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Table of Contents

Title Page

Preface

PART I - Sources of Authority

CHAPTER 1 - LLCs and Limited Liability Company Acts

SIMPLICITY AND FLEXIBILITY

POTENTIAL DISADVANTAGES OF THE LIMITED LIABILITY COMPANY

IS AN LLC A TYPE OF CORPORATION?

HOW LLCS ARE FORMED

HOW LLCS ARE GOVERNED

PROFESSIONAL LIMITED LIABILITY COMPANIES

LLCS VS. S CORPORATIONS

LIMITED LIABILITY COMPANY ACTS

FILING MECHANICS

ARTICLES OF ORGANIZATION AND THE OPERATING AGREEMENT

PURPOSES AND POWERS

LIMITED LIABILITY COMPANY NAMES

MEMBERSHIP INTEREST: THE LLC EQUIVALENT OF CORPORATE STOCK

FUNDAMENTAL CHANGES

DISSENTERS’ RIGHTS/MEMBERS’ APPRAISAL RIGHTS

LLC RECORDS

FOREIGN LLCS

WHERE DO YOU ORGANIZE?

WHY ARE YOU REQUIRED TO FILE DOCUMENTS?

FINAL THOUGHTS ON LIMITED LIABILITY COMPANY ACTS

CHAPTER 2 - Articles of Organization

WHAT INFORMATION SHOULD YOU INCLUDE IN YOUR ARTICLES?

HOW DO YOU AMEND YOUR ARTICLES?

SHOULD YOU ORGANIZE BY YOURSELF OR HIRE AN ATTORNEY?

FINAL THOUGHTS ON ARTICLES OF ORGANIZATION

CHAPTER 3 - The Limited Liability Company Operating Agreement

HOW IS AN OPERATING AGREEMENT MADE EFFECTIVE?

HOW DO YOU AMEND YOUR LLC’S OPERATING AGREEMENT?

FINAL THOUGHTS ON OPERATING AGREEMENTS

CHAPTER 4 - Taxes and General Information for All Businesses

LOCAL TAXES, LOCAL LICENSES

PARTNERSHIP TAXATION

LLC TAXES: WHAT TO FILE AND HOW TO FILE AT YEAR-END

LLC TAXES: EMPLOYMENT AND PAYROLL TAXES

THREE LANGUAGES FOR THREE TYPES OF BUSINESS ENTITIES

PART II - The Limited Liability Company Players

CHAPTER 5 - Promoters, Managers, Officers, and Agents

PROMOTERS

ORGANIZERS

MANAGERS, BOARD OF MANAGERS, AND COMMITTEE OF MANAGERS

DUTIES OF DUE CARE AND LOYALTY

STATUTORY SOURCES OF LIABILITY FOR MANAGERS

ADVISORY BOARDS

OFFICERS

INDEMNIFICATION AND INSURANCE FOR MANAGERS AND OFFICERS

MEMBERS

PRINCIPLES OF AGENCY LAW

FINAL THOUGHTS ON THE PLAYERS

PART III - The Limited Liability Company Players

CHAPTER 6 - LLC Ownership and LLC Stock

EQUITY, OWNERSHIP, STOCK, AND SECURITIES LAWS

CHARACTERISTICS AND CLASSES OF MEMBERSHIP INTERESTS

DIVIDENDS

PRE-EMPTIVE RIGHTS

MISCELLANEOUS STOCK CONCEPTS

CHAPTER 7 - Agreements to Control Ownership and Management

RESTRICTING ADMISSION OF NEW MEMBERS

EXPELLING MEMBERS FROM THE LLC

BUYING BACK THE INTERESTS OF DEPARTING MEMBERS

PART IV - LLC Formalities: Meetings, Minutes, and Resolution of Managers and Members

CHAPTER 8 - Managers’ Meetings

IS IT A REGULAR MEETING OR A SPECIAL MEETING?

IS NOTICE OF THE MEETING REQUIRED?

IS THERE A MEETING AGENDA?

ARE FORMAL PROCEDURES REQUIRED?

ARE THERE ANY VOTING REQUIREMENTS FOR THE MANAGERS?

CAN MANAGERS ACT WITHOUT A FORMAL MEETING?

WHO SERVES AS MANAGERS?

MANAGER LIABILITY AND THE BUSINESS JUDGMENT RULE

FINAL THOUGHTS ON MANAGERS’ MEETINGS

ANNUAL MEETING OF MANAGERS CHECKLIST

CHAPTER 9 - Members’ Meetings

IS YOUR MEETING ANNUAL OR SPECIAL?

WHO CAN CALL A SPECIAL MEETING?

IS NOTICE OF THE MEETING REQUIRED?

IS A QUORUM REQUIRED?

WHO CAN VOTE AT A MEMBERS’ MEETING?

CAN MEMBERS ACT WITHOUT A MEETING?

ANNUAL MEETING CHECKLIST FOR MEMBERS

CHAPTER 10 - Minutes of Meetings, Resolutions by Consent, and More Paperwork

RECORDING MEETINGS OF MANAGERS AND MEMBERS WITH MINUTES

AN ALTERNATIVE TO MINUTES: WRITTEN CONSENT RESOLUTIONS

ANNUAL AND PERIODIC REPORTS

LLC RECORD-KEEPING

LLC IDENTITY AND INTEGRITY

LLC PAPERWORK CHECKLIST

PART V - Lawsuits and Personal Liability Protection

CHAPTER 11 - Suing and Being Sued as an LLC

THE LLC SUES

THE LLC IS SUED

OWNER SUITS

FINAL THOUGHTS ON LAWSUITS

CHAPTER 12 - How to Effectively Manage Your LLC to Maximize Liability Protection

INTRODUCTION

DISREGARDING THE LLC ENTITY

INSTRUMENTALITY/ALTER EGO

CONTRACT AND TORT CLAIMS

TAXICAB CASES

PERSONAL INJURY CASES AND CLAIMS

CONTRACT CREDITORS AND CONTRACT CLAIMS

GOVERNMENT CLAIMS

PARENT AS ALTER EGO OF SUBSIDIARY

THE SEVEN MOST IMPORTANT LIABILITY PROTECTION RULES

LIABILITY PROTECTION: CORPORATION VS. LLC

FINAL THOUGHTS ON LIABILITY PROTECTION

CHAPTER 13 - Using Your Professional Team

GUIDELINES FOR SELECTING AND WORKING WITH YOUR PROS

FINAL THOUGHTS ON USING YOUR PROFESSIONAL TEAM

CONCLUSION

APPENDIX A - Supplement LLC Forms

APPENDIX B - State Reference Information

APPENDIX C - Glossary

Index

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Ultimate LLC Compliance Guide

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