Welcome to 2018! Given the 20 plus percent run up in the financial markets of 2017, coupled with the recently enacted Tax Cuts, 2018 is poised to be a big year for businesses, big and small. With that said, it should be a great year for the LLC.
A focus of The Corrigan Law Firm PC has always been the creation, buying, selling and dissolution of LLCs in Alabama. As a business entity, LLCs are relatively new to the legal landscape. In our state, they have been subject to some fairly significant modifications in the past 25 years, some of which are beneficial to small and medium business owners, some of which are, quite frankly, headscratching.
Creation of an LLC is a fairly straightforward task, if you know what you’re doing. If you don’t, you could be like the lady that called me a while back to straighten out a mess created by an online service provider who shall remain nameless (but their name has a Z in it.) Her husband’s custom made hand bag business had somehow been domesticated in Jefferson County, not Mobile County. Now they have the privilege of paying local taxes in two jurisdictions, not just the one they are in.
Starting the LLC is really just the beginning of the relationship between the lawyer and the business. Annual reports must be filed. Registered agents and registered offices must be maintained. New members are added. Old members die or wish to retire. Divorces occur. Wills attempt to leave membership interests to undesirable transferees. Members use the company checking account for hunting camp leases or to buy a boat. Financial rights between the members must often be reallocated.
All of these issues can be addressed without a lawyer. But you will be just as successful on the PGA Tour without using a qualified professional if you don’t use a qualified attorney to assist your business.
Most overlooked in the starting of the business, an Operating Agreement is a dead lock necessity. Ask any number of my clients that passed on that “expense” and said that they would get back to it one day if that was a great idea or not. The law constantly changes, and those changes can be the difference between salvaging your investment or losing your shirt. Or t-shirts, as one client has discovered.
Have a big money deal? Great! Did you know that a membership interest in an LLC is nothing like a share of stock? Did you also know that an LLC membership is a “security” that falls under the jurisdiction of the Alabama Security Commission? Grow big enough, you will get their attention.
If you decide to sell your business, or buy one, what exactly are you buying or selling? Assets? Stock? Membership Interests? The business? (The last one is a trick question: you actually do have to buy assets or ownership interests. There is no such thing as buying “the business.”)
If we can be of assistance to you and your business, please, do not hesitate to give us a call at (251) 476-2292 or email us at firstname.lastname@example.org. We’re ready to get your business on the right track.
Rule 7.2 of the Alabama rules of professional conduct requires the following:
“No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.”