WORKING DRAFT IN PROGRESS Revised April 29, 2010

Transcription

1 WORKING DRAFT IN PROGRESS Rvd Apl 29, 2010 Mdl Ogzl Chckl F A Ld Lbly Cpy A pjc f h Ld Lbly Cpy Subc f h LLC, Php d Ucpd E C, Sc f Bu Lw, Ac B Ac

2 WORKING DRAFT IN PROGRESS Rvd Apl 29, 2010 Evy ld lbly cpy uqu y dd flc h bjcv d g f h b (d php h khld) h bu. Wh fw xcp h fd f cc g h p flc h g h pg g. Cul blg u w-fld: xpl h cquc d plc f h dl p whch dc hv l pvlly b d d dfy ddl up whch dc d b d. Cul h blgd flc h g h w u. Th chckl ff, ddly gc dcu, dfy c up whch g d b hd d whch, lhugh ddly ll, pg g h g huld b fh. Th dcu bu c pcfc. Obvuly h pg g f ll ccug f LLC whch llc/dbu bd ful h lk cl g, c, d wk cd ublly dff dcu f h f ydcd l vu whch vl p fud pvdg fud d dvlp vg g d cvg cv. Th pcul f h dl qu u b ddd h pg g dfd f h dl. Nh h dcu pcfc. A uch, w d dv gfc h cc b h pbl Dlw d Kucky, h bd g ucu h vlbl T, M d Nh Dk, d h LLC vlbl Dlw, Iw, Ill d h. Ech LLC Ac h uy dffc wh cpd h f h, d cul d k ccu f h dg chc f judc whch gz d dfg h pg g. I pbl df pg g whu kg ccu h x plc f h g bg lzd h pg g. Th d, h chckl dd pvd cphv duc gdg h plc f vu lc d d v-à-v h dvdul b d h LLC g h b. I y c w hv pvdd dc f h x cquc f pcul lc, bu h x ffc f pcul pv dfd huld b pd dc h h x ffc. Th f dd dfy y ubv u d p h d vg pl u clly h w. Whl h c LLC, Php d Ucpd E h publhd Mdl LLC Opg Ag f Rl E Vu, 1 h chckl dd b cp h g. Th g xpl f hw pg g culd b w f pcul fc u, ly h-py l dvlp, d ud h lw f pcul, ly Dlw. Th chckl dd b bd cp, ld h pcul fcul u f h c qu cd y dvdul. Th Mdl Ld Lbly Cpy gzl chckl pjc f h Ld Lbly Cpy Subc f h LLC, Php d Ucpd E C, Sc f Bu Lw, Ac B Ac.

3 Th dl h pduc f cbu f y dvdul v vl y, d h fllwg huld b cgzd f h ff: Pul M. Al, Mchl A. Bbg, Lu D Agl, All G. D, Cu L. Glkw, Lu G. Hg, Ady I, W. Al Kl, Lw R. K, C Cly K, Rb R. Kg, Dl S. Klbg, Phuc H. Lu, Elzbh Mll, Jf Hwd M, Th E. Ruldg, Shw P. S, Edwd L. Wd d J Wh. Rpcfully, Yu C-Ch, Lu D Agl d Phuc H. Lu

4 WORKING DRAFT IN PROGRESS Rvd Apl 29, 2010 TABLE OF CONTENTS PART I. OUR CLIENT 1 A. Cl : 1 B. N d dd f cl[]: 1 C. Egg l d wv: 1 D. Cl/M ub: 1 E. Accu: 1 PART II. If f Acl f Ogz 1 A. S f gz: 1 B. N f LLC: 1 C. LLC wll b: 2 D. N f Rgd Ag: 2 E. Add f Rgd Ag: 2 F. Pcpl Add f LLC: 2 G. N d dd f Ogz (Auhzd P): 2 H. Effcv d f gz: 2 I. Pfl LLC: 2 J. Fd by cv g: 2 K. Oh pv: 2 L. Wv f ld lbly: 2 M. Opg Ag b gd by LLC: 2 N. Opg Ag b gd by Mg: 2 O. Cpy Cuc Ag: 2 PART III. Idfc f Mb 3 A. Mb: 3 B. Tx Clfc: 5 C. OFAC Cplc: 5 PART IV. Gl Pv 6 A. Gl Pv: 6 B. Fcl ; ccu; ccug hd; ud: 6 C. Cpl cbu: 7 D. Addl cbu: 7 E. Iuc f Equy I Svc Pvd: 9 F. Mb gu f LLC blg: 9 G. Dbu: 9 H. Mc f Cpl Accu. 11 I. Allc f Pf d L: 12 J. Allc f db (f y). 12 K. Cd 704(c) hdlgy d v 704(c) hdlgy: 12 L. L f Mb: 12 M. Tf f bhp : 13 N. Dgg Ag: 14 O. Dc: 15 P. C f Appvl f Ad Opg Ag: 16 Q. Wll h LLC b ffg h publc? 16

5 R. D gh h v f g: 16 S. Dvv c: 17 T. Tx M P: 17 PART V. Gl Mb If 17 A. Cl f b: 17 B. M f cg: 17 PART VI. If f Opg Ag f Mb-Mgd 18 A. Mhd f ug lvl f uhz c: 18 B. I qug dff lvl f uhz c: 18 PART VII. If f Opg Ag f Mg-Mgd 21 A. Il Mg: 21 B. Qulfc f Mg: 22 C. Slc f Mg: 22 D. Elc pp f Mg: 23 E. Rvl f Mg: 23 F. M f cg: 25 G. Mhd f ug lvl f c: 25 H. Mg g Opg Ag: 25 I. I qug dff lvl f c: 26 J. Du f g: 29 K. Oh Duy f Lyly Iu: 30 L. Gd Fh/F Dlg: 30 M. Mb Appvl f Cflc f I Tc: 30 N. Sdd f Judcl Appvl f Cflc f I Tc bw LLC d Mg: 30 O. Mg f d g: 30 P. Tl f c g, f y: 30 Q. Cp f g, f y: 31 R. Mg If: 31 PART VIII. Oh M 31 A. Fg qulfc: 31 B. Cpl cbu g dd: 31 C. Bu ldy p gl ld php l pphp: 32 D. Td g wh Scy f S: 32 E. Advc gv h g f cpy d f d d gv dk pc: 32 F. N f ccu; h lgl dv: 32 PART IX. Dlu, Wdg up & T 34 A. Vluy Dlu: 34 B. Ivluy Dlu: 34 PART X. Dpu Rlu 34 A. Md qud: 34 B. Ab: 35 C. Wv f juy l: 35 D. Chc f vu: 36

6 PART XI. S 36 A. I LLC bg gzd judc wh : 36 B. A d: 36 C. Auhy gz dvdul : 36 D. Mbhp f : 36 E. Mg f : 36 PART XII. Rp d W 36 A. F y b h y, du f d vld xc. 36 B. Mb h d h g. 36 C. Mb d OFAC SDN L. 36 D. Rp f ccdd v u d h dclu qud puu pplcbl fdl d cu lw. 37 E. 37 F. 37 G. 37 PART XIII. Schdul f pbl 37

7 WORKING DRAFT IN PROGRESS Rvd Apl 29, 2010 MEMORANDUM TO: Fl FROM: RE: LLC F Chckl DATE: July 21, 2009 PART I. OUR CLIENT A. Cl : 2 1. Mb 2. Th LLC 3 3. Mg 4. Mb d h LLC 5. M h Mb B. N d dd f cl[]: C. Egg l d wv: 4 D. Cl/M ub: E. Accu: PART II. If f Acl f Ogz 5 A. S f gz: 6 B. N f LLC: 7 1

8 C. LLC wll b: 8 Mb Mgd Mg Mgd Oh 9 D. N f Rgd Ag: 10 Lw F Svc Cpy Oh: E. Add f Rgd Ag: 11 F. Pcpl Add f LLC: 12 G. N d dd f Ogz (Auhzd P): 13 Lw F Svc Cpy Oh [ dd] N d Add f Mg(): H. Effcv d f gz: 14 I. Pfl LLC: 15 Y N J. Fd by cv g: 16 Y N K. Oh pv: 17 L. Wv f ld lbly: 18 Y N M. Opg Ag b gd by LLC: 19 Y N N. Opg Ag b gd by Mg: 20 Y N N/A O. Cpy Cuc Ag: 21 2

9 PART III. Idfc f Mb 22 A. Mb: 23 N: Ud S P 24 If y: f f y, judc f gz d x u: 26 Add: Y N S() f Rdc Whch Txbl: 25 Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mb #2 N: If y: f f y, judc f gz d x u: Add: Ud S P: Y N S() f Rdc Whch Txbl: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mb #3 3

10 N: If y: f f y, judc f gz d x u: Add: Ud S P: Y N S() f Rdc Whch Txbl: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mb #4 N: If y: f f y, judc f gz d x u: Add: Ud S P: Y N S() f Rdc Whch Txbl: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mb #5 N: If y: f f y, judc f gz d x u: Add: Ud S P: Y N S() f Rdc Whch Txbl: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: 4

11 Mb #6 N: If y: f f y, judc f gz d x u: Add: Ud S P: Y N S() f Rdc Whch Txbl: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: If b u, pvd f u d d f dcu cg u. 27 If b, pvd f lgl pv, d f dh f pplcbl, d cfd cpy f ppg cu d. If g, pvd f pcpl, cpy f ppg dcu, d ffdv f ffc. I y b Affl f y h Mb Mg? Idfy h lhp bw h Mb d/ Mg (pl, fly, h bu lhp). B. Tx Clfc: 1. I h gl b LLC: 28 Y N 2. LLC b xd ud: 29 Subchp K 30 Subchp C 31 Subchp S 32 Oh 33 C. OFAC Cplc: Cf h l g bfcl w Offc f Fg A Cl (OFAC) Spclly Dgd Nl (SDN) L. Y N D f L: 5

12 2. Rpbly f chckg SDN up d f ddl b(): Mg All Mb Lgl Cul Oh: PART IV. Gl Pv A. Gl Pv: 1. Effcv d f pg g:, S f LLC pup: Fcl y: 37 Cld y Oh: 4. Aud N Flg: 38 N N Fl S() Fl S() B. Fcl ; ccu; ccug hd; ud: 1. Fcl S Mb. Rgul fcl p pvdd b 39 b. Audd fcl p pvdd b c. Ay f h fgg pvdd b, bu ly up b qu ( ) Accu 41 (N) (F) (Add) (Ph) 6

13 (Fx) (E-Ml) 3. Accug Mhd: 42 Ch Accul 4. Aud Rvw: Aud Rvw Rqud Rqud A p f Mg A p f Mg A p f Mb A p f Mb Wh hll b c Wh hll b c 5. Cfc f Mbhp I: 43 Y N C. Cpl cbu: Il Cbu: Mb F f Cbu Vlu 46 (f db, hw cud)? Rp d w gdg db d l ld cbu (Tl Iuc qud by LLC?) (Cd pp f p cbu g 47 ): D. Addl cbu: A ddl cbu qud? 49 Y N 2. If gd dvc: 7

14 F f Cbu Vlu D Cd f Mkg Cbu 3. A ddl cpl cll pd? 50 Y N. Tggg Ev: (1) Wh c k h cpl cll? (2) Spcfc v ccuc pc? b. Mg k cll; b u cbu p (1) wh dy/wk/h, (2) wh h pd pcfd cll c c. Mg k cll; f % f b c, b u cbu p (1) wh dy/wk/h, (2) wh h pd pcfd cll c d. Vluy Cbu (chg hg / pg g y hv p- gh) 4. Cquc f flu fud: 51. Rduc h f pf b. Rduc h f pf d llc f cpl c. Pfl dbu h b d. L f cpy %. L f -dfulg b (d ) f. Pl lbly h p f b g. Oppu f h b k up d dfulg b dlud h. Sup f g uhy vg gh. Rgh puch dfulg b h LLC j. Ffu f dfulg b h LLC 8

15 k. Auc dv f dbu k up dfc (l lk) 5. Adju f Cpl Accu. 52 E. Iuc f Equy I Svc Pvd: Wll h LLC u quy cp f vc? 54 Y N Vd Uvd Pf I Cpl I 2. F vc by b? Y N 3. F vc by -b ply? (If, cd ph. 55 ) Y 56 N F. Mb gu f LLC blg: N 2. Pl: 3. Uld: 4. Ag Pcp Gu f Fuu LLC Oblg G. Dbu: 1. Gl Qu Abu Dbu Sch:. Wll dbu b d pp cpl cbud? 58 b. Wll y b cv pfl u cpl? 59 c. Wll y b cv pfl u f cpl? 60 d. A pfc dd b py p? 61 9

16 . A dbu f pg c xpcd? f. Wll pg dbu d cpl dbu b d dffly? 2. Gud Py: Dbu f Pcd f Op:. Df Op. b. Shg R d Ecc U 63 Mb Shg R Ecc U c. I ccdc wh Cpl Accu d. Ay pfd u Cpl Cbu (py p)?. Ay pfd u f Cpl Cbu? f. Dw dvc 64 g. Oh: 4. Dbu f Pcd f Cpl Tc.. Df Cpl Tc: (1) Sl f cpl (2) Rfc (3) Oh b. I ccdc wh Cpl Accu c. A pfd u Cpl Cbu d. I ccdc wh Shg R. I ccdc wh Ecc U f. Oh: 10

17 5. Lqudg dbu: 65. S lw cd b. I ccdc wh Cpl Accu c. A pfd u Cpl Cbu d. I ccdc wh Shg R. I ccdc wh Ecc U f. A pfd u cpl cbu g. Oh: (Shuld dbu pv? N pbl f cc lhp.) 6. Dbu kd: 66 Phbd (ll dbu u b ch) Pd f p- g h b Oh: 7. Tx Dbu: 67 Y N. uclly % f xbl c b. uclly % dd pdclly by b g c. uclly hgh cbd gl d fdl f dvdul pcfd, kg ccu h fdl dduc f x d. k ccu dff dff yp f c. k ccu dff pd by dff b f. x dbu ll b, p by pf h g. x dbu ly b wh wuld hw hv ph c h. b ppl g; g ppv. b ppl g, g ppv; b ppvl qud % j. b ppl g, g ppv; f g dcl, pcl g f b clld ( c qud) wh hv ppv % H. Mc f Cpl Accu. Cpl ccu wll b d ccdc wh T. Rg (b)(2)(v): 68 Y N 1. Tx B; 11

18 2. Tx Bk Rul (); 3. GAAP; 4. Opl/Addl hd: I. Allc f Pf d L: (b) Sf Hb 70. Dfc R Oblg b. Al T 2. Tgd cpl ccu Oh: J. Allc f db (f y). 72 K. Cd 704(c) hdlgy d v 704(c) hdlgy: 73 Tdl Tdl Wh Cuv Rdl Oh: L. L f Mb: My b k l h LLC? Y. If Y, wh k h d? N 2. A b blgd k l h LLC? Y N 3. If dy:. Au: $ b. I R: $ 12

19 c. T: $ d. Clll: $ N clllzd. Rd up dful: 4. If pd:. Au: $ b. I R: $ c. T: $ d. Dcp f clll:. Rd up dful: f. Rcu Ncu: M. Tf f bhp : Vluy f: Rcu Ncu. Abluly phbd 76 b. Pd, bu g dd whu c f % f h h b 77 c. Pd ly wh c f % f h h b d. Pd : 78 (1) Spu (2) Chld (3) Oh lv: 2. Ivluy f. (4) Tu f y f h bv (5) Clld bu bu ly ud h cd: 79 Ag uclly bc b Ag dd whu c Pd ly wh c f % f h h b 13

20 . Ag dd whu c f ll h b 80 b. Ag dd whu c f % f h h b 3. Rgh f f ful/ff: 81. Vluy f: (1) Excbl by LLC (2) Excbl by b bu cc hld (3) Excbl by b d cc hld (4) Excbl by LLC f d b cd (5) Excbl by LLC f d b d cc hld cd b. Ivluy f N. Dgg Ag: Typ f g: (1) Excbl by LLC (2) Excbl by b bu cc hld (3) Excbl by b d cc hld (4) Excbl by LLC f d b cd (5) Excbl by LLC f d b d cc hld cd. Pu 83 b. Cll c. Buy-Sll 84 (l clld Ru Rul, Hgh-N, Shgu Pv) d. Oh: Ccuc f xc f dgg:. Ay b. Ay f c. I h v f ddlck d. I h v f c ddlck. Up h dc f b f. If -cpcl gh g b cl f b, dcb gh f ch h: 14

21 3. Pc: 86 O. Dc: 92. S by g by h b g gul b 87 b. Bk vlu 88 (1) A kp f x pup (ppd by h Cpy gully plyd ccu) (2) Bkd up f k vlu f Cpy c. F Mk 89 dd by ppl pdclly f cll, c. 90 (1) A kp f x pup (2) Bkd up f k vlu f Cpy. d. Ful Vluy whdwl f b 93. A b y ullly whdw 94 (1) Mb puchd (2) Mb bc g b. A b y whdw up h c f (1) Mg () All (b) Supjy (c) Mjy (2) Mb () All (b) Supjy (c) Mjy Up ppvd whdwl: (3) Mb puchd (4) Mb bc g 2. Dh, dbly, dlu bkupcy f b: 95 15

22 . Mb pv h bc b whu fuh c b. Mb pv h cu g c. Mb puchd f h pv h d. Mb pv h bc b ly wh c. Df f dbly: (1) Gud/cv ppd by cu (2) Py c phyc dg d bly g bu ff (3) Mb h pfd bu fuc f dy (4) Ag puu pw f y c Cpy 3. Dlu/ f b xc b: 96. Mb puchd b. Mb bc g P. C f Appvl f Ad Opg Ag: Uu c f h b f ll d 2. C f % f h b qud f ll d (h h h h ffc b uquly) 3. C f % f h b f d bu uu c f d, pbly cludg. Fcl Ag b. Ay qug uu ppvl h pg g c. Ad d xpul f b d. N. Pup f. Auhy f b g g. Dlu h. Oh: Q. Wll h LLC b ffg h publc? 98 Y N R. D gh h v f g: 99 Y N 16

23 S. Dvv c: 100 Y N T. Tx M P: 101 PART V. Gl Mb If A. Cl f b: O cl 2. Mulpl cl f b Dffg vg gh Dffg cc gh Oh: 3. Il vg gh: 103 Mb Cl f Vg Rgh f Vg Rgh B. M f cg: Mg wh fl ul 2. Vg by Pxy 3. C 104 Uu f h b 105 V f b hw uffc c Oh: 17

24 PART VI. If f Opg Ag f Mb-Mgd A. Mhd f ug lvl f uhz c: 1. P cp By hg /u 3. By ld cpl cbu By cu cpl ccu blc Oh:. B. I qug dff lvl f uhz c: 1. Acqu ppy 2. M uc 3. Bw fud Ac 4. Appv L f Mb 5. Cll L 6. Iv f LLC fud xc f $ M g g Mb() M j y f S u p j y f U u C f O h 18

25 7. Excu dcu Ac 8. Dc wh pc v f fud 9. M cd 10. D h c cy bu h uul wy 11. Cu h LLC pcp gz, g, cv 12. Dlv h LLC 13. Sll ll ublly ll f h ppy f h LLC ud f h dy cu f h LLC bu 14. Icu dbd xc f $ 15. Icu dbd xc f $ 16. Expd fud f h LLC xc f $ 17. Expd fud f h LLC xc f $ 18. Cuc cpl pv xc f $ 19. Cuc cpl pv xc f $ 20. Cu h LLC gu h blg f y p pldg ppy cu h blg f y p 21. Ld y f h LLC y p 22. Fl bhlf f h LLC ud h gz, lvcy bkupcy lw M g g Mb() M j y f S u p j y f U u C f O h 19

26 Ac 23. Cu h LLC qu cpl cbu f Mb 24. Ad h pg g 25. D h d u f dbu h Mb 26. Ad g Mb 27. Mk x lc Cc lg h f h LLC 29. E g bhlf f h LLC 30. Exc LLC gh ud gh f f ful buy/ll g 31. Op bk ccu d gg chck 32. Appv py f cp Mb d h g 33. Appv bu f xp f g 34. D xpl b f cu 35. Iu c f judcl dlu d wdg up 36. Ad w b d dfc f cc lhp f b cc hwh M g g Mb() M j y f S u p j y f U u C f O h 20

27 PART VII. If f Opg Ag f Mg-Mgd A. Il Mg: 1. Nub f Mg: 2. Bd f Mg? 110 Y N 3. Cl f Mg 111 Y N 4. N, dd d l (f y) f Mg: Mg #1 N: Add: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mg #2 N: Add: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mg #3 21

28 N: Add: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mg #4 N: Add: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: Mg #5 N: Add: Txpy Idfc Nub: Tlph Nub: Fx Nub: E-l Add: B. Qulfc f Mg: 1. Mu b b? 112 Y N 2. Mu b dvdul? 113 Y N C. Slc f Mg: 22

29 1. Uuly lcd by b 2. Slcd by jy f b cg f % 3. Mg lcd by pcul b cl f bhp : Mb / Cl Nub f Mg h Mb c pp 4. Mg lcd by cuulv vg Spcl ul wh g vd f cu. All f h b h h b wh ppd h g b. Th b ppd h g c. S ul f h lc pp d. Mjy f h b h h h b wh ppd h g. Mjy f h b 6. Oh: D. Elc pp f Mg: 1. Pdc lc f g. Aul b. Oh: 2. Elc pp ly h vl dpu f g 3. Spcfc ucc pvdd pg g: E. Rvl f Mg: 23

30 1. Wh d vl f g?. All f h b b. All f h b wh ppd h g c. % f h b wh ppd h g d. All f h b h h h b wh ppd h g. % f h b f. % f h b h h h b wh ppd h g g. All f h g h h h g bg vd h. % f h g h h h g bg vd. Oh: 2. Rvl ly f cu? Y N. If y, df f cu: (1) Fud (2) G glgc (3) Bkupcy (4) Dbly; f, df f dbly:. () Gud/cv ppd by cu (b) Py c phyc dg d bly g bu ff (c) Mb h pfd bu fuc f dy (d) N pfc f du f Cpy dy () Ag puu pw f y c Cpy f dbly (5) Wllful cduc (6) Cvc f c (7) Cvc f c g h Cpy (8) Vl f h pg g: () Ay vl (b) Ml vl (c) Rpd vl (d) Vl f pcul pv: 24

31 (9) Oh: 3. If y, wh d whh f cu fc hv b?. S d vl f g, bv b. Adjudc c. Ab F. M f cg: Mg wh fl ul 2. Ifl c 3. V by Pxy? 116 G. Mhd f ug lvl f c: P cp 2. Oh: H. Mg g Opg Ag: 118 Y N 25

32 26 I. I qug dff lvl f c: 119 Mg() Rfc Rqud by: Ac S g l M j y f S u p j y f U u C f S g l S u p M j y f M b S u p j y f M b U u C f M b O h 1. Acqu ppy 2. M uc 3. Bw fud 4. Appv L f Mb 5. Cll L 6. Iv LLC fud xc f $ 7. Excu dcu 8. Eply pfl d h g 9. Dc wh pc v f fud 10. M cd 11. D h c cy bu h uul wy

33 27 Mg() Rfc Rqud by: Ac S g l M j y f S u p j y f U u C f S g l S u p M j y f M b S u p j y f M b U u C f M b O h 12. Cu h LLC pcp g/cv/dc/ 13. Dlv h LLC 14. Sll ll ublly ll f h ppy f h LLC ud f h dy cu f h LLC bu 15. Icu dbd xc f $ 16. Icu dbd xc f $ 17. Expd fud f h LLC xc f $ 18. Expd fud f h LLC xc f $ 19. Cuc cpl pv xc f $ 20. Cuc cpl pv xc f $

34 28 Mg() Rfc Rqud by: Ac S g l M j y f S u p j y f U u C f S g l S u p M j y f M b S u p j y f M b U u C f M b O h 21. Cu h LLC gu h blg f y p pldg ppy cu h blg f y p 22. Ld y f h LLC y p 23. Cu h LLC cc c bkupcy 24. Cu h LLC qu cpl cbu f b 25. Ad h pg g D h d u f dbu h b Ad g b Mk x lc 29. Cc lg h f h LLC

35 29 Mg() Rfc Rqud by: Ac S g l M j y f S u p j y f U u C f S g l S u p M j y f M b S u p j y f M b U u C f M b O h 30. E g bhlf f h LLC 31. Exc LLC gh ud gh f f ful buy/ll g 32. Op bk ccu d g chck 33. Appv py f cp b d h g 34. Appv bu f xp f g 35. D xpl b f cu 36. Iu c f judcl dlu d wdg up 37. Ad w b d dfc f cc lhp f b cc hwh J. Du f g:

36 1. Duy f c 123. G glgc b. Ody pudc c. Oh: 2. Rgh cp: 124. Y b. N c. Y, bu ld. d. N, bu y v cpg wh h Cpy f g gh d v h y d xcd % h cpg vu. 3. Duy ff ppu h LLC: 125 Y,. N 4. Expc h g wll hv h cv: Y N K. Oh Duy f Lyly Iu: L. Gd Fh/F Dlg: 126 M. Mb Appvl f Cflc f I Tc: Uu N. Sdd f Judcl Appvl f Cflc f I Tc bw LLC d Mg: E F A Lgh 127 O. Mg f d g: 128 P. Tl f c g, f y: 30

37 Q. Cp f g, f y: R. Mg If: All bk d cd 2. S gh b 3. All bk d cd p dchg f pbl g 4. Oh (dcb): A. Fg qulfc: 130 PART VIII. Oh M Y N If y, pcfy wh d gd g/ffc. Kp d h ch h w qu wh g qud. S RO/RA B. Cpl cbu g dd: Y N If y, h pvd f: 1. Dclu h bhp gd cu 2. Acqu f bhp / cc 3. Accpc f cbu; cd. Ch 31

38 b. L f Cd c. Scud py d. Pl guy f cpy db (f pd by lw) 4. Rp v ubly dd; h dd 5. Rp -fg p u; dc 6. Rp h ll qud f w d vlbl 7. Rp h v ly 8. Idfc p; cuy hf 9. Tfbly 10. Cd lgl vw f h ffg dcu 11. Oh: C. Bu ldy p gl ld php l pphp: Y N 1. Tf f dcu f xchg f cpl cbu. Bll f l f (qu lg f cl) b. Ag f gbl d h 2. Tx cd f l cbu (bk-up; xbl v, c.) D. Td g wh Scy f S: E. Advc gv h g f cpy d f d d gv dk pc: Y N Illcul Ppy Wk Rfd : F. N f ccu; h lgl dv: 1. Tx Adv 32

39 N: Add: Tlph Nub: Fx Nub: E-l Add: 2. E plg y N: Add: Tlph Nub: Fx Nub: E-l Add: 3. Fcl dv N: Add: Tlph Nub: Fx Nub: E-l Add: 4. Oh Adv N: Add: Tlph Nub: Fx Nub: E-l Add: 33

40 A. Vluy Dlu: PART IX. Dlu, Wdg up & T C f b 132. Uu c f h b cl f b b. C f Nub % f h b c. Wll f y b d. Oh:. 2. Spcfc v. Up Sl f ublly ll f h LLC 133 b. Ev kg ulwful cy bu c. Dc f ky p d. D Ev C. Oh:. B. Ivluy Dlu: 1. Judcl Dlu Adv dlu 135. Auhy v dv dlu? 3. Ag llw cu dd dlu 136. Opp 137 b. Ibly p xcp l 138 c. Ddlck d. N bly pccl dd 4. Wdg Up 139. Wh h uhy wd up? b. Acl Cfc f Dlu c. Publc qu (Nc kw d ukw cd) d. Chg fducy du? 5. T PART X. Dpu Rlu A. Md qud:

41 Y N B. Ab: 141 Y N 1. I f b:. Wh? b. Hw? 2. Sgl b Pl Slc 4. Rul ppld b Evdy: Pcdul: Subv: 5. Rqu w dc Y N 6. Excluv dy 7. Bdg Y N Y N 8. L Dg Y; N C. Wv f juy l:

42 Y N D. Chc f vu: Y N PART XI. S A. I LLC bg gzd judc wh : 144 Y N B. A d: 145 Y N C. Auhy gz dvdul : 146 Mg Mb D. Mbhp f : 147 LLC All Mb Oh E. Mg f : 148 Mg f P LLC S Spcfc Mg Mb Oh PART XII. Rp d W A. F y b h y, du f d vld xc. B. Mb h d h g. C. Mb d OFAC SDN L

43 D. Rp f ccdd v u d h dclu qud puu pplcbl fdl d cu lw. E. F. G. PART XIII. Schdul f pbl Tk Py Rpbl Pd cl by Acl/Cfc f Ogz Fl dly? Y/N Dlyd Effcv D? Y/N Opg Ag Cpl cbu g 150 Mg ply g() Mb ply g() Equy cp dcu Subcp g 151 Bll f l f cpl cbu Ag f cpl cbu Tx dfc ub (SS-4) S Rvu Cb l flg g Cpy u bk Fg qulfc /1/ :27 AM 1 C LLC, Php d Ucpd E, Mdl Rl E Dvlp Opg Ag wh Cy, 63 BUS. LAW. 385 (Fb. 2008). 2 Clly dfyg wh h cl d kg h d cl ly h cl bu h h wh y blv y-cl lhp cucl. Th u cplcd by h fc h f h cl h LLC, h h cl d x p flg cl/cfc. S pply h cp ul ud whch h gz cul wh y gdg h f f bu y, d up f h y-cl lhp hf h wly fd bu ucu. S,.g., M v. Ng, 2004 U.S. D. LEXIS 1776 (D. M. 2004), ff d, 394 F.3d 1062 (8 h C. 2005). Bu Pucc v. S, 711 F. Supp. 916, (N.D. Ill. 1989) (y f php l p ch gl p); 37

44 Schwz v. Bdc Muc, Ic., 16 F.R.D. 31 (S.D.N.Y. 1954) (ch b f ucpd c cl f c y); Nw Yk Cy B A C. Pfl d Judcl Ehc, Fl Op (1986). S l ABA Mdl Rul 1.7, 1.9, 1.13, 2.2 (w dld by ABA bu ll plc,,.g., Ky.R.S.C (2.2)); Th E. Ruldg d Phuc H. Lu, N Gd Dd G Upuhd: Pfll f Cul Php Abu b Gvd by Nw Lw, 45 BRANDEIS L.J. 755 (2007). I Mgy v. Tppd Tchlg, LLC, 548 F. Supp.2d 1175, 2008 WL (D. Nv. 2008), h Cu hld h cul LLC w cul dc lgl gz, h f g d b w, f pup f pvlg, j cl wh h LLC f h h w h g hf, d h dpu bw h f g/b d h LLC, cuc bw h LLC d cul w dcvbl. Cul huld l cd whh h pl pbl wh cul pg ll f h LLC b, h dug h f pl g f h LLC. F xpl, h cpg f h b y b g gc h h cul pg h b y c uvdbl cflc f. Idd, h pl f h cplc whv h ulpl p bu gz. I uch u, y b dvbl f h LLC b hv p p. S ABA Mdl Rul f Pfl Cduc, Rul 1.7 Cflc f I: Cu Cl, pclly C [8],[18] d [29]-[32]. 3 F xv ly f chc f y u, ROBERT R. KEATINGE & ANN E. CONAWAY, KEATINGE AND CONAWAY ON CHOICE OF BUSINESS ENTITY (2009) ( KEATINGE AND CONAWAY ). S l CARTER G. BISHOP AND DANIEL S. KLEINBERGER, LIMITED LIABILITY COMPANIES: TAX AND BUSINESS LAW, Ch. 3 (Chc f Ey: Tx d Nx Cp) ( BISHOP AND KLEINBERGER ). 4 L h l b wh wll b vlvd h gz bu wh pd huld b cdd wll. S l GARY A. MUNNEKE & ANTHONY B. DAVIS, I THE ESSENTIAL FORMBOOK - COMPREHENSIVE MANAGEMENT TOOLS FOR LAWYERS, ch. 4 (ABA: Chcg, 2000). A ppul ppch clud pv h pg g h df h cl. 5 I c h l flg wh h Scy f S dgd Acl f Ogz Cfc f F. S,.g., DEL. CODE ANN (cfc f f); KY. REV. STAT (cl f gz); WASH. REV. CODE (cfc f f); VA. CODE (cl f gz); N.J. STAT. ANN. 42:2B-11 (cfc f f); N.Y. LLC Lw 203 (cl f gz); d TEX. BUS. ORG. CODE (cfc f f). S l PROTOTYPE LLC ACT 201 (cl f gz); 6 Chc f h judc f gz y hv pc up h ul hf gvg h LLC d w. F xpl, whl c pvd dful ul f uu ppvl f d f h pg g (,.g., ALA. CODE (b); MONT. CODE ANN (3)()); TEX. BUS. ORG. CODE d VA. CODE ANN (B)(2), h p h d f h pg g by l h uu ppvl. S,.g., CONN. GEN. STAT (b) (2/3 d f h b); KY. REV. STAT. ANN (2)() ( jy f h b); d OKLA. STAT (B)(3) ( jy f h b). By wy f h xpl, h Dlw LLC Ac pvd h pg g y pvd h gg b y cv h f vlu f bhp h (DEL. CODE. ANN.. 6, , 604), h pvd h b, up whdwg, bc ply g f bhp h cpy d h gh lqud h. S,.g., Rvd Uf Ld Lbly Cpy Ac 603()(3), 6A U.L.A Whl h d h dful ul ubjc dfc h pg g, ppcg h udlyg dful ul c lly pc h ulg g. F vvw f h bc ppch f LLC u cludg dcu lc c, BISHOP AND. KLEINBERGER Ech h qu gdg dy dg f ld lbly cpy uch ld lbly cpy L.L.C. S,.g., KY. REV. STAT. ANN (1); VA. CODE ; DEL. CODE ANN ; FLA. STAT ; N.Y. LLC LAW 204; d TEX. BUS. ORG. CODE Cd l h qu f dguhbly pd by h lw f h judc f gz d f whch cpd h LLC wll d bu d d qulfy c bu. S d fdl dk d vc k pc d fg huld wll b cdd. 8 S, bu ll, LLC c qu dg h cl f gz f h LLC bgd g-gd. S,.g., MONT. REV. CODE (1)(2); KY. REV. STAT. ANN (1)(d); d TEX. BUS. ORG. CODE S whu h qu clud Dlw (DEL. CODE ANN ) (Dlw dful b-gd f dg), Gg (GA. CODE ANN ) (Gg dful b-gd f dg) d Vg, lhugh Vg d xply llw 38

45 h dg. (VA. CODE (B)(1)). Th lc h plc f bh h xl pp uhy bhlf f h LLC d h l dc-kg ch f h LLC. S,.g., KY. REV. STAT. ANN ; ; VA. CODE (b)(1); S glly Th E. Ruldg, Th L Dc Bw Agcy d Dcl Auhy: Ufu Cquc f h Mb-Mgd vu Mg-Mgd Dc h Ld Lbly Cpy, 93 KY. L.J. 737 ( ). Th cly dpd Rvd Uf Ld Lbly Cpy Ac (6A U.L.A. (2007 Suppl.)), ulk pdc ( Uf Ld Lbly Cpy Ac 203()(6), 6A U.L.A. 579), d qu dg f whh h LLC b gd g gd d d cd gcy uhy bhlf f h LLC up uch dg. S Uf Ld Lbly Cpy Ac 301, 6A U.L.A. (2007 Supp.) 301. F ly f b g d g g ucu h LLC, BISHOP AND KLEINBERGER F -by- gud g ucu f LLC, d S l Th E. Ruldg d Sv G. F, RULLCA Sc 301 Th Fu Cquc (d Cug Qu) f Dguhg App Agcy d Dcl Auhy, 64 BUS. LAW 37 (Nv. 2008). I d b cgzd h h uy pv f h b-gd ggd LLC, uch l h - dc kg fuc, pl d -xcluv dl. M, Nh Dk d T, by u, ch pvd lv g ucu, ly bd gd LLC. S MINN. CODE 322B.606 q.; N.D. CENT. CODE q.; d TENN. CODE q. I ch f h, f h bd-gd p ulzd, y b cuzd h pg g. I h h, v hugh h uy ch f bd g, y b pvdd f h pg g. Ev h, h ly xhubl ub f p h gh b pvdd. F xpl, culd b pvdd h h wll b y ub f dvdul wh wll b h l f g, d h whl y dvdul g h uhy bd h LLC up pcul dll hhld, y blg xc f h l u b cd by hhld f h ub f g bf h cpy b bud. Alvly, culd b pvdd h h wll b bd f dc, lcd ppd f by h b, h h gl vgh pbly f h LLC bu wh dvdul cu b d, b f h bd f dc, hv y gcy uhy bd h LLC. Rh, h LLC wll c hugh h p wh gd pcfc uhy wh pc pcul c hugh p wh hv b ffdd pp gcy uhy bd h LLC uch hugh l uch pd h dc pp gcy bd bu gz. 9 T, Nh Dk d M fll ud f h gl b-gd ggd ucu. M d pcfclly uhz g f h LLC by b, d qu h ch LLC hv l w g, chf xcuv g d u. M LLC hv bd f gv wh pp h g (MINN. STAT. ANN. 322B.676). I huld b d, hwv, h h pw dcly g ll pc f h LLC y b vd h b puu cl g (MINN. STAT. ANN. 322B.37) d h y dc h culd b d by h g y wll b k by uu v f h b (MINN. STAT. ANN. 322B.606, ubd. 2). T ulz ucu ud whch LLC h b-gd bd-gd (T.C.A ). Wh h LLC bd-gd, h b y vd h dc f h bd by w-hd v. (T.C.A ()(3)). Nh Dk pvd bd-gd ucu, wh h bd c f gv (N.D. CENT. CODE ) d y b lcd by h gz d h cl f gz b-cl g (N.D. CENT. CODE (1)). Mb y, by uu v, k y c h pbl qud by h bd (N.D. CENT. CODE (2). Mb y, ubjc xcp, v y ll gv wh whu cu by jy v (N.D. CENT. CODE (3). 10 Evy LLC Ac qu h dg by h cpy f gd g. 11 Mu b wh f f d u b phycl dd. 12 Dpdg up h pcfc f lw, h pcpl ffc dd y b P. O. Bx, h lv, y b qud h b dd. If, h h chckl bg cpld, d h f gz h y b flzd, h b pcc y b g bh h d, f dff, h lg dd h wll b h pcpl dd f h LLC. 13 Ogz/Auhzd P d b b. 14 Typclly h LLC wll b dd gzd up h flg f h cl f gz. S,.g., KY. REV. STAT. ANN ; (1); TEX. BUS. ORG. CODE 3.001(c)(d); ULLCA 202(b); RULLCA 201(d)(1); Myld Cp d A Acl Sc 4A-202(b) (2007 Rplc Vlu). M, f ll, llw h flg f dcu, cludg cl f gz, wh dlyd ffcv d. S,.g., KY. REV. STAT. ANN (2) (llwg fld dcu hv dlyd ffcv d l h h 90 h 39

46 dy f h flg); FLA. STAT (2) (dlyd ffcv d f dcu y b l h h 90 h dy f h flg d); N.Y. LLC LAW 203(d) (llwg fld dcu hv dlyd ffcv d xcd 60 dy f h flg d); TEX. BUS. ORG. CODE (). I Vg, cpy dd gzd up h uc f Cfc f Ogz by h Vg S Cp C VA. CODE B. Th Dlw Ac qu h b ld lbly cpy g cpl h f pc bu llw ld lbly cpy g b d f h flg f cfc f f d y b d ffcv f h f f h ld lbly cpy uch h d pvdd h ld lbly cpy g. DEL. CODE ANN (d). Fdl x pcpl, h h LLC lw, d h whch php c xc f fdl x pup. O flul dc h A php glly d b cd wh p j gh h y, gd, lb, kll f h pup f cyg d, pf, bu d wh h cuy f h pf d l. C v. Tw, 327 U.S. 280, 286 (1946). S l Spk v. C, 87 T.C. 1279, 1282 (1986) ( A php fd wh h p vu j gh cpl vc wh h f cducg ply p bu ). S l T v. C, 88 T.C. 702 (1987). Accdgly, h h h cfu f hvg h d f h pg g dff f h d f h LLC f, h huld b ubv dffc dg h g f h d gd f h d f f wh h LLC d cduc y bu gg y h l cv dug h pd bw h w d. A gu x, hwv, dug h pd h dful ul gv d y ul udd cquc f h pd. 15 Clf llw h u f h LLC f ucug pfl pcc xcp f h pf f lw d dc. CAL. CORP. CODE All h llw h u f h LLC f lgl d dcl pcc d h pf. F h u, chck h LLC c f wh dfd b pf. S,.g., KY. REV. STAT (20); FLA. STAT (3); TEX. BUS. ORG. CODE (8). S qu ddl f h cl f gz f pfl LLC (,.g., KY. REV. STAT (3) (pf pf b pccl hugh LLC); TENN. CODE ()(2)-(3) (h LLC pfl LLC d h h pfl w d -pfl b); TEX. BUS. ORG. CODE 3.014). I fg pfl LLC, c u b k dd cplc wh pfl guly ul h pc up ucu d whp. S,.g., KY. REV. STAT (1)(-c),(f); 201 KAR 1:081 (ul pplcbl ccug f). I, h f pfl LLC u clud h wd pfl ppp bbv. S N.C. GEN. STAT. 57C-2-01(c); FLA. STAT (2) ; TEX. BUS. ORG. CODE 5.059, c N.Y. LLC LAW 1212 ( Pfl qud b h f pfl vc ld lbly cpy). 16 C lw llw LLC b fd by h cv f xg gl php, ld php cp. S,.g., KY. REV. STAT. ANN ; ; ; GA. CODE ANN , ; FLA. STAT ; TEX. BUS. ORG. CODE ; ULLCA 902; IOWA CODE ; TENN. CODE (f); Myld Cp & A Acl 4A-211. Myld wll p h cv f l pphp LLC. Myld Cp & A Acl 4A-212. A cd wh h g f xg bu y LLC, () y h x ly bu y, () h hvg b g, du g clu ggd, d () h cvd y h y h whch xd p h cv. N h g cv y b ubjc chllg f l pup dc h lvl f fducy du by hvg h ulg y gvd by h lw f dff. Th cc gh b cdd bch ud h lw f h l. 17 My LLC Ac p h Acl f Ogz c pv h qud b fh h. S,.g., KY. REV. STAT. ANN (4); DEL. CODE ANN ()(3); TEX. BUS. ORG. CODE 3.005(b). Hwv, whl h y p h ddl f h Acl, hy hv dff ul wh pc whh h pv, ply by flg wh h Scy f S, cu c hd p wh hw w. S,.g., DEL. CODE ANN (ly h pv f h Cfc f F g fh h, h gd g/ffc, d whh h LLC LLC cu c by flg wh h Scy f S ffc); KY. REV. STAT. ANN (8) (Acl f Ogz fl wh h Scy f S c h LLC gzd ud Kucky lw d f ll h fc fh h h qud b fh h); N.H. REV. STAT. ANN. 304-C:16 (2008) (Cfc f F fl wh h Scy f S c h h y h b fd LLC d c f ll h fc fh h cfc whch qud b fh by RSA 304-C:12II(), (b), d (c). ). F dcu pl c h Acl f Ogz, BISHOP AND KLEINBERGER 40

47 5.05[3]. Nw Yk h ddl qu h h cl f gz b publhd w wpp f 6 wk d h LLC d fl pf f uch publc wh h dp f (N.Y. LLC Lw 203). 18 Svl f h LLC c xply p h b, by pv h cl f gz, wv h ld lbly h l wh pc c blg. S,.g., ME. REV. STAT. ANN (4) (2008) (ld lbly wvd by ll pcfd b f LLC wh h ffc cd h cl f gz.). Oh LLC c llw uch lc b fh h h cl f gz h w g. S,.g., KY. REV. STAT. ANN (2); IOWA CODE (2) ( Nwhdg h pv f ubc f h c, ud pg g ud h g, b g y g b blgd plly f y ll f h db, blg d lbl f h ld lbly cpy. ); TEX. BUS. ORG. CODE , I uuul f LLC b wv ld lbly cplly. I c, hwv, f LLC b gu ll f h LLC db g ld blg dfc cpl ccu. Bd h bvu cc cquc, gu f db dfc blg c hv p x cquc, cludg cquc ud Cd 465 ( k ul) d Cd 752 (LLC db cludd b b). 19 Th qu gdg whh h LLC bud by h pg g f h LLC fl xcu h pg g. C Bubbl & Blch, LLC v. Bck, 1997 WL (N.D. Ill. My 23, 1997) (LLC bud by b clu pg g), I Ac Md Dbu, LLC, 216 B.R (Bk. S.D.N.Y. 1998) (LLC py d hf bkup LLC c u pg g) d M Rdl, LLC v. Tpl N Pp, LLC, 654 S.E.2d 888 (V. 2008) (b clu pg g dd qu b f b dvv cl bcu h cl blgd h LLC, d h LLC w lf py h pg g, dd d h b f dvv cl) wh Elf Ach Nh Ac, Ic. v. Jff, 727 A.2d 286 (Dl. 1999) (LLC bud by chc f fu d b clu pg g). Th Dlw LLC Ac w pcfclly pvd h LLC d g h ld lbly cpy g b bud by. DEL. CODE ANN (7). S l, RULLCA 111() ( A ld lbly cpy bud by d y fc h pg g, whh h cpy h lf fd h pg g. ) F ly uggg h Dlw LLC y hv dg fc LLC g whu bg py, BISHOP AND KLEINBERGER 14.02[8][][]. M LLC c l h u. By h Ac pvdg h Dlw LLC h d g h pg g bud by, f fc d h pg g h g h p f h pg g, wuld h clud h LLC lf? Th qu hg h h df f h pg g huld b cgz f d pvd ppp clfc. Php h wy dl wh h qu hv h LLC g h pg g, hby clly kg py h pg g, h f fc h p f h pg g dd clud h LLC lf, cv u h ffc y b pvdd. 20 Ud uy ful, h pg g d by d g h b. S,.g., KY. REV. STAT. ANN (2); VA. CODE A h, hd p h pg g y b d bfc h, d by cy plc g blgd dchg h uhy ccdc wh h pg g. T h d, y b ppp qu h g, f ldy b, ckwldg d g b bud, h dchg f h vc, by h f h pg g. C huld b k u, ul uch h dd uc, h h c f h g ubqu d h pg g d qu h c. A h, g y w k pc g cv dfc f h pg g pcg up h gh d blg. 21 C c qu h LLC dfy gd g cuc cc uhzd cv cuc bhlf f h LLC f h gd g. S,.g., DEL. CODE ANN.. 6, (g); KY. REV. STAT. ANN. 14A.4-010(3). Ev wh qud by u, ccl gd g cp wll k h LLC dfy p fllg h l f h cuc cc. 22 Glly pkg, ld lbly cp gvd by cc (,.g., KY. REV. STAT. ANN ; DEL. CODE ANN.. 6, ), d h cc ypclly dd h pg g, lhugh c fd h h gul ( FLA. STAT ; TEX. REV. CIV. STAT. ANN., A (xp J. 1, 2010; TEX. BUS. ORG. CODE, ffcv J. 1, 2006, ply h cpy g ), h b cl g ( MINN. STAT. 322B.37; N.D. CENT. CODE ) h ld lbly cpy g DEL. CODE ANN.. 6, )). A LLC Ac ypclly v gp fll wh h x w pg g, wh pc y ccl p u, cucl h pg g b dfd h flc h g f h p. A bvd by h Dlw Chcy 41

48 Cu Wlk v. Ruc Dvlp C. Ld., LLC, 791 A.2d 799, 813 (Dl. Ch. 2000), LLC b gh bg wh d ypclly d wh h Opg Ag. Wh dfg pg g, huld b dful f h bv d by Vc Chcll S Kbg v. Kz, 872 A.2d 568, 593 (Dl. Ch. 2004)) (Th uk f h lgug f pg g, pcully wh pc dfyg dl fducy du, f fl. ). Vc Chcll S l h wd v lv h hy wll b hld h f h cc whch hy : Th Cu h d cl h wll [b] pd by h pu pl f ld p wh kg cp h cquc f h w dc bc v php wh gl p h clly xpd lf f dl fducy du. Th DRULPA [( d h DLLCA)] pu v c h fducy du y b ld by php g, d hf h v huld b cful d php g bf buyg u. I lg u, h DRULPA flc h dc f cv p, fg gv h v ld php hv cul h v ppu vlbl h h vlv l k d/ lgl pc. F xpl, y v wh wh h pc f dl fducy du c lwy v cp ck. Mll v. Ac Rl E P, L.P., C.A. N (Dl. Ch. 2001) (f d, 2001 WL ). 23 P III f h Chckl ( Idfc f Mb ) h plc l h w f h LLC, bu d d uch h b. Mbhp c l yhg h p w. LLC bhp uully l cb f cc (quy whp) d cc (gvc) gh, bu h xcp. I pbl f h LLC d b lckg y cc gh. DEL. CODE ANN.. 6, (d). I l pbl y f h pg g whl h cc gh f b dw l hg. I c, ch b f h LLC wll b d p ( w b) f x pup. Ev f h LLC clfd php f x pup, hwv, h b f h LLC ud pplcbl lw y b h h p f x pup. Whl g f b cc h LLC wll cly b b f pup f lw, h g wll f b d f x pup p h vu. S Rv. Rul , C.B Slly, lw b lckg cc h LLC wuld b d p f x pup. S Pv L Rulg (Oc. 5, 2001). S glly Pul D. C d Cll A. Kuh, Th Uc Cy f Bg P: P Clfc f Tx Pup, Jul f Tx (Sp. 2008). 24 Th LLC d dv chgd wh vwg h OFAC l (y ludg d ul) u h bu cducd wh phbd p. Th Offc f Fg A Cl wh h Ud S Dp f h Tuy fc vu cc d d c. Th Offc f Fg A Cl ( OFAC ) h Spclly Dgd Nl L ( SDN L ); vlbl OFAC wb. Ud S cz d cp, ubjc c xclu ypclly cdd up h uc f pcl lc, pcludd f ggg bu wh y p y ld h SDN L. F f d OFAC gudc, h OFAC wb <hp:// Th LLC y hv pcl whhldg x blg wh pc b wh U.S. p. (ul h b hw ubjc U.S. x c llcd h f h LLC) A U.S. p, dfd Cd 7701()(30), : () cz d f h Ud S; () php cp cd gzd h Ud S ud h lw f h Ud S y ; () h c f whch ubjc U.S. fdl c x gdl f uc; (v) u f U.S. cu bl xc py upv v h d f h u d U.S. p h h uhy cl ll ubl dc f h u (d c h u xc Augu 20, 1996). Whhldg f x wh pc fg p c b vy bud f h LLC, d LLC y vd hvg fg p. Cd 1446 glly qu quly whhldg fg p llcd h f c ffcvly ccd wh U.S. d bu, v f dbu d h fg p. Th qu c c ch flw pbl, pcully f h LLC gg c h g ffcvly ccd c bu ch. Cd 1445 (whch gv h h Fg Iv Rl Ppy Tx Ac FIRPTA ) y qu h LLC whhld x g llcbl fg p wh h LLC dp f U.S. l ppy (cludg U.S. l ppy hldg cp. A LLC y l b qud whhld fxd dbl ul pdcl ( FDAP ) c (f xpl,, dvdd,, yl) llcbl fg 42

49 p gdl f whh h LLC k dbu h fg p. S T. Rg (b)(2)()(A). N-U.S. p y b ld duc l f whhldg c kd f c ud h xv x y wk h h U.S. h wh h cu. S glly IRS Publc 515, Whhldg f Tx Nd Al d Fg E (vd Apl 2008); Cl P. Tll, d : T.M. U.S. Whhldg d Rpg Rqu f Py f U.S. Suc Ic Fg P (BNA). Th pg g huld pcfy h p dd f u whhld bhlf f b (whh py fdl x, d blw, py lcl x). Ud y pg g, h u whhld duc, dll f dll, dbu (cludg -clld x dbu ) whch h b hw y l bc ld. Oh g, hwv, h u l, whch h b u py h LLC, c h u f cpl h h b u cbu h LLC. S g gv h LLC g h dc ch h wy h LLC wll whhld x. 25 M h gh x d b f h LLC by f h LLC bu ppy h. Th hv k dff ppch h fc f h xg judc. Appch clud hvg h LLC: () b gd c f d b py c x h h h f h LLC c, lvg h LLC f blg k x py pc f d b; () whhld (d py v h ) c x h d b h; () fl cp u d x h b h. A gl y cb dff ppch. I Clf, h LLC blg py x bhlf f d b ggd ly f h b fl pvd c fl dvdully Clf. Cl Rv. & Tx. Cd (). I Gg, h LLC u whhld h f 4% Gg c dbud cdd d,, h lv, u fl cp u d h x hw h cp u. GA. CODE ANN A b f ul LLC y fc v cplc bud f h b u fl x u vy whch h LLC d bu. Al ll h p c x p w p (, c, qu) cp u, whch h LLC fl u d h x bhlf f h d b. Au h h LLC whhld, wh h cp u, cdd g h b x lbly h. I c, bu ll, h b y b ld fl f fud f vpy. S hv dff hd f dg hw uch f LLC c llcd ppd h. Alhugh h LLC b h uully ubjc h b x h h h f h LLC c whu gd hw uch f h c llcd ppd h h pbl f dubl x d b gly ducd, bu cly ld, by cd h h b h gv f x pd h. S,.g., Pck H. Sh d Mchl W. McLughl, S N-Rd Cp Ic Tx Ru C Pvd Splcy bu C, 6 BUSINESS ENTITIES 26 (Nv./Dc. 2004); BISHOP AND KLEINBERGER 1.07[4] (S Tx f Nd Ic f Phugh E). C hv dpd, f lw pup, pv pd h fdl FIRPTA whhldg qu. S,.g., CAL. REV. & TAX. CODE S whhldg c h u ch flw pbl d h f u pd bhlf f b d bv cc wh fdl whhldg. 26 Th LLC y d w kw whh h b lf p-hugh y, whh x-xp y (d f wh x-xp u h). F xpl, f h b x-xp y, h LLC y b qud p uld bu xbl c ( UBTI ) h b. S Cd S x-xp (ply ducl u d p pl) jy pcl xp f c UBTI wh h LLC v db-fcd l ppy, bu ubjc f h cplcd qu ll f x lw. S Cd 514(c)(9). Th pc f x-xp b ffc x cquc h LLC b. S Cd 168(h)(6) d 470. F ly f j vu bw xp d f-pf gz, BISHOP AND KLEINBERGER 1.09 (Exp Ogz Ccl Acvy d J Vu). 27 Th u dcu u b vwd d blh h bhp LLC, d h cpd bu cv, pd ud h u dcu d h Tu cp f uhy. Th u dcu wll l pvd wh h uhy bd h u. 28 All w p h f f gl b LLC. LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 4.3 (2004). A gl b LLC glly pl gz d y f h h Chckl wll b ucy; cludg, f xpl, qu f gv lvl f b ppvl f dc, puppg h h LLC php f x pup. 43

50 29 N h h qu dd ly fdl x clfc. S p y-lvl x bu ucu h, f fdl x pup, p-hugh. S glly Buc P. Ely, S Tx f Subchp S d Subchp K E d Th Ow A Ovvw, CHOICE OF ENTITY-2007 (ALI-ABA, Fb. 8, 2007), Appdx B, Appdx C; KEATINGE & CONAWAY Ch. 15 (W 2007); BISHOP AND KLEINBERGER Ch. 3 (Chc f Ey: Tx d Nx Cp). My h fllw h fdl clfc f c x pup dvg f h fdl clfc f pup f h x, uch l d u x. Th Gg LLC Ac, f xpl, w fllw h fdl clfc ul ly f c x pup. GA. CODE ANN (2001 d d h wd c fu plc). 30 F pup f fdl c x clfc, ld lbly cpy lgbl y dfd h -clld Chck-h-Bx clfc gul, g h lgbl ch bw cp -cp clfc. LLC pcfclly d h Chck-h-Bx Rgul. Th LLC glly lgbl ch h w x clfc ply h hy fd ud u h dcb f [h] cpd cp, bdy cp, bdy plc. TREAS. REG (b)(1). A LLC h bu y h xbl cp ud pv f h Cd h h Cd 7701()(3), hwv, lgbl lc h clfc. TREAS. REG (b)(7). M ply, y y LLC, php hw wll b lgbl f publcly dd y h qud b d cp ud Cd I dd y publcly dd, f h h cg f bu h lgbl d wll lwy b clfd cp clud uc cp, -chd bk hldg fdlly ud dp, c gv-wd, c fg d clg fdl x-xp u. Aug h LLC lgbl y d h w b, wll hv dful clfc php d wll b gvd by Subchp K f h Il Rvu Cd. Wh h LLC lgbl y d h ly gl b wll hv dful clfc dgdd y. TREAS. REG A d bv, b p f x pup cly h b ud pplcbl LLC lw. M ( ll) ul-b LLC wll b clfd php f x pup. Ul hw d, c h Chckl lg h x f h LLC d b u h h LLC wll b d php d h h b wll b d p bu lwy cl whh GP LP. 31 I l vy c, ld lbly cpy hw qud b xd C cp y lc b xd C cp, ubjcg h LLC x ud Subchp C. Th lc d by flg F 8832 wh h IRS. Elly, h ly l LLC lgbly b clfd C cp h LLC ( h y) glly y chg lc c vy xy h (lhugh lc by w y ffcv h d f f d cu chg). TREAS. REG (c)(1)(v). Th LLC lc u b gd by ll h b y ffc, g, b f h lcg y wh uhzd (ud lcl lw h y gzl dcu) k h lc.... TREAS. REG (d)(2). 32 If h LLC k b S cp ud Cd 1361, wll fl F Wh S cp u dd, h F 8832 d b fld, d h F 2553 wll ccplh bh h lc b clfd c xbl cp d h lc ud Cd TREAS. REG (c)(1)(v)(C). My LLC wll b lgbl f S cp u. F xpl, f v f h b f h LLC cp h LLC h clfd php, lgbly l. CODE 1361(b)(1)(B). Fuh, uch LLC wll b ubjc h cl f ck ul f Cd 1361 (b)(1)(d). 33 Th y h pbl, lhugh hy d cly. F xpl, c LLC y b bl lc clfc cpv d x ud Subchp T. Whl d pp h u h b dcly ddd by h IRS, h cu w pp b h LLC, hw xd ud Subchp K, ccuc y k lc ud Cd 761 u f Subchp K. S glly LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES (2004); BISHOP AND KLEINBERGER 2.10 (Elc Ou f Subchp K). 34 S [3]. [?] 35 Aug h h l pg g, h ffcv d uully h ffcv d f h flg f cl f gz, ul dff d dd. C huld b k dg wh h pg g ffcv vd gp h uddg d g f h p. S u d pg g x f h d f gz f h LLC d h u d. 44

51 36 I ll y k fug uy pv h ffc h h bu u y b ud f y lwful bu d u h pup l lg cc f d bu gz. Such cf ujufd. I fc, y f pp pup l x, d h ub f u h xply d pc h h h l pp pup u b cdd. F xpl, h PROTOTYPE LIMITED LIABILITY COMPANY ACT, c 106, pvd p: If h pup f whch ld lbly cpy gzd cv k ubjc pcl pv f lw, h ld lbly cpy hll l cply wh h pv. PROTOTYPE LTD. LIAB. CO. ACT 106 (1992). S l KY. REV. STAT. ANN ( Excp hw pvdd KY. REV. STAT , f h pup f whch ld lbly cpy gzd cv k ubjc (1) pcl pv f lw, h ld lbly cpy hll l cply wh h pv. ); S.D.C.L A-112(). Th u c l wh fg bu gz, ggd judc f gz f pbl cvy, gg cvy fg judc whch pd c. ULLCA 1001(c) ( A cfc f uhy d uhz fg ld lbly cpy gg y bu xc y pw h ld lbly cpy y gg xc h S.); KY. REV. STAT (2) ( A cfc f uhy bd puu h chp hll uhz fg ld lbly cpy xc y pw gg y bu h dc ld lbly cpy fbdd xc gg by h lw f h Cwlh); S.D.C.L A-1001(c) ( A cfc f uhy d uhz fg ld lbly cpy gg y bu xc y pw h ld lbly cpy y gg xc h. ); TEX. BUS. ORG. CODE ANN ( A fg y y cduc h bu cvy h pd by h cd b cd by h dc y whch clly cpd. ). S glly Th E. Ruldg, Ld Lbly (O N): Rflc h Hly Gl, 51 S.D. L. REV. 417, (2006). F ly f bu pup qu cludg uy c yp f bu, BISHOP AND KLEINBERGER 5.03 (Bu Pup). 37 S I.R.C. 444 gdg h vlbly f xbl y h h h cld y. S glly Ahy P. Pl, d T.M. Accug Pd (BNA). I dd, LLC clfd f x pup php glly u hv h xbl y jy f p. S Cd 706(b)(1)(B). 38 If h LLC d cduc bu ug dff f l, y b cy fl cfc f ud l dcu wh h ppp cy f. S,.g., KY. REV. STAT. ANN (gulg ud gl), (gulg u f fcu by fg LLC); FLA. STAT ; TEX. BUS. COM. CODE Th bg w qu wh gul, d wh h fcl p? Th w ch wll dpd up h dl qu. Dpu c b vdd by pcfyg h p wll b dlvd wh X dy f dfbl d uch h d f vu fcl pd. Dpu fuh vdd by pcfyg whh c dcu (.g., blc h, pdc pf d l, pf d l cpd g budg, c.) cpd h df f h fcl h wll b dlvd. I y b ppp wll pcfy whh h fcl wll b ppd ccdc wh U.S. GAAP (glly ccpd ccug pcpl), ccdc wh h ccug dd uch Il Fcl Rpg Sdd ( IFRS ). Audd fcl ypclly vlbl ly ul b, f ll. Wh cpd h udd p wll b dlvd ul b, y b ppp pcfy h h pdc p wll b udd. Ul h LLC dgdd y, h LLC qud hv f x bk. If h LLC clfd php f x pup, h LLC glly huld cpl ccu ccdc wh h pplcbl Tuy Rgul pp fdl c x u. I y u, h fcl f ppd f x pup uffc. If, hwv, h p blv h uch fcl f ppd f x pup uffc. If, hwv, h p blv h uch fcl f ppd ccdc wh x ccug hd uffc, hy y qu h p f bk d cd b d ud U.S. GAAP h f dd. A ddl ppch qu h ly x bk u b d bu llwg h g h b cu h LLC pp fcl ccdc wh h hd f ccug. Cd -pcfc qu wh pc h dlvy f f d whh h pg g y dfy h dlvy blg. S,.g., KY. REV. STAT. ANN (3) (qug h ffv dlvy f f b h x h ccuc d ju d bl, u d full f f ll ffcg h b y b ); DEL. CODE () (b f ld lbly cpy hv h gh dd f, ubjc bl dd y b fh ld lbly cpy g f y pup bly ld h b 45

52 b f h ld lbly cpy, d ubjc ddl c bg f h y b pd ccdc wh DEL. CODE (g)). 40 Dpdg up h LLC Ac ud whch h LLC fd d h LLC pg g, b y hv gh cc cd d f, cludg h gh pc d cpy, dug dy bu hu d f pp pup, cd pg h pd dug whch hy w b. S ULLCA 408; RULLCA 410, 6A U.L.A. 410; FLA. STAT ; TEX. BUS. ORG. CODE I h c h qu f pp pup, bu ly h h qu b bl. S,.g., KY. REV. STAT. ANN (2). Th gh publy clud, bu ld, fcl cd f h cpy. Ud c u, h gh f y b ubly cd. S,.g., ULLCA 103(b)(1) 6A U.L.A. 103(b)(1); RULLCA 110(c)(6); 6A U.L.A. 110(c)(6). If h LLC clfd php f x pup, h IRS u llw y p wh w b f uch php dug y p f h pd cvd by h u h php u. Cd 6103()(1)(C). S glly BISHOP AND KLEINBERGER 5.07 (Rqud Rcd). 41 Th LLC glly d ccu f x d f -x fcl pup. 42 A LLC huld dcu ccug hd wh ccu d x dv. I gl, LLC wll hv h vll hd f x d fcl ccug pup ( h cfy ul f Cd 446()), bu h xcp. Th w c x ccug hd h ch cp d dbu hd d h ccul hd. Th ch hd d b pl, bu h ccul hd cdd ccu d c wh glly ccpd ccug pcpl ( GAAP ). Txpy hv chc lcg h vll x ccug hd. Cd 446(c). Hwv, h xg uh d dfv ch hd pg, d h ul dg h ccul hd f y xpy, cludg c C cp, c php h hv C cp p, x hl, d bu qud v. Cd 448(). Oh ccug hd y b qud pd dpdg h u f h LLC cv. S,.,., Cd 460 (pcg f cpl hd qud f y lg- ufcug cuc cc); Cd 475 (k k ccug qud f dl cu). 43 M f ll LLC Ac xply p bhp b pd by phycl cfc. S,.g., GA. CODE ANN (b). A ld lbly cpy y b vdcd by cfc. Hwv, dpdg up pplcbl lw d uch dfc h df cd h pg g, uch cfc gh vdc ly b cc gh ( GA. CODE ANN (13)) d h y f h g gh h gh b cly pcvd bg cp bhp. N h, f dd h phycl cfc b gvd by d hv h ffc f cfcd cuy ud Acl 8 f h Uf Ccl Cd, cy h pcfc lc h ffc b d h pg g. Ab uch lc, ld lbly cpy gl gbl gvd by Acl 9 f h Uf Ccl Cd. S Ly A. Sukup, Opg I Acl 8 LLC, GP & LP I Clll, Ccl Lw Nwl (wl f h ABA Uf Ccl Cd C), July, 2002, pd PUBOGRAM (wl f h ABA C Php d Ucpd Bu Ogz), Nvb, 2002; l Rb R. Kg, Tkg d Efcg Scuy I I Ucpd Bu, LIMITED LIABILITY ENTITIES IN TIME OF CHANGE, ALI-ABA (Mch 12, 2002) VPC0312 ALI-ABA 245; Rb R. Kg, I Ucpd Ac Scu Ud Acl 8 f h UCC, LIMITED LIABILITY ENTITIES IN TIMES OF CHANGE, ALI- ABA (Mch 12, 2002) WPC0312 ALI-ABA 361. S glly BISHOP AND KLEINBERGER 5.04[2][c] (Mbhp I Pl Ppy). A LLC y hv whhldg blg u wh d hv h ch fud py h x. F h ch quy w f h LLC qud g h g pw f y puu whch h g y cu, h x pbl, h quy w ub h xg judc f h f whch h LLC g wuld hw b blgd py x ll p f h quy w h f h LLC c Cd whh h wll gv h pw f y h dd ffc. 44 M LLC Ac p b cbu b d y f vy f cludg ch, ppy, vc dd, py, g cbu ch ppy, cc f vc b pfd. S,.g., ULLCA 401, 6A U.L.A. 401; FLA. STAT I l judc, f b fl k qud cbu f ppy vc, h b blgd cbu ch qul h vlu f h d cbu h w d. S,.g., ULLCA 402, 6A U.L.A. 402; RULLCA 403, 6A U.L.A. 403; KY. REV. STAT. ANN ; RHODE ISLAND (c). Whl h gl ul ud Cd 721() h h g l cgzd up h cbu f ppy php 46

53 xchg f h php, d b pd Cd 721(b) d T. Rg (c)(1) vd h ul cg f g up h cbu f ppcd ppy LLC. Whl LLC Ac p h cbu f vc, d h cbu f vc l f y LLC, Cd 721() d pply cbu f vc. Th x f vc cbu h b vy cvl. Hwv, f h LLC b d cv y cpl ccu cd f vc, h b f c cv LLC f vc whu ggg d c. I h chckl, vc cbu d ply f cpl cbu. S Sc [IV(E) ]. F ly f b cbu cludg cbu f vc, BISHOP AND KLEINBERGER 5.04[3][b], 5.04[4] (Mb' Cbu, Cbu Vlu h Dful Md). 45 If h LLC g cpl ccu ud h Cd 704(b) gul, LLC b glly wll g d cpl ccu cd f cbug h b w py. S T. Rg (b)(2)(v)(d)(2). 46 Th d vlu f cbud ppy wll glly b whv u h p g f k vlu, lhugh h p y dp h pcdu (uch ppl ful) f g vlu. Th cpl ccug ul f T. Rg (b)(2)(v)(b) qu cpl ccu b cd by (g h hg) h f k vlu f cbud ppy, f lbl h h php cdd u k ubjc. 47 A cbu g p g h dl h (d lbl) h ch b cbu h LLC d huld fh h lv vlu f h cbu f pup f blhg ch b cpl ccu. 48 F dcu f dfg pv gdg l ddl cpl cbu, Tc Flyd Cuff, Dfg Php d LLC Ag: P I, 3 BUS. ENTITIES 22 (2001) (My/Ju 2001). 49 Th pbly d lbly f cbug h quy cpl dd by h p ubjc h huld cv cdbl wh gg d dfg pg g. Mb, by u, w l h u f cpl h hy y b qud cbu vu. A bu, hwv, lkly wll fl f chclly udcplzd d ubl cc quy cpl h fcg wh dd. Th bw vu d f quy cpl d h lucc by ll f b h blg hlv cbu cpl wh dd ccp dlu f h cc f dffcul ccl. 50 Addl u f b qud pcp uch cbu. Mb wh ch cbu wll pbbly w h h f LLC pf c lv h h f b wh fl cbu. Thu, h c f dful qud cpl cbu ( [30]), df huld cd cludg pv duc h f -cbug b LLC pf. S Bdly R. Cppdg, LLC Opg Ag Dfg Tp d Tp f h Uwy, PROB. & PROP. 44, 50 (J./Fb. 2005). Hwv, b wh y b l bl c up wh ddl cpl huld cd h pl f uf dlu f h pf. 51 S Cuff, up [44], f dcu f vu d f dlg wh dful cpl cbu d pl x cquc f pv h ul cpl hf g vu. Cuff fuh h h fcbly f dful pv y vy cdbly g h. S l Cppdg up [46], 50. Dlg wh cquc f flu qud cpl cll cplcd u. A d by c, uggd h h -dfulg pcp w b bl c h dfulg vu, c h hy, d buy h hll h h u u. S Cuff, up [44] f. 8. Th c g h pcul dy lly pd ud lw ccg LLC Php. Id. F fuh ly f d f dful, BISHOP KLEINBERGER 6.05[1][c]. Th k dv bw pv ddg dfuld cpl cbu blg bw h h d buyu ffu f h f h dfulg pcp vu h pv h ply pvd f h dlu f h pcp. O qu kp d dcdg whch vu k whh dful wll h lhp bw h dfulg pcp k pcdg f ly dlu ppp d ffcv. N, hwv, h pvdg f buyu f h f h dfulg b wll qu dp f cpy cpl d h x php cu fuh gv pc up h -dfulg vu. If h dful ffu pvdd f, bu h dlu ppl, pg g y pvd f ll f () duc/dlu h f h dfulg vu; () pg h h vu k dd l h vu bhlf f h dfulg vu h u f h dful wh h fud d cpl cbu h vu d 47

54 gvg blg f h dfulg vu fy h blg; () h l f g vg gh dug h pdcy f h dful; d (v) u f pcfc pfc f h blg cbu. Whl uc pv cllg f h ffu f h f h dfulg pcp, c u h cu wll fc whv yu df. Th cpl cbu dful dy pv l lqudd dg pv. A dy pv wll d yu uch gd f yu c fc. Th fcbly f dful pv y vy cdbly f b udd by p bkupcy. S Cuff, up [44] f. 8. S LLC Ac xply h ffu pd. S DEL. CODE ANN.. 6, (c); GA. CODE ANN B w h dlu pv y hv udd x cquc h u f cpl hf y l h LLC uch f ulzd ppc, h f whch y ul xbl cquc. S glly Tc Cuff, Tx Apc f Php Dlu Pv, TAX PLANNING FOR DOMESTIC AND FOREIGN PARTNERSHIPS, LLCS, JOINT VENTURES, AND OTHER STRATEGIC ALLIANCES (PLI 2000) ; BISHOP AND KLEINBERGER 8.07 (Fdl Tx Cquc f h T f Mb I). 52 Th pg g y p qu h cpl ccu b djud ccuc flc vlu f h LLC ppy (cludg gdwll). Alhugh h pv f uch dju y b bud h df f uch G A Vlu, Tx Appdx h g, hy y b cucl h cc dl. B cful wh gv h uhy dcd h d u f h dju. F cpl ccu h cply wh T. Rg (b)(2)(v), dju glly y b d: () cc wh cbu f y h ppy (h h d u) h php by w xg p cd f h php; () cc wh h lqud f h php dbu f y h ppy (h h d u) by h php g cug p cd f h php; () cc wh h g f h php (h h d ) f My 6, 2004, cd f h pv f vc f h bf f h php by xg p cg p cpcy, by w p cg p cpcy cp f bg p; (v) ud glly ccpd duy ccug pcc, pvdd ublly ll f h php ppy (xcludg y) c f ck, cu, cd, p, w, fuu, l u h dly dbl blhd cu k. 53 Aug h h LLC b d p f x pup, h h c b d LLC ply f x pup. Rv. Rul , C.B. 256; GCM (Dc. 23, 1969) d GCM (July 25, 1969). Th LLC b wh cv cp f vc f h LLC lf-plyd, d y b ubjc lf-ply x. My LLC b c wh hck dblf lg h h IRS fu cd h ply f h bu hy wk f. LLC h cd h x f b/vc pvd b pbl hv dpd vu ppch f vdg h. O ppch h h b pd ucu h vc pvd cp h ph, bd wy quy bu cug quy. Ev f LLC dgdd y f c x pup, w qud b d p y f ply x (d xc x) pup. F wg pd by dgdd y bf Juy 1, 2009, h y culd ch p ply x ply, hv w p. S Tuy Dc 9356, 72 Fd. Rg (8/16/2007) (updg Nc 99-6, C.B. 321). F dcu h cp f vc, ply u, d ply x h LLC, BISHOP AND KLEINBERGER 4.10[2]. 54 If h cd f f hb, h IRS wll p d x b wh cv LLC pf xchg f vc. S Rvu Pcdu 93-27, C.B S l Rv. Pc , C.B. 191 (uvd ). If h f hb fd, h f h vc pvd y b l cl. If h b cv h cpl f h LLC f p fuu vc, h b dd hv cvd xbl cp c. Th u f h cp c y b dffcul d, bu gh b dd qul h cpl ccu cd gv h vc pvd. Th cpy glly wll hv qul dduc f cp pd. Sv C. Alby, Addg Nw Mb LLC (wh F), THE PRAC. LAW. 25, 30 (J. 2002). Ppd gul d ccpyg c wuld, f dpd, bl Rv. Pc d Rv. Pc , d wuld cu lg chg cu pcc. Rg , My 24, 2005; Nc , I.R.B Th ppd gul k h p, hwv, h h cpy wuld hv g cg cc wh ug cpl vc pvd. S dv ccd, hwv, h, h bc f fl 48

55 gul, h k h h cpy gg cpl vc pvd gh b dd hv ld p f h vc pvd, pbly ggg xbl g h cpy. LLC ug, d vc pvd cvg, LLC quy cc wh h pfc f vc huld b cd h pbly f Sc 83(b) lc. Th lc d by h vc pvd, bu c y ffc ll b f h LLC h vc pvd d LLC wll g dvc whh h lc b d. If h vc pvd gg k h 83(b) lc, h h d d wh h ld (30 dy) wdw f dg. 55 S [36]. 56 [45]. 57 A b f LLC c b d ply f h LLC f x pup. S dcu Ab xdy wv f ld lbly (,.g., KY. REV. STAT (2); TEX. BUS. ORG. CODE ; RULLCA 110(g)), b, b, plly lbl f h db d blg f h LLC. A cd xdg cd, c cd wll up pl gu f ll f h b. Ccuc y jufy pvdg h pg g cb f () c by ch b gu ll blg f h LLC, (b) udkg, pcul ccuc, xcu d dlv pl gu d/ (c) pw f y ffdg g bd h b gu LLC blg. S glly BISHOP AND KLEINBERGER 6.04[1] ( Lbly Ud Cc dcu pl gu f b wll pcc p f h uwy). Wh pl gu gv, h pg g d dd cbu blg g h b wh l h ll gu fy h blg d h d f ch b cbu u. I dd, b huld cd h c f y buy-ll pv wh pl gu, -wh, v b bg puchd dd by h b, h l f h dpg b pl gu g f h puchg b dfy h dpg b huld b cdd. Gu d cbu blg c hv p x cquc. S [17]. 58 Th y why dbu y b pp cpl cbud, bu php h c h dbu flc h pv f vc by f h b. 59 F xpl, LLC whch b ( Cpl P ) cbu $1,000, d h h b ( Svc P ) cbu ly vc, Cpl P y b ld dbu qul 10% pl ully, cuulvly uud cpl, bf Svc P cv y dbu. 60 A pfl u f cpl h Cpl P g h h Svc P lkly b llcd ph c, d y w dd x dbu d hv ugh ch py x lbly. S [46]. 61 F xpl, f Cpl P g 10% -lk pfc, d h dul pf pl 80% Cpl P/20% Svc P, wll h Svc P g cch up h hy cv 20% f ll pf, cludg h 10% h w h Cpl P (whch wuld h h 10% w py pfc f h Cpl P)? O d wll h Svc P h whv pf lf v f h Cpl P cv h 10% (whch wuld k h 10% p pfc f h Cpl P. 62 A gud py ud Cd 707(c) gud y l. Rh, py p, f vc h u f cpl, dd whu gd h c f h php. Th y b p x dffc bw llc d dbu, h hd, d gud py h h. F pup, bu ll, gud py d pd hd py. Fxd ly-yp py Svc P lly d gud py, gdl f whh hy pvdd f p ply g p f h LLC pg g. Pfc Cpl P cu gud py. Gud py f cpl f bl py, bu h x cquc y b dff. A py d p h h h cpcy b f uch php uch l gud py, bu d ccug bw h php d hd py. S glly MCKEE, NELSON & WHITMIRE, FEDERAL TAXATION OF PARTNERSHIPS & PARTNERS (WG&L), (P Acg Np Cpc: Sc 707() Tc) d (P Acg Th Cpc P: Sc 707(c) Gud Py). My pg g cful bv dc bw dbu d py. 63 Th gl ul cp lw h ll h f ck f h cl u hv pfc, l, d lv gh dcl wh h f h h f h cl.... GA. CODE ANN Th uch ul LLC lw, v f h pg g u cp jg by dgg h LLC h, cl, h lk. A LLC u lly whv h pg 49

56 g y. D b fld by lgy uch u ug h ll h u, ll h u f gv cl, fugbl, h ll p pc f h b gh d blg cpud h f h u. Id, LLC y, d fquly d, p-u p-h b, hv dff h g, cpl, pf, l, d x bu f h LLC. A c k fg k h dffc ccu wh dfg h buy-ll, ppv gh, c-l gh, dg-lg gh, pu d cll p, lqudg dbu, c. pv f h pg g. W P. K, C Mk d Ovgh Wh Dfg d Rvwg LLC Opg Ag XXV-2 PUBOGRAM 6 (Mch 2008), pd, Tx Nw f Bu Lwy (Su 2008). 64 Scly pkg, dvc dw wh dff f dbu, d h dffc y hv p x cquc. A dvc dw g p dbuv h f c d cu dbu d h l dy f h php xbl y. T. Rg ()(1)(). S glly MCKEE, NELSON & WHITMIRE, FEDERAL TAXATION OF PARTNERSHIPS & PARTNERS (WG&L), 19.03[2] (Advc Dw Dguhd F Dbu). 65 My LLC pvd f dbug lqud pcd ccdc wh pv cpl ccu bcu h pv y hlp u h h LLC llc pcd f x pup. Hwv, y LLC, pclly h fd c y, d pvd f lqudg dbu ccdc wh cpl ccu. I pcul, LLC ug gd llc (l kw fcd llc ) c pvd f lqudg dbu ccdc wh cpl ccu. Cuff, SOME BASIC ISSUES IN DRAFTING REAL ESTATE PARTNERSHIP AND LLC AGREEMENTS, 65 N.Y.U. Tx Lw Iu 18.07[5] (2W7). M LLC Ac l ch h h pv f dpg f up lqud. A u f b ppld dchg blg cd; ULLCA 806 xply clud b wh cd. Whh py cd lqud chclly huld b clld dbu, y pg g h dbu. Th [dful ul f h] ULLCA dc h uplu b ud u ll cbu pvuly ud d h h d b dbud h b qul h. ULLCA 806. [Th dful ul f] KY. REV. STAT pvd f dbu fllw: (1) cd; (2) b f b fc f lbl f dbu ud KY. REV. STAT ; d (3) b d f b f f h u f h cbu d cd pp h b pcv gh h dbu f h LLC p dlu. Th LLC Opg Ag glly wll ffc h gh f hd py cd, bu c blh hw dbu b wll b dl wh up lqud[, d wll glly upd h LLC Ac pv gdg dbu b]. 66 C LLC Ac, b cy pv h pg g, pclud dbu kd (.g., NEV. REV. STAT , MD. ANNOTATED CODE, Cp & A Sc 4A-504) p dbu kd ly h x h dbud p- g h b (.g., KY. REV. STAT. ANN (2); TEX. BUS. ORG. CODE ). Phbg dbu kd l flxbly d y cpl h l f fllg llqud k hw f l. Cvly, dbug c cy g h b fllwg dlu y cpl f b wh dd w b bu wh h cu h l, lhugh w ud f LLC. I dd, hldg ppy c y gv dd php f x -x pup. I c y, h bdl bw c d dd p h b xpld vly cc wh x-f xchg. S glly Rchd M. Lp, Th S f h A Lk-Kd Exchg, 2009, JOURNAL OF TAXATION (J. 2009); Rv. Pc , C.B S u y jufy pg -p- kd dbu ubjc ppp vgh f vlu. 67 Opg g y pvd f -clld x dbu. Ic f php xd h p wh d by h php, whh dbud. Ic h llcd, whu y cpdg dbu, clld ph c. Th p f x dbu z h k h p wll hv py x llcd c wh hy hv cvd ugh ch py h x. Tx dbu huld b lkd pcl kd f dbu. I ccu hk f h dvc dbu f u h, l h h dbu d, h p pp b ld cv vully. Bcu uully pccl d h cul u f ch h b d py x, x dbu uully d ud c gl up bu x. Mb wh cv LLC pf cc wh pfg vc d hv pcully cu d f x dbu. S dv kly p l h d f x dbu by pvdg h c wll b llcd wy f h b wh hw cvg dbu. Th p y ul vld llc d h cc dl. A pl x dbu pv u Cppdg, up [46], 48. Cuff, up [47], l dcu x dbu 50

57 pv dl d dcb fc h c k h cplx df. U.S. cp d dvdul xpy u py d x ud Cd 6654 d Alhugh h py fquly fd hvg b d quly b, h py d d fll pcly h h p f ch h. Id, dvdul d fdl c x du bf Apl 15, Ju 15, Spb 15 d Juy 15. Cp d py du Apl 15, Ju 15, Spb 15 d Dcb 15. A pg g f pvd h x dbu b d by h LLC f h quy w u h dbud fud py, hlp py, h d x lbl. Th gl ul h 25% f h qud ul py (whch, wh c xcp, bw 90% d 100% f h l x cully du by h xpy f h xbl y) u b pd wh ch ll. Bh cp d dvdul, hwv, y d h u f d x py wh ch ll ulzd b. Th df f N Txbl Ic ud dg h LLC N Txbl Pf ppl uch ulzd ppch d h LLC quly xbl c. Th fdl gv ly f h xg uh whch quy w y b qud py c x h quy w h f h LLC c. Mv, dd gul fdl c x, quy w y b ubjc h fdl x, uch xc x, whhldg x, lv u x, d lf-ply x. Th -gg b y w clud lgug h pg g hlp bl h p h hy huld b d ld p, wh ud Cd 1402()(13) ubjc lf-ply x (.., SECA x) h dbuv h f php d bu c. S LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES, Ch. 21 (2005) f ddl dcu h fdl x f ply d h vc pvd f LLC. BISHOP AND KLEINBERGER 4.10 (Cp f Svc, Eply Su, d Eply Tx d 4.13[3][c] (Dbu Txbly f Dbu: LLC Mb)). I dd, dff yp f c y b ubjc dff f x ( bly, lg- cpl g xd dvdul pfl ). Fuh, fdl d x cd y flw hugh h LLC. Accdgly, h p c, b, ppx wh hy blv b f f cpug h x dbu b d, whl yg z h u h quy w wll hv u ch f h uc py x wd h LLC g h dbud h, whl h zg h u f ch flw h dcd f x dbu. F h, g y pu f x h c b djud f h g/b d ppp (uch, by fcg h cpl g f h LLC h gfc u f lg- cpl g f xbl y qu hvg h quy w xd hgh g lw pud ). Ah ful h y w ulz pvd h h hll b h hgh cbd fdl, d lcl d, c, fg gl c x (djud f y dduc cd llwd by xg uhy f x pd h xg uhy) pplcbl wh pc h I f y Equy Ow bly dd by h Mg d/ Mb h h h c pc f whch h dbu b d w d by h Cpy. A pd u bv, h ful lly pc h ug fxd, puld bu wll qu h LLC pd gfcly d ff dv y f y - xc h y cclud ucy d dlly bud. A -dph vw f x lbly dbu pp Mdl Rl E Dvlp Opg Ag, up Th fu lv h ld IRS Schdul K-1. I uully dvbl, d l, f LLC cpl ccu ccdc wh h pcpl f T. Rg (b)(2)(v) (kw Sc 704(b) bk) cpl ccu), whh h LLC l d ddl cpl ccu ud h pcpl. Ud T. Rg (b)(2)(v), ch p h d ly cpl ccu; cpl ccu kp f ch p, d f ch u ( h ). F pup f h cpl ccu ul, h dv f LLC u ( h ) glly gd by h IRS. Alhugh h x ul d hv u fluc cpl ccu c, cpl ccu c b d f fudl h cc f h dl. D u h vy xcp h x dv c fly g cpl ccu. 69 Allc g h cfug pc php x. A x xp y b qud, v f y pply pl c. O pbl h llc, ulk pc f h LLC, lv vy ld f g d g g h p. Vld llc l flxbl h p u. I ypcl bu dl, llc wll b dcd by h flw f cbu d dbu u f h LLC. Th xc f lv dfg chqu huld dgu h vy ld 51

58 u f h p fd llc. Ov h lf f h LLC, cbu plu llc f c (u llc f dduc) ugh qul dbu. If yu kw hw yu w cbu b d, d hw yu w dbu (ply cludg lqudg dbu) b d, h h llc d fllw. A p xcp x f llc bubl cu db. LLC Ac y hv dful pv h llc f pf d l. KY. REV. STAT. ANN (pvd dful ul h pf d l f LLC hll b llcd h b f h gd vlu, d h cd f h [LLC] qud by KY. REV. STAT , f h cbu d by ch b h x hy hv b cvd by h [LLC] d hv b ud. ). S l TEX. BUS. ORG. CODE Hwv, llc pv f pg g lly dfd ply wh x cd d, d wh ll gd f h LLC Ac dful. If pcl llc dd, pv uhzg pclzd llc huld b ddd. S glly MCKEE, NELSON & WHITMIRE, FEDERAL TAXATION OF PARTNERSHIPS & PARTNERS (WG&L), Ch. 11 (Dg h P Dbuv Sh); BISHOP AND KLEINBERGER 4.12 (Allc f Pf d L). 70 S glly MCKEE, NELSON & WHITMIRE, FEDERAL TAXATION OF PARTNERSHIPS & PARTNERS (WG&L), (Tg Allc Ud Sc 704(b)). I vully uhd f f LLC b g uld dfc blg. If h LLC w cply wh h f hb, wll p ly h l. 71 O gd cpl ccu ( fcd llc ), Tc Flyd Cuff, Wkg wh Tg Allc Dfg Wdld, REAL ESTATE TAXATION 162 (Thd Qu 2008); Tc Flyd Cuff, Wkg wh Tg Allc Id-Pf Dfg f Id?, REAL ESTATE TAXATION 116 (Scd Qu 2008). Tg Cpl Accu, wh pc y Mb d y Fcl Y ( pd), u (whch y b h pv dfc blc) qul h hyphcl dbu uch Mb wuld cv puu clu () blw, u h hyphcl cbu uch Mb wuld b qud k puu clu (), d u h Mb h f h Cpy php u g, d u h Mb h f h Cpy p cu db u g, ll cpud dly p h hyphcl l dcbd clu () blw. () Th hyphcl dbu Mb y qul h u h wuld b cvd by uch Mb f ll f h Cpy w ld f u f ch qul h Bk Vlu, ll Cpy lbl w fd h x qud by h (ld, wh pc ch cu lbly p cu db ( dfd Rg.(S) (b)(4)) h Bk Vlu f h Cpy cug ch uch lbly), d h f h Cpy, cludg y u ud h Cpy puu Sc 12.4, w dbud full h Mb puu Sc 12.3(c) hf up lqud f h Cpy. () Th hyphcl cbu by Mb qul h u h uch Mb wuld b blgd cbu puu Sc 12.4 up h hyphcl l dcbd clu () bv lqud f h Cpy. 72 Db cud by h LLC, bh cu db d cu db, cludd h x b h h b hv h LLC. Th ul f llcg db g h p qu lb, d vy dpdg whh h db cu cu. S Cd 752; T. Rg hugh -7. S glly MCKEE, NELSON & WHITMIRE, FEDERAL TAXATION OF PARTNERSHIPS & PARTNERS (WG&L), 8.02 (Shg Rcu Lbl Ud h Nw Rgul); 8.03 (Shg Ncu Lbl). Ncu db f h pup h df h y b upg bu lwy. A lbly cu h x h p ld p b cc k f l f h lbly.... T. Rg ()(2). Thu db h fully cu ll h f h LLC y b cu ud h x ul. 73 Cd 704(c) dl wh h x cquc f cbud ppy h, h f cbu, h vlu h hgh lw h x b. Th chc f Cd 704(c) hd c k bg dffc. F xpl, f h cbud ppy ld x b, bu l f bk vlu, h w wuld hv xbl g ud h dl hd bu culd hv ubl xbl g ud h dl hd. If h ppy dpcbl zbl, h lc f Cd 704(c) hd bc gfc bcu y ffc h u f xbl c l f ch quy w dug h pplcbl cvy pd. Mb f wll g whch Cd 704(c) llc hd u wh pc pcul ppy cbud h LLC. Th b uully wll hv dv h u, d y hd lkly wll bf b h xp f h b. Bcu f h dv f h b, h LLC huld lv h chc f Cd 704(c) h g ul dd h h g hv h uhy fv b h xp f h. Th chc f Cd 704(c) hd() c hv gfc x 52

59 d, hf, cc cquc h p. Thu, h pv lg h lc f h Cd 704(c) hd() b dpd by h LLC huld b d gfc ul blpl. Dff hd y b ud f dff. Rv 704(c) llc dl wh h u whch php vlu cc wh dbu cbu (. [33]), d h w vlu f dff f h x b f h. S, Cuff, 65 NYU Th ch f ppvg b l ddd blw P V. 75 Mbhp LLC ypclly c wh bh cc gh (pclly h gh dbu) d -cc gh (uch h gh v, pcp g, cv f). I Dlw d Gg, LLC lly cc, culd b cfug f full bhp. Glly, h Opg Ag c f f LLC pv php x u flc h f h p b bl v w b. Th uf f pv, d hu y uch pv u b pcfclly ld h c. Tf f ly h cc LLC glly pd c d ffc h g f h LLC. S glly LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 7.3 (2004) ; BISHOP AND KLEINBERGER Ud LLC Ac, h f f ly f h b gh cv dbu (h cc ), d h g d hv uc gh bc b pcp h g f h LLC. S,.g., KY. REV. STAT. ANN ; TEX. BUS. ORG. CODE Cd whh pplcbl lw wll fc blu phb f. 77 Th ppch f dpd by h dful ul. KY. REV. STAT. ANN (1) ( [A] g f ld lbly cpy hll bc b ly f jy-- f h b c ); TEX. BUS. ORG. CODE (b) ( A g f bhp ld lbly cpy ld bc b f h cpy h ppvl f ll f h cpy b. ); MD. ANNOTATED CODE, Cp & A 4A-604. All b u c g bg dd, ul h Opg Ag pvd hw. 78 I y b dbl pvd blu gh f pd f (uch pu chld), whch wuld p f h p whu ggg gh f f ful pv. Cppdg, up [46], 47. Th f pv culd l b d pplcbl ly h v f h dh h vluy f. Th py dwbck h p h h h b y d up wh p f h chg. Id. F x dcu lg l d f f cc gh h LLC d p h h h LLC, BISHOP AND KLEINBERGER 8.07[1], 8.07[2]. 79 S Opg Ag llw h f f bhp y clld by h fg b. Th pv c h pl f bu f ply dfd, llwg h b f h gl b LLC h h cl, h llg h uld hd py. T pv h yp f u, pv huld dc h buy-u f h dcly fd b f h f bch h Opg Ag. S glly Tc F. Cuff, Dfg Php d LLC Ag: P II, 3 BUS. ENTITIES 26 (JULY/AUGUST 2001). Cuff, up. N.Y.U B w h h u bkupcy f b y h bly bc ubu b uhzd xc ll gh, cludg h gh pcp g, f b, whdg h bc f h c f h g b h d f h u b. S,.g., I Eh, 319 B.R. 200 (Bk. D. Az. 2005); 334 B.R. 437, whdw 2006 WL (2006). I pd dc, Oh cu kly ffdd h f f b h gh pcp h g f h LLC. S Hld v. Epp, 857 N.E.2d 583 (Oh 2006). S BISHOP AND KLEINBERGER 1.04[3][c]. 81 If h pg g pvd f gh f f ful, b wh d ll h bhp h LLC d h gd l g, u f ff h LLC h g b p puch uch b LLC glly h d cd ffd h pl puch. S Cppdg, up [46], 46. Th Opg Ag u fh vy p f pcdu, wh clfyg pd f c hugh clg. Th Opg Ag huld l pll u xcly wh hpp f h b fl xc h gh f f ful. S Tc F. Cuff, Dfg Php d LLC Ag: P II, 3 BUS. ENTITIES 26 (JULY/AUGUST 2001). I h bkupcy f b, gh f f ful h ggd by bkupcy h pp f cv y b d dffly f gh ggd up y f by h b. S I Cpl Acqu & Mg Cp., 341 B.R. 632 (Bk. N.D. Ill. 2006). 53

60 82 T vd ddlck, h Opg Ag d pvd f cclly ccpbl x pv f b. Ay x pv huld qu h dpg b b cplly pd f h LLC S LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 11.9 (2004). S glly BISHOP AND KLEINBERGER 8.02 (Mb Ex Expl d Tlgy) d 8.06 (L Mb Pw d Rgh Tf). 83 Th pu pv pvd h b y, y, pu h h h b. I h c, h llg b wuld fy h g b h h h wh buy ll gv pc. Cppdg, up [46], 46. Th g b hv w p: (1) hy y ll h h llg b h d pc, (2) hy y puch h llg b. Id. 84 O c f f buy-ll pv glly pvd h h b y ff buy u h h b LLC dug ddlck. Oc b cv uch ff, h b c ll h h bhp f h ffd pc, buy h ffg b f uch pc ( f pc dd h b f h whp f h b qul). 85 Expl f h x g clud dg-lg gh, whch p b llg h hd py fc h h b ll h h py l, wll h g-lg gh, whch p h h b qu llg b qu h puch f h buy h f h h b l. Th pbl f h yp f pv ld ly by h cvy f h df. S Tc F. Cuff, Dfg Php d LLC Ag: P II, 3 BUS. ENTITIES 26 (JULY/AUGUST 2001) [N: Ech u f BUSINESS ENTITIES ply pgd.] 86 I p pcfy hw h LLC wll b vlud up dgg f b. Th p y b vlud ccdg pc blhd by h llg b, dd hugh ppl, dcdd by b. Th ch f g h pc dgg y h ch f bkg up cpl ccu. S glly BISHOP AND KLEINBERGER 8.05 (Effc f Dc Ecc Rgh). 87 O d pcfy h ch y h b wll d gd vlu f 1%. S Cppdg, up [46], 46, 47. Wh h g cll f pdc vlu by h b, cd huld b gv whh h l gd vlu, gdl f hw l, huld pply whh, f pd f h l gd vlu wll b -bdg d lv vlu pcdu wll b plyd. 88 A ddd h vu p dfd blw wh pc bk vlu, xcly wh y pcul c wll b bk vlu bh d pply huld b f dcu. F xpl, bu whch hld ppy, uch l, h xpcd gfcly ppc vlu, dg bk vlu bd up hcl cqu c y yld wdfll h p wh bg bugh u. Slly, cp whch cpl l c-pducg, uch pfl pcc, bu whch d g gfc gd wll, d pclly h c f gd wll h y b cbl h ff f pcul w, h g h k h buyu bd up hcl blc h vlu y g ppp wdfll. 89 Cd d lc bw f vlu d f k vlu, ppcg h cu pply cu h (,.g., Fd v. Cu-Jul Pg C., 639 S.W.2d 553 (Ky. C. App. 1982)) d cy dl whh d hw dcu f kbly d/ cl huld b ppld. S l DNk v. Cup, 926 A.2d 869 (N.J. Sup. A.D. 2007) (dcug dc bw f vlu d f k vlu ). 90 If h ppl p lcd, h Ag huld dd hw pp b lcd. Th y p f lcg pp pvdg pd f h p g pp, g b vc judg lc pp, lcg ulpl pp d vgg h ppl. B dful h ppl c b xpv. 91 Ful y b bd cplz f h c f h LLC ff b f f k vlu, h c f puch f d ply, b bd ful whch dd f k vlu. Th ful culd b pcg f f k vlu b d pcg f h Cpl Accu f h bu h dl vy f pbl ful. If h puch pc l h h whdwg b cpl ccu, h xc cpl ccu wll b llcd h h b d y gg c. 92 Of pcul pc h u hw hdl h vl f h gg b f h LLC. Th Opg Ag huld pcfy wh y v h g d ud wh ccuc. A dld l f v f dful ypcl. Al, h Opg Ag huld fh pv f lcg 54

61 w gg b. C (.g., VA. CODE (F)) pvd uy dful f h vl f h g. 93 S LLC Ac vy wh gd b pw vluly whdw f LLC d cv h fcl vlu f h/h. Th dpy ul f h cpg hv pvdg lqudy f LLC b whl ll pcg h LLC d h g b f h dup cud by dc. S glly LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 11.2 (2004); BISHOP AND KLEINBERGER 8.03[1]. C LLC u pvd f yp f py whdwg b ud vu -pcfc ful. S LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 11.3 (2004); BISHOP AND KLEINBERGER 8.06 (L Mb Pw d Rgh Tf). S, l, Th E. Ruldg, Yu Ju Rgd Nw Wh? Dff Pdg f Whdwg F Vu, 12 J. Phugh E 43 (Nv./Dc. 2009). 94 I p dfy pcfc dpu lu ch h Opg Ag. I c lg y b ppp, bu h u y ld hlv b lu hugh b. A d qu y b ud f p bf h bdg b lg d. Ay pcfc dpu lu pv u k ccu lcl lw. Wh dfg g b, p df h p bud by h b, whh h xcluv dy vlbl d whh bdg, hw h b lcd, d h x f h b uhy. Dlg whh h LLC bud by h blg b p. 95 Up h dh f b, ly h b h LLC, d pcfc LLC ppy, p h b. Th f p h b fcl h LLC, d d clud y g. S LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 7.9 (2004); l BISHOP AND KLEINBERGER 8.03[3]. Bu Hld v. Epp, 857 N.E.2d 583 (Oh 2006) ( ). 96 Al vy llw b dfy pcfc v h Opg Ag h wll ul dlu f h LLC. S, glly, LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 11.5 d Appdc 11-1 hu (2004). S l BISHOP AND KLEINBERGER 9.02 A fw, hwv, llw h cu f LLC fllwg v f dlu ly wh h c f ll g b. S Buc P. Ely & Chph R. G, CHOICE OF ENTITY: AN OVERVIEW OF TAX AND NON-TAX CONSIDERATIONS 1550:0220 (2002); l LARRY E. RIBSTEIN AND ROBERT R. KEATINGE, RIBSTEIN AND KEATINGE ON LIMITED LIABILITY COMPANIES 11.7 (2004); BISHOP AND KLEINBERGER A pg g huld l pvd f wh wll hpp h LLC wh l g b l. M llw h LLC cu lgl xc ld ccuc v f h l f h fl b. Id. 1550:0329. S,.g., KY. REV. STAT. ANN (4); COLO. REV. STAT ; TEX. BUS. ORG. CODE I cdg wh lvl f c qu f d f h pg g, h w cpg gl: (1) ug h lg ugh v qud vd uf bl b g u-f-fv y b d (2) ug h h, fc, flxbly h g. Cppdg, up [46], 50. Cppdg ugg h g f 75%-90% ppvl f d h pg g f dl. Id. I y l b dbl qu hgh pcg uu v f c yp f d. F dcu d h pg g, BISHOP AND KLEINBERGER 5.06[4]. 98 If ffd publc, cd cu, y ucu d publcly dd php x u. 99 A y f h vu LLC Ac pvd uy d gh h b h v f c c, lhugh y b pbl l h gh h pg g. S,.g., Clf. (CAL. CORP. CODE ); Fld (FLA. STAT. ANN ); Gg (GA. CODE ANN q.); Myld (MD. CODE ANN., CORPS. & ASSNS. 4A-705); Mchg (MICH. COMP. LAWS (2)); M (MINN. STAT. 322B B.386); Mpp (MISS. CODE ANN ); Nw Hph (N.H. REV. STAT. ANN. 304-C:22); Nw Yk (N.Y. LLC LAW 1005, 1002); Nh Dk (N.D. CENT. CODE (1)(c)); Oh (OHIO REV. CODE ANN q.); T (TENN. CODE ANN q.); Whg (WASH. REV. CODE q.); d Wc (WIS. STAT ). S,.g., DEL. CODE ANN ; TEX. BUS. ORG. CODE Ud Kucky lw, hy x f pvdd f h cl f gz, h pg g, pl f g f cv (KY. REV. STAT. ANN (4), (3), (4), d ), bu hw vlbl. If h gzl lw pvd d gh, bu h dd, cd whh h LLC Ac qu 55

62 pvd h flxbly dfy ly wv h gh. Wh d gh ugh d hy pvdd f h u, hy u b w h pg g. Cd wll h uy lgug pvdg f d gh h c f, f xpl, g, d whh h lgug d b xpdd dd, f xpl, cv h w ubquly ddd h LLC Ac w vlbl by f h dp f h Mdl Ey Tc Ac (6A U.L.A 1 (2006 upp.)) l juc bx u. F dcu d gh, BISHOP AND KLEINBERGER Whl LLC Ac xply pvd f dvv c (,.g., FLA. STAT ; TEX. BUS. ORG. CODE ), h l h u. I h b hld h h bc f dvv c pv h LLC Ac, h dvv c. [c] Whl h hd b pl Nw Yk cu gdg vlbly f dvv c ud Nw Yk u, whch l dvv c, 2008 h pl w lvd dc f Nw Yk hgh cu h h w c gh bg dvv c whch w blhd by h pg f h LLC Ac. Tzl v. Wlff, 10 N.Y.3d 100 (2008). If h LLC Ac qu d xply p dvv c d hy dd, hy huld b ddd h pg g. Dlw p b g f LLC bg dvv c. DEL. CODE TIT F dcu dvv c, BISHOP AND KLEINBERGER d Dl S. Klbg, Dc Vu Dvv d h Lw f Ld Lbly Cp, 58 BAYLOR L. REV. 63 (2006). 101 Ud Cd 6221, y php ubjc ufd fdl x ud pcdg, whch dgd fcl php x ud by dg dju, h x pbl, h php lvl h h qug h h Svc ud ch dvdul p. A d bv, ul-b LLC cdd php f x pup. A ll php xp f h ufd ud ul. A php cdd ll php f h fw p, ch f wh dvdul (h h d l), C Cp h f dcd p. Cd 6231()(1)(B)(). Thf, LLC hvg S cp php b ll php gdl f z. A hubd d wf d p f h pup. Ev f php hw xp f h ul, h php y lc b ubjc h. Cd 6231()(1)(B)(). S glly WILLIS, PENNELL & POSTLEWAITE, PARTNERSHIP TAXATION (6 h d. 1997) (publh ld f h ). Ay php ubjc h cphv ufd ud pcdg qud hv x p. Cd 6231()(7). Th x p u b gl p d h h gl p dgd by h php h p wh h lg pf wh dg h b d. Wh LLC lf hld by dgdd y, h php lg qulf ll php d u hv x p. Chf Cul Mdu Rfc huld b hd T. Rg ()(7)-2 wh pc h d f wh gl p f LLC d h dg f h x p f LLC. S Rv. Rul , I.R.B. 65, gdg dgdd y h x p. F dcu h ll php xcp, BISHOP AND KLEINBERGER 2.07[2][c]. F dcu x p, d. 2.07[c][]. 102 S xply p LLC hv dff cl f b wh dff gh d pw. E.g., DEL. CODE ANN ; TEX. BUS. ORG. CODE Cuff, up 77, dcu pl u f dff cl f, uch cg c d pfd. [Ady Qu: N LLC c qu h LLC blh dff cl f d dff g h gh f dff b. Dff b y hv dff gh v f h ly cl, cl, f LLC.] 103 S lw y pvd dful ul h vg p cp (b hv qul v v wh whp qul), p bd whp hw. Cd huld l b gv ppp quu pv. S d F -by- ly f vg gh dful ul, BISHOP AND KLEINBERGER 5.09 Tbl Alv clud pg c by uu w c, by h v f h b uffc p h qu cvd g f h b, by hhld hgh h h qud cvd g bu blw uu. Th l p h h bf f php cugg cful cuy wh cg b h dcu d ply h wuld hpfully k plc cvd g. 105 Ud h p, v f h b y g c by jy, wh cg by w c h ppvl f ll h b qud. Accd MBCA 7.04(1). 106 Th ul f p cp vg (,.g., TEX. BUS. ORG. CODE ; RULLCA 407(b)(2), (3), (4); Pyp LLC Ac 403(); l RUPA 401(f), 401(j)) h, ug h l g 56

63 gdg wh h b, pbl d lv vg gh. P cp vg gh vd, y uphcd LLC, pbl f vlu f dff yp f cpl cbu (.g., wkg cpl vu llcul ppy vu g pvd vc). 107 Allcg vg gh lv cpl cbu h h bf f cy ug h cplc wh h qu f w cd f cbu. S,.g., KY. REV. STAT. ANN Hwv, h x h cpl h h pd (.g., g py cpl h h y b clld), dff cul vu ppcv xpu d b ddd, d h cquc f flu cbu v-à-v fuu vg gh. 108 If vg gh bd cpl ccu, h x dbu p- bu h wghd wd pcul cl f b, h vg gh wll b dpply ducd dbu d. Rlc, hwv, cpl ccu blc wll c cuu h c. A cd d h clcul f upcg v y b ppp. I LLC ulzg pcl llc, pclly f l cpd, ulz f cpl ccu d vg gh c b pblc. 109 Th f pcl pv f lc ud Cd 754; l clg f bk v. p llc. S w ppd gul whch y l d p llc. 110 If h LLC hv Bd f Mg h g c, h Ag huld pvd f pp f ucc, f ffc, g d vl pcdu, d h lk. Cppdg, up [46], 49. Vg pcdu f g huld l b pcfd h Ag. Id. 111 C u xply pvd f dff h uhy d du f vu g (,.g., VA. CODE (J)), whl h u d l dc. S,.g., KY. REV. STAT (2); TEX. BUS. ORG. CODE S,.g., KY. REV. STAT. ANN (2)(b) (xcp qud by h cl f gz h pg g, g hll b qud b b f h ld lbly cpy ul p ); VERMONT 3001 (12) ( Mg p, whh b, f g-gd [LLC]. ); VA. CODE B ( Mg d b d f h Cwlh b f h ld lbly cpy ul h Acl f Ogz Opg Ag qu. ) TEX. BUS. ORG. CODE ( g y c f p whch dfd clud fcl p, d pcfyg g d b b d f ). 113 If y ppd h g, h h pg g lf g g bw h LLC d h g huld dd chg f cl f h g wll bkupcy, dlu, d l v. 114 If cuulv vg dd, h pg g huld pll u xcly wh by cuulv vg. I huld b ud h h ccul v f h LLC h h cp lw f cuulv vg wll b ppld ul xply cpd h pg g. F dcu f g g ucu cludg f lc, glly BISHOP AND KLEINBERGER Glly pkg, LLC c d clud dful pv f g f h b d h fl gvc pcdu. Rh, h pcdu wll b dd by h g f h b. Th bc f dd pv dlg wh b g d l u kg c bu cp lw. Hwv, h xcp h ul, bly M d Nh Dk whch, by u, c dld pv dlg wh h pcdul. S MINN. STAT. 322B.33 hugh 322B.37; N.D. CENT. CODE hugh S l N.Y. LLC LAW ; TENN. CODE ANN A, ; TEX. BUS. ORG. CODE , ). 116 B w h h pcfc l h u f px LLC. F xpl, h T LLC Ac pvd h pg g y uhz dc f LLC v by pxy. S TENN. CODE ANN (b)(11). 117 I LLC, h glly x gfc flxbly wh pc h llc f vg gh. Whl c ly c pvdd h ll b, pcv f h cc p h cpy, wuld hv qul vg gh (.g., Pyp LLC Ac 403(A)), c dy llc, dful, vg gh h lv cl h cpl cbu hv b d h cpy. S,.g., KY. REV. STAT. ANN (1), (3). Oh d pvd dful ul, lvg h u f llc f vg gh ly h pg g. S,.g., OHIO (h pg g y g ll pcfd gup f b h gh v p cp h b up y. ) I LLC whch vg gh dd lv cpl cbu, cful dff f h ccp dd 57

64 h ud ud h x cd, whch glly dc h h f dll ud y p f u f cbud cpl, cy I p k p pv hd p f lyg h pp uhy f g, b, d/ ffc wh h p cully uhzd bd h cpy. F dcu h pw bd h LLC ccul udkg, glly BISHOP AND KLEINBERGER I dd h cucl u f dg h ppp hhld f d f h pg g h wll h u f dfg xcly wh cu h pg g. Glly pkg, h pg g cu h g g h b h p f h cpy. S,.g., KY. REV. STAT. ANN (14); TEX. BUS. ORG. CODE ANN (1). Cquly, y dc d by ll f h b ( y dc d by h hhld f h b cy dp d h pg g) cu p f h pg g. I fllw h h y l c l h pvu dc lf d h pg g d wll qu h hhld f h b qud f d. By wy f xpl, u h pg g qu 80% v f h b f d, bu llw jy f h b d h dy cu. A dc d wh pc h cpg h cp f h LLC ffc, d h dc d by l h hhld f h b qud f d f h pg g. Th ubqu ff k dff cl lc, h cv xc f h jy qud f h dy cu bu l h h ppvl qud f d f h pg g. I y b gud h h dc chg h cl ch ffcv h h qud v d h pg g h b fd. A uch, wh pc h pv ddg h d f h pg g wll h pv ddg h ppvl f h h dy h dy cu f bu, kp d d pply dd wh cu h pg g. F dcu h pg g, BISHOP AND KLEINBERGER F dcu d h pg g, d. 5.06[4]. 121 Idvdul LLC Ac y hv pcfc qu f dbu. F xpl, Rhd Ild (R.I. GEN. LAWS ) d Hw (HAW. REV. STAT (c)(6)) pvd dful ul f uu ppvl f h b f dbu. 122 A b f LLC y ullly f h gh cv h cc fu f h LLC (.., llc f h x f c, l, dduc d cd d d lqudg dbu) bu y ullly f h gh pcp h g d dc f h LLC. S,.g., ME. REV. STAT. ANN Rh, h gh pcp h g f h LLC cd h wh hv b dd b. Th hv dpd vy f dful vg hhld qud f h d f f b. S,.g., RULLCA 502()(3); KY. REV. STAT. ANN (1) (ll f h cub b); HAW. REV. STAT (c)(7) (ll f h cub b); IOWA CODE 490A.903 (ll f h cub b); CONN. GEN. STAT (jy f h b). F dcu h l b pw d gh f, BISHOP AND KLEINBERGER Th dful duy f c Dlw f pg lbly g glgc. W v. Mll Tchlgy Mg, L.P., 831 A.2d 318, 331 (Dl. Ch. 2003), cg I Ld, Ic. (Dl. Ch. 2002) d Gu v. Hug, 823 A.2d 492, 507 (. 39) (2003) (h lu Dlw f pg lbly f bch f h fducy duy f c, b xculpy pv h y gvg dcu, g glgc). T blh h g glgc f h g, b u pld d pv h h g w cklly ufd cd ud h bud f. Cc Bll Cllul Sy. C. v. Ach Mbl Ph Svc f Cc, Ic. (Dl. Ch. 1996), ff d 692 A.2d 411 (Dl. 1997). S LLC c hv ddd h dd f c wd by g d gg b vy f wy. S J. Wll Cll & All W. Vl, Thy v Cd Lb wh Mdbl f Dh: Sccy, Dclu, d Fducy Du Ld Lbly F, 76 IND. L.J. 271, (2001). Svl LLC c dp dd f c k g glgc. S,.g., KY. REV. STAT. ANN (1) ( A b g hll b lbl, pbl, ccubl dg hw h [LLC] h b f h [LLC] f y c k flu c bhlf f h [LLC] ul h c cu w ckl cduc. ); FLA. STAT ( Th duy f c ld fg f ggg gly glg ckl cduc, l cduc, kwg vl f lw. ); ULLCA 409(c). Oh dp vu dd cludg gd fh, dy glgc, d cg blvd b h b f h cpy. Cll & Vl, up 282. Th cly dpd vd ULLCA dp duy f c cl dy glgc dd d fc h bu judg ul. Rvd ULLCA (2006)

65 Typclly, h pg g c ubly duc h duy f c, bu y hgh h dd f c. S ULLCA 103(b)(3) (y ubly duc h duy f c). F dcu cczg ULLCA dp f g glgc dd, glly J. Wll Cll, Th Lw D N Pfcly Cphd.... : Th Idqucy f h G Nglgc Duy f C Sdd Ucpd Bu Ogz, 94 KY. L.J. 451, & ( ). F dcu f h duy f c, BISHOP AND KLEINBERGER Th fcbly f cv cp lgly dpd lw. Tc Flyd Cuff & Rb Shw, Dfg Php d LLC Ag: P 4, 3 BUS. ENTITIES 12 (2001). 125 Th x whch, f ll, b d g f LLC u p ppu g h LLC bu gg h bu cv ubjc h uully qu pcul d g wh gzg vu. C d b k ccl h pv wh h pup f h LLC (I IV()(2) d 33bv). 126 A pg g cc, d uch cp pld duy f gd fh d f dlg. S,.g., RESTATEMENT (SECOND) OF CONTRACTS 205 ( vy cc p up ch py duy f gd fh d f dlg pfc d fc. ). Ud h Rvd Uf Ld Lbly Cpy Ac, 110(c)(5), pg g y l h blg f gd fh d f dlg, fh xply h Ac 409(d), bu h pg g y pcb h dd by whch h pfc f h blg f gd fh d f dlg wll b ud. RULLC 110(d)(5). Th, hwv, gfc dc h g f gd fh. F xpl, S v. R, 911 A.2d 362, 370 (Dl. 2006), h Dlw Sup Cu dd h gd fh ubdy l f h duy f lyly. Th cp f wh cu gd fh h bc f bd fh cgzd bg uky b. I h Dy dc h Dlw Chcy cu ckwldgd h lkly pbl cul bd ugh df cpu h uv f c h wuld cu bd fh. I R Th Wl Dy Cpy Dvv Lg, 907 A.2d 693, 755. S l Th C Cp Lw, Chg h Rvd Mdl Bu Cp Ac --- Ad Pg h Lbly f Dc, 45 BUS. LAW. 695, 697 (1990). Th ph c gd fh ly ucpbl wdly dffg p, pclly cvly d w dd b pc dd duy b bd f bg wvd cp cfc f cp. Id, h bdh f wh gh cu wvbl bd fh h b wd ud h Mdl Bu Cp Ac clud c () wh pc whch h dc dv fcl bf whch h h ld () h h lly cl lly dgd h h cp. Th Dy dc f h c lw h fg f... hzy jupudc, bu [] c gd fh, dc u c ll wh hy f pup d h b d wlf f h cp, whch clud lly dgdg h h du fducy. B w h gd fh y b fducy blg whl gd fh d f dlg ul f cc. 127 F c pg d pplyg l -lgh pv pg g, Flgh Op Il, Ic. v. Flgh Op, LLC, C.A. N N (2005) ( 2005 WL (Dl. Ch.)), ccludg h h b f vlug c ud h dd whh h pc d h f h c wuld hv b h uc f lgh g. I h c, b pc f fyg h g d h h f lf-d c w quvl wh wuld hv b gd lgh c, h cu ccludd h h g hd h bud f dg h d h dd. Th cu, f 34, cgzd h h dd w l u h h f dd bu qud pf h h pc w quvl wh wuld hv b chvd f l g - h pc f gv d k. 128 Hldg quy LLC, cludg cd, ypclly k h g p f x pup. 129 Whl c f h LLC c xply ffd g gh pc h bk d cd f h LLC (,.g., DEL. CODE ANN.. 6, (b)), y h LLC c l g gh cc bk d cd. T h x h u l, h x c pv h dfbl d dfc dd, h pc huld b ddd h pg g. 130 C d b k h f gz vg h lw f h fg whch h LLC wll d bu w d d whh qulfc c bu wll b qud, d, ply, whh h LLC d b y b ubjc x h. Thf, h u d b cuuly vwd ccu f cul bu cv. S glly BISHOP AND KLEINBERGER 5.08 (Rg Rqu f Fg Ld Lbly Cp). 59

66 131 S glly BISHOP AND KLEINBERGER Ch. 9 (Ey Dlu). 132 Th vy f dful hhld f vluy dlu. S,.g., ALABAMA (2) ( w c f ll b ); ARKANSAS (2) ( w c f ll b ); CONNECTICUT (2) ( l jy f h b ); RHODE ISLAND (3) (jy f h cpl vlu f ll bhp whch hv b gd ); TEX. BUS. ORG. CODE ( jy v f ll h b ); Myld Ad Cd Cp & A Sc 4A-902. Of h u xply p dfc f h hhld. S,.g., CONNECTICUT ( ul hw pvdd wg h cl f gz pg g ); RHODE ISLAND (b) ( Ul hw pvdd h cl f gz pg g ); TEX. BUS. ORG. CODE ( cpy g cl xcp pcfd -wvbl ). F dcu vluy dlu by h c f b, BISHOP AND KLEINBERGER 9.02[3]. 133 N h dffcul df d cd huld b gv dfg h pg g. 134 S LLC c cly pvd f judcl dlu ud pcfd ccuc, glly h ld fu f cc pup. Thy ypclly clud, u, ccuc wh pccbl cy h bu cfy wh h pg g. S,.g., DEL. CODE ; KY. REV. STAT ; NY. LLC LAW 702; TEX. BUS. ORG. CODE S l pvd f judcl dlu h v f ddlck. S FLA. STAT C y p h Opg Ag pvd f ddl b f judcl dlu. Dp u pvdg f judcl dlu, c b vy dffcul b. S All G. D, Fd f Cc d Blpl Pv f Bu Ey Ag, 8 J. PASSTHROUGH ENTITIES 11, (Mch/Apl 2005). F dcu judcl dlu, BISHOP AND KLEINBERGER 9.02[7]. Ud Dlw lw, pbl f h pg g ly wv h gh bg judcl dlu. R & R Cpl, LLC v. Buck & D Ru Vlly F, LLC, 2008 Dl. Ch. LEXIS 115 (Aug. 19, 2008). Cvly, ud RULLCA, judcl dlu f LLC jufd h b fh ubc (4) d (5) f Sc 701. RULLCA 701, 6B U.L.A. 506 (2008). RULLCA pvd h h pg g y vy h pw f Cu dc dlu h ccuc pcfd Sc 701()(4) d (5). RULLCA 110(c)(7), 6B U.L.A. 443 (2008). Cquly, judc whch RULLCA h b dpd (d pug dfc f h pv h c), wuld b pbl l h gh f b v, h uly dfd b, f judcl dlu f LLC. 135 F xpl, dv dlu f flu py x fl ul p. TEX. TAX CODE , (dv ffu f flu fl p u); TEX. BUS. ORG. CODE (vluy by Scy f S vu gud). F dcu dv dlu, BISHOP AND KLEINBERGER 9.02[6]. 136 Cd whh pg g c bw ubjc judc f h u cu. F xpl, f X ccu, dlv ud upv f cu. 137 Ah vgu ccp h ubjc dff p. Cd dfg Opg Ag. 138 E f p x l d gud py y b ucud g l f x pup, h l y b ppp. 139 Pc f lg ccu d lqudg f h pup f fl dbu h b. S glly BISHOP AND KLEINBERGER Cd pvdg f wh hll b pbl f flg dcu, pyg cd, hllg. Cd wh x dv gdg g d chcz f py, d fdl flg. 140 Glly, h -bdg pcdu bf gl ul hd py d wh d judg h c bu hlp fcl dcu d vul lu f h dpu. Dl h huld b cludd d pv clud: (1) c h p; (2) g u; (3) ppg d; (4) blg d gd fh; d (5). 141 If b lcd v lg h fu f dpu lu, h pg g d dd h pvd, fu d vu, d c hfg (f y) h wuld b pplcbl h c f lg. 142 F xpl, ch py wll lc b d h w lcd b wll lc hd b. AAA h l f cfd Ab. 143 Wv f juy l clu glly fcbl vywh xcp Gg d Clf. S Bk Suh N.A. v. Hwd, 444 S.E.2d 799 (1994) (puu whch h Gg Sup Cu hld h p-dpu 60

67 ccul wv f juy l b ufcbl c d ud Gg lw); Gf P L.P. v. Sup Cu, 36 Cl. 4 h 944 (2005). 144 Culy gh p LLC: Dlw, DEL. CODE ANN ; Ill, 805 ILCS 180/37-40; Iw, IOWA CODE 490A.305; Nvd, NRS ; Oklh, 18 OKLA. STAT B; T, TENN. CODE ANN ; Tx, TEXAS BUS. ORG. CODE (2009); d Uh, UTAH CODE ANN. 48-2c Th ccp h cx f uy u ulzd f cuz d h gz f v cp/uul fud. S Th E. Ruldg, Ag, F h W f Thy: Th Chllg f h S Bu Ogz Lw, 46 AMERICAN BUSINESS LAW JOURNAL 311, (2009). I c y h ccp h pd LLC d h ulz f h ccp h xpdd byd gl pplc. Sll, h gfc u wh pc h ulz f h, cludg wh pc () h f h ud bkupcy lw; () qu whh h l hld wll b pcd judc whch LLC u whch h cpd h dc LLC c; () qu f fdl x clfc, cludg whh dvdul lgbl y bl dpdly lc clfc; (v) u f x clfc; (v) u f xu f pup f x ; (v) u f pp, f pup f x, bw dvdul d bw d h p LLC; (v) u wh pc h gg f cuy h cd wh bu ld h f pcul ; (v) u, h h d xply pvd ul h pv, whh dvdul y cc w, u d b ud w, hld l ppy w. S l pfy N Rvd Uf Ld Lbly Cpy Ac, 6B U.L.A (2008); Ruldg, up D whh h uhy gz dvdul f h LLC d c LLC ppy hwh wll b d f h g h b d h ppp hhld hf. 147 I LLC, h h p LLC c b h l b f h dvdul, bhp h y b cpd f ll b f h LLC, ub f h b f h LLC, d php h pbl. 148 Th LLC c pvdg f uvlly pvd h h dvdul y hv g dff h h f h p LLC. I pg g f LLC, pv d b d f hw ch wll b gd d v lf, cy chg g ucu. 149 S up. 150 I y c h LLC d h cbug b wll p cbu g wll dd dld f ccg h cbud ppy chdul xhb h pg g. I f gd pcc hv ll f h b xcu ubcp g puch g cbu g h c p, w, d cv f c f h u. A cbu g bw h LLC d h cbug b f ppp wh ppy h h y cbud. Such g wll b l puch d l g f h ppy vlvd. I uully wll clud cuy p, w, d cv pc f h ppy bg cvyd h LLC. F ly f cpl-ld blg pd by LLC u, BISHOP AND KLEINBERGER A ubcp g uully wll clud dd cu lw (cludg pplcbl Blu Sky lw) p d w d qu blhg h ppcv b b ccdd v ud Rgul D pulgd ud h 1933 Ac. Rb R. Kg d Th E. Ruldg, LLC d LLP I Scu, pd ALI-ABA Chc f Ey 2008 (Fbuy 13, 2008), vlbl <hp:// p3 dwld. F dcu f h lhp f fdl d cu lw LLC bhp, BISHOP AND KLEINBERGER