Distribution Provisions in LLC Operating Agreements

At the formation of a limited liability company (LLC), an important consideration is the writing and adopting of the LLC operating agreement. One aspect that should be included in the operating agreement is how the profits (or losses) will be distributed among the members of the LLC. Determining each owner’s financial interest at the outset…

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Qualified Personal Service Corporations Avoid Flat Tax

A few months ago the U.S. Tax Court ruled on a case involving the treatment of qualified personal service corporations when those corporations are part of an affiliated group. The ruling has important, and beneficial, tax implications for qualified personal service corporations in these types   What is a Qualified Personal Service Corporation? Under §448…

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Fee Shifting Bylaws

The Delaware Supreme Court upheld on May 8 in ATP Tour v. Deutscher Tennis Bund a corporate bylaw stating that losing plaintiffs of intra-corporate litigation must reimburse the company’s litigation expenses. The decision may have large repercussions if other firms follow suit because it means that fee-shifting bylaws are generally recognized in Delaware as valid…

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