TELESEMINAR: Dangers of Using "Units" in LLC Planning

October 28, 2010
12:00 – 1:00 p.m.
1.00 MCLE hours

Telephone

LLC interests are complex bundles of economic and governance rights – non-standardized interests that have the near-limitless flexibility of contract law. There is a widespread temptation in drafting LLC operating agreements to try to shoehorn these complex LLC interests into corporation-like “units,” which are the draftsman’s shorthand for corporate stock. But that shorthand is very dangerous, sometimes truncating the rights of LLC interest holders or implying that more is given than can be given, as in the case of governance rights. In the world of “units,” there is substantial opportunity for LLC interest holders not to get the benefit of their bargain. Furthermore, the language of “units” has no recognition or force in state organizational laws or under federal income tax law. This program will provide you with a practical guide to the pitfalls of using “units” in LLCs and how to avoid – or correct – them. The program is designed for business attorneys with intermediate to advanced levels of practice experience.
 
Highlights:                                                                                      
  • Practical risks and pitfalls of using “units” in LLC operating agreements
  •  “Joint venture” v. “Corporation” paradigms for drafting LLC operating agreements
  • Governance rights – how “units” can overpromise the transfer and exercise of voting rights
  • Economic rights – how “units” may shortchange LLC interest holders of the benefit of their bargain
  • Tax issues – how “units” can lead to substantial adverse tax results
  • How to avoid “unit” errors – or correct them, if already made
 
 
For more information about the new ISBA Teleseminar programs, please visit: http://www.isba.org/cle/teleseminar
Program Speaker:
Leon Andrew Immerman, Alston & Bird, LLP, Atlanta, GA
 
 

Leon Andrew Immerman is a partner in the Atlanta office of Alston & Bird, LLP, where he concentrates on federal income tax matters, including domestic and international tax planning and transactional work for joint ventures, partnerships, limited liability companies and corporations. He is chair of the Committee on Taxation of the ABA Business Law Section and is chair of the Partnership and LLC Committee of the State Bar of Georgia Business Law Section. He is also co-author of “Georgia Limited Liability Company Forms and Practice Manual”(2d ed. 1999, and annual supplements). Mr. Immerman received his B.A., magna cum laude, from Carleton College, his M.A. from the University of Minnesota, and another M.A. and his Ph.D. from Princeton University, and his J.D. from Yale Law School.

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