Your Limited Liability Company: An Operating Manual, 5th edition

Web Resources......Page 0
Table of Contents......Page 9
Your LLC Companion......Page 15
1. LLC Documents......Page 19
Basic LLC Documents......Page 20
2. Using Meetings, Minutes, and Written Consents......Page 25
Three Ways to Make and Document Formal LLC Decisions......Page 26
How Your Management Structure Affects Decision-Making Requirements......Page 27
Questions and Answers About LLC Meetings, Minutes, and Written Consents......Page 28
3. Steps to Take Before Holding a Meeting......Page 35
Types of LLC Meetings......Page 36
Steps to Prepare for a Meeting......Page 38
4. How to Hold an LLC Meeting......Page 63
Step 2. Prepare an Agenda for the Meeting......Page 64
Step 5. Hold a Meeting in Cyberspace If You Have the Equipment and Know-How......Page 65
Step 6. Appoint a Chairperson and Secretary......Page 66
Step 8. Secretary Determines Whether a Quorum Is Present......Page 67
Step 11. Officers and Committees Present Reports......Page 69
Step 12. Introduce and Discuss Specific Proposals......Page 71
Step 13. Take the Votes of Managers or Members......Page 72
Step 14. Adjourn the Meeting......Page 76
5. How to Prepare Written Minutes of LLC Meetings......Page 77
When to Prepare Minutes......Page 79
Preparing the Minutes Form......Page 80
6. How to Hold a Paper LLC Meeting......Page 95
Decide Whether to Hold a Paper Meeting......Page 96
How to Prepare Minutes of Paper LLC Meetings......Page 98
7. How to Take Action by Written Consent Without an LLC Meeting......Page 105
Step 2. Prepare Written Consent Form......Page 107
Step 3. Place Signed Consent Forms in Your LLC Records Binder......Page 109
8. Standard LLC Business Resolutions......Page 111
When to Use Resolutions Included in This Chapter......Page 112
Bank Account Resolutions......Page 113
Assumed or “Fictitious” LLC Name Resolution......Page 118
Resolution to Approve an LLC Contract......Page 120
Real Property Resolutions......Page 121
Delegation of Authority and Approval of Individual Contracts......Page 125
Certification, Affidavit, or Acknowledgment of LLC Decision or Document......Page 129
9. LLC Tax Resolutions......Page 133
LLC Corporate Tax Treatment Election......Page 135
Resolution for Approval of Independent Audit......Page 136
Approval of LLC Tax Year......Page 137
10. Resolutions to Amend the LLC Articles and Operating Agreement......Page 139
Decide Whether You Need to Amend Your Articles or Your Operating Agreement......Page 140
Amending Articles of Organization......Page 141
Amending the LLC Operating Agreement......Page 146
11. LLC Membership Resolutions......Page 149
Distributions of LLC Profits to Members......Page 151
Additional Capital Contributions by Members......Page 157
Admitting LLC Members......Page 161
Withdrawal of LLC Members......Page 171
12. LLC Hiring and Compensation Resolutions......Page 181
Approving Salaries for Members and Employees Using Independent Contractors......Page 182
Using Independent Contractors......Page 186
Appointing and Paying Officers......Page 188
Compensation for Attending LLC Meetings......Page 190
Indemnification for Members, Managers, Officers, and Employees......Page 191
13. Loans to the LLC......Page 195
Bank Loans to the LLC......Page 197
Loans to the LLC by Members and Other Insiders......Page 207
Promissory Notes Overview......Page 214
Promissory Notes for Loans to LLC......Page 218
14. Loans by the LLC......Page 233
Overview of Loans to Insiders......Page 234
Legal Considerations for Loans to Insiders......Page 235
Tax Consequences of Insider Loans......Page 236
Resolution for LLC and Member Approval of LLC Loans to Insiders......Page 238
Promissory Notes for Loans by LLC......Page 240
Release of Promissory Note......Page 254
15. Self-Interested Business Dealings Between the LLC and Its Members or Managers......Page 255
Legal Duties Owed by Members and Managers......Page 257
Resolution for Approval of Member or Manager Self-Interested Business Deals......Page 260
16. Lawyers, Tax Specialists, and Legal Research......Page 263
How to Find the Right Lawyer......Page 264
Finding the Right Tax Adviser......Page 267
How to Do Your Own Legal Research......Page 268
Appendix A: How to Use the CD-ROM......Page 271
Using the Word Processing Files to Create Documents......Page 272
Files Included on the Forms CD......Page 275
Appendix B: State Information......Page 279
Appendix C: Forms......Page 343
Meeting Summary Sheet......Page 347
Call of Meeting......Page 349
Meeting Participant List......Page 351
Notice of Meeting......Page 353
Acknowledgment of Receipt of Notice of Meeting......Page 355
Membership Voting Proxy......Page 357
Certification of Mailing of Notice......Page 359
Minutes of LLC Meeting......Page 361
Waiver of Notice of Meeting......Page 371
Approval of LLC Minutes......Page 373
Cover Letter for Approval of Minutes of LLC Meeting......Page 375
Written Consent to Action Without Meeting......Page 377
Authorization of Treasurer to Open and Use LLC Accounts......Page 379
Authorization of Treasurer to Open and Use Specific LLC Account(s)......Page 381
Authorization of LLC Account and Designation of Authorized Signers......Page 383
Authorization of Rental of Safe Deposit Box......Page 385
Adoption of Assumed LLC Name......Page 387
Approval of Contract......Page 389
Approval of Lease of Premises by LLC......Page 391
Purchase of Real Property by LLC......Page 393
Authorization of Sale of Real Property by LLC......Page 395
Delegation of LLC Authority......Page 397
Ratification of Contract or Transaction......Page 399
Rescission of Authority......Page 401
Certification of LLC Resolution......Page 403
Affidavit of LLC Resolution......Page 405
Acknowledgment......Page 407
LLC Election of Corporate Tax Treatment......Page 409
Approval of Independent Audit of LLC Financial Records......Page 411
Approval of LLC Tax Year......Page 413
Approval of Amendment to Articles of Organization......Page 415
Approval of Restatement of Articles of Organization......Page 417
Amendment of Articles Form......Page 419
Amendment of LLC Operating Agreement......Page 421
Approval of LLC Distribution......Page 423
Approval of Additional Contributions of Capital by Members......Page 425
Admission of New Member......Page 427
Approval of Transfer of Membership......Page 429
Approval of LLC Purchase of Interest of Withdrawing Member......Page 431
Approval of LLC Hiring......Page 433
Approval of Bonuses and Salary Increases......Page 435
Approval of Independent Contractor Services......Page 437
Appointment of LLC Officers......Page 439
Authorization of Payment for Attending LLC Meetings......Page 441
Annual Stipend for Attendance at LLC Meetings......Page 443
LLC Indemnification and Insurance......Page 445
Authorization of Loan to LLC at Specific Terms......Page 447
Authorization of Maximum Loan Amount to LLC......Page 449
Authorization of LLC Representative to Borrow Funds on Behalf of LLC as Needed......Page 451
Authorization of Loan Terms Secured by LLC Property......Page 453
Authorization of Line of Credit......Page 455
Authorization of Line of Credit With Cap on Each Transaction......Page 457
Authorization of Line of Credit Secured by LLC Property......Page 459
Approval of Loan to the LLC......Page 461
LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan)......Page 463
LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) Secured by LLC Property......Page 465
LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) With Balloon Payment......Page 467
LLC Promissory Note: Periodic Payments of Interest With Lump-Sum Principal Payment......Page 469
LLC Promissory Note: Lump-Sum Payment of Principal and Interest on Specified Date......Page 471
LLC Promissory Note: Lump-Sum Payment of Principal and Interest on Demand by Noteholder......Page 473
LLC Promissory Note: Special Schedule of Payments of Principal and Interest......Page 475
Approval of LLC Loan to Insider......Page 477
Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan)......Page 479
Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) Secured by Property......Page 481
Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) With Balloon Payment......Page 483
Individual Promissory Note: Periodic Payments of Interest With Lump-Sum Principal Payment......Page 485
Individual Promissory Note: Lump-Sum Payment of Principal and Interest on Specified Date......Page 487
Individual Promissory Note: Lump-Sum Payment of Principal and Interest on Demand by Noteholder......Page 489
Individual Promissory Note: Special Schedule of Payments of Principal and Interest......Page 491
Release of Promissory Note......Page 493
LLC Approval of Transaction Benefiting a Member or Manager......Page 495
Index......Page 497
Related Products......Page 509