June 10, 2014
12:00 – 1:00 p.m.
1.00 MCLE hours
When drafting an LLC operating agreement, virtually the only limitation is the creativity of the drafter. Economic and management rights and tax benefits can be separately allocated to the LLC’s members in virtually any manner. To impose some order on this broad flexibility, attorneys frequently rely on “units,” variously captioned, as a conceptual planning and practical drafting tool to mimic the bundle of rights represented by stock in a corporation. Though easy and seemingly effective, these units do not correspond to anything defined by state organizational or federal income tax law. This lack of congruence very easily leads to a misallocation of economic and management rights, adverse tax consequences, and clients losing the benefit of their bargain. This program will provide you with a practical guide to the pitfalls of using units when drafting LLC agreements, how to avoid them, and how to correct them in existing agreements.
Leon Andrew Immerman, Alston & Bird, LLP, Georgia