Response to RFE on Ownership and Control of U.S. Entity

For purposes of L-1 Classification, the foreign entity must present evidence of ownership and control of the U.S. Entity in order to prove that a qualifying relationship exists.  My client's business immigration attorney received a lengthy Request for Evidence, and I was asked to draft a letter addressing the ownership and control issue, as well as governance and contributions. After all, I created the business structure, so it seemed natural that I was tasked with explaining the parent-subsidiary relationship from a limited liability company law viewpoint. By way of background, my client's structure is as follows: Venezuelan owned foreign entity which [...]

By |October 15th, 2020|Categories: LLC|Tags: , |

There is no such thing as a Limited Liability Corporation

There is no such thing as a Limited Liability Corporation.  Sure, corporations to an extent enjoy limited liability, but that does not make them limited liability corporations -- corporations are just corporations.  The LLC designation actually stands for limited liability company, i.e. the LLC, and confusing company with corporation is legally incorrect. This may seem rather self-evident, but I get alerts from Google Scholar every time a judicial opinion, or order, uses the words "limited liability corporation," and I am alerted nearly every single day with multiple examples. In fairness to the court, however, most of the time (but not always!) [...]

By |February 20th, 2019|Categories: Asset Protection|Tags: , , , |

Response to Attorney Question: Multiple LLCs

An attorney question came across my desk the other day and I thought I would share my response with the collective. She queried whether multiple LLCs or a single LLC was most appropriate to hold her client's rental properties, and solicited experiences and opinions on how other attorneys deal with the issue, especially in light of the famed Olmstead decision, personal liability, adequacy of insurance, and tenants by the entirety (TBE) ownership structures.  What follows is my spark notes response: Those are interesting questions and ones that I discuss with my clients and in presentations quite frequently.  Ultimately, the creation [...]

LLCs as Creatures of Contract: Don’t Overestimate this Legal Fiction

I recently sat down with a nonprofit to discuss the asset protection tenets of LLCs, among other things, and was particularly intrigued by where our conversation headed.  It was a smart group, to boot, so I took them on a ride all the way back to what LLCs are in their most primitive form: creatures of contract. LLCs exist by virtue of state statutory schemes.  In Florida, the Revised Limited Liability Company Act (the "Act") requires the filing of articles of organization with the Department of State in order to form the LLC.  The articles of organization is really just a contract between the [...]

The LLC Is No Magic Carpet | Personal Liability

I'm consulted quite frequently on the efficacy of using an LLC to protect oneself from personal liability.  I find that most people, including prospective clients and their advisors, believe the LLC to be the magic carpet that will carry them far, far away from personal liability should potential litigation start to appear on the horizon.  Well, magic is rarely a defense, and throwing your liability-prone asset into the arms of the LLC may not get you very far. This myth is promulgated by a loose understanding of the liability protection offered by the LLC.  The LLC is certainly a behemoth of an entity [...]

Arizona Charging Order Subject to Garnishment Limit

The plaintiff successfully sued the defendant in Arizona.  The judgment required the defendant to pay restitution to the plaintiff by way of $300 minimum monthly payments.  This amount later increased to $750 and lo the defendant could no longer afford it.  The plaintiff then sought a charging order against the defendant's limited liability company (LLC) which the court granted. Arizona Law: Charging Order and Garnishment Under Arizona law, "[A] court of competent jurisdiction may charge the member's interest in the limited liability company with payment of the unsatisfied amount of the judgment plus interest."  A.R.S § 29-655(A).  (internal quotations omitted.)  In [...]

By |May 25th, 2016|Categories: Asset Protection|Tags: , , , |

Split Your LLC Interest Into Two Parts

LLC ownership is evidenced by an LLC interest.  The nature of this interest is determined by contract -- the LLC operating agreement -- or by statute.  Uncommon to most, your ownership in the LLC is actually split up into two parts: (1) transferable interest and (2) nontransferable interest. Transferable Interest and Nontransferable Interest The transferable interest is your economic right to receive distributions and share in the profits of the LLC.  The nontransferable interest includes your right to vote, obtain information (i.e. books and records) and that other than your transferable interest.  Together, both of these interests make up your LLC [...]

By |April 3rd, 2016|Categories: Asset Protection|Tags: , |

Writing A Beautiful Business Purpose

German philosopher Gotthold Ephraim Lessing once said that "for me the greatest beauty always lies in the greatest clarity." It follows, then, that drafting a beautiful and adequate business purpose for your company requires a certain degree of clarity.  Regrettably, Lessing would be much disappointed with the way most business purposes are written today. In fact, the oft-neglected business purpose, much to the dismay of Lessing, has many-a-times been reduced to the following five word sentence:  "Any and all lawful business." Neither clear nor beautiful. Rhetoric aside, though, defining your business purpose with sufficient clarity actually serves a purpose beyond the actual [...]

By |January 7th, 2016|Categories: Asset Protection|Tags: , , |

Consider An LLC With A Board of Directors

It certainly isn't commonplace to think of the limited liability company (hereinafter "LLC") as having a board of directors.  In fact, it may be that most individuals, upon hearing the words "board of directors," immediately assume the topic of conversation revolves around the action of some corporation.  In other words, it might be thought that having a board of directors is exclusively reserved to corporations, and not LLCs. I'll take the liberty and cut through your anticipation: they are not.  By way of introduction, all business entities are persons under the law by means of the contracts that create them. For example, the LLC [...]

By |November 10th, 2015|Categories: Asset Protection|Tags: , , , |
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