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Archive for for December, 2015

LLC Owners, If You Owe Someone Money, Your Ownership of an LLC Might Not Be Protected: When It Comes to Single-Member LLCs, Charging Order May Not Be the Exclusive Remedy (Part 6)

December 5, 2015

After Olmstead v. FTC, a Florida Case with Potential National Implications.

The Florida Supreme Court’s opinion in Olmstead v. FTC created much uncertainty concerning charging order protection for multi-member LLCs in Florida[1] and seems to have been the catalyst for legislative action in Florida and Delaware, among others.

In 2011, the Florida legislature amended the Florida Revised Limited Liability Company Act to provide that a charging order is the sole and exclusive remedy by which a judgment creditor of a member or member’s transferee may satisfy a judgment from the judgment debtor’s interest in an LLC or rights to distributions from the LLC.… Read the rest

Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules (Part 5)

December 3, 2015

Investor Qualification.

Each time before accepting any investment commitment, an intermediary must have a reasonable basis for believing that the investor satisfies the investment limitations discussed above; in doing so, an intermediary may rely on an investor’s representations concerning the investor’s annual income, net worth, and the amount of the investor’s other investments made under the crowdfunding exemption, unless the intermediary has reason to question the reliability of such representation.[1] An intermediary must also obtain from the investor: (i) a representation that the investor has reviewed the intermediary’s educational materials discussed above, understand that the entire amount of his or her investment may be lost, and is in a financial condition to bear the loss; and (ii) a questionnaire completed by the investor demonstrating the investor’s understanding regarding restrictions on the investor’s ability to cancel an investment commitment, resale restrictions, and risks of loss.… Read the rest

Is It Time To Do Crowdfunding To Raise Money?: SEC Releases Federal Crowdfunding Final Rules (Part 4)

December 1, 2015

Funding Portal Registration.

As expected, a funding portal must register with the SEC by filing a complete Form Funding Portal (to be amended whenever previously submitted information becomes inaccurate) and become a member of a national securities association[1]; a funding portal that is registered this way is exempt from the broker registration requirements.[2] A non-U.S. portal can register, too, but its registration is conditioned upon there being an information sharing arrangement in place between the SEC and the competent regulator in the non-U.S.… 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.