Читать книгу Ultimate LLC Compliance Guide - Michael Spadaccini - Страница 37

There is a common misconception that LLCs can operate with nearly no formalities. Certainly, the formalities required of LLCs are less than those required of corporations. When LLCs first began appearing as an alternative to corporations, many professionals and academics loudly touted the lack of formalities as a key selling point. But as time has passed, there have been some court decisions that are tending to indicate that LLCs will be held to a fairly high standard in order to preserve the their liability shield. We discuss LLC liability protection in detail in Section V: LLC Lawsuits and Personal Liability Protection, with some actual personal liability cases.

Remember: state statutes will only dictate the minimum standard of formalities and recordkeeping that an LLC must follow. One should always endeavor to follow a higher standard of formalities and record-keeping than the statutory minimum. There are several important benefits to following higher standards.

The single greatest reason is for liability protection. The central concept in LLC liability protection is separateness. Formalities and record-keeping support this concept. A lack of formalities and record-keeping can be interpreted by a court to indicate a lack of separateness of individual and entity. The judge in Labadie Coal Co. v. Black said it better than I ever could: “Faithfulness to the formalities is the price paid to the corporation fiction, a relatively small price to pay for limited liability.”

If you ever sell your business, a potential buyer and his or her professional team will examine your records. If those records are in a poor state, it will tend to lower the price you’ll get or delay the sale.

Good records can ward off action by the IRS. The IRS imposes its own standards for recordkeeping; generally those standards are higher than the statutory minimum.

So, you should venture to maintain formalities and keep appropriate records. Key concepts in maintaining LLC liability protection are separateness, as mentioned above, and control and domination . (One of the elements considered in disallowing liability protection is whether LLC members exercise such complete control that the entity is merely the “alter ego” of its members.) So, if you are an owner of a single-member LLC, you must strive even harder to observe formalities and keep appropriate records.

LLCs are required to keep the following records, and we discuss some of these specific topics later in the book:

• Minutes of all member and manager meetings, as well as copies of all notices to members and managers, and any proxy voting materials

• A record of all material and substantive actions taken by the managers or owners without a meeting (We’ll discuss later the sorts of actions that are material and substantive and should be submitted to a proper vote and recorded.)

• A record of all actions taken by any committee of the managers

• A list of the names and addresses of current managers and owners

• All written communication by the LLC to its owners within the last five years

• All periodic reports of the LLC submitted to the secretary of state

With respect to financial statements, there is generally no requirement that an LLC provide formal financial statements to its members. Such a practice would tend to develop by the practices that an LLC chooses to follow. Providing such information, however, is good company governance and can be very good for owner relations.

The financial statements should contain the report of the public accountant who prepared the statements or, if prepared by the LLC without the use of a public accountant, a statement of the person preparing the report indicating whether or not the report was prepared in accordance with generally accepted accounting principles (GAAP). Finally, the LLC must provide a written summary to owners of any indemnification or loans or advances to managers and of any decision by the managers to issue ownership shares in exchange for promissory notes or future services. This notice must be provided with or before any notice of owners’ meetings. LLC records are a major topic in this book that we’ll cover at length throughout.