LLC

The Operating Agreement Should Address an Exit Strategy In limited liability companies involving a small number of members, the Operating Agreement will need to restrict transfers. That restriction assures that the parties will continue to do business with the same people, and not strangers. Restrictions on transfers of interests by small passive investors are less […]

What Is a Subsidiary? A subsidiary company is a child company owned by a “parent” company. A subsidiary is tethered to the parent when all of the child’s ownership interests are in the name of the parent company. Subsidiaries are powerful tools. They allow for independence and for the protections needed for prudent risk-taking. Often, […]

A Delaware LLC is protected from creditors that target a member The charging order that allows creditors of a member to pursue their distributions, but not LLC assets or other member assets, applies uniquely to LLCs in Delaware. Creditors are not entitled to LLC property or an ownership stake in the LLC, while The Uniform […]

A More Modern Form of the LLC According to the US Supreme Court in a case about twenty years after the 14th Amendment was adopted, Santa Clara County v. Southern Pacific Railroad Co., the court extended that personhood to artificial business entities. What happened as a result of that was it gave business entities the […]

We’re in America, so people get sued. Those with the temporary discomfort of a cup of hot coffee to the skin decide to sue—and sue everyone they can. They sweep the streets. The allegedly injured see dollar signs and decide to sue the artist, the touring company and the Queen Theater venue all as defendants, […]

LLC Charging Order: Two-Way Protection Unlike many other states, one key benefit of the Delaware LLC not available to corporations in any state is that the Delaware LLC also offers a second type of protection: the “reverse shield.” Choosing to form a Delaware LLC creates a two-way shield. Unlike the traditional shield, the reverse shield […]