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Archive for for December, 2015

Will Your Personal Obligations Cause You To Lose Control of Your LLC? LLC Charging Order Update: Vision Marketing Resources, Inc. v. McMillin Group, LLC (Part 2)

December 29, 2015

Vision Marketing Resources, Inc. v. McMillin Group, LLC.

 In Vision Marketing, the court first addressed whether it could issue a charging order against a non-Kansas LLC over which it did not have jurisdiction. There was no Kansas case law on this issue, so the court looked at several cases in which other state’s appellate courts held that the court need not have jurisdiction over the foreign LLC (i.e., those formed elsewhere) in order to issue a charging order against the interests of its members: for example, the Illinois Appellate Court found that a court only needs to have jurisdiction over the judgment debtor to enter charging orders against the judgment debtor’s interest, because charging orders on distributional interests do not affect the rights or interests of the LLC; and in Georgia, the Court of Appeals has likewise held that it is only necessary for a court to have jurisdiction over the judgment debtor to have the authority to enter charging orders against the judgment debtor’s interest because the LLC has no right or direct interest that is affected by the charging order.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 4)

December 22, 2015

Texas Crowdfunding Portal Registration and Activities.

As we mentioned previously, an offering conducted under the crowdfunding exemption must be made exclusively through an Internet website operated by a registered general dealer or registered TCP.

Local Character. Just like crowdfunding issuers, a TCP must be an entity formed and authorized to do business in Texas.[1]  A TCP should be physically located in and operate exclusively within Texas.[2] Moreover, a TCP must be engaged exclusively in intrastate offers and sales of securities in Texas and limit its activities to operating an Internet website utilized to offer and sell securities under the Texas crowdfunding exemption, without operating or facilitating a secondary market in securities.… Read the rest

Will Your Personal Obligations Cause You To Lose Control of Your LLC? LLC Charging Order Update: Vision Marketing Resources, Inc. v. McMillin Group, LLC

December 19, 2015

In our previous blog series on single-member LLCs and creditors’ rights (available here), we discussed charging order protection and courts’ application of the same to single-member LLCs. As we mentioned, the obvious purpose of charging order is to protect other members of an LLC from having involuntarily to share governance responsibilities with someone they did not choose or from having to accept a creditor of another member as a co-manager—that is, to protect the autonomy of the original members and their ability to manage their own enterprise.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 3)

December 17, 2015

How Should the Offering Be Conducted?

Must Use a website. An offering conducted under the crowdfunding exemption must be made exclusively through an Internet website operated by a registered general dealer or registered TCP.[1] Such website must meet the following requirements:

  • A disclaimer that access to the website and offers and sales of the securities are limited to Texas residents;
  • An affirmative representation by a visitor to the website that the visitor is a Texas resident before they can view information on the website;
  • Evidence of Texas residency before a sale can be made to a prospective purchaser, e.
… Read the rest

Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update (Part 2)

December 15, 2015

Hill International, Inc. v. Opportunity Partners L.P.

In Hill Int’l, Inc. v. Opportunity Partners L.P., Hill asserted that its announcement in 2014 constituted prior public disclosure of the date of the 2015 annual meeting, and since this disclosure was made more than 70 days in advance, Opportunity’s proposals dated May 7, 2015, was untimely for failing to meet the 30-day-window requirement under the bylaws.[1] Opportunity argued that Hill first gave notice of the date of the annual meeting on April 30, 2015, because that was the first time Hill specifically identified June 9, 2015, as the actual date of its annual meeting, and since the notice was given less than 70 days in advance of the meeting, the 10-day notice period applied and its proposals dated May 7, 2015, were timely.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption (Part 2)

December 12, 2015

Who Is Eligible?

Texas Formation. Texas crowdfunding exemption is only available if the issuer is a Texas entity that has filed a certificate of formation with the Texas Secretary of State and is authorized to do business in Texas.[1] This means that sole proprietor, general partnerships, or joint ventures would not be eligible to use the exemption, as those types of businesses do not file a certificate of formation, nor would companies whose certificate has been terminated or forfeited for failure to file a required report, to pay franchise tax or penalty, or to maintain a registered office or registered agent.… Read the rest

Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update

December 10, 2015

Many are familiar with the advantages of having a formal entity for business. Limited liability companies, or LLCs, in particular, have gained popularity in recent years and seem to be the entity of choice for small business owners not only because of the liability shield and favorable tax treatment, but also because of the simplicity and flexibility. Mind you, certain formalities, such as meetings and records, are still necessary for LLCs (if required by your LLC Agreement or similar governing document), and LLC members and managers are not free to ignore them if they want to maintain the liability shield.… Read the rest

An Easy Way for Texas Companies To Raise Money? A Discussion of the Texas Crowdfunding Exemption

December 8, 2015

In our previous blog series titled “Crowdfunding: Is It Right for My Business?”, we discussed Title III of the JOBS Act, popularly known as the “CROWDFUND Act (Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012),” which would exempt crowdfunded securities from the federal registration requirement. On October 30, 2015, the Securities and Exchange Commission (‘SEC”) finally voted to adopt the final rules to implement the law (see our previous blog titled “SEC Votes To Adopt Federal Crowdfunding Rules”).… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.


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