format makes clear and accessible both the legal rules and important business decisions regarding LLCs and LLPs.

With more than 300 authoritative answers, you'll understand how to:

• Custom design an LLC or LLP that provides liability protection to principals and agents -- and one-time taxation of revenue
• Weigh the pros and cons of converting your business to an LLC or LLP
• Capitalize on the operational, tactical, and strategic advantages of converting to an LLC or LLP
• Ensure compliance with the IRS and avoid "double taxation" of revenues
• Set up accurate and efficient tax and accounting systems
• Use a family limited partnership or LLC in business succession planning

Plus, this practical handbook contains a state-by-state listing of statutory provisions regarding structure and organization; registration procedures and filing fees; a comparison chart of the LLC, LLP, regular and S corporation, limited partnership, and general partnership; and model operating agreements.

Note: Online subscriptions are for three-month periods.

List of Questions 

CHAPTER 1 Choice or Change of Entity 

• Choice of Entity 
• Choosing the “Right” Business Form for a New Business: Making a Non-Tax Choice of Entity Analysis 
• Conducting Business 
• Choosing the “Right” Tax Regimen: Making a Tax Choice of Entity Analysis 
• Defining Terms 

CHAPTER 2 Formation 

• Comparing LLC Acts and Statutes 
• Forming the LLC 
• Converting an Existing Business to an LLC 
• Merging with LLCs and Other Entities 
• Qualifying as a Foreign LLC 

CHAPTER 3 Tax Classification 

• The “Check-the-Box” Regulations 
• Continuity of Life 
• Free Transferability of Interest 
• Centralized Management 
• Limited Liability 

CHAPTER 4 Capital Contributions and Distributions 

• Formation 
• Enforcement of Commitments to Contribute Capital 
• Distributions 

CHAPTER 5 Management and Control; Members; Managers; Series LLCs; Fiduciary Duties and Certain Litigation Issues 

• The Operating Agreement 
• Management of the LLC 
• Member-Managed LLCs 
• Manager-Managed LLCs 
• Choice of Member-Managed or Manager-Managed LLC 
• Fiduciary Duties and Duty of Care 
• Derivative Suits 
• Other Litigation Issues Involving LLCs 

CHAPTER 6 Members' Interests 

• Overview 
• Transferability of an Interest 
• Creditors' Remedies & Charging Orders 
• Transfers of Members' Interests; Transferees & Assignees 
• Withdrawal 
• Limited Liability 
• Property of the LLC 
• Other Members' Interests Issues: Divorce, Employment Discrimination, and Worker's Compensation 

CHAPTER 7 Taxation 

• Introduction 
• Tax Basis 
• Capital Accounts and Other Items 
• Formation and Consequences to the Members 
• Consequences to the LLC: Start-Up Decisions and Tax Elections 
• Partnership Operations 
• Single-Member LLCs (SMLLC) 
• Large Partnerships, Publicly Traded Partnerships, and International Partnerships 
• Allocations Attributable to Nonrecourse Debt 
• Other Restrictions on the Allocation of LLC Income 
• Restrictions on the Use of LLC Losses by Members 
• Transfer of an LLC Interest 
• Termination and Liquidation of the LLC 
• Conversion of a Corporation or Partnership to an LLC; Conversion of an LLC to a Corporation; Mergers Involving LLCs 
• Employee Benefits 
• Qualified Retirement Plans 
• Self-Employment Tax 
• Other Tax Issues 
• Options, Warrants, Convertible and Restricted Interests 
• Anti-Abuse Regulations Applicable to LLCs and LLPs 
• W-9 and EIN Considerations 
• Bipartisan Budget Act of 2015 

CHAPTER 8 Dissolution/Termination of an LLC 

• Dissolution Events 
• Members' Rights Upon a Dissolution Event 
• Process of Dissolution 

CHAPTER 9 Securities and Bankruptcy Laws 

• Securities Laws 
• Bankruptcy Laws 
• Bankruptcy of a Member 

CHAPTER 10 Specialized Uses for Business, Estate Planning, and Personal Use Assets 

• General Business Applications 
• Real Estate and Joint Ventures 
• Charitable and Non-Profit Activities 
• Health Care: Integrated Delivery Systems 
• Estate Planning 
• Personal Use Assets 
• Security Interests 

CHAPTER 11 Limited Liability Partnerships 

• In General 
• Choosing an LLP or an LLC 
• Extent of Liability Protection 
• Formation, Costs, and Operational Issues 
• LLPs and the Effects of Dissolution, Dissociation, and Termination 
• Conversions and Mergers 
• Application of Securities and Employment Discrimination Law to LLPs 

CHAPTER 12 Professional LLCs and LLPs: Comparison with General Partnerships and Professional Corporations 

• General Partnership of Professionals: No Longer the Preferred Practice Entity 
• Characteristics of the Corporation for Professionals 
• Professional Corporation Statutes: Similarities and Differences 
• The LLC for Professionals 
• The LLP for Professionals 
• Using Two Entities 
• Multistate Professional Practices 
• Specific Types of Professional Liability 
• Issues in Using the LLP 
• Issues in Using the LLC 
• Issues in Using the PC 
• Fiscal Year, Medicare, Pensions, and Employee Benefits 
• Medical/Dental Insurance and Reimbursement Plans 
• Special Fringe Benefit Tax Rules for Regular C Corporations 

CHAPTER 13 Family Limited Partnerships and Family LLCs 

• Overview 
• Creditor Protection 
• Tax Advantages to the Business 
• Income Tax Advantages and Issues to the Partners/Members 
• Gift and Estate Tax Advantages 
• Valuation Discounts 
• Alternatives to the Family Limited Partnership or Family LLC 
• Challenges to the Family Limited Partnership and Family LLC 

CHAPTER 14 LLC Formation Best Practices 

• LLC Theory 
• Formation 
• Operating Agreements 
• Taxation 
• Asset Protection 
• Miscellaneous Issues 

APPENDIX A Registration of Foreign LLCs 
APPENDIX B Analysis of LLCs by State 
APPENDIX C Comparison Chart: Regular and S Corporations, LLC, Limited Partnership (LP), General Partnership (GP), and LLP 
APPENDIX D Limited Liability Company Checklist 
APPENDIX E Articles of Organization-Regular LLC; Delaware & Illinois Series LLC 
APPENDIX F Member-Managed LLC Operating Agreement 
APPENDIX G Manager-Managed LLC Operating Agreement 
APPENDIX H Partnership Agreement for Professional Firm 
APPENDIX I “Check the Box” Treasury Regulations 
APPENDIX J Revised Uniform Limited Liability Company Act  
APPENDIX K Family Limited Partnership Agreement 
APPENDIX L Sample Estate Planning Provisions and Comments 
APPENDIX M State Formation and Ownership Requirements 
APPENDIX N Operating Agreement of LLC a [State] Limited Liability Company 
APPENDIX O Family Limited Partnership Documents Requested by IRS in Estate Tax Audits 
APPENDIX P Modifications of “Standard” Delaware Operating Agreement for an LLC Taxed as S Corporation 
APPENDIX Q Excerpts from Tax Cuts and Jobs Act of 2017 

TABLES

• Administrative Announcement Table 
• Internal Revenue Code 
• Treasury Regulations Sections 
• Table of Cases 

INDEX