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Louisiana Llc Tax Classification
Summary
A Louisiana LLC owned 100% by a single-member holding company is a disregarded entity for tax purposes, not a partnership. This means its income and expenses are reported on the holding companys tax return. In the operating agreement, the holding LLC should be listed as the manager for day-to-day decisions. Manager compensation can be based on financial performance and discretion. Profits are distributed by majority equity owners, and decisions are made by the manager. Amendments require a majority equity vote. New members need majority approval, and withdrawal terms require a 60-day notice. Dissolution needs a majority vote, and profits/losses are allocated by ownership percentage. Non-compete clauses typically last 1-2 years. Share sales to non-members need majority approval. Non-equity members are paid based on performance, not LLC profits. Phantom stock and stock options should be in bylaws under Equity Compensation Plans.Full Conversation
you didn't answer my question would that set up if my holding company was single member be partnership or not? I having to add this to operation agreement so need to know
If your holding company is a single-member LLC, then your LLC will be considered a disregarded entity for federal tax purposes, not a partnership. This means the LLC's income and expenses will be reported on the holding company's tax return.
Do you need more information on how this affects your operating agreement?
Do you need more information on how this affects your operating agreement?
so say disregarded entity for classification or single member LLC?
For your operating agreement, you should classify it as a "disregarded entity" if your holding company is a single-member LLC. This means it's treated as part of the single-member LLC for tax purposes.
Do you need more detail on the implications for your operating agreement?
Do you need more detail on the implications for your operating agreement?
my eform operation agreement form is asking who will make the day to day decision in the business. I want to say the manager buy my holding LLC would be the manager therefore should I say my holding LLC is the manager name or me as actual person?
Since your holding LLC owns *% of the business, you should list the holding LLC as the manager in the operating agreement. This clarifies that the holding LLC is responsible for day-to-day decisions.
Do you have any other questions about your operating agreement?
Do you have any other questions about your operating agreement?
can this be said better for the purpose of LLC on operating agreement. see area in quotation for assignment 'Provide real estate services to general public especially appraisals services with integrity, simplicity and excellence. The sole purpose of this company is to be an operating company for real estate services. The parent company is solely responsible revenue and direction of this subsidiary."
Sure, here's a refined version:
"Provide real estate services to the general public, specializing in appraisals, with integrity, simplicity, and excellence. The primary purpose of this company is to operate as a real estate services provider. The parent company will be responsible for the revenue and strategic direction of this subsidiary."
Do you need help with any other sections of your operating agreement?
"Provide real estate services to the general public, specializing in appraisals, with integrity, simplicity, and excellence. The primary purpose of this company is to operate as a real estate services provider. The parent company will be responsible for the revenue and strategic direction of this subsidiary."
Do you need help with any other sections of your operating agreement?
eform is asking on operating agreement managers compensation which is my holding company. I'm sure what I should say I don't have set salary I would like to good money as need based on my descretion, but whats the professional answer to put in there?
For the operating agreement, you can state the manager's compensation as follows:
"Manager's compensation shall be determined based on the company's financial performance and the manager's discretion, without a fixed salary."
Would you like more information on any other parts of your operating agreement?
"Manager's compensation shall be determined based on the company's financial performance and the manager's discretion, without a fixed salary."
Would you like more information on any other parts of your operating agreement?
Can I say this better for operation agreement on how will profits be distributed. see area in quotation for assignment "When majority equity owners decide."
Sure, here's a refined version for the operating agreement on how profits will be distributed:
"Profits will be distributed as determined by the majority equity owners."
Is there anything else you need help with in your operating agreement?
"Profits will be distributed as determined by the majority equity owners."
Is there anything else you need help with in your operating agreement?
what do i put for which members can decide on behalf of company?
For your operating agreement, you can state who can make decisions on behalf of the company as follows:
"Decisions on behalf of the company will be made by the manager, which is the holding LLC, in accordance with the terms outlined in this agreement."
Do you need any more assistance with your operating agreement?
"Decisions on behalf of the company will be made by the manager, which is the holding LLC, in accordance with the terms outlined in this agreement."
Do you need any more assistance with your operating agreement?
what do I put for how business decisions are made?
You can state how business decisions are made in your operating agreement as follows:
"Business decisions will be made by the manager, the holding LLC, in accordance with the policies and procedures outlined in this agreement."
Do you need assistance with any other sections of your operating agreement?
"Business decisions will be made by the manager, the holding LLC, in accordance with the policies and procedures outlined in this agreement."
Do you need assistance with any other sections of your operating agreement?
how does this sound "Business decisions will be made by the majority equity members, in accordance with the policies and procedures outlined in this agreement."
Your wording sounds clear. Here's a slightly refined version for clarity:
"Business decisions will be made by the majority equity members according to the policies and procedures outlined in this agreement."
Do you need help with any other parts of your operating agreement?
"Business decisions will be made by the majority equity members according to the policies and procedures outlined in this agreement."
Do you need help with any other parts of your operating agreement?
what should i put for amending the operating agreement area of operating agreement?
For amending the operating agreement, you can include the following clause:
"Amendments to this Operating Agreement may be made with the approval of a majority of the equity members. All proposed amendments must be presented in writing and approved in accordance with the procedures outlined in this agreement."
Need any help with other sections?
"Amendments to this Operating Agreement may be made with the approval of a majority of the equity members. All proposed amendments must be presented in writing and approved in accordance with the procedures outlined in this agreement."
Need any help with other sections?
does the way that is said does that embody that they most have a majority ownership or no? from a legal basis?
To clarify, the phrase "majority equity members" means members who collectively own more than *% of the equity. This implies that decisions require the approval of those holding the majority ownership.
Would you like more details on how this impacts decision-making in your LLC?
Would you like more details on how this impacts decision-making in your LLC?
Does this sound good for operation agreement "Amendments to this Operating Agreement may be made with the approval of a majority equity members vote (meaning over *% ownership vote). All proposed amendments must be presented in writing and approved in accordance with the procedures outlined in this agreement."
Your clause is clear and effectively conveys the majority requirement. Here's a slightly refined version for clarity:
"Amendments to this Operating Agreement may be made with the approval of a majority equity members vote (over *% ownership). All proposed amendments must be presented in writing and approved according to the procedures outlined in this agreement."
Do you need help with any other sections?
"Amendments to this Operating Agreement may be made with the approval of a majority equity members vote (over *% ownership). All proposed amendments must be presented in writing and approved according to the procedures outlined in this agreement."
Do you need help with any other sections?
what about operating agreement area on adding new members to company
For adding new members to your LLC in the operating agreement, you could use the following clause:
"New members can be added to the company with the approval of a majority equity members vote (over *% ownership). Terms of membership and contributions must be documented and agreed upon in writing."
Would you like to refine any other sections of your operating agreement?
"New members can be added to the company with the approval of a majority equity members vote (over *% ownership). Terms of membership and contributions must be documented and agreed upon in writing."
Would you like to refine any other sections of your operating agreement?
what about how members can withdraw from company how do must professional companies put this in their LLC operating agreement. give me what the *% high net worth do
For high-net-worth LLCs, withdrawal clauses are often detailed and specific. Here’s a refined version for your operating agreement:
"Members may withdraw from the company with a written notice of at least 60 days. Withdrawal terms, including the buyout of the member’s interest, must be agreed upon by the majority equity members and outlined in a written agreement."
Would you like more details on any other clauses?
"Members may withdraw from the company with a written notice of at least 60 days. Withdrawal terms, including the buyout of the member’s interest, must be agreed upon by the majority equity members and outlined in a written agreement."
Would you like more details on any other clauses?
also what do the do on disslove of company for operating agreement
For dissolution, you can include a clause like this:
"Dissolution of the company may occur upon the approval of a majority equity members vote (over *% ownership). Upon dissolution, the company's assets will be liquidated and distributed according to the terms outlined in this agreement."
Need help with anything else in your operating agreement?
"Dissolution of the company may occur upon the approval of a majority equity members vote (over *% ownership). Upon dissolution, the company's assets will be liquidated and distributed according to the terms outlined in this agreement."
Need help with anything else in your operating agreement?
what would they put for profit and loss allocated to each member?
For profit and loss allocation in your operating agreement, you can include a clause like this:
"Profits and losses will be allocated to members based on their respective ownership percentages. In the case of non-equity members, no allocation of profits or losses will be made."
Do you need more help with other sections of your operating agreement?
"Profits and losses will be allocated to members based on their respective ownership percentages. In the case of non-equity members, no allocation of profits or losses will be made."
Do you need more help with other sections of your operating agreement?
what about non compete clause for all members?
A non-compete clause in your operating agreement may look like this:
"Members agree not to engage in any business activities that compete with the company during their membership and for a period of [X] years after withdrawal or termination. This includes offering similar services, working with competitors, and soliciting clients or employees."
Do you need more details or help with other sections of your operating agreement?
"Members agree not to engage in any business activities that compete with the company during their membership and for a period of [X] years after withdrawal or termination. This includes offering similar services, working with competitors, and soliciting clients or employees."
Do you need more details or help with other sections of your operating agreement?
whats a good recommended time for that. I'm in the appraisal business
For the appraisal business, a common duration for a non-compete clause is * to 2 years. This period helps protect your business interests without being overly restrictive.
Would you like more information on anything else?
Would you like more information on anything else?
what about whether a member can sell their shares to a non-member for operating agreement for LLC what would high networth put?
For high-net-worth LLCs, a clause on selling shares to non-members can be:
"Members may sell their shares to non-members with the approval of a majority equity members vote (over *% ownership). The terms of the sale must be documented and agreed upon in writing."
Do you need any more help with your operating agreement?
"Members may sell their shares to non-members with the approval of a majority equity members vote (over *% ownership). The terms of the sale must be documented and agreed upon in writing."
Do you need any more help with your operating agreement?
how do a say employees or associates of the LLC is typical to hold non-equity member position, but they may be paid via parent company and that this LLC serves mainly as a operating company that reports to parent company. Also, that associates of LLC that are non-equity member do not get paid based on the profit, loss or earnings of the LLC but actual work performance and likely as *, but if applicable as w-*. Can you put this together for me to make this sound professional and legal, but also where it doesn't scary away anyone
Here's a professional and clear version that addresses your needs:
"Employees or associates of the LLC typically hold non-equity member positions. They are usually compensated by the parent company. This LLC primarily functions as an operating company that reports to the parent company. Non-equity members are compensated based on their actual work performance, usually as * contractors, or as W-* employees if applicable, rather than on the LLC’s profit, loss, or earnings."
Does this cover everything you need?
"Employees or associates of the LLC typically hold non-equity member positions. They are usually compensated by the parent company. This LLC primarily functions as an operating company that reports to the parent company. Non-equity members are compensated based on their actual work performance, usually as * contractors, or as W-* employees if applicable, rather than on the LLC’s profit, loss, or earnings."
Does this cover everything you need?
what is promissory note versus loan agreement what is difference?
- Promissory Note:
- A written promise to pay a specific amount of money at a future date.
- Typically simpler, outlining the loan amount, interest rate, and repayment terms.
- Loan Agreement:
- More detailed contract between lender and borrower.
- Includes terms like repayment schedule, collateral, covenants, and conditions.
Do you need further details on how these might apply to your situation in Texas?
- A written promise to pay a specific amount of money at a future date.
- Typically simpler, outlining the loan amount, interest rate, and repayment terms.
- Loan Agreement:
- More detailed contract between lender and borrower.
- Includes terms like repayment schedule, collateral, covenants, and conditions.
Do you need further details on how these might apply to your situation in Texas?
so can someone have boh fo same loan?
Yes, it's possible to have both a promissory note and a loan agreement for the same loan. The promissory note serves as the borrower's written promise to repay the loan, while the loan agreement provides detailed terms and conditions of the loan, offering more protection to both parties.
Do you need more details on the implications of having both documents?
Do you need more details on the implications of having both documents?
if you want to do phantom stock, stock options, different types of memorandum (ppm) does that have be specifically in your by laws?
Yes, if you plan to implement phantom stock, stock options, or different types of memorandums (PPM), it is advisable to include these provisions in your bylaws or operating agreement. This ensures clarity on these mechanisms and establishes the rules governing them.
Would you like more detailed information on any of these provisions?
Would you like more detailed information on any of these provisions?
what section would go under for by laws?
Bylaws typically include sections like:
- Stock Options and Phantom Stock: This can go under "Equity Compensation Plans" or "Stock Plans."
- Memorandums (PPM): Include this under "Issuance of Securities" or "Investment Documents."
Do you need more details on drafting these sections?
- Stock Options and Phantom Stock: This can go under "Equity Compensation Plans" or "Stock Plans."
- Memorandums (PPM): Include this under "Issuance of Securities" or "Investment Documents."
Do you need more details on drafting these sections?
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