Multi-Member Limited Liability Company Agreement Illinois by ktr11791

VIEWS: 51 PAGES: 7

Multi-Member Limited Liability Company Agreement Illinois document sample

More Info
									Table of Contents
CHAPTER 1. AN OVERVIEW OF THE LIMITED
LIABILITY COMPANY
§ 1:1    Introduction
§ 1:2    Origins and proliferation of the limited liability company
§ 1:3    Fundamental characteristics of the limited liability company
§ 1:4    The professional limited liability company
§ 1:5    Emergence of the limited liability partnership

CHAPTER 2. ENTITY CLASSIFICATION FOR FEDERAL
AND STATE PURPOSES
I.     IN GENERAL
§ 2:1    Introduction
§ 2:2    The history: Revenue Procedure 95-10 and the four critical characteristics

II.     DON'T “CHECK-THE-BOX” REGULATIONS
§ 2:3     Introduction
§ 2:4     Eligible entity
§ 2:5     —Entities classiŽed as corporations
§ 2:6     —Election
§ 2:7     —Protective election
§ 2:8     —Change of election
§ 2:9     LLCs created before 1997
§ 2:10    One-Member LLCs
§ 2:11    Foreign entities

III.     REVENUE RULINGS 99-5 AND 99-6
§ 2:12    Conversion of disregarded entity into partnership and vice versa
§ 2:13    —Revenue Ruling 99-5, disregarded entity to partnership
§ 2:14    Revenue Ruling 99-6, partnership into disregarded entity

IV.      CLASSIFICATION CHANGE TO OR FROM CORPORATION
§ 2:15    LLC classiŽed as partnership to corporation
§ 2:16    —Corporation to partnership
§ 2:17    —Disregarded entity to corporation
§ 2:18    —Corporation to disregarded entity
§ 2:19    Timing

V.      STATE CLASSIFICATION/TAXATION
§ 2:20 Generally
Appendix 2A. Entity ClassiŽcation Election

CHAPTER 3. CHOICE OF ENTITY AND PLANNING
CONSIDERATIONS
§ 3:1    Background
                                                                                      xvii
                                                         Limited Liability Company Handbook

I.      GENERAL PARTNERSHIPS
        A.    ADVANTAGES OF GENERAL PARTNERSHIPS
§ 3:2    Single level of tax
§ 3:3    Partnership debt included in partners' bases
§ 3:4    Special allocations
§ 3:5    Section 754 election
§ 3:6    Contributions and distributions
§ 3:7    Service partners

        B.    DISADVANTAGES OF GENERAL PARTNERSHIPS
§ 3:8        Liability
§ 3:9        Management
§ 3:10       Mutual agency
§ 3:11       Transfers
§ 3:12       Medical expenses
§ 3:13       Dissolution
§ 3:14       Employment taxes and liability issues
§ 3:15       I.R.C. § 708
§ 3:16       —Real estate development with appreciated property

        C.    CONVERSION TO LLC
§ 3:17       Generally

II.     LIMITED LIABILITY PARTNERSHIPS (LLPs)
§ 3:18       Generally
§ 3:19       Advantages of LLPs include liability protection
§ 3:20       —Ease of conversion
§ 3:21       Discrimination rules
§ 3:22       Disadvantages of LLPs
§ 3:23       —Scope of liability protection
§ 3:24       —Interstate transactions
§ 3:25       —Lack of uniformity: law undeveloped
§ 3:26       Conversion to LLC

III.     LIMITED PARTNERSHIPS
        A.    ADVANTAGES OF LIMITED PARTNERSHIPS
§ 3:27       Liability protection
§ 3:28       Management and dissolution
§ 3:29       Transfers
§ 3:30       State taxes and self-employment taxes
§ 3:31       Estate planning for families
§ 3:32       Creditor protection
§ 3:33       Well-established law

        B.    DISADVANTAGES OF LIMITED PARTNERSHIPS
§ 3:34       Complexity
§ 3:35       One-person limited partnerships



xviii
Table of Contents

§ 3:36     State taxation
§ 3:37     Medical expenses
§ 3:38     Public trading
§ 3:39     Accrual accounting

      C.    CONVERSION TO LLC
§ 3:40     Generally

IV.      LIMITED LIABILITY LIMITED PARTNERSHIPS (LLLPs)
§ 3:41     Generally
§ 3:42     Advantages and disadvantages of LLLPs
§ 3:43     Conversion to LLC

V.    C CORPORATIONS
      A.    ADVANTAGES OF C CORPORATIONS
§ 3:44     Liability protection
§ 3:45     Stock transfers
§ 3:46     Reorganizations
§ 3:47     Administration
§ 3:48     Lower corporate rates
§ 3:49     Medical beneŽts
§ 3:50     Control
§ 3:51     Dierent classes of stock
§ 3:52     QualiŽed small business stock
§ 3:53     Passive loss and at risk rules
§ 3:54     Ordinary losses allowed on I.R.C. § 1244 stock

      B.    DISADVANTAGES OF C CORPORATIONS
§ 3:55     Double taxation
§ 3:56     Corporate losses
§ 3:57     Net operating losses
§ 3:58     Formalities
§ 3:59     Contributions and distributions
§ 3:60     Service providers

      C.    CONVERSION TO LLC
§ 3:61     Generally

VI.      S CORPORATIONS
§ 3:62     Generally

      A.    ADVANTAGES OF S CORPORATIONS
§ 3:63     Still a corporation but with a single level of tax and ow through of losses
§ 3:64     Administration
§ 3:65     Ordinary losses allowed on I.R.C. § 1244 stock
§ 3:66     Self-employment taxes
§ 3:67     Public oering



                                                                                          xix
                                                      Limited Liability Company Handbook

§ 3:68      I.R.C. §§ 704(c) and 751
§ 3:69      Subsidiaries and LLCs
§ 3:70      Real estate development with appreciated property

       B.    DISADVANTAGES OF S CORPORATIONS
§ 3:71      QualiŽcation requirements
§ 3:72      Tax dierences with partnership
§ 3:73      Contributions and distributions
§ 3:74      One class of stock limitation
§ 3:75      Service providers
§ 3:76      State taxation
§ 3:77      Corporate-level tax
§ 3:78      Medical insurance
§ 3:79      Accrual accounting

       C.    CONVERSION TO LLC
§ 3:80      Generally

VII.      LIMITED LIABILITY COMPANIES (LLCs)
§ 3:81      Generally

       A.    ADVANTAGES OF LLCs
§ 3:82       Generally
§ 3:83       Liability protection
§ 3:84       Series LLCs
§ 3:85       Simplicity and lack of formalities
§ 3:86       At risk rules and nonrecourse debt
§ 3:87       Single-member LLCs
§ 3:88       —When is one, one?
§ 3:89       —Need for operating agreement
§ 3:90       —Like-kind exchanges
§ 3:91       —Employer identiŽcation numbers and employment taxes
§ 3:92       —Ancillary probate
§ 3:93       —100% penalty
§ 3:94       —Converting single-member LLC to multi-member LLC
§ 3:95       —Consolidated returns and reorganizations
§ 3:96       Transfer taxes
§ 3:97       Start-up expenses
§ 3:98       Community property states
§ 3:99       Creditor protection for multiple and single-member LLCs
§ 3:100      Issues for two-member LLCs
§ 3:101      Operating agreements
§ 3:102      Nonbusiness usage
§ 3:103      Agency
§ 3:104      Bankruptcy remote entities

       B.    DISADVANTAGES OF LLCs
§ 3:105      General partnership similarities
§ 3:106      Corporate classiŽcation and conversion



xx
Table of Contents

§ 3:107       Interstate transactions
§ 3:108       Lack of uniformity and developing law
§ 3:109       State taxation
§ 3:110       Estate planning for families
§ 3:111       Use by professionals
§ 3:112       Employment taxes and liability issues
§ 3:113       Pre-acquisition investigation
§ 3:114       Passive loss rules
§ 3:115       Public oering
§ 3:116       Real estate development with appreciated property

        C.    LLC AS ENTITY OF CHOICE
§ 3:117       Generally
§ 3:118       Charts comparing the state tax treatment of LLCs and LLPs

CHAPTER 4. CREDITOR PROTECTION AND GIFT AND
ESTATE TAX PLANNING USING LIMITED
PARTNERSHIPS AND LIMITED LIABILITY COMPANIES
I.     INTRODUCTION
§ 4:1     Background
§ 4:2     Economic Growth and Tax Relief Reconciliation Act of 2001

II.     ASSOCIATED ISSUES
§ 4:3        Business purpose/nonbusiness usage
§ 4:4        —ClassiŽcation of personal-use LLCs
§ 4:5        —Creditor protection
§ 4:6        —Management and transfer beneŽts
§ 4:7        — —Family home
§ 4:8        — —Possible business purposes
§ 4:9        —Marketable securities
§ 4:10       Near-death (and not-so-near-death) FLLEs
§ 4:11       —Judicial responses
§ 4:12       Planning
§ 4:13       I.R.C. § 704(e)
§ 4:14       Minor children as partners
§ 4:15       Basis
§ 4:16       Is a partnership or LLC interest a present interest?

III.     DISCOUNTS
§ 4:17       Introduction
§ 4:18       Minority-interest discount
§ 4:19       Lack-of-marketability discount
§ 4:20       I.R.C. § 2704
§ 4:21       I.R.C. § 2704(b) and the applicable restriction
§ 4:22       Lapses under I.R.C. § 2704(a)
§ 4:23       Gifting general partnership and managing membership interests

IV.      APPRAISERS
§ 4:24       Generally



                                                                             xxi
                                                 Limited Liability Company Handbook

Appendix 4A.   Family Limited Liability Company Agreement
Appendix 4B.   Family Limited Liability Limited Partnership Agreement

APPENDICES
APPENDIX   ST.   Sample Limited Liability Company Organizational Documents
APPENDIX   AL.   Alabama LLC Operating Agreement
APPENDIX   CA.   California LLC Operating Agreements
APPENDIX   CO.   Colorado LLC Articles of Organization and Operating Agreement
APPENDIX CT. Connecticut LLC Operating Agreement
APPENDIX DE. Delaware LLC Single Member Operating Agreement, Short Form
                Operating Agreement, and Family Operating Agreement
APPENDIX GA. Georgia LLC Articles of Organization and Operating Agreements
APPENDIX IA. Iowa LLC Articles of Organization and Operating Agreement
APPENDIX IL. Illinois LLC Articles of Organization and Operating Agreement
APPENDIX IN. Indiana LLC Articles of Organization and Operating Agreement
APPENDIX KS. Kansas LLC Articles of Organization and Operating Agreement
APPENDIX KY. Kentucky LLC Articles of Organization, Correction, Amendment, Articles
                of Merger, and Operating Agreements
APPENDIX LA. Louisiana LLC Articles of Organization and Operating Agreement
APPENDIX MA. Massachusetts LLC CertiŽcate of Organization and Operating
                Agreement
APPENDIX MD. Maryland LLC Articles of Organization and Operating Agreements
APPENDIX MN. Minnesota LLC Articles of Organization, Operating Agreement, and
                Member Control Agreement
APPENDIX MO. Missouri LLC Operating Agreements
APPENDIX NC. North Carolina LLC Operating Agreement
APPENDIX NE. Nebraska LLC Articles of Organization and Operating Agreement
APPENDIX   NH.   New Hampshire LLC Agreements
APPENDIX   NJ.   New Jersey CertiŽcates of Formation and LLC Operating Agreements
APPENDIX   NM.   New Mexico LLC Articles of Organization and Operating Agreements
APPENDIX   NY.   New York LLC Articles of Organization and Operating Agreement
APPENDIX   OH.   Ohio LLC Operating Agreement
APPENDIX   OK.   Oklahoma LLC Articles of Organization and Operating Agreement
APPENDIX   OR.   Oregon LLC Articles of Organization and Operating Agreements
APPENDIX   PA.   Pennsylvania LLC Operating Agreement
APPENDIX RI. Rhode Island Articles of Organization and Operating Agreement
APPENDIX TN. Tennessee LLC Articles of Organization and Operating Agreement
APPENDIX   TX.   Texas LLC Articles of Organization and Regulations (Annotated)
APPENDIX   VA.   Virginia LLC Operating Agreement (with Organizational Checklist)
APPENDIX   WA.   Washington LLC Operating Agreement
APPENDIX   WI.   Wisconsin LLC Articles of Organization (and Related Documents) and
                   Operating Agreements
Table of Laws and Rules



xxii
Table of Contents

Table of Cases
Index




                    xxiii

								
To top