Doing business as a Limited Liability Company is popular because, similar to a corporation, owners (members) have limited personal liability for the debts and actions of the LLC. At the same time there is great management flexibility, and LLCs enjoy the benefit of pass-through taxation. Members may be individuals, corporations, other LLCs and foreign entities. There can be only one member of an LLC (in most states), or there can be an unlimited number of members. We are frequently asked how LLCs are taxed.
If an LLC has only one member (a single member LLC), the default taxation is that the member files as if the LLC does not exist. So if the single member is an individual, LLC income and expenses are reported on schedule C, E or F of the member’s 1040 return. If the single member is a corporation, the LLC income and expenses are reported on the corporation’s return (usually Form 1120 or 1120S). If an individual LLC single member prefers the LLC to be taxed as a corporation, the LLC must submit IRS Form 8832 to change the default and select the corporate form of taxation.
If an LLC has multiple members, the default is for the LLC to be taxed as a partnership (Form 1065). If the LLC prefers to be taxed as a corporation, the LLC must submit IRS Form 8832 to change the default and select the corporate form of taxation.
Remember that LLCs are subject to withholding of employment tax. Members of single member LLCs are subject to self-employment taxes on earnings. Also, members of multiple member LLCs pay self-employment taxes on their share of partnership earnings.
We would be happy to be of assistance in solidly planning and properly setting up a business entity for your venture.
Paul Tipton
(214) 890-0991
ptipton@tiptonjoneslaw.com
Wednesday, April 16, 2008
Monday, April 14, 2008
BEYOND BRIEFS
Over the years, I’ve heard from a lot of lawyers who want to write. Goodness knows plenty have made the successful transition: John Grisham, Scott Turow, James Grippando, Steve Martini -- and the list goes on. So this is for all you lawyers out there who want to tap into that storytelling urge buried deep in your soul.
Let’s start with this inquiry for starters: Why do you want to write?
That seems like a pretty basic question, but it’s one you really need to answer before you get started. After all, you’ve poured three precious years of your life into law school -- too late to get it back now -- and embarked on a noble legal career. An esteemed member of society, you are “Lawyer,” successful in your chosen profession, respected by your peers, king of all you survey. So why would you want to chase after a writing career? One that is sure to frustrate you; one in which success is never guaranteed but, rather, chances are huge that you will fail in the ultimate goal of either being a published novelist or produced screenwriter.
That’s right, chances are good that you’ll never be published or produced. Truth be told, chances are good you may never finish writing the great American novel or completing that screenplay. You might even have better chances of success if you were to enter the space program with aspirations of becoming a space shuttle astronaut.
So let me repeat the question: Why do you want to write?
There are probably as many motivations for you to write as there are lawyers writing, but I suspect most of them can be boiled down into several broad categories. For some of you, a writing career may offer an opportunity to leave the practice of law, to simply walk away from billable hours, depositions, contentious partners meetings, cranky judges, uncooperative clients, and opposing counsel from the pits of hell. Yeah, staying at home, controlling your own time -- and not keeping track of those hours -- while hunched over your computer, spinning yarns, holds great appeal.
For others, it may all be about ego. Go figure -- a lawyer with an ego. You want to see your name on the cover of books in the bookstore, your smiling face peering out from the photo on the book jacket, or your name splashed in huge letters across a silver screen. If that’s your motivation, my advice is to keep practicing law. Believe me when I say that law practice will better fuel the fires of your ego than will writing. If you don’t believe me, just wait until you have enough rejection letters from agents, publishers, and producers to paper the walls of your house. And your second house at the beach. And your kids’ dorm rooms.
Yeah, writing can be an experience in ego-shattering humility.
Some of you want to get rich. Three and four and five hundred dollars an hour, or forty-percent contingencies, just doesn’t seem to be getting you there. You see some author’s name in Forbes Magazine and say to yourself, “Yeah, I could live on thirty million dollars a year.” Or you read about the latest spec screenplay sale for three million dollars and figure that’s not a bad return on 110 pages. If you’re in this to get rich, I’ve got advice for you as well: Buy a lottery ticket; your chances of untold wealth by winning the lottery are better.
But some of you may feel you have a story to tell. It’s been rattling around in your head for years, monopolizing valuable brain cells, distracting you from your law practice, your family, your friends. You’ve got to get it out of your head and down on paper. If someone buys it, that’s just gravy; the reward for you will be in the writing. If that’s your motivation, then go for it.
Mike Farris
(214) 979-0100
mfarris@tiptonjoneslaw.com
Let’s start with this inquiry for starters: Why do you want to write?
That seems like a pretty basic question, but it’s one you really need to answer before you get started. After all, you’ve poured three precious years of your life into law school -- too late to get it back now -- and embarked on a noble legal career. An esteemed member of society, you are “Lawyer,” successful in your chosen profession, respected by your peers, king of all you survey. So why would you want to chase after a writing career? One that is sure to frustrate you; one in which success is never guaranteed but, rather, chances are huge that you will fail in the ultimate goal of either being a published novelist or produced screenwriter.
That’s right, chances are good that you’ll never be published or produced. Truth be told, chances are good you may never finish writing the great American novel or completing that screenplay. You might even have better chances of success if you were to enter the space program with aspirations of becoming a space shuttle astronaut.
So let me repeat the question: Why do you want to write?
There are probably as many motivations for you to write as there are lawyers writing, but I suspect most of them can be boiled down into several broad categories. For some of you, a writing career may offer an opportunity to leave the practice of law, to simply walk away from billable hours, depositions, contentious partners meetings, cranky judges, uncooperative clients, and opposing counsel from the pits of hell. Yeah, staying at home, controlling your own time -- and not keeping track of those hours -- while hunched over your computer, spinning yarns, holds great appeal.
For others, it may all be about ego. Go figure -- a lawyer with an ego. You want to see your name on the cover of books in the bookstore, your smiling face peering out from the photo on the book jacket, or your name splashed in huge letters across a silver screen. If that’s your motivation, my advice is to keep practicing law. Believe me when I say that law practice will better fuel the fires of your ego than will writing. If you don’t believe me, just wait until you have enough rejection letters from agents, publishers, and producers to paper the walls of your house. And your second house at the beach. And your kids’ dorm rooms.
Yeah, writing can be an experience in ego-shattering humility.
Some of you want to get rich. Three and four and five hundred dollars an hour, or forty-percent contingencies, just doesn’t seem to be getting you there. You see some author’s name in Forbes Magazine and say to yourself, “Yeah, I could live on thirty million dollars a year.” Or you read about the latest spec screenplay sale for three million dollars and figure that’s not a bad return on 110 pages. If you’re in this to get rich, I’ve got advice for you as well: Buy a lottery ticket; your chances of untold wealth by winning the lottery are better.
But some of you may feel you have a story to tell. It’s been rattling around in your head for years, monopolizing valuable brain cells, distracting you from your law practice, your family, your friends. You’ve got to get it out of your head and down on paper. If someone buys it, that’s just gravy; the reward for you will be in the writing. If that’s your motivation, then go for it.
Mike Farris
(214) 979-0100
mfarris@tiptonjoneslaw.com
Thursday, April 10, 2008
OF SUGAR CANE AND QUEENS: Sovereignty in the Sandwich Islands
“The time has come,” the Walrus said,
“To talk of many things:
Of shoes – and ships – and sealing wax –
Of cabbages and kings –
And why the sea is boiling hot –
and whether pigs have wings.”
The Walrus and the Carpenter
by Lewis Carroll
Hawaii!
The very word evokes visions of Paradise – white, sandy beaches; swaying palm trees; silver waterfalls, hula girls; mai tais; and luaus. Each year, millions flock to the islands to soak up rays, splash in the surf, play golf, and lounge around luxury resorts. But beneath the surface of this tourist Mecca, a simmering resentment threatens to boil over at any moment as a proud people, the native Hawaiians, find themselves servants in their own home, waiting hand and foot on these white interlopers – the dreaded haoles (pronounced “how-li”).
Believe it or not, there are really two Hawaii’s. One is the “tourist” ideal, consisting of the aforementioned (nice legal term, don’tcha think?) white beaches, resort hotels and golf courses, luaus, and hula dancers. The other is the “real” Hawaii – the native peoples living in near poverty because the tourism industry has created prices for food, shelter, and land that they can’t afford. They work in the taro fields, fish in the ocean, and clean up the messes tourists leave behind in hotels and restaurants. They have become second class citizens in their own land.
So what happened? Well, that takes us into a little history lesson.
On January 17, 1993, the Hawaiian people observed the one hundredth anniversary of the overthrow of the Hawaiian monarchy. On that date, one hundred years earlier, the self-proclaimed Committee of Safety, a group of haole businessmen heavily interested in Hawaii’s major crop, sugar, declared that the “Hawaiian Monarchial [sic] system of Government is hereby abrogated” and replaced by a provisional government “for the protection of the public peace . . .” Yeah, right!
That same day, the Hawaiian monarch, Queen Lili’uokalani, temporarily surrendered her sovereignty, not to the provisional government, but “to the superior force of the United States of America, whose Minister Plenipotentiary, His Excellency John L. Stevens, has caused United States troops to be landed at Honolulu and declared that he would support said Provisional Government.” Although she expressly intended her surrender to be temporary, “until such time as the Government of the United States shall . . . undo the action of its representatives and reinstate me in the authority which I claim as the constitutional sovereign of the Hawaiian Islands,” the monarchy has never been restored.
While we, in the United States, celebrate the anniversary of the overthrow of English rule, for many native Hawaiians, the anniversary of the Hawaiian monarchy’s overthrow provides no basis to celebrate. Rather, they lament not only the loss of their form of government, but also the loss of a sacred way of life. Instead of reveling in their U.S. citizenship, they vilify the haoles who stripped them of their queen and their land. They demand reparations from the United States for their loss, and demand a return of their sovereignty for the Hawaiian people – restoration of citizenship in a reconstituted Hawaiian nation, with rights of self-determination, to exercise independent control over their lands and lives. That includes a return to their native language, customs and religions. Harsh words are written and spoken, decrying the illegality of the overthrow and the unlawful intervention by the United States. These Hawaiians believe themselves to be living in a “stolen kingdom” and believe that now is the time to reclaim what was wrongfully taken.
Is this nothing more than chauvinistic saber-rattling from disgruntled natives, or is there something more to what they claim? The words of our own President, Grover Cleveland, about the question may be instructive. On December 18, 1893, he told a joint session of Congress:
"Hawaii is ours. As I look back upon the first steps in this miserable business, and as I contemplate the means used to complete the outrage, I am ashamed of the whole affair.
. . .
It appears that Hawaii was taken possession of by the United States forces without the consent or wish of the government of the islands, or of anybody else so far as shown, except the United States Minister.
Therefore the military occupation of Honolulu by the United States . . . was wholly without justification, either as an occupation by consent or as an occupation necessitated by dangers threatening American life and property.
. . .
By an act of war, committed with the participation of a diplomatic representative of the United States and without authority of Congress, the Government of a feeble but friendly and confiding people has been overthrown. A substantial wrong has thus been done which a due regard for our national character as well as the rights of the injured people requires we should endeavor to repair."
One hundred years later, President Bill Clinton signed Public Law 103 - 150 into effect. Known to native Hawaiians as The Apology Bill, it said:
"The Congress –
(1) on the occasion of the 100th anniversary of the illegal overthrow of the Kingdom of Hawaii on January 17, 1893, acknowledges the historical significance of this event which resulted in the suppression of the inherent sovereignty of the Native Hawaiian people;
(2) recognizes and commends efforts of reconciliation initiated by the State of Hawaii and the United Church of Christ with Native Hawaiians;
(3) apologizes to Native Hawaiians on behalf of the people of the United States for the overthrow of the Kingdom of Hawaii on January 17, 1893 with the participation of agents and citizens of the United States, and the deprivation of the rights of Native Hawaiians to self-determination;
(4) expresses its commitment to acknowledge the ramifications of the overthrow of the Kingdom of Hawaii, in order to provide a proper foundation for reconciliation between the United States and the Native Hawaiian people; and
(5) urges the President of the United States to also acknowledge the ramifications of the overthrow of the Kingdom of Hawaii and to support reconciliation efforts between the United States and the Native Hawaiian people."
So maybe the native Hawaiians have a point. Maybe it would do us well to hear them out. To put a spin on Carroll’s Walrus, “the time has come to talk of many things . . . of sugar cane and queens.”
Mike Farris
(214) 979-0100
mfarris@tiptonjoneslaw.com
“To talk of many things:
Of shoes – and ships – and sealing wax –
Of cabbages and kings –
And why the sea is boiling hot –
and whether pigs have wings.”
The Walrus and the Carpenter
by Lewis Carroll
Hawaii!
The very word evokes visions of Paradise – white, sandy beaches; swaying palm trees; silver waterfalls, hula girls; mai tais; and luaus. Each year, millions flock to the islands to soak up rays, splash in the surf, play golf, and lounge around luxury resorts. But beneath the surface of this tourist Mecca, a simmering resentment threatens to boil over at any moment as a proud people, the native Hawaiians, find themselves servants in their own home, waiting hand and foot on these white interlopers – the dreaded haoles (pronounced “how-li”).
Believe it or not, there are really two Hawaii’s. One is the “tourist” ideal, consisting of the aforementioned (nice legal term, don’tcha think?) white beaches, resort hotels and golf courses, luaus, and hula dancers. The other is the “real” Hawaii – the native peoples living in near poverty because the tourism industry has created prices for food, shelter, and land that they can’t afford. They work in the taro fields, fish in the ocean, and clean up the messes tourists leave behind in hotels and restaurants. They have become second class citizens in their own land.
So what happened? Well, that takes us into a little history lesson.
On January 17, 1993, the Hawaiian people observed the one hundredth anniversary of the overthrow of the Hawaiian monarchy. On that date, one hundred years earlier, the self-proclaimed Committee of Safety, a group of haole businessmen heavily interested in Hawaii’s major crop, sugar, declared that the “Hawaiian Monarchial [sic] system of Government is hereby abrogated” and replaced by a provisional government “for the protection of the public peace . . .” Yeah, right!
That same day, the Hawaiian monarch, Queen Lili’uokalani, temporarily surrendered her sovereignty, not to the provisional government, but “to the superior force of the United States of America, whose Minister Plenipotentiary, His Excellency John L. Stevens, has caused United States troops to be landed at Honolulu and declared that he would support said Provisional Government.” Although she expressly intended her surrender to be temporary, “until such time as the Government of the United States shall . . . undo the action of its representatives and reinstate me in the authority which I claim as the constitutional sovereign of the Hawaiian Islands,” the monarchy has never been restored.
While we, in the United States, celebrate the anniversary of the overthrow of English rule, for many native Hawaiians, the anniversary of the Hawaiian monarchy’s overthrow provides no basis to celebrate. Rather, they lament not only the loss of their form of government, but also the loss of a sacred way of life. Instead of reveling in their U.S. citizenship, they vilify the haoles who stripped them of their queen and their land. They demand reparations from the United States for their loss, and demand a return of their sovereignty for the Hawaiian people – restoration of citizenship in a reconstituted Hawaiian nation, with rights of self-determination, to exercise independent control over their lands and lives. That includes a return to their native language, customs and religions. Harsh words are written and spoken, decrying the illegality of the overthrow and the unlawful intervention by the United States. These Hawaiians believe themselves to be living in a “stolen kingdom” and believe that now is the time to reclaim what was wrongfully taken.
Is this nothing more than chauvinistic saber-rattling from disgruntled natives, or is there something more to what they claim? The words of our own President, Grover Cleveland, about the question may be instructive. On December 18, 1893, he told a joint session of Congress:
"Hawaii is ours. As I look back upon the first steps in this miserable business, and as I contemplate the means used to complete the outrage, I am ashamed of the whole affair.
. . .
It appears that Hawaii was taken possession of by the United States forces without the consent or wish of the government of the islands, or of anybody else so far as shown, except the United States Minister.
Therefore the military occupation of Honolulu by the United States . . . was wholly without justification, either as an occupation by consent or as an occupation necessitated by dangers threatening American life and property.
. . .
By an act of war, committed with the participation of a diplomatic representative of the United States and without authority of Congress, the Government of a feeble but friendly and confiding people has been overthrown. A substantial wrong has thus been done which a due regard for our national character as well as the rights of the injured people requires we should endeavor to repair."
One hundred years later, President Bill Clinton signed Public Law 103 - 150 into effect. Known to native Hawaiians as The Apology Bill, it said:
"The Congress –
(1) on the occasion of the 100th anniversary of the illegal overthrow of the Kingdom of Hawaii on January 17, 1893, acknowledges the historical significance of this event which resulted in the suppression of the inherent sovereignty of the Native Hawaiian people;
(2) recognizes and commends efforts of reconciliation initiated by the State of Hawaii and the United Church of Christ with Native Hawaiians;
(3) apologizes to Native Hawaiians on behalf of the people of the United States for the overthrow of the Kingdom of Hawaii on January 17, 1893 with the participation of agents and citizens of the United States, and the deprivation of the rights of Native Hawaiians to self-determination;
(4) expresses its commitment to acknowledge the ramifications of the overthrow of the Kingdom of Hawaii, in order to provide a proper foundation for reconciliation between the United States and the Native Hawaiian people; and
(5) urges the President of the United States to also acknowledge the ramifications of the overthrow of the Kingdom of Hawaii and to support reconciliation efforts between the United States and the Native Hawaiian people."
So maybe the native Hawaiians have a point. Maybe it would do us well to hear them out. To put a spin on Carroll’s Walrus, “the time has come to talk of many things . . . of sugar cane and queens.”
Mike Farris
(214) 979-0100
mfarris@tiptonjoneslaw.com
Thursday, March 20, 2008
The California Talent Agencies Act and Personal Managers:
Are They or Aren’t They Covered?
Under the heading of “no good deed goes unpunished” comes Marathon Entertainment v. Blasi, 42 Cal. 4th 974, 174 P.3d 741 (Cal. 2008), which reached some conclusions about the application of the California Talent Agencies Act (Cal. Lab. Code, § 1700 et seq.) to personal managers. That statute governs talent agents in the entertainment world – those people who engage in the occupation of “procuring, offering, promising, or attempting to procure employment or engagements for an artist or artists,” (§ 1700.4(a)) but conventional wisdom has long held that the Act doesn’t apply to personal managers. As is so often the case, conventional wisdom missed it by a mile.
In 1998, Marathon and actress Rosa Blasi entered into an oral contract for Marathon to act as Blasi’s personal manager, providing a variety of management and counseling services, in exchange for a 15% commission from all her entertainment employment income. Over the next three years, Blasi obtained a role in the film Noriega: God’s Favorite and a lead role in the television series Strong Medicine. Among the management services Marathon said it provided during that time were making the down payment on Blasi’s home, paying her business manager’s salary, paying her travel expenses, and giving her professional and personal advice.
So far, so good – right?
Wrong! By the summer of 2001, Blasi unilaterally reduced the commissions she paid Marathon from 15% to 10%, and later stopped paying commissions altogether and terminated the management contract. Marathon then sued her on theories ranging from breach of contract to unfair business practices. As damages, they wanted to recover their unpaid commissions from Blasi’s role in Strong Medicine. Blasi got the action stayed, then filed a petition with the California Labor Commissioner and claimed that – and you could probably see this coming from a mile away – Marathon had violated the Talent Agencies Act by procuring work for her as an actress on Strong Medicine without being licensed as a talent agency. The Labor Commissioner agreed and invalidated the entire management contract between Blasi and Marathon.
Holy mackerel! Let me see if I got that straight: She said that Marathon got her a paying gig as an actress on a TV series, but by doing so, they violated the law so she doesn’t have to pay them for getting her the job in the first place because it was illegal for them to get her that job. And, in fact, the Labor Commissioner essentially said she didn’t have to pay them for anything they had done for her because the entire contract was invalid. If so, that would mean Blasi could have counterclaimed in the lawsuit to recover back all commissions she had already paid, wouldn’t it?
Fortunately, the California Supreme Court ultimately injected a heavy dose of common sense. In Marathon, the Court held that: (1) the Talent Agencies Act regulates conduct, not titles, so if a manager “procures employment” for a client, he/she is performing the services of a talent agency and must be licensed under the Act; but (2) although the Labor Commissioner may invalidate an entire management contract, it doesn’t have to; thus, applying the doctrine of severability, the courts and/or Commissioner may uphold those portions of a management contract that don’t violate the Act while only invalidating those that do.
The Court said: “A personal manager who spends 99 percent of his time engaged in counseling a client and organizing the client’s affairs is not insulated from the Act’s strictures if he spends 1 percent of his time procuring or soliciting; conversely, however, the 1 percent he spends soliciting or procuring does not thereby render illegal the 99 percent of the time spent in conduct that requires no license and that may involve a level of personal service and attention far beyond what a talent agency might have time to provide. Courts are empowered under the severability doctrine to consider the central purposes of a contract; if they determine in a given instance that the parties intended for the representative to function as an unlicensed talent agency or that the representative engaged in substantial procurement activities that are inseparable from managerial services, they may void the entire contract. For the personal manager who truly acts as a personal manager, however, an isolated instance of procurement does not automatically bar recovery for services that could lawfully be provided without a license.” 42 Cal. 4th at 997-98.
The Court also said that it was not deciding, nor did the Act define, what “procure employment” actually meant, leaving open the question of whether Marathon had actually procured for Blasi the acting job on Strong Medicine. Noting that both parties to the case, as well as letters and briefs the Court received from personal managers, “indicate a uniform dissatisfaction with the Act’s application,” it then concluded by nudging the California Legislature: “We, of course, have no authority to rewrite the regulatory scheme. In the end, whether the present state of affairs is satisfactory is for the Legislature to decide, and we leave that question to the Legislature’s considered judgment.” Id. at 998-99.
(214) 979-0100
mfarris@tiptonjoneslaw.com
Tuesday, March 11, 2008
Texas Attorney General Abbott Declares War on Identity Theft…
and Could Hold Your Company Responsible.
“Texans expect their personal information to remain confidential. The Office of the Attorney General will take all necessary steps to protect consumers from identity thieves.”
– Texas Attorney General Greg Abbott
Don’t mess with Texas and you better be sure not to mess with a Texan’s nonpublic personal information. Texas Attorney General Greg Abbott has declared war on identity theft and he’s holding companies responsible. In 2007, Mr. Abbott filed no less than six lawsuits against companies for violations of the Texas Identity Theft Enforcement and Protection Act of 2005, Tex. Bus. & Com. Code Ann. §§17.41, et seq. In May 2007, Attorney General Abbott filed an enforcement action against CNG Financial Corporation, its subsidiaries, and EZPAWN for improperly dumping customer records, including promissory notes and bank statements. In April, Attorney General Abbott took legal action against CVS/pharmacy and RadioShack Corporation for exposing hundreds of customers to identity theft by failing to properly dispose of records that contained sensitive information. In March, the Attorney General filed an enforcement action against Jones Beauty College in Dallas for improperly discarding student financial aid forms containing Social Security numbers and other personal information. Also in March, Attorney General Abbott took legal action against On Track Modeling, a North Carolina-based talent agency that abruptly shut down its North Texas office and abandoned more than 60 boxes containing hundreds of confidential client records.
The Texas Identity Theft Enforcement and Protection Act.
The Identity Theft Enforcement and Protection Act (the “Identity Theft Act” or “ITEPA”), mandates that businesses have a legal duty to protect and safeguard sensitive personal information. The Identity Theft Act also requires businesses that collect or maintain sensitive personal information in the regular course of business to implement and maintain reasonable procedures and corrective measures to protect and safeguard sensitive personal information from unlawful use or disclosure. Furthermore, the Identity Theft Act includes a “Dumpster Diving” provision where companies are required to destroy customer records no longer in use by shredding, erasing or modifying the records to make the information unreadable or undecipherable.
Why is the ITEPA a big deal? Well first, the Texas Attorney General holds a press conference announcing to anyone who will listen, that a company was negligent and its customers’ may be at risk. Most importantly, however, it goes directly to a company’s bottom line. Section 48.201 of the Identity Theft Act not only allows the Attorney General to seek a permanent injunction against a company that could, in essence, shut it down. The Identity Theft Act also exposes a company to a civil penalty of at least $2,000 and up to $50,000 for each violation. Radio Shack, CVS, EZPAWN, On Track Modeling and Jones Beauty College all settled out of court and quickly. Not even the largest of companies have a checkbook big enough to compete with the Texas Attorney General’s Office.
(214) 890-0991
Thursday, March 6, 2008
Score One for the Investors: Employers Liable for Retirement Plan Mismanagement
The United States Supreme Court ruled in favor of investors this week.
In LaRue v. DeWolff, Boberg & Associates, the court ruled that employees can sue employers under the Employee Retirement Income Security Act for mismanaging their 401(k) retirement plans. Companies are no longer protected from these claims. Business groups have strenuously argued that the law did not allow for individual claims.
James LaRue sued his employer DeWolff, Boberg, a Dallas consulting firm, claiming that the company failed to carry out his investment instructions for his 401(k), resulting in a loss of $150,000 in the value of his plan. Justice John Paul Stevens, writing for a unanimous court, said the law does allow for lawsuits to recover “fiduciary breaches that impair the value of plan assets” in individual accounts.
(214) 979-0100
Tuesday, March 4, 2008
Important Information for single member limited liability companies!
Are you a single member limited liability company (SMLLC) who has or will have employees before January 1, 2009? IRS regulations require a single member limited liability company that is (1) owned by one individual and (2) has or will have employees before January 1, 2009 to have two Employer Identification Numbers (EIN). One EIN is assigned to the individual owner (as a sole proprietor) and one is assigned to the LLC.
If the SMLLC does not intend to have employees, then an EIN is not necessary. It should use the name and Taxpayer Identification Number of the single member owner for federal tax purposes. However, if a SMLLC, whose taxable income and loss will be reported by the single member owner, nevertheless needs an EIN to open a bank account or if state tax law requires the SMLLC to have a federal EIN, then the SMLLC can apply for and obtain an EIN. If the SMLLC has no employees, it will not use this EIN for any federal tax reporting purpose.
For more information regarding single member limited liability companies, please contact an experienced lawyer at Tipton Jones.Paul W. Tipton
(214) 890-0991
ptipton@tiptonjoneslaw.com
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