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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10584
Experience:  30 years of corporate, litigation and international law
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Thanks getting back to me so quickly on a holiday Sunday.

Customer Question

Richard,Thanks getting back to me so quickly on a holiday Sunday. Just to clarify, I am a New York attorney who has not actually practiced corporate law in many years. I have just joined a group of successful business men, two in Alabama and one in New York. The four current LLC's are registered in New York, DC and two in Alabama. If I understand you correctly you are recommending that each of us draft a "Resolution" assigning all future rights to the NEWCO LLC and on the other end draft a Resolution through the NEWCO to accept the assignment of ownership rights from each of the four LLC's? If that is correct are there any other steps that need to be performed to complete the transaction and assure all is well with the State of Alabama come tax time?
Submitted: 2 months ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 2 months ago.

Hi thanks for asking for me.

Let me clarify. Let's assume that each ownership group of each of the five existing LLC's is to get 20% of the new LLC and the new LLC will be parent of each of the five existing LLCs. Let's also assume that all of the existing LLCs except one is owned by two members each owning 50% of the LLC and one LLC has three members each owning 1/3 of the membership interests. If each member of each of the four existing LLC's with two members exchanges their current membership interest in the existing LLC with the new LLC for their same percentage ownership in the new LLC it would work as follows. Since each existing LLC is to get 20% of the new LLC, each of the members of the 4 LLCs with two members would get a 10% membership interest in the the new LLC. The owners of the four existing LLCs would then own 80% of the membership interests in the new LLC. The last ownership group in the last LLC would get the remaining 20%. However, since their are three members, they would each receive 6 2/3% interest in the new LLC.

Once the exchange was completed, each of the five existing LLC would be wholly owned by the new LLC and members of the five existing LLCs will now only own membership interests in the new LLC. The new LLC could be organized in any state you choose. You do not any resolutions in any of the LLCs. Everything is accomplished by the exchange of membership interests.

If I have answered all your questions, please highly rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.

Customer: replied 2 months ago.
Excellent assessment of our situation. Simple but needs to be handled properly. I will share this with the partnership group and get back to you regarding the possibility of you assisting us in properly setting this up as long as we can expedite the process. Am I allowed within the rules to contact your practice directly. Thank you. ***** -***@******.***
Expert:  Richard - Bizlaw replied 2 months ago.

For questions like the one you posted or if you just need a review and critique of documents you prepared, you can just come back to the site. For actual representation that is not done through the site.

If I have answered all your questions, please highly rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.

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