Response to RFE on Ownership and Control of U.S. Entity

For purposes of L-1 Classification, the foreign entity must present evidence of ownership and control of the U.S. Entity in order to prove that a qualifying relationship exists.  My client's business immigration attorney received a lengthy Request for Evidence, and I was asked to draft a letter addressing the ownership and control issue, as well as governance and contributions. After all, I created the business structure, so it seemed natural that I was tasked with explaining the parent-subsidiary relationship from a limited liability company law viewpoint. By way of background, my client's structure is as follows: Venezuelan owned foreign entity which [...]

October 15th, 2020|Tags: , |

When Transferring Assets to Family Backfires

It's like a never ending what-if scenario during many of my consultations, but when clients want asset protection, or at least what they think is asset protection, many ask about transferring assets to family as a form of pre-litigation planning.  Obvious fraudulent transfer issues aside, let's see how this worked out for Mohammad from California: At Mohtasham's suggestion, for asset protection purposes, Mohammad quitclaimed his house in Moreno Valley to Mohtasham's wife. He never got it back. Well, that can happen sometimes.  Perhaps this asset protection strategy worked out just fine, i.e. his creditors didn't get the house, but ultimately [...]

October 10th, 2020|Tags: , |

Dissent: LLCs are a legal fiction, nexus of contracts

The emergency suspension without a hearing of an alcoholic beverage license issued by the Department of Business and Professional Regulation (“DBPR”) for alleged violations of Florida’s COVID-19 orders sparked a quick petition to the First District Court of Appeal in Florida for review of DBPR’s non-final agency action, which was accompanied by a motion to stay the suspension of the license.  The court denied the motion to stay in an unpublished order, having yet to decide the merits of the petition, and noted that a dissent would be issued at a later date. I thought I would mark the dissent not [...]

September 28th, 2020|Tags: , |

Implications for Foreigners in the IRS Revision to the EIN Application

In March, the Internal Revenue Service (IRS) announced a revision to the Employer Identification Number (EIN) application process that could potentially have some serious consequences for foreigners or non-resident aliens (NRA) who wish to start a company in the United States. The change the IRS made applies to both the paper Form SS-4 (Application For Employer Identification Number) and the online EIN application. The press release states that as of May 13, 2019, "The change will prohibit entities from using their own EINs to obtain additional EINs," and that, "Individuals named as responsible party must have either a Social Security [...]

August 28th, 2019|Tags: , |

There is no such thing as a Limited Liability Corporation

There is no such thing as a Limited Liability Corporation.  Sure, corporations to an extent enjoy limited liability, but that does not make them limited liability corporations -- corporations are just corporations.  The LLC designation actually stands for limited liability company, i.e. the LLC, and confusing company with corporation is legally incorrect. This may seem rather self-evident, but I get alerts from Google Scholar every time a judicial opinion, or order, uses the words "limited liability corporation," and I am alerted nearly every single day with multiple examples. In fairness to the court, however, most of the time (but not always!) [...]

February 20th, 2019|Tags: , , , |

Response to Attorney Question: Multiple LLCs

An attorney question came across my desk the other day and I thought I would share my response with the collective. She queried whether multiple LLCs or a single LLC was most appropriate to hold her client's rental properties, and solicited experiences and opinions on how other attorneys deal with the issue, especially in light of the famed Olmstead decision, personal liability, adequacy of insurance, and tenants by the entirety (TBE) ownership structures.  What follows is my spark notes response: Those are interesting questions and ones that I discuss with my clients and in presentations quite frequently.  Ultimately, the creation [...]

Event: Legal Structures for Small Businesses

This past week I had the pleasure of presenting on Legal Structures for Small Businesses for a Spanish speaking audience.  The event was organized by Prospera, a non-profit that provides bilingual assistance to hispanic entreprenuers trying to establish or expand their business, and hosted by Cambridge Innovation Center, a hip coworking facility with beautiful conference rooms.  Our conference room in particular had a nice view of the Miami skyline and was super comfortable. In attendance we had current and future business owners.  I made it a point to emphasize that as entrepreneurs, learning how to protect what you earn, or [...]

LLCs as Creatures of Contract: Don’t Overestimate this Legal Fiction

I recently sat down with a nonprofit to discuss the asset protection tenets of LLCs, among other things, and was particularly intrigued by where our conversation headed.  It was a smart group, to boot, so I took them on a ride all the way back to what LLCs are in their most primitive form: creatures of contract. LLCs exist by virtue of state statutory schemes.  In Florida, the Revised Limited Liability Company Act (the "Act") requires the filing of articles of organization with the Department of State in order to form the LLC.  The articles of organization is really just a contract between the [...]

The LLC Is No Magic Carpet | Personal Liability

I'm consulted quite frequently on the efficacy of using an LLC to protect oneself from personal liability.  I find that most people, including prospective clients and their advisors, believe the LLC to be the magic carpet that will carry them far, far away from personal liability should potential litigation start to appear on the horizon.  Well, magic is rarely a defense, and throwing your liability-prone asset into the arms of the LLC may not get you very far. This myth is promulgated by a loose understanding of the liability protection offered by the LLC.  The LLC is certainly a behemoth of an entity [...]

PACC Event: Commentary on the Panama Papers

I happily accepted an invitation by the Panamanian American Chamber of Commerce to briefly speak on the Panama Papers at their last networking event.  The event, appropriately entitled "Commentary on the Panama Papers," was sponsored by the Carolina Ale House and Ron Abuelo.  There were many points of discussion, all of which I crammed into a fifteen minute conversation, but all in all I thought my comments were well received. In fact, I was very much delighted to see the huge amount of interest everyone had in the topic and relished the opportunity to clarify Panama's well-documented stance on international transparency and correct [...]

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