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Operating Agreement Vs Articles of Incorporation

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					SUMMARY TABLE OF CONTENTS

Table of Contents

Foreword

CHAPTER 1           Introduction

CHAPTER 2           How to Draft Operating Agreements for Multi-Member LLCs: Preliminary Matters

CHAPTER 3           LLCs: General Overview

CHAPTER 4           LLC Taxation: Introduction for the Non-Specialist

CHAPTER 5           The Twenty-Two Professional Tasks That Lawyers should Handle in LLC Formations

CHAPTER 6           How to Draft Operating Agreements for Single-Member LLCs

CHAPTER 7           How to Draft Articles of Organization

CHAPTER 8           The Professional Responsibilities of Lawyers Who Represent Multiple Clients in the
                    Formation of Multi-Member LLCs

CHAPTER 9           Forming Limited Liability Companies Under the Delaware Limited Liability Company
Act

CHAPTER 10          Non-Tax Choice of Entity: A Seven-Step Method

CHAPTER 11          Twelve Fundamental Errors in Drafting LLC Operating Agreements

CHAPTER 12          The 51 U.S. LLC Acts: Overviews for Use in LLC Formations

CHAPTER 13          LLC Case Law to Date: Its Content and Practical Implications

CHAPTER 14          How Many Types of Model Operating Agreements Should LLC Lawyers Have?

CHAPTER 15          The Lawyer’s Role as Teacher in LLC Formations

CHAPTER 16          Choosing Between Long-Form and Short-Form Model Provisions in Drafting Operating
                    Agreements for Multi-Member LLCs

CHAPTER 17          The Use of Planning Memos with LLC Formation Clients

CHAPTER 18          Protecting LLC Members from Social Security Taxes

CHAPTER 19          Statutory Conversions of Corporations to Limited Liability Companies

CHAPTER 20          Understanding, Evaluating and Using Model Operating Agreements For Multi-Member
                    LLCs

SAMPLE FORMS

COMMENTARY

INDEX



                                                      1
TABLE OF CONTENTS

Foreword

Chapter 1 - INTRODUCTION

1.01    The Key Ideas in This Book
1.02    Can Lawyers Rely on A Generic Handbook in State-Specific LLC Formations?

Chapter 2 - HOW TO DRAFT OPERATING AGREEMENTS FOR MULTI-MEMBER LLCs:
              PRELIMINARY MATTERS

2.01    Introduction: Definition of Operating Agreement; Validity; Need for Written Agreement
2.02    Why Are Operating Agreements Important for Multi-Member LLCs and Their Members?
2.03    What Objectives Should Lawyers Have in Drafting Operating Agreements for Multi-Member
        LLCs?
2.04    What Knowledge Do Lawyers Need in Order to Draft Operating Agreements?
2.05    What Practice Tools Do Lawyers Need in Order to Draft Operating Agreements?
2.06    The Importance of Practical Experience in Drafting Operating Agreements

Exhibit 2-1     Types of Issues That Third Parties May Wish to Review in LLC Operating Agreements

Exhibit 2-2    Types of Questions on Which Operating Agreements Should Provide Users’ Manual
Guidance to Members and Managers

Chapter 3 - LLCs: GENERAL OVERVIEW

3.01    Introduction: The Purpose of This Chapter
3.02    Definition of the LLC Form; LLC Advantages
3.03    Chief Legal Characteristics of the LLC Form
3.04    LLC Formations: Documents and Costs
3.05    LLC Origins; Milestones in the Development of the LLC Form
3.06    LLC Usage
3.07    Key Terms Describing LLC Statutory Rules; the Purpose and Content of Default Rules
3.08    Single-Member and Multi-Member LLCs; LLC Members; Membership Rights; LLC Interests
3.09    LLC Management Structures and Decision-Making Procedures
3.10    LLC Statutory Rules on Important Business Organization Law Issues
3.11    Comparison of LLCs and Corporations from the Viewpoint of Business Organization Law
3.12    How to Choose between LLCs and Corporations on the Basis of Business Organization Law
        Factors
3.13    Situations in Which the Corporate Form May Be Preferable to the LLC from a Business
        Organization Law Viewpoint
3.14    How to Choose among LLCs, Sole Proprietorships, General and Limited Partnerships, and
        Limited Liability Partnerships on the Basis of Business Organization Law Factors
3.15    Areas of Law Other Than Business Organization Law Relevant to LLC Practice
3.16    The Significance of LLCs for Lawyers
3.17    A Note on LLC Case Law




                                                2
Chapter 4 - LLC TAXATION: INTRODUCTION FOR THE NON-SPECIALIST

4.01    Introduction; The Four Types of Taxes to Which LLCs and Their Members Are Subject
4.02    How Much Do Lawyers Need to Know about LLC Taxation in Order to Draft Operating
        Agreements:
4.03    The Four Federal Income Tax Regimens Applicable to Businesses and Their Owners
4.04    Federal Tax Classification
4.05    Social Security Taxes: Overview
4.06    Choice of Tax Regimen: The Process; Typical Outcomes for LLCs
4.07    Sole Proprietorship Taxation
4.08    Taxation under Subchapter C
4.09    Taxation under Subchapter K: Overview
4.10    Principal Federal Income Tax Advantages Unique to Subchapter K
4.11    Principal Federal Income Tax Disadvantages Unique to Subchapter K
4.12    The Impact of Subchapter K on the Drafting of Operating Agreements: Overview
4.13    Should the Operating Agreement of an LLC Include 704(b) Safe Harbor Provisions Even if It
        Does Not Provide for Special Allocations?
4.14    Liability of LLC Members for Social Security Taxes
4.15    Taxation under Subchapter S

Chapter 5 - THE TWENTY-TWO PROFESSIONAL TASKS THAT LAWYERS SHOULD HANDLE IN
              LLC FORMATIONS

5.01    Introduction
5.02    The 22 Tasks That Legal and Tax Professionals Should Handle in Assisting Clients in Entity
        Formations

Exhibit 5-1     The 20 Steps in the LLC Formation Process
Exhibit 5-2     The 22 Professional Tasks That Lawyers should Handle in Entity Formations
Exhibit 5-3     Questions to Ask Clients Concerning Basic Factual Issues in Entity Formations
Exhibit 5-4     The 26 Main Types of “Miscellaneous” Legal Issues Potentially Relevant in LLC
                Formations

Chapter 6 - HOW TO DRAFT OPERATING AGREEMENTS FOR SINGLE-MEMBER LLCs

6.01    Introduction: Definition of Operating Agreement of Single-Member LLCs; Are Operating
        Agreements Necessary for Single-Member LLCs?
6.02    The Single-Member LLC Formation Process; Types of Knowledge and Practice Tools Needed by
        Lawyers in Order to Assist in Forming Single-Member LLCs
6.03    Drafting Issues in Operating Agreements for Single-Member LLCs
6.04    Veil-Piercing




                                                  3
Chapter 7 - HOW TO DRAFT ARTICLES OF ORGANIZATION

7.01   Introduction
7.02   The Nature and Purpose of Articles of Organization; Their Relationship with Operating
       Agreements
7.03   Comparison of Articles of Organization with Articles of Incorporation
7.04   Drafting Issues in Articles of Organization
7.05   When Should Articles of Organization Be Filed?
7.06   Tax Implications of Statements in Articles of Organization

Chapter 8 - THE PROFESSIONAL RESPONSIBILITIES OF LAWYERS WHO REPRESENT
              MULTIPLE CLIENTS IN THE FORMATION OF MULTI-MEMBER LLCs

8.01   Introduction
8.02   The Duties of Intermediaries in LLC Formations: Overview
8.03   Factors that Lawyers Should Consider in Determining Whether an Intermediary Arrangement Is
       Appropriate in an LLC Formation
8.04   Factors that LLC Organizers Should Consider in Determining Whether an Intermediary
       Arrangement Is Appropriate in an LLC Formation
8.05   Practice Guidelines for Lawyers Serving as Intermediaries in LLC Formations

Chapter 9 - FORMING LIMITED LIABILITY COMPANIES UNDER THE DELAWARE LIMITED
              LIABILITY COMPANY ACT

9.01   Introduction: Forming LLCs Under the Delaware Limited Liability Company Act-Overview of
       the Formation Process; Using this Chapter and Its Exhibits in Forming Delaware LLCs
9.02   Enactment of the Act; Its Importance in LLC Practice
9.03   Codification of the Act; Structure; Current Version; Responsible Administrative Agency
9.04   General Characteristics of the Act
9.05   Web Sites Relevant to the Act
9.06   Legislative History of the Act; Other Sources for Interpreting the Act
9.07   Administrative Regulations Under the Act
9.08   Secondary Authorities Concerning the Act
9.09   Important Features of the Act
9.10   Case Law Concerning the Act; the Decision of the Delaware Supreme Court in Elf Atochem
       North America, Inc. v. Jaffari et al.
9.11   Comments on the Mandatory Rules of the Act
9.12   Comments on the Default Rules of the Act
9.13   Comments on the Permissive Provisions of the Act
9.14   Comments on Statutory Gaps in the Act
9.15   Drafting Pitfalls in the Act
9.16   Choosing Between the Act and Other LLC Acts-Factors Favoring the Act
9.17   Choosing Between the Act and Other LLC Acts-Factors Favoring Other LLC Acts
9.18   Use of the Act in Forming Corporate-Forms LLCs; Iridium, LLC as a Model of a Corporate-Form
       LLC




                                                 4
Exhibit 9-1        Title vs. Actual Content of the Eleven Subchapters of the Delaware Limited Liability
                   Company Act (the “Act”)
Exhibit 9-2        Definitions of Key Terms of the Act
Exhibit 9-3        Questions and Answers About Key Issues Under the Act
Exhibit 9-4        Model Certificate of Formation for XYZ, LLC (a Delaware LLC) (unofficial form; no
official form exists)
Exhibit 9-5        [Unofficial] Form of Cover Letter for Use in Submitting LLC Certificates of Formation
to the Delaware Secretary of State
Exhibit 9-6        Questions and Answers About Filing Certificates of Formation Under the Act
Exhibit 9-7        LLC Agreement of Iridium, LLC, as Amended Through December 7, 1998
Exhibit 9-8        Master List of Provisions of the Delaware LLC Act Potentially Relevant to LLC
Formations
Exhibit 9-9        [Reserved.]
Exhibit 9-10       Provisions of the Act Concerning LLC Disputes
Exhibit 9-11       Types of LLC Matters and Voting Requirements Under the Delaware Default Rules
Exhibit 9-12       Mandatory Rules of the Act Relevant to LLC Formations
Exhibit 9-13       Default Rules of the Act Relevant to LLC Formations
Exhibit 9-14       Prompting Provisions of the Act Relevant to LLC Formations

Chapter 10 - NON-TAX CHOICE OF ENTITY: A SEVEN-STEP METHOD

10.01   Introduction and Summary
10.02   The Seven-Step Method: Theoretical and Practical Foundations
10.03   The Seven Steps: Practice Comments
10.04   Applying the Seven-Step Method: A Concrete Illustration

Exhibit 10-1     Checklist: Business Organization Law Issues, Miscellaneous Legal Issues, and Non-
                 Legal Issues Potentially Relevant to Clients in Choosing Among Available Business
                 Organization Forms on Non-Tax Grounds

Chapter 11 - Twelve Fundamental Errors in Drafting LLC Operating Agreements

11.01   Introduction
11.02   The Twelve Fundamental Errors

Exhibit 11-1     16 Criteria for Evaluating LLC Operating Agreements
Exhibit 11-2     20 Guidelines on How to Write Good English Prose
Exhibit 11-3     11 Guidelines for Achieving a Good Contract Format and Style

Chapter 12 - THE 51 U.S. LLC ACTS: OVERVIEWS FOR US IN LLC FORMATIONS

12.01   Introduction
12.02   Usefulness of the Overviews in Making Non-Tax Choice of Entity Determinations
12.03   Comments on Overview Categories
12.04   Methodological Issues in Compiling the Overviews

Exhibit 12-1     Template Used in Creating the LLC Overviews
Exhibit 12-2     Overview of Delaware LLC Act from an Entity Formation Viewpoint



                                                    5
Chapter 13 - LLC CASE LAW TO DATE-ITS CONTENT AND PRACTICAL IMPLICATIONS

13.01   Introduction
13.02   Cases on LLC Business Organization Law Issues; Practical Implications
13.03   Cases on LLC Miscellaneous Legal Issues; Practical Implications

Chapter 14 - HOW MANY TYPES OF MODEL OPERATING AGREEMENTS SHOULD LLC
              LAWYERS HAVE?

14.01   Introduction
14.02   Model Operating Agreements for Single-Member LLCs
14.03   Model Operating Agreements for Member-Managed Multi-Member LLCs
14.04   Model Operating Agreements for Member-Managed Multi-Member LLCs

Exhibit 14-1    Table of Generic LLC Operating Agreements

Chapter 15 - THE LAWYER’S ROLE AS TEACHER IN LLC FORMATIONS

15.01   Introduction
15.02   Advising, Advocating, Drafting, Teaching
15.03   What Should We Teach Our LLC Formation Clients?
15.04   16 Guidelines For Effective Teaching In LLC Formations

Exhibit 15-1    Questions About LLCs
Exhibit 15-2    Questions About LLCs-With Plain-English Answers for LLC Formation and Conversion
                Clients

Chapter 16 - CHOOSING BETWEEN LONG-FORM AND SHORT-FORM MODEL PROVISIONS IN
               DRAFTING OPERATING AGREEMENTS FOR MULTI-MEMBER LLCs

16.01   Introduction
16.02   Miscellaneous Background Points Concerning the Long-Form and Short-Form Model Provisions
        in Exhibits B-1 Through B-32

Exhibit A      Captions for LLC Operating Agreement Sections Addressing the 32 Main Types of Legal
               and Tax Issues Likely to Be Relevant to Organizers of Manager-Managed Multi-Member
               LLCs
Exhibits B-B32 The 32 Sections-Long-Form and Short-Form Versions

Chapter 17 - THE USE OF PLANNING MEMOS WITH LLC FORMATION CLIENTS

17.01   Introduction
17.02   Benefits of Planning Memos
17.03   Structure and Content of Planning Memos
17.04   Objections to the Use of Planning Memos
17.05   Planning Memos for Entities That Are Forming Wholly Owned Single-Member LLC Subsidiaries

Exhibit 17-1    Planning Memo for Cosmic Widgets, LLC



                                                   6
Chapter 18 - PROTECTING LLC MEMBERS FROM SOCIAL SECURITY TAXES

18.01   Introduction and Summary
18.02   Prop. Reg.        1.1402(a)-2-Background
18.03   The Four Tests Under the Prop. Reg. for Determining Whether an LLC Member Is a Limited
        Partner for Purposes of Section 1402(a)(13)
18.04   The Prop. Reg. Single-Class-of-Interest Rule and Two-Classes-of-Interest Rule
18.05   Choosing Between Subchapter K and Subchapter S to Minimize Social Security Tax
18.06   In the Absence of Final Guidance from the IRS, How Are CPAs Advising LLC Members About
        LLC Set Issues?
18.07   Since Prop. Reg. 1.1402(a)-2 Is Merely a Proposed Regulation, to What extent Can LLC Members
        Rely on It in Planning for Set Avoidance?

Exhibit 18-1    Illustration of How to Implement the Prop. Reg. Two-Classes-of-Interest Rule

Chapter 19 - STATUTORY CONVERSIONS OF CORPORATIONS TO LIMITED LIABILITY
               COMPANIES

19.01   Introduction
19.02   LLC and Corporate Statutory Law as Relevant to Statutory Conversions-Key Points of
        Comparison
19.03   Statutory Conversion Law-Overview
19.04   PLR 200528021-Summary of the Ruling; Practical Implications
19.05   PLR 200548021-Summary of the Ruling; Practical Implications
19.06   To What Extent Can Corporations Other Than XYZ Rely on Rulings PLR 200528021 and
        200548021?
19.07   Conclusion

Exhibit 19-1    Glossary of Business Organization Law Terms Relevant to Statutory Conversion of
                Corporations to LLCs
Exhibit 19-2    Table-Laws Governing Statutory Conversions of Corporations to LLCs in the 50 States
                and the District of Columbia
Exhibit 19-3    Table-Laws Governing Statutory Interspecies Mergers of Corporations into LLCs in the
                50 States and the District of Columbia

Chapter 20 - UNDERSTANDING, EVALUATION AND USING MODEL OPERATING
                 AGREEMENTS FOR MULTI-MEMBER LLCs
20.01 Introduction and Summary
20.02 Standards of Quality in Evaluating Individual Agreements in a Model Operating Agreement Set
20.03 Standards Applicable in Evaluating Agreement Sets as a Whole
20.04 Operating Agreement Issues that Model Operating Agreements Should Address Briefly or Not at
        All
20.05 General Guidelines for Using Model Operating Agreements
20.06 General Guidelines for Adapting the Aspen Agreements for Use Under Specific LLC Acts
20.07 How The Aspen Agreements Differ from Other Model Operating Agreements
20.08 The Benefits that Sound Model Operating Agreements Can Provide to Lawyers-Competence,
        Efficiency, Profitability




                                                  7
Exhibit 20-1   Standards Applicable in Evaluating Model Operating Agreements
Exhibit 20-2   20 Standards of Quality for Good English Prose
Exhibit 20-3   11 Standards of Quality for Good Contract Prose and Format




                                               8
TABLE OF CONTENTS

SAMPLE FORMS

General Introduction to Forms 1.1 through 7.2

Form 1.3         Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC That
                 Is Owned by an Individual, That Is Managed by Its Member, and That Is Taxable as a
                 Sole Proprietorship

Form 1.4         Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC That
                 Is Owned by an Individual, That Is Managed by Its Member, and That Is Taxable as an S
                 Corporation

Form 1.5         Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC That
                 Is Owned by an Entity and That Is Subject to Federal Income Taxation as a Disregarded
                 Entity

Form 2.1         Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-That
                 Has Two Member, That Has an Informal General Partnership Management Structure and
                 That Is Taxable Under Subchapter K

Form 3.2         Model Operating Agreement (Generic) for Member-Managed Multi-Member LLC-Three
                 or More Members-Simple General Partnership Management Structure-Taxable Under
                 Subchapter S

Form 4.3         Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Two
                 Members-Informal Limited Partnership Management Structure-Controlled by a Single
                 Member-Manager-Taxable Under Subchapter K-Tailored for Use Under Prop. Reg.
                 1.1402(a)-2

Form 10.1        General Introduction For Users-Model Operating Agreement (Generic) for Manager-
                 Managed Multi-Member LLC Taxable as a Partnership

NOTE: These and all the other model operating agreements and provisions in this book appear on the CD
that accompanies this book.




                                                  9
DRAFTING LLC OPERATING AGREEMENTS

COMMENTARY

Commentary on Form 10.1
Comments on the Title Page of Form 10.1, Etc
Comments on Section 1
Comments on Section 2
Comments on Section 3
Comments on Section 4
Comments on Section 5
Comments on Section 6
Comments on Section 7
Comments on Section 8
Comments on Section 9
Comments on Section 10
Comments on Section 11
Comments on Section 12
Comments on Section 13
Comments on Section 14
Comments on Section 15
Comments on Section 16
Comments on Section 17
Comments on Section 18
Comments on Section 19
Comments on Section 20
Comments on Section 21
Comments on Section 22
Comments on Section 23
Comments on Section 24
Comments on Section 25
Comments on Section 26
Comments on Section 27
Comments on Section 28
Comments on Section 29
Comments on Section 30
Comments on Section 31
Comments on Section 32
Comments on Section 33
Comments on Signature Page

APPENDICES--SEE CD

INDEX




                                               10
TABLE OF CONTENTS FOR CD-ROM COMPONENT

Statutes Delaware Code Annotate (as amended through [date])

Exhibit 9-7     LLC Agreement of Iridium, LLC, as Amended Through December 7, 1998

MODEL OPERATING AGREEMENTS

Form 1.1        Model Operating Agreement (Generic) for Member-Managed Single-Member LLC that
                Is Owned by an Individual and is Subject to Federal Income Taxation as a Disregarded
                Entity (Sold Proprietorship)

Form 1.2        Model Operating Agreement (Generic) for Member-Managed Single-Member LLC that
                Is (I) Owned by an Individual and (II) Subject to Federal Income Taxation as an S
                Corporation

Form 1.3        Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC that
                Is Owned by an Individual, that Is Managed by Its Member, and that Is Taxable as a Sole
                Proprietorship

Form 1.4        Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC that
                Is Owned by an Individual, that Is Managed by Its Member, and that Is Taxable as an S
                Corporation

Form 1.5        Model Operating Agreement (Generic) for Manager-Managed Single-Member LLC that
                Is Owned by an Entity and that Is Subject to Federal Income Taxation as a Disregarded
                Entity

Form 2.1        Model Operating Agreement (Generic) for Member-Managed Multi-Member LLC-that
                Has Two Members, that Has an Informal General Partnership Management Structure and
                that Is Taxable Under Subchapter K

Form 2.2        Model Operating Agreement for (Generic) Member-Managed Multi-Member LLC-Three
                Members-Informal General Partnership Management Structure-Taxable Under
                Subchapter K

Form 3.1        Model Operating Agreement (Generic) for Member-Managed Multi-Member LLC-Two
                Members-Simple General Partnership Management Structure-Taxable Under Subchapter
                S

Form 3.2        Model Operating Agreement (Generic) for Member-Managed Multi-Member LLC-Three
                or More Members-Simple General Partnership Management Structure-Taxable Under
                Subchapter S

Form 4.1        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Two
                Members-Informal Limited Partnership Management Structure-Controlled by a Single
                Member-Manager-Taxable Under Subchapter K-Not Tailored for Use Under Prop. Reg.
                1.1402(a)-2

Form 4.2        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Controlled by a
                Single Member-Manager-Taxable Under Subchapter K-Not Tailored for Use Under Prop.
                Reg. 1.1402(a)-2




                                                 11
Form 4.3        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Two
                Members-Informal Limited Partnership Management Structure-Controlled by a Single
                Member-Manager-Taxable Under Subchapter K-Tailored for Use Under Prop. Reg.
                1.1402(a)-2

Form 4.4        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Controlled by a
                Single Member-Manager-Taxable Under Subchapter K-Tailored for Use Under Prop.
                Reg. 1.1402(a)-2

Form 5.1        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Two
                Members-Informal Limited Partnership Management Structure-Controlled by a Single
                Member-Manager-Taxable Under Subchapter S

Form 5.2        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Controlled by a
                Single Member-Manager-Taxable Under Subchapter S

Form 6.1        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Only
                Two Members-Informal Limited Partnership Management Structure-Member-Controlled-
                Taxable Under Subchapter K-Not Tailored for Use Under Prop. Reg. 1.1402(a)-2

Form 6.2        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Member-
                Controlled-Taxable Under Subchapter K-Not Tailored for Use Under Prop. Reg.
                1.1402(a)-2

Form 6.3        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Only
                Two Members-Informal Limited Partnership Management Structure-Member-Controlled-
                Taxable Under Subchapter K-Tailored for Use Under Prop. Reg. 1.1402(a)-2

Form 6.4        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Member-
                Controlled-Taxable Under Subchapter K-Tailored for Use Under Prop. Reg. 1.1402(a)-2

Form 7.1        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Only
                Two Members-Informal Limited Partnership Management Structure-Member-Controlled-
                Taxable Under Subchapter S

Form 7.2        Model Operating Agreement (Generic) for Manager-Managed Multi-Member LLC-Three
                or More Members-Informal Limited Partnership Management Structure-Member-
                Controlled-Taxable Under Subchapter S

Form 10.1      General Introduction for Users-Model Operating Agreement (Generic) for Manager-
Managed Multi-Member LLC Taxable as a Partnership




                                                12
PLUG-IN PROVISIONS

Plug-in Provision 1                 Model Provision-Amendment of Operating Agreement to Add New Member

Plug-in Provision 2                 Model Provisions for Buy-Out of Member in Form of “Shoot-Out”

Plug-in Provision 3                 Model Provision Establishing Class of Capital Interests and Class of Profits
Interests

Plug-in Provision 4                 Model Provision for Use in Avoiding Self-Employment Tax Under Proposed
                                    Regulation 1.1402(a)(13)

Plug-in Provision 5                 Internal Revenue Code Section 704(B) Safe Harbor Provisions and Related Tax
                                    Provisions

MISCELLANEOUS FORMS

Misc. Form 1            Durable Power of Attorney for Financial and Business Matters

Misc. Form 2            Employment Agreement Between LLC and Manager or Assistant Manager

Misc. Form 3            Engagement Letter (Single Representation)

Misc. Form 4            Engagement Letter (Joint Representation)

Misc. Form 5            Bylaws for Use By Corporate-Form LLCs

APPENDICES (on CD)
Appendix A: Practice Aids

Appendix A-1            Checklists

Appendix A-2            Select Bibliography of Books and Articles on LLC Tax Issues

Appendix A-3            Select Bibliography of Books and Article on LLC Legal Issues

Appendix A-4            LLC Tax Issues (Charts)

Appendix A-5            LLC Legal Issues (Charts)

Appendix A-6            Glossary of LLC Terms

Appendix A-7            Practice Aids for Use in Forming LLC’s under Form 3A

Appendix B: Primary Source Materials

Appendix B-1            Key Federal Tax Materials

Appendix B-2            Surveys of LLC Federal and State Case Law


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