Limited liability companies were created as a new, more flexible form of business entity which would enable its members to exercise their freedom of contract to the fullest permissible limits. Because they are contractually malleable, the language of the operating agreement organically defining an LLC must be precise and judicious. In Synectic Ventures I, LLC v. EVI Corp., 353 Or. 62 (2012) the Oregon Supreme Court, reversing an earlier decision by the Court of Appeals, … Read more
Oct 24, 2012
Family Dynamics and Estate Planning
Understanding a family’s dynamics in estate planning is very important. Frequently, I have clients that come to me requesting a “simple will”. For example, a couple in their mid 60s comes to my office for estate planning. They have three kids all over the age of 30. They own a primary residence, a vacation property at the beach which has been in the family for two generations that they would like the kids to receive … Read more
Aug 23, 2012
Liability Issues for LLC Members
When I meet with clients for the first time they usually tell me they want to set up an LLC so that they cannot be sued personally for the company’s business. However, limited liability does not mean absolute liability. Members of limited liability companies can be liable for company debts, obligations, and liabilities for a number of reasons.
As a general rule members of a limited liability company are not personally liable for the debts, … Read more
May 22, 2012
Kevin Tillson to Speak at Local LLC CLE
Our very own Kevin J. Tillson is scheduled be a speaker at a CLE entitled “LLCs: From Formation to Special Uses“. The CLE is scheduled to take place on Tuesday June 26, 2012 all day beginning at 8:30 AM at the Red Lion Hotel & Convention Center which is located at 1021 NE Grand Avenue in Portland, Oregon. He will be specifically discussing the impact of state law on LLCs. Sign up for … Read more
Apr 26, 2011
Reducing Fiduciary Duties in Oregon LLCs: How Far Can You Go?
Freedom of contract is one of the principal principles in the law of limited liability companies. That is, limited liability companies were legislatively created to enable the equity owners of such companies to contractually define their relationship vis-à-vis their company and each other to the fullest extent reasonably possible. The limited liability company operating agreement provides the vehicle for the exercise of that freedom. Unfortunately, such freedom can make trust more expensive where the members … Read more
Dec 16, 2010
Out of State Resident Owning Property in Oregon: Will Your Estate Have to Pay an Oregon Inheritance Tax?
With President Obama’s proposed tax cuts passing the Senate, the House is set to vote on the proposed legislation before the end of the year. If the House approves the legislation as written, individuals that die in 2011 or 2012 and have an estate which is under $5 million dollars ($10 million for married couples), the decedent’s estate will be exempt from the federal estate tax.… Read more
Dec 1, 2010
Limitations on Distributions from Closely Held Corporations and Limited Liability Companies in Oregon and Their Potential for Personal Liability
There are important statutory limitations on the ability of Oregon corporations and limited liability companies (“LLC’s”) to make distributions to their shareholders and members which are often ignored ultimately at the risk of the directors, managers or other members. Distributions, including redemptions, made disregarding the statutory limitations may result in personal liability of those directors, managers or members responsible for an improper distribution if the company subsequently becomes insolvent.… Read more
Nov 5, 2010
Indemnification and Limitations on Liabilities of Members and Managers of Limited Liability Companies under Oregon Law
When a legal claim is brought against the manager, member, employee or agent of a limited liability company one of their first questions is who will pay for their defense and any damages ultimately assessed against them for the claim. They will generally look to the company itself to fund their defense and to pay any damages or settlement amounts to the claimant. That is, they will want the company to indemnify them against the … Read more
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