LLC operating agreements may be the document most commonly drafted or reviewed and negotiated by transactional counsel. The almost-default choice of entity that LLCs have become make these agreements pervasive. But their virtual universality belies their complexity. The tax allocation and property distribution provisions alone—where tax reality and cash reality may differ substantially—require a firm grasp of tax law, the client’s distribution plans, and financial accounting. Management provisions vary depending on whether the entity is member-managed or manager-managed, with fiduciary duties modifiable in a way they are not in other entities. These and other provisions make LLC operating agreements challenging to draft and negotiate. This program provides you with a real-world guide to drafting the most important provisions of LLC operating agreements. Part 1—April 19, 2018 • Drafting the most important provisions of LLC operating agreements • Planning for different types of capital contributions—capital vs. services, current contributions vs. future capital calls • Management provisions depending on whether the LLC is member- or manager-managed • Fiduciary duties of members, modifications, and the “LLC opportunity doctrine” • Restrictions on transfers of capital and profits interests • Relationship between tax allocation and property distribution provisions, including IRC Section 704(b) accounting Part 2—April 20, 2018 • Drafting allocation provisions for maximum tax benefit and to secure the safe harbor • How “payments to member” (not distributions) are treated for financial vs. tax purposes • Drafting ordinary distributions, minimum tax distributions, waterfall distributions, liquidating distributions • Rights of first refusal, rights of first offer, buy-sell provisions—understanding the alphabet soup of exit alternatives • Liquidation of the entity and sale of an individual member’s interests Speakers: Leon Andrew Immerman is a partner in the Atlanta office of Alston & Bird LLP, where he concentrates on federal income tax matters including domestic and international tax planning and transactional work for joint ventures, partnerships, limited liability companies, and corporations. He is past chair of the ABA Business Law Section Committee on Taxation and the State Bar of Georgia Business Law Section Partnership and LLC Committee. He is coauthor of Georgia Limited Liability Company Forms and Practice Manual (2d ed. 1999, and annual supplements). Lee Lyman is a shareholder in the Atlanta office of Carlton Fields Jorden Burt LLP. She provides corporate and transactional advice with an emphasis on advising clients engaged in ongoing business transactions, including joint ventures, mergers and acquisitions, and business restructurings. She has extensive experience in LLC and partnership law, organization, structure, and operations and structuring equity and debt financing for the acquisition, development, and sale of real estate and in general corporate transactions. (1*4248, 6/13/17; 1*4249, 6/14/17)
LLC operating agreements may be the document most commonly drafted or reviewed and negotiated by transactional counsel. The almost-default choice of entity that LLCs have become make these agreements pervasive. But their virtual universality belies their complexity. The tax allocation and property distribution provisions alone—where tax reality and cash reality may differ substantially—require a firm grasp of tax law, the client’s distribution plans, and financial accounting. Management provisions vary depending on whether the entity is member-managed or manager-managed, with fiduciary duties modifiable in a way they are not in other entities. These and other provisions make LLC operating agreements challenging to draft and negotiate. This program provides you with a real-world guide to drafting the most important provisions of LLC operating agreements.
Part 1—April 19, 2018
• Drafting the most important provisions of LLC operating agreements • Planning for different types of capital contributions—capital vs. services, current contributions vs. future capital calls • Management provisions depending on whether the LLC is member- or manager-managed • Fiduciary duties of members, modifications, and the “LLC opportunity doctrine” • Restrictions on transfers of capital and profits interests • Relationship between tax allocation and property distribution provisions, including IRC Section 704(b) accounting
Part 2—April 20, 2018
• Drafting allocation provisions for maximum tax benefit and to secure the safe harbor • How “payments to member” (not distributions) are treated for financial vs. tax purposes • Drafting ordinary distributions, minimum tax distributions, waterfall distributions, liquidating distributions • Rights of first refusal, rights of first offer, buy-sell provisions—understanding the alphabet soup of exit alternatives • Liquidation of the entity and sale of an individual member’s interests
Speakers: Leon Andrew Immerman is a partner in the Atlanta office of Alston & Bird LLP, where he concentrates on federal income tax matters including domestic and international tax planning and transactional work for joint ventures, partnerships, limited liability companies, and corporations. He is past chair of the ABA Business Law Section Committee on Taxation and the State Bar of Georgia Business Law Section Partnership and LLC Committee. He is coauthor of Georgia Limited Liability Company Forms and Practice Manual (2d ed. 1999, and annual supplements).
Lee Lyman is a shareholder in the Atlanta office of Carlton Fields Jorden Burt LLP. She provides corporate and transactional advice with an emphasis on advising clients engaged in ongoing business transactions, including joint ventures, mergers and acquisitions, and business restructurings. She has extensive experience in LLC and partnership law, organization, structure, and operations and structuring equity and debt financing for the acquisition, development, and sale of real estate and in general corporate transactions.
(1*4248, 6/13/17; 1*4249, 6/14/17)