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Attorney2020
Attorney2020, Attorney
Category: Business Law
Satisfied Customers: 2578
Experience:  I am a practicing attorney. I have experience in business law, bankruptcy, real estate law and estates.
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State of Florida - I have an option to purchase equity in a

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State of Florida -
I have an option to purchase equity in a private LLC from a Member (RT) of that LLC. The Operating Agreement and its Amendments spell out the ownership of each Member, but there are no stock certificates or anything else. I am structuring a loan with RT and am using the % ownership to which I am entitled in my option as collateral. I do not want to exercise my option at this time, but need to somehow protect my options. That means they will remain in RT's name (Actually, RT's equity is held in an LLC owned by RT) Is there some way to protect the equity covered by my options like putting the equity in escrow or something?
Also, RT has some IRS issues and I want the options to be protected should the IRS seize his assets.
Submitted: 1 year ago.
Category: Business Law
Expert:  Attorney2020 replied 1 year ago.

Equity cannot be placed in escrow as it is an intangible asset. Certain restrictions can be placed on the company to protect your interest such as covenant restricting the amount of debt the company may take one, or even personal guarantees in certain amounts against the owners of the company or certain authority of finances with respect to company accounting. As to the IRS tax issue, again personal guarantees in a certain amount against the owners would protect you or taking secured interest in company owned property.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation. Thank you.

Expert:  Attorney2020 replied 1 year ago.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation. Thank you.

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