5

My understanding is that the "flow-through" treatment is specifically a tax law concept. The LLC has its own income, which it can use to pay expenses or acquire assets or for whatever other purpose, and such assets become the property of the LLC. It's just that when it comes time to pay taxes, the LLC's net income is taxed as income to the owner. But that ...


5

This is neither unusual nor illegal, assuming that the buyback price is specified in the agreement. If your friend does not wish to take advantage of the "nice discount" he can decline the deal, and decide for himself whether he wishes to buy shares without restriction, at the market rate. (It would be interesting to know what happens if he sells his shares ...


4

First - do it all with an operating agreement in writing; always - no exceptions! Second - what you are describing in fairly simple for any competent lawyer to draft. The voting section of the operating agreement needs to include a provision stating something to the effect that until a Trigger Event occurs, Big Member will have 90% of the voting power of ...


4

Such agreements are extremely common In fact, companies can issue redeemable shares to the market which can be bought back at any time from the current owner. Such shares normally trade at a discount to the company’s ordinary shares. Of course, companies can also buy back their ordinary shares on a voluntary or compulsory basis anyway. Unpacking your ...


3

The question of whether a person was acting on their own behalf or that of a company would generally be a question of fact, so if such a case came to court it would be for both sides to present evidence and argue for their interpretation of it. In most cases the context makes it clear. You mention having a company email domain and associated email signature;...


3

In general, you cannot neither change contracts nor restrict/nullify other people's rights by your acts alone. The people who hired you personally have a contract with you, not with your LLC. So, if someone has a claim against you, then their claim should not be contingent of your LLC going bankrupt or not; they have a right to have their damages restored ...


3

No more than using your own phone, eyeglasses or underwear while working for the LLC. These are all tools of trade than one wold expect employees of the LLC to bring to their job (especially underwear). There is potentially a problem if assets of the LLC are alienated for personal use rather than the other way around. However, that would be subject to a ...


2

You are placing too much importance on "flow-through". It does not even belong on the same list as the others. LLCs are defined by state governments. They decide what an LLC is, what features it gets, and whether it can hold property. ("yes"). When an LLC holds property, the title is held by the LLC. Period. The state gets to decide that. The IRS is ...


2

Sometimes people loan money to a company in a convertible debt transaction. This means that if a certain event happens a certain amount of debt loaned to the company by an investor is converted into a certain amount of equity (i.e. stock or a membership interest) in a company. "Upon conversion" when at the time that a debt to equity conversion is occurs ...


2

You and the company are separate entities. Let’s say your company has a printer. If that printer as a used printer is worth $500 then the company can’t give it to you for free or sell it for less than the value, or it will be tax evasion. The company’s profits are lower than they should be, and your wallet contains more money than it should. The only legal ...


2

Yes. There is no strict regulation of what kind of business can be operated out of a for profit entity in most jurisdictions, subject to some specific exceptions. In certain regulated industries, e.g. banking, pubic utilities, alcohol industry firms, firearms sales and manufacturing firms, marijuana industries, law firms, firms of medical doctors, there are ...


1

First of all, this is probably not legal, either because it is in substance an effort to avoid immigration laws, because the workers are inaccurately classified as independent contractors when they should be classified as employees, or because it amounts to money laundering. It also would be a violation of immigration laws to the extent that someone knew, or ...


1

B has the same right to change the contracts that A had In general, altering a contract requires the agreement of all parties to the contract. So A/B and the customer have to agree to the change. However, most contracts for ongoing services (rent, telephone, internet etc.) have that agreement written into the terms. That is, the customer agrees that the ...


1

How would I go about (in these negotiating times) to avoid such a scenario? You can't, although a well-thought contract reduces the chances of loss. Even if you hire an expensive attorney and sue the buyer or company, you still are at risk of losing everything because there are many incompetent lawyers and many corrupt judges. The judge presiding your case ...


1

It is important to only enter into this partnership with someone you trust but you and the investor will have different incentive structures and may very well have different views of the company as time goes on. The investor does not need to be a dishonest person to decide that you might need to be demoted from CEO at some point, for example. You may differ ...


1

Because he wanted to Why he wanted to only he and whoever he's told knows. An out of court settlement is simply a deal that comes at the end of a negotiation - possibly a long and arduous negotiation. People make deals based on what they think is in their own best interests. This may not be going to court for many years, funding that litigation for an ...


1

However you like; subject to the law Your constitution can deal with any matters that take your fancy and can require whatever majority you like in order to make changes to some or all of it up to and including unanimity.


1

A for-profit company cannot technically have non-profit subsidiaries, but it can do so effectively by design of non-profit by-laws. According to IAS 27, a subsidiary is an entity that is controlled by a parent. Control is defined accordingly: over more than one half of the voting rights by virtue of an agreement with other investors, or to govern ...


1

The trustee is the legal owner of all assets of the trust. Under 259A a company cannot own its own shares. Therefore, a company cannot be trustee of a trust that holds its shares. Quod erat demonstrandum


1

Yes - if you were to incorporate in Delaware, you could sell it freely wherever you want. In general, for this kind of business, you would only need to register as a foreign corporation in states where you have employees or real property (like an office or warehouse - whether owned or leased). Most likely, that's the end of it. If you have lots of partners ...


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