Exit planning and succession planning in a Washington limited liability compa...Beresford Booth PLLC
Exit planning and succession planning in LLCs.
By: David C. Tingstad
Beresford Booth, PLLC
145 Third Avenue South, Suite 200
Edmonds, Washington 98020
(425) 776-4100
DavidT@beresfordlaw.com
This document discusses insolvency and bankruptcy. It defines insolvency as the inability to pay debts when they are due, while bankruptcy is a legal process to resolve insolvency. There are two types of insolvency: cash-flow, where one cannot make a payment due to lack of funds, and balance-sheet, where debts exceed assets. Insolvency can lead to bankruptcy if not addressed through measures like debt repayment plans, borrowing, or renegotiating debts. The document outlines key bankruptcy laws and procedures in the United States.
This document provides an overview of business failure, bankruptcy, reorganization, and liquidation. It discusses the major causes of business failure, sizes of firms more prone to failure, key issues managers face in financial distress, informal and formal bankruptcy remedies, U.S. bankruptcy law terminology, differences between informal and formal reorganization, prepackaged bankruptcies, priority of claims in Chapter 7 liquidation, and criticisms and recent changes to bankruptcy laws.
Bankruptcy. Part of Toles curriculum. Universidad Católica de Cuyo sede San Luis. Liquidators, Receivers, Administrators. Listening Activity on Bankruptcy.
This document provides an overview of bankruptcy and mortgage deficiency basics, including Chapter 7 and Chapter 13 bankruptcy. It discusses what bankruptcy is, reasons for and against filing, eligibility requirements, exemptions, keeping property, costs, strategic defaults, and dealing with mortgage deficiencies. The key points are that bankruptcy provides a financial "fresh start" but can negatively impact credit, and strategic default may be an option to avoid deficiency if the home is underwater.
The document discusses various aspects of managing corporations, including:
- Corporate objectives, powers, and the roles of boards of directors and officers
- Directors' and officers' duties to act in the corporation's best interests and avoid conflicts of interest
- Protection from liability provided by the business judgment rule for decisions made with care, in good faith, and without conflicts
- Potential liability of directors and officers for negligence, torts, crimes, and usurping corporate opportunities
- Defenses against hostile takeovers and protections for minority shareholders
Chapter 42 – Organization and Financial Structure of CorporationsUAF_BA330
This document provides an overview of the organization and financial structure of corporations. It discusses promoters and preincorporation contracts, the incorporation process, financing corporations through equity and debt securities, and share types including common and preferred stock. It also addresses defective incorporation, de jure and de facto corporations, and restrictions on transferring shares. The key points are that incorporation requires complying with state law requirements, promoters have fiduciary duties, and corporations use various financial instruments to raise capital.
To understand various issues and concerns faced by the entrepreneurs/top management on the key aspects of Related party transactions and to support them in implementing better governance in organizations.
Exit planning and succession planning in a Washington limited liability compa...Beresford Booth PLLC
Exit planning and succession planning in LLCs.
By: David C. Tingstad
Beresford Booth, PLLC
145 Third Avenue South, Suite 200
Edmonds, Washington 98020
(425) 776-4100
DavidT@beresfordlaw.com
This document discusses insolvency and bankruptcy. It defines insolvency as the inability to pay debts when they are due, while bankruptcy is a legal process to resolve insolvency. There are two types of insolvency: cash-flow, where one cannot make a payment due to lack of funds, and balance-sheet, where debts exceed assets. Insolvency can lead to bankruptcy if not addressed through measures like debt repayment plans, borrowing, or renegotiating debts. The document outlines key bankruptcy laws and procedures in the United States.
This document provides an overview of business failure, bankruptcy, reorganization, and liquidation. It discusses the major causes of business failure, sizes of firms more prone to failure, key issues managers face in financial distress, informal and formal bankruptcy remedies, U.S. bankruptcy law terminology, differences between informal and formal reorganization, prepackaged bankruptcies, priority of claims in Chapter 7 liquidation, and criticisms and recent changes to bankruptcy laws.
Bankruptcy. Part of Toles curriculum. Universidad Católica de Cuyo sede San Luis. Liquidators, Receivers, Administrators. Listening Activity on Bankruptcy.
This document provides an overview of bankruptcy and mortgage deficiency basics, including Chapter 7 and Chapter 13 bankruptcy. It discusses what bankruptcy is, reasons for and against filing, eligibility requirements, exemptions, keeping property, costs, strategic defaults, and dealing with mortgage deficiencies. The key points are that bankruptcy provides a financial "fresh start" but can negatively impact credit, and strategic default may be an option to avoid deficiency if the home is underwater.
The document discusses various aspects of managing corporations, including:
- Corporate objectives, powers, and the roles of boards of directors and officers
- Directors' and officers' duties to act in the corporation's best interests and avoid conflicts of interest
- Protection from liability provided by the business judgment rule for decisions made with care, in good faith, and without conflicts
- Potential liability of directors and officers for negligence, torts, crimes, and usurping corporate opportunities
- Defenses against hostile takeovers and protections for minority shareholders
Chapter 42 – Organization and Financial Structure of CorporationsUAF_BA330
This document provides an overview of the organization and financial structure of corporations. It discusses promoters and preincorporation contracts, the incorporation process, financing corporations through equity and debt securities, and share types including common and preferred stock. It also addresses defective incorporation, de jure and de facto corporations, and restrictions on transferring shares. The key points are that incorporation requires complying with state law requirements, promoters have fiduciary duties, and corporations use various financial instruments to raise capital.
To understand various issues and concerns faced by the entrepreneurs/top management on the key aspects of Related party transactions and to support them in implementing better governance in organizations.
Well, insolvency is a financial state where you are unable to pay your debts. The declaration of such a state is called bankruptcy. The definitions of these are same in India as everywhere else. How these are handled in India makes the difference!
This document discusses the intersection of business law and bankruptcy. It provides an overview of bankruptcy law concepts including different chapters of bankruptcy, the automatic stay, treatment of secured and unsecured claims, executory contracts, leases, sales of property, and plan confirmation. It also discusses how various business situations could intersect with bankruptcy law, such as when a business, vendor, customer or owner experiences financial troubles. Key areas of focus are reviewing cash flow and debt structure, analyzing claims and contracts, and understanding opportunities to purchase debtor assets.
This document discusses voluntary winding up and liquidation of companies under Indian law. It begins by defining voluntary liquidation as terminating a company's operations, winding up its financial affairs, and dismantling its corporate structure in an orderly fashion while repaying creditors. It notes the legal framework governing voluntary liquidation under the Companies Act of 1956 and 2013 and the Insolvency and Bankruptcy Code of 2016. The detailed procedure for voluntary liquidation is outlined, including passing a special resolution, appointing a liquidator, making public announcements, preparing reports, and applying to the NCLT for an order of dissolution. Case studies of companies undergoing voluntary liquidation are also presented.
Avoiding #BVI law and #Cayman Islands law pitfalls in banking & finance and corporate transactions
There are certain notorious pitfalls to avoid in the context of British Virgin Islands (“BVI”) and Cayman Islands banking & finance and corporate transactions. In this article, we examine five such pitfalls. While there are no “one size fits all” solutions to these issues, we set out some practical considerations, solutions and risk mitigation tools (as appropriate) with respect to them.
Having examined the backdating of documents and asset disposals by a BVI company in the previous parts of this FAQs series, in this part III we examine the disclosure of conflicts of interest by directors. Find out more about the position set out in the BVI Business Companies Act, 2004 (the “Act”) regarding the disclosure of a director’s interests in a transaction, the consequences of non-disclosure under the Act, whether the common law rules on conflicts of interest are still relevant, what the common law duties are and what risk mitigation strategies should be considered by a third party dealing with a BVI or Cayman Islands counterparty in a transaction.
Be sure to follow #LoebSmithAttorneys for #offshorelaw legal news, information and insights from the #BVI #Cayman and #HongKong
The document discusses risk management in insolvency proceedings. It outlines various risks faced during insolvency such as contractual issues with suppliers, market reputation risks, and business interruptions. It provides recommendations for mitigating exposure, including carefully following procedural steps, considering appeal options, and preparing a strong defense arguing the company is not insolvent. The document also discusses protecting creditors' rights, managing directors' liability, and debt restructuring options to avoid insolvency proceedings.
FAQs COVID-19: A practical guide to frequently asked offshore law questions /...Loeb Smith Attorneys
COVID-19: A practical guide to frequently asked offshore law questions
Having considered the impact of Covid-19 on meetings, economic substance and the execution of documents in parts I to III of this guide, we now examine its impact on the BVI Registry of Corporate Affairs and the Cayman Islands Registrar of Companies, as well as the issue of liquidity and financial distress with respect to BVI and Cayman Islands companies.
Related Party Transactions: Disclosure & TransparencyPavan Kumar Vijay
It deals with the concept and need of disclosures and transparency in corporate affairs. It further enumerates the provisions of related party transactions and insider trading.
Related Party Transactions by Dipti Mehta Partner Mehta & Mehta Company Secretary
Both under the 2013 Act , requirements concerning related party transactions may be divided into four key parts, viz., identification of related parties, related party transactions, approval process and disclosure requirements. It is clear from discussion below that in most cases, The definition of ‘related party’ under RC49 is likely to result in identification of significantly higher number of related party. Unlike the 2013 Act, RC49 does not exempt related party transactions from special resolution of disinterested shareholders based on criteria, viz., (i) transaction is in the ordinary course of business and at arm’s length, or (ii) prescribed threshold regarding transaction value and share capital are not breached.
Disclaimer: Disclaimer: This presentation is based on my internal research. It is notified that the presenter and any other person related to him shall be responsible for any damage or loss of any action taken based on this presentation. It is suggested to seek professional advice before initiating any action.
This information sheet gives general information for shareholders on the three most common forms of external administration (liquidation, voluntary administration and receivership).
The Revised Uniform Limited Liability Company Act (RULLCA) was adopted in New Jersey and governs LLCs formed in the state after March 1, 2014. Some key changes under RULLCA include: operating agreements no longer need to be in writing; LLCs now have perpetual duration; fiduciary duties are imposed on members and managers; and withdrawing members are now dissociated and only entitled to future distributions rather than the fair value of their interest. RULLCA also establishes provisions for member disputes, derivative actions, and the application of foreign LLC laws in New Jersey.
This document provides an overview of corporate governance and management. It discusses key topics such as:
1) The roles and responsibilities of shareholders, boards of directors, officers, and committees in managing corporations.
2) Legal doctrines governing corporate objectives and powers like ultra vires.
3) Fiduciary duties of directors and officers, and standards of review like the business judgment rule.
4) Issues related to mergers, acquisitions, conflicts of interest, and shareholder oppression.
Related Party Transactions-Detailed AnalysisKrishan Singla
It deals with detailed analysis of related party transactions under Companies Act, 2013 and Clause 49 of Listing Agreements and Accounting Standard 18. You please also comment upon it as you wish for guidance of all.
The group presented on the topic of insolvency law in India. Some key points:
1) Insolvency occurs when an individual or organization cannot meet their financial obligations and pay debts as they are due. Bankruptcy is a legal process that occurs when a court declares an insolvent party is unable to pay debts.
2) The two main statutes governing insolvency law in India are the Presidency Towns Insolvency Act and the Insolvency Act, with jurisdiction falling to High Courts and district courts respectively.
3) Upon a declaration of insolvency, all the insolvent's properties are vested with the official assignee to be realized and distributed among creditors
The document discusses the winding up process of a company whereby a liquidator is appointed to end the company's existence. There are three modes of winding up: compulsory by court order, voluntary, or subject to court supervision. Grounds for compulsory winding up include an inability to pay debts, failure to submit statutory reports or hold meetings, and situations where the company's purpose no longer exists or management is oppressing shareholders.
The document discusses reforms to Malaysia's corporate insolvency regime. It notes international trends moving towards corporate rescue mechanisms rather than just liquidation. The current regime focuses on liquidation and lacks rescue mechanisms. It examines approaches taken in other countries and whether Malaysia should have a single omnibus insolvency act. Key areas for reform include commencement/termination of winding up processes, liquidator powers and duties, qualifications, treatment of secured creditors, and voidable transactions. The review aims to balance facilitation of winding up with protecting creditor/shareholder rights while establishing rescue mechanisms.
The document defines insolvency as when a business or individual cannot pay their debts when they are due. It provides examples of reasons why insolvency may occur, including insufficient financial management training, failure to manage risks, and changes in the business environment. It also discusses credit control and debt recovery, including performing credit checks and actions that can be taken to recover debts such as sending reminders, contacting the debtor, and pursuing legal action. Finally, it defines bad debts as when a business is unable to obtain payment that is owed, and notes that bad debts will be pursued but may eventually be written off if the debt is too small to chase.
The document discusses the winding up process of a company in India. There are two types of winding up - compulsory and voluntary. Compulsory winding up is ordered by the National Company Law Tribunal for reasons such as inability to pay debts or it being just and equitable. Voluntary winding up can be members' voluntary winding up if the company is solvent, or creditors' voluntary winding up if it proposes to wind up. The winding up process is conducted by an administrator called a liquidator, who realizes the company's assets and pays off debts. Winding up brings an end to the company's legal personality while dissolution removes it from the register of companies.
The document discusses the process of liquidating a company. It begins by defining liquidation as the process where a company is ended and its assets are administered for creditors and members. A liquidator is appointed to sell assets, pay debts, and distribute any surplus. There are three modes of liquidation: compulsory by court, voluntary by members/creditors, and under court supervision. The roles and responsibilities of the liquidator are outlined, including preparing a final statement of accounts. Preferential creditors who are paid before unsecured creditors are also defined.
This document provides an overview of key concepts related to bankruptcy, including types of bankruptcies, common shocks experienced during bankruptcy, out-of-court settlement options, steps to file UCC documents, issues related to distressed debtors, actions creditors can take after a bankruptcy filing is made, and definitions of key terms like reclamation and bankruptcy priorities. The document covers corporate and individual bankruptcy filings and considerations, as well as non-bankruptcy liquidation and restructuring alternatives.
Well, insolvency is a financial state where you are unable to pay your debts. The declaration of such a state is called bankruptcy. The definitions of these are same in India as everywhere else. How these are handled in India makes the difference!
This document discusses the intersection of business law and bankruptcy. It provides an overview of bankruptcy law concepts including different chapters of bankruptcy, the automatic stay, treatment of secured and unsecured claims, executory contracts, leases, sales of property, and plan confirmation. It also discusses how various business situations could intersect with bankruptcy law, such as when a business, vendor, customer or owner experiences financial troubles. Key areas of focus are reviewing cash flow and debt structure, analyzing claims and contracts, and understanding opportunities to purchase debtor assets.
This document discusses voluntary winding up and liquidation of companies under Indian law. It begins by defining voluntary liquidation as terminating a company's operations, winding up its financial affairs, and dismantling its corporate structure in an orderly fashion while repaying creditors. It notes the legal framework governing voluntary liquidation under the Companies Act of 1956 and 2013 and the Insolvency and Bankruptcy Code of 2016. The detailed procedure for voluntary liquidation is outlined, including passing a special resolution, appointing a liquidator, making public announcements, preparing reports, and applying to the NCLT for an order of dissolution. Case studies of companies undergoing voluntary liquidation are also presented.
Avoiding #BVI law and #Cayman Islands law pitfalls in banking & finance and corporate transactions
There are certain notorious pitfalls to avoid in the context of British Virgin Islands (“BVI”) and Cayman Islands banking & finance and corporate transactions. In this article, we examine five such pitfalls. While there are no “one size fits all” solutions to these issues, we set out some practical considerations, solutions and risk mitigation tools (as appropriate) with respect to them.
Having examined the backdating of documents and asset disposals by a BVI company in the previous parts of this FAQs series, in this part III we examine the disclosure of conflicts of interest by directors. Find out more about the position set out in the BVI Business Companies Act, 2004 (the “Act”) regarding the disclosure of a director’s interests in a transaction, the consequences of non-disclosure under the Act, whether the common law rules on conflicts of interest are still relevant, what the common law duties are and what risk mitigation strategies should be considered by a third party dealing with a BVI or Cayman Islands counterparty in a transaction.
Be sure to follow #LoebSmithAttorneys for #offshorelaw legal news, information and insights from the #BVI #Cayman and #HongKong
The document discusses risk management in insolvency proceedings. It outlines various risks faced during insolvency such as contractual issues with suppliers, market reputation risks, and business interruptions. It provides recommendations for mitigating exposure, including carefully following procedural steps, considering appeal options, and preparing a strong defense arguing the company is not insolvent. The document also discusses protecting creditors' rights, managing directors' liability, and debt restructuring options to avoid insolvency proceedings.
FAQs COVID-19: A practical guide to frequently asked offshore law questions /...Loeb Smith Attorneys
COVID-19: A practical guide to frequently asked offshore law questions
Having considered the impact of Covid-19 on meetings, economic substance and the execution of documents in parts I to III of this guide, we now examine its impact on the BVI Registry of Corporate Affairs and the Cayman Islands Registrar of Companies, as well as the issue of liquidity and financial distress with respect to BVI and Cayman Islands companies.
Related Party Transactions: Disclosure & TransparencyPavan Kumar Vijay
It deals with the concept and need of disclosures and transparency in corporate affairs. It further enumerates the provisions of related party transactions and insider trading.
Related Party Transactions by Dipti Mehta Partner Mehta & Mehta Company Secretary
Both under the 2013 Act , requirements concerning related party transactions may be divided into four key parts, viz., identification of related parties, related party transactions, approval process and disclosure requirements. It is clear from discussion below that in most cases, The definition of ‘related party’ under RC49 is likely to result in identification of significantly higher number of related party. Unlike the 2013 Act, RC49 does not exempt related party transactions from special resolution of disinterested shareholders based on criteria, viz., (i) transaction is in the ordinary course of business and at arm’s length, or (ii) prescribed threshold regarding transaction value and share capital are not breached.
Disclaimer: Disclaimer: This presentation is based on my internal research. It is notified that the presenter and any other person related to him shall be responsible for any damage or loss of any action taken based on this presentation. It is suggested to seek professional advice before initiating any action.
This information sheet gives general information for shareholders on the three most common forms of external administration (liquidation, voluntary administration and receivership).
The Revised Uniform Limited Liability Company Act (RULLCA) was adopted in New Jersey and governs LLCs formed in the state after March 1, 2014. Some key changes under RULLCA include: operating agreements no longer need to be in writing; LLCs now have perpetual duration; fiduciary duties are imposed on members and managers; and withdrawing members are now dissociated and only entitled to future distributions rather than the fair value of their interest. RULLCA also establishes provisions for member disputes, derivative actions, and the application of foreign LLC laws in New Jersey.
This document provides an overview of corporate governance and management. It discusses key topics such as:
1) The roles and responsibilities of shareholders, boards of directors, officers, and committees in managing corporations.
2) Legal doctrines governing corporate objectives and powers like ultra vires.
3) Fiduciary duties of directors and officers, and standards of review like the business judgment rule.
4) Issues related to mergers, acquisitions, conflicts of interest, and shareholder oppression.
Related Party Transactions-Detailed AnalysisKrishan Singla
It deals with detailed analysis of related party transactions under Companies Act, 2013 and Clause 49 of Listing Agreements and Accounting Standard 18. You please also comment upon it as you wish for guidance of all.
The group presented on the topic of insolvency law in India. Some key points:
1) Insolvency occurs when an individual or organization cannot meet their financial obligations and pay debts as they are due. Bankruptcy is a legal process that occurs when a court declares an insolvent party is unable to pay debts.
2) The two main statutes governing insolvency law in India are the Presidency Towns Insolvency Act and the Insolvency Act, with jurisdiction falling to High Courts and district courts respectively.
3) Upon a declaration of insolvency, all the insolvent's properties are vested with the official assignee to be realized and distributed among creditors
The document discusses the winding up process of a company whereby a liquidator is appointed to end the company's existence. There are three modes of winding up: compulsory by court order, voluntary, or subject to court supervision. Grounds for compulsory winding up include an inability to pay debts, failure to submit statutory reports or hold meetings, and situations where the company's purpose no longer exists or management is oppressing shareholders.
The document discusses reforms to Malaysia's corporate insolvency regime. It notes international trends moving towards corporate rescue mechanisms rather than just liquidation. The current regime focuses on liquidation and lacks rescue mechanisms. It examines approaches taken in other countries and whether Malaysia should have a single omnibus insolvency act. Key areas for reform include commencement/termination of winding up processes, liquidator powers and duties, qualifications, treatment of secured creditors, and voidable transactions. The review aims to balance facilitation of winding up with protecting creditor/shareholder rights while establishing rescue mechanisms.
The document defines insolvency as when a business or individual cannot pay their debts when they are due. It provides examples of reasons why insolvency may occur, including insufficient financial management training, failure to manage risks, and changes in the business environment. It also discusses credit control and debt recovery, including performing credit checks and actions that can be taken to recover debts such as sending reminders, contacting the debtor, and pursuing legal action. Finally, it defines bad debts as when a business is unable to obtain payment that is owed, and notes that bad debts will be pursued but may eventually be written off if the debt is too small to chase.
The document discusses the winding up process of a company in India. There are two types of winding up - compulsory and voluntary. Compulsory winding up is ordered by the National Company Law Tribunal for reasons such as inability to pay debts or it being just and equitable. Voluntary winding up can be members' voluntary winding up if the company is solvent, or creditors' voluntary winding up if it proposes to wind up. The winding up process is conducted by an administrator called a liquidator, who realizes the company's assets and pays off debts. Winding up brings an end to the company's legal personality while dissolution removes it from the register of companies.
The document discusses the process of liquidating a company. It begins by defining liquidation as the process where a company is ended and its assets are administered for creditors and members. A liquidator is appointed to sell assets, pay debts, and distribute any surplus. There are three modes of liquidation: compulsory by court, voluntary by members/creditors, and under court supervision. The roles and responsibilities of the liquidator are outlined, including preparing a final statement of accounts. Preferential creditors who are paid before unsecured creditors are also defined.
This document provides an overview of key concepts related to bankruptcy, including types of bankruptcies, common shocks experienced during bankruptcy, out-of-court settlement options, steps to file UCC documents, issues related to distressed debtors, actions creditors can take after a bankruptcy filing is made, and definitions of key terms like reclamation and bankruptcy priorities. The document covers corporate and individual bankruptcy filings and considerations, as well as non-bankruptcy liquidation and restructuring alternatives.
Delaware versus Washington: Where should I incorporate my startup?theventurealley
This a chart comparing some of the high-level pros and cons of being incorporated in Washington versus Delaware. For more information, visit www.theventurealley.com.
The document provides solutions to questions on company law for an accounting technician exam in Malawi. It covers topics such as the duties of promoters, pre-incorporation contracts, the significance of a company's memorandum and articles of association, share certificates, share transfers, the principle of corporate personality, fixed and floating charges, receivers, prospectuses, and ways an individual can become or cease being a member of a company limited by shares. The solutions are detailed and provide explanations and references to relevant sections of Malawi's Companies Act.
Multi member-llc-operating-agreement-downloadGeorges Krinker
This document outlines an operating agreement for a limited liability company (LLC). It establishes four members of the LLC and allocates ownership units equally among them. The agreement specifies the LLC will be member-managed and decisions will be made by majority vote. It also covers responsibilities of members, capital contributions, distributions, admission of new members, transfer of ownership units, withdrawal of members, and dissolution of the LLC.
The document discusses key issues regarding post-commencement finance (PCF) in business rescue proceedings. It summarizes that PCF refers to financing obtained by distressed companies undergoing business rescue to facilitate restructuring. While PCF is prioritized for repayment under the Companies Act, the proper ranking of PCF claims relative to pre-existing secured creditors requires further clarification. Additionally, it is unclear if PCF creditors could invoke the Insolvency Act to challenge dispositions made to other PCF creditors during liquidation proceedings. Judicial rulings are still needed to provide guidance on interpreting these provisions.
Liquidation is winding up of an entity and the selling of its assets to distribute them, depending on the factor whether the company is solvent or insolvent.
The document discusses the process of liquidating a company. It provides details on:
- The definition of liquidation and winding up of a company.
- The three modes of liquidation: compulsory, voluntary, and under court supervision.
- The roles and powers of the liquidator in taking control of company assets/affairs.
- The consequences of winding up like discharge of employees and end of company existence.
- Preparation of statements of affairs and deficiency accounts.
- Order of payment of creditors, shareholders and distribution of surplus.
This document summarizes key concepts in corporate law. It discusses how corporations are classified as stock or non-stock. It also covers the separate legal personality of corporations, corporate tort liability, piercing the corporate veil, determining corporate nationality, and the retroactive effect of amending corporate documents. Additionally, it addresses topics such as share classifications, redeemable shares, treasury shares, and the rules regarding non-voting shares.
This document discusses types of winding up, the differences between compulsory and voluntary winding up, procedures for members' voluntary liquidation and creditors' voluntary liquidation, powers and duties of a liquidator, and priorities for distributing funds in winding up. It provides details on:
- Grounds and processes for compulsory (court-ordered) winding up versus voluntary winding up initiated by shareholders or creditors.
- Requirements and steps for members' voluntary liquidation when a company is solvent, and creditors' voluntary liquidation when insolvent.
- Acceptance of a liquidator's authority, their main functions of taking control of assets and distributing proceeds, and who can be appointed.
- Evidence and priorities for
Distribution Of Company Assets In LiquidationBRIPAN
This document summarizes the key aspects of distributing company assets during liquidation proceedings under Nigerian law. It discusses:
1. The roles and duties of a liquidator to gather company assets, realize their value, pay debts, and distribute any surplus to shareholders.
2. The types of assets available for distribution, including realized assets, assets from continuing business operations, and discovered assets.
3. Methods for increasing the asset pool, such as legal claims, demands on shareholders, calling unpaid capital, and summoning those possessing assets.
4. The process for creditors to prove debts, including deadlines, affidavit requirements, and the liquidator's examination and certification.
5. The ranking of
Distribution Of Company Assets In LiquidationBRIPAN
This document summarizes the key aspects of distributing company assets during liquidation proceedings under Nigerian law. It discusses:
1. The roles and duties of a liquidator to gather company assets, realize their value, pay debts, and distribute any surplus to shareholders.
2. The types of assets available for distribution, including realized assets, assets from continuing business operations, and discovered assets.
3. Methods for increasing the asset pool, such as legal claims, demands on shareholders, calling unpaid capital, and summoning those possessing assets.
4. The process for creditors to prove debts, including deadlines, affidavit requirements, and the liquidator's examination and certification.
5. The ranking of
White Paper_SBA Guarantees and DivorceAlex Zarcone
This document discusses how divorce proceedings often fail to properly address SBA loan guarantees, leaving clients still liable for the debt even if the ex-spouse was assigned responsibility in the settlement. It notes attorneys cannot rely on marital settlements to protect clients, who must be formally released by the SBA from their guarantee before or during the divorce to avoid future liability if the loan defaults. The document then provides an in-depth overview of SBA loans, personal guarantees, government collection processes, and steps needed to obtain formal release from the guarantee.
The document discusses articles of association (AOA), which regulate a company's internal affairs and management. Key points:
1) AOA are subordinate to a company's memorandum of association and cannot extend the objectives defined in the memorandum.
2) AOA define the duties, rights, and powers of the governing body and procedures for internal company matters like share issuance and meetings.
3) While a memorandum sets external limits, AOA govern internal relationships between the company and members. AOA can be more easily altered than a memorandum.
4) The document outlines requirements for registering, printing, and altering AOA according to company law. It also discusses related legal doctrines like constructive notice and indoor
The document discusses the borrowing powers and restrictions on borrowing for companies under Indian law. It provides details on:
- Companies have implied power to borrow, while non-trading companies must include this power in their memorandum.
- The key restrictions on borrowing include limits based on paid-up capital and reserves, and requirements for shareholder authorization for amounts over these limits.
- Borrowings must be registered within 30 days for charges over specific assets like property or within 300 days with a late fee. Lenders can also register in some cases. The registrar issues certificates of registration and satisfaction.
This document analyzes the legal mechanisms that allow creditors to potentially receive a "double-dip" recovery in bankruptcy through asserting claims against both a guarantor entity and primary obligor entity for the same debt. It describes how a creditor can receive an allowed claim for the full amount owed against each debtor. It also explains how bankruptcy law treats intercompany claims and claims for reimbursement in a way that prevents offsetting of recoveries, allowing the creditor to potentially recover more than the amount owed from multiple entities. However, it notes there are risks like substantive consolidation that could eliminate this result.
This document provides information on company law concepts and the Companies Act. It discusses:
1. Key concepts like corporate personality, corporate democracy, and corporate status.
2. The differences between a company limited by shares and an association.
3. Circumstances where the veil of incorporation may be lifted, holding members or officers personally liable.
4. Functions of the Registrar of Companies and requirements for a company's register of members.
5. Conditions for altering a company's Articles of Association and how an alteration may breach existing contracts.
6. Definitions of ordinary shares, deferred shares, and preferred shares.
This document provides definitions for terms related to legal jargon. It notes that the definitions are intended as an introduction and specific legal advice will be required due to the complex legal issues involved. Additionally, the terms and applicable laws are subject to change. The information should not be construed as legal advice. Users can suggest additional terms or clarified definitions by email.
The Most Inspiring Entrepreneurs to Follow in 2024.pdfthesiliconleaders
In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN CHART KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
High-Quality IPTV Monthly Subscription for $15advik4387
Experience high-quality entertainment with our IPTV monthly subscription for just $15. Access a vast array of live TV channels, movies, and on-demand shows with crystal-clear streaming. Our reliable service ensures smooth, uninterrupted viewing at an unbeatable price. Perfect for those seeking premium content without breaking the bank. Start streaming today!
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AI Transformation Playbook: Thinking AI-First for Your BusinessArijit Dutta
I dive into how businesses can stay competitive by integrating AI into their core processes. From identifying the right approach to building collaborative teams and recognizing common pitfalls, this guide has got you covered. AI transformation is a journey, and this playbook is here to help you navigate it successfully.
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN CHART KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
Cover Story - China's Investment Leader - Dr. Alyce SUmsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
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Winding up an LLC
1. Winding Up
What is it? Who does it? How is done? When is it over?
Once dissolution has been triggered, an LLC enters a dark and murky status of “winding
up”. In the current economic environment, more and more LLCs have entered this stage, but
most of us do not really know what “dissolution” really is, nor do we know what happens next.
The purpose of this article is to identify what winding up means, who does it and how to know
when your client has completed the process. Practical tips for each stage in the winding up
process will be provided.
What is “Winding Up”?
I.
In general, winding up is the period between dissolution of the LLC and filing a
Certificate of Cancellation. Some states provide for filing of a Certificate of Dissolution, but not
a Certificate of Cancellation. Many practitioners are confused when considering the status of an
LLC following its dissolution. Dissolution does not terminate the existence of an LLC. Rather,
the LLC’s status is converted from that of “a going concern” to one that is “winding up” its
affairs and ceasing its operations.
Some states do not require filing to dissolve the LLC, filing is permissive but some states
require a filing upon completion of the winding up process.
Most state acts explicitly prohibit a dissolved LLC from engaging in any activities except
as is appropriate to wind up and liquidate its activities and affairs. However, some state a limited
liability company continues after dissolution only for the purpose of winding up its activities.
II. Who “Winds Up” and How Do They Do It?
A.
Who?
In general, state LLC Acts and RULLCA allow an LLC to be wound up by its manager,
members, and/or creditor/assignee. The members or managers may lack sufficient incentive to
complete the winding up activities. As a result, many cases turn on the question of who may
wind up the affairs of a dissolved LLC. In addition, all LLC statutes empower a court to wind up
the business of the LLC, usually through a “trustee” or “receiver”. Most LLC Acts grant the trial
court the full power to wind up and liquidate the assets and business of an LLC.
The court’s discretion on whether to wind up the affairs of an LLC frequently depends
upon the basis for dissolution. For example, if the basis for dissolution is because of deadlock
between the members, a court may intervene to wind up the affairs of the LLC to protect the
creditors of the LLC. However, if the LLC is profitable and solvent, a court is less likely to
intervene to dissolve the LLC’s affairs because the members have an economic interest to
protect. In other words, a court is more likely to stay out of a private dispute between members
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2. that does not impact innocent third party creditors, but is more likely to intervene if the dispute
between members harms or threatens to harm third party creditors.
B.
How: Gathering Assets and Resolving Liabilities.
Persons winding up the business and affairs of an LLC may, in the name of, and on
behalf of, the LLC, prosecute and defend suits, settle and close the business of the LLC, dispose
of and transfer the property of the LLC, discharge the liabilities of the LLC and distribute to the
members any remaining assets of the LLC. The primary function of winding up is to make
reasonable provision for the LLC’s liabilities and to distribute to the members any remaining
assets of the LLC.
Following dissolution, the LLC should undertake a plan to wind-up its affairs. The plan
should include a notice to known creditors, a method of disposing and conveying its property as
well as collecting and dividing its assets. A plan for winding up should include a minimum of the
following:
1)
2)
3)
4)
5)
Consent to the dissolution (if applicable);
Notice to known creditors including special notice for state tax purposes,
which includes a deadline to provide the amount of the creditor’s claim
and any supporting documentation for the claim;
Identification of claims and their priority and how the priority of claims
will be determined;
Distribution of assets; and
State filing if necessary.
After all known debts and liabilities of the company have been paid or adequately
provided for any remaining assets should be distributed to the members according to their
respective rights and preferences. Of course, problems arise when there are insufficient assets to
satisfy the debts and liabilities of the LLC.
C.
How: Making Provisions for Creditors.
(a) Upon the winding up of a limited liability company, the assets shall be
distributed as follows:
(1) To creditors, including members and managers who are creditors, to
the extent otherwise permitted by law, in satisfaction of liabilities of the limited liability
company (whether by payment or the making of reasonable provision for payment
thereof) other than liabilities for which reasonable provision for payment has been made
and liabilities for distributions to members and former members under §18-601 or §18604 of this title;
(2) Unless otherwise provided in a limited liability company agreement, to
members and former members in satisfaction of liabilities for distributions; and
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EDMONDS, WASHINGTON 98020
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3. (3) Unless otherwise provided in a limited liability company agreement, to
members first for the return of their contributions and second respecting their limited
liability company interests, in the proportions in which the members share in
distributions.
(b) A limited liability company which has dissolved:
(1) Shall pay or make reasonable provision to pay all claims and
obligations, including all contingent, conditional or unmatured contractual claims, known
to the limited liability company;
(2) Shall make such provision as will be reasonably likely to be sufficient
to provide compensation for any claim against the limited liability company which is the
subject of a pending action, suit or proceeding to which the limited liability company is a
party; and
(3) Shall make such provision as will be reasonably likely to be sufficient
to provide compensation for claims that have not been made known to the limited
liability company or that have not arisen but that, based on facts known to the limited
liability company, are likely to arise or to become known to the limited liability company
within 10 years after the date of dissolution.
If there are sufficient assets, such claims and obligations shall be paid in full and any
such provision for payment made shall be made in full. If there are insufficient assets,
such claims and obligations shall be paid or provided for according to their priority and,
among claims of equal priority, ratably to the extent of assets available therefor. Unless
otherwise provided in the limited liability company agreement, any remaining assets shall
be distributed as provided in this chapter. Any liquidating trustee winding up a limited
liability company’s affairs who has complied with this section shall not be personally
liable to the claimants of the dissolved limited liability company by reason of such
person’s actions in winding up the limited liability company.
(c) A member who receives a distribution in violation of subsection (a) of this
section, and who knew at the time of the distribution that the distribution violated
subsection (a) of this section, shall be liable to the limited liability company for the
amount of the distribution. For purposes of the immediately preceding sentence, the term
“distribution” shall not include amounts constituting reasonable compensation for present
or past services or reasonable payments made in the ordinary course of business pursuant
to a bona fide retirement plan or other benefits program. A member who receives a
distribution in violation of subsection (a) of this section, and who did not know at the
time of the distribution that the distribution violated subsection (a) of this section, shall
not be liable for the amount of the distribution. Subject to subsection (d) of this section,
this subsection shall not affect any obligation or liability of a member under an agreement
or other applicable law for the amount of a distribution.
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4. (d) Unless otherwise agreed, a member who receives a distribution from a limited
liability company to which this section applies shall have no liability under this chapter or
other applicable law for the amount of the distribution after the expiration of 3 years from
the date of the distribution unless an action to recover the distribution from such member
is commenced prior to the expiration of the said 3-year period and an adjudication of
liability against such member is made in the said action.
Some states provide that reasonable provision requires the dissolved LLC to make
provision sufficient to provide compensation for claims that have not been made known to the
LLC but are likely to arise within 10 years after the date of dissolution. A number of states do
not include provisions for creditors with unknown claims.
It is critical to make reasonable provisions for creditors because in the event the LLC
fails to make reasonable provisions for creditors the members will be personally responsible to
the extent of any distributions of assets made to them.
III.
When is the Winding Up Process Complete?
From a practical perspective, winding up is completed when all debts, liabilities, and
obligations of the LLC have been paid, or a reasonable adequate provision is made for them, and
all remaining property has been distributed to the LLC members. Most state LLC Acts do not
require the winding up process be completed in a certain period of time, rather, winding up must
proceed as soon as reasonably practicable. There is risk in making any distribution to members
during the winding up process because a cause of action against a dissolved LLC may be
enforced against the LLC members to the extent the company’s assets were distributed to them
upon dissolution without making reasonable provision for creditors.
As for a requirement of a filing to give notice to completion of winding up, State law may
require no filing (e.g. Washington), one filing, such as a certificate of cancellation or articles of
dissolution (e.g. Delaware, Texas and Virginia), or two filings: statement of intent to dissolve
and articles of dissolution (e.g. Colorado and Florida).
IV.
What should the LLC Agreement Say About Winding Up?
Most provisions of state LLC Acts can be modified by the LLC Agreement. For example,
in Virginia, their LLC statute provided for winding up by members who had not wrongfully
dissolved, but the court allowed that statutory restriction to be modified so the manager of the
company could wind up the company’s affairs.
The LLC Agreement should identify the person or persons who will wind up the affairs
of the company and the process to be used. Members who have loaned money to the LLC should
have the same priority as other non-member creditors of the company. Frequently LLC Acts do
not allow for that distinction unless it is stated in the company’s LLC Agreement. It should also
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5. provide for compensation for the person completing the winding up process, and that the person
winding up will have no personal obligation for winding up the company’s affairs.
Other provisions may be necessary, depending on the nature of the company, such as the
right to an accounting or right to complete work in progress of a professional firm.
V.
Conclusion
Upon dissolution, the winding up process begins. Often, the dissolution trigger dictates
how the winding up process will work and a winding up plan should be adopted to protect the
personal liability of the members by making reasonable provision for the company’s creditors.
Once the assets have been collected, provision made for creditors and the balance (if any) of the
assets are distributed to the members, state law determines whether a filing is required. Now you
know the, what, who, how and when of winding up.
Winding Up
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BERESFORD ♦ BOOTH PLLC
145 THIRD AVENUE SOUTH, SUITE 200
EDMONDS, WASHINGTON 98020
(425) 776-4100