Tag: LLC Agreements

Inaugural Case of the Year – Yakuel v. Gluck

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Jan 12, 2022
As a New Year’s treat, this week’s post will be a twofer. We will now discuss Yakuel v. Gluck, a convoluted case involving the entity Agency Within LLC (hereby referred to as the “Company”). The Company’s Shareholder and LLC Agreements priced a buy-out option subject to the “final and binding” determination of a third-party appraiser,… Read More

Capital Contributions and the Case of Brickstone Holdings, LLC

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Sep 29, 2021
Last week, we discussed different possible remedies for a failure to contribute capital. This week, let us consider a recent Washington Court of Appeals case, Moses Land Grow LLC v. Brickstone Holdings LLC, that helps to clarify the definition of a capital contribution. Moses Land Grow LLC v. Brickstone Holdings LLC In March of 2017,… Read More

Remedies For Failure To Contribute Capital

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Sep 22, 2021
Every business needs capital, so what happens when members form an LLC and promise to contribute capital but fail to follow through?  The breach of such a promise is foreseeable, so plan for it. Consider drafting provisions in an LLC Agreement that outline remedies when a member breaches their promise to contribute. Our discussion this… Read More

Shotgun Buy-Sell Agreements – What Are They? Do I Need One?

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Sep 1, 2021
The premise of the shotgun buy-sell agreement is an age-old technique that dates back far beyond its legal history. Explore this analogy with me: one piece of grandpa’s famous chocolate cake remains from a family birthday party and both you and your sibling want that cake but cannot agree on who gets what size portion.… Read More

Even Single Member LLCs Need Written LLC Agreements

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
May 5, 2021
Investors regularly make the mistake of assuming they do not need a written LLC agreement when they form a single-member entity. In the absence of a written LLC agreement, statutory default rules apply, which often come with surprising consequences. A Hypothetical Let us consider, for example, you purchase a fourplex in your own name then transfer… Read More

LLC Interests And Securities – Personal Liability Looms

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Feb 24, 2021
When drafting LLC agreements, practitioners ought to remember that LLC interests may be securities subject to both state and federal securities laws. When an LLC interest becomes a security, additional disclosures of  “material facts” are required.  Without such disclosures, personal liability for securities fraud looms. The recent Washington Court of Appeals case of Freeman v.… Read More

LLCs And Capital Accounts: An Introduction

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Feb 17, 2021
Lawyers advising LLCs and their members must understand capital accounts from a tax perspective. When LLCs are taxed as a partnership, a member’s capital account reflects a portion of a member’s economic interest in the LLC. The tax regulations surrounding capital accounts are lengthy and complex, but understanding the basics allows practitioners to fully counsel… Read More

Carefully Drafting ….or Else!

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Jan 6, 2021
Draft carefully, because ambiguous drafting may leave you at the mercy of default rules of the LLC Act.  A recent Wisconsin Supreme Court decision, Marx v. Morris, 925 N.W.2d 112 (Wisc. 2019), illustrates the need for careful drafting. The Case’s Significance Before delving into the facts and dispute arising out of Marx, it is important… Read More