WHAT DOES IT MEAN FOR A COMPANY TO GO THROUGH A REVERSE MERGER?

By John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M

Kiritsis Law Group

212 922 0005

 

A reverse merger is a process in which a private company merges with a publicly traded shell company. This allows the private company to become publicly traded without going through an initial public offering (IPO). The public shell company is essentially absorbed by the private company and the private company's owners and management become the owners and management of the newly merged public company. Reverse mergers can be a quicker and less expensive way for private companies to become public, but they also come with increased regulatory scrutiny and a higher risk of fraud.

 

 

 

 

  

CAN LIMITED LIABILITY COMPANIES OWN REAL ESTATE PROPERTIES?

Yes, limited liability companies (LLCs) can own real estate properties. As separate legal entities, LLCs have the ability to purchase, own, and manage real estate just like individuals or other business entities can. It's important to note that the ownership and management of real estate by an LLC may have tax implications and regulatory requirements that vary by jurisdiction, so it's advisable to consult with a lawyer or tax professional to determine the best course of action for your specific situation.

 

 

 

 

  

HOW IMPORTANT IS THE OPERATING AGREEMENT WITH REGARDS TO GOVERNING THE DAY-TO-DAY BUSINESS AFFAIS OF A LIMITED LIABILITY COMPANY?

The operating agreement is extremely important with regards to governing the day-to-day affairs of a limited liability company (LLC). The operating agreement lays out the rules and procedures for how the company will be run and is a crucial document that outlines the ownership and management structure, rights and obligations of the members, and how profits and losses will be divided among the members. In the absence of an operating agreement, the default rules established by state law will apply, which may not align with the specific needs and intentions of the members. Thus, it is important for an LLC to have a well-drafted and comprehensive operating agreement to ensure that the company runs smoothly and in a manner consistent with the intentions of the members.

 

 

 

 

  

WHAT ARE THE DOS AND DON'TS OF DRAFTING A PROPER LLC OPERATING AGREEMENT?

By John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M

Kiritsis Law Group

212 922 0005

 

When drafting a proper operating agreement for a limited liability company (LLC), it's important to follow these guidelines:

 

Dos:

 

Clearly define the ownership structure and allocation of profits and losses.

Outline the roles, responsibilities, and decision-making authority of each member.

Establish a process for adding or removing members.

Specify the rules for conducting meetings and taking votes.

Clearly state the method for resolving disputes.

Include provisions for handling the death or departure of a member.

Specify the accounting and tax requirements for the company.

Don'ts:

 

Include provisions that are illegal or in violation of state law.

Include provisions that are too vague or ambiguous.

Make the agreement too rigid, so it cannot be modified if the company's circumstances change.

Neglect to consider the future growth and evolution of the company.

Neglect to consider the tax implications of certain provisions.

Note that while operating agreements are important, they may be subject to interpretation by courts, so it is recommended to consult with a lawyer before drafting an agreement.

 

 

Sources:

New York Business Corporation Law

New York Limited Liability Company

New York General Obligations Law

NYS Office of Professions

U.S. Constitution

 

Whether you are a new business startup or a well-established company, our law firm can help you with all of your business law legal needs. For a free consultation, you can call us at 212 922 0005.

 

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