How do I get out of a limited liability partnership?
Looking at agreements and tax consequences

If you are part of a limited liability partnership, and you want out of it, the first place to look is the partnership agreement.  You should know if you are a general partner (or owner of the entity that is the general partner) or a limited partner.  Look at the agreement in its entirety, including transfer, assignment, gifting, and termination provisions.  Look at your options to sell your interest in the partnerships.  If you are a limited partner and want to transfer your interest to another partner, you may be able to do so with a simple transfer document.  Be sure you have reviewed any notice provisions, as there are often requirements that the general partner and  other partners be notified prior to any partner selling, transferring, or assigning a partnership interest.  Your attorney should be able to help you read the agreement to make sure you are following it.

You will also need to review the tax consequences of leaving a limited liability partnership.  Because such partnerships are often created with minority interests and other tools to reduce tax liability, when one partner leaves, it may affect the other partners as well.  Your attorney should work with your CPA to determine the best time to effectuate the transfer for minimal tax consquences due to this transaction.

Preventative Law * Action Item *
When entering a partnership,  be certain that your partners are people in whom you have the utmost trust and confidence, and with whom you can express your opinions without jeopardizing the partnership itself.  Also, always ensure that you have an exit strategy should any irreconciliable
disagreement occur.

Desai Law Firm, PLLC concentrates in the areas of business, employment, estate planning, and real estate law.  Comments and requests for articles on a topic of interest are welcome and may be sent to ami@desailawfirm.com.

Ami Desai
Desai Law Firm, PLLC
www.desailawfirm.com

What happens when both parents pass at once?
Reciprocal Wills

Many couples making wills decide on reciprocal wills, each drafting a will that mirrors the other’s will and leaving everything to the remaining spouse. Most simple wills prepared for parents have a clause to deal with the common disaster situation. Each will may state, “all my property to my spouse, if he/she survives me by at least 30 days. Otherwise, all goes to the children.”

However, neither this clause nor legal advice will help much unless these parents have decided who will be the guardian of their child(ren) and ensure that funds are available to support them.

Can I be fired if I am on FMLA?
Limited protection provided by the Family Medical Leave Act.

Under the FMLA, unless you are a key employee and under certain circumstances, you cannot be fired because you are on FMLA, but you can be fired while you are on FMLA leave.

Employers are not required to continue FMLA benefits or reinstate employees who would have had their employment terminated had they continued to work during the FMLA leave period, for example, a general layoff, negative performance review, or any other reason unrelated to the FMLA leave. In addition, employers are not required to continue FMLA benefits past the mandated 12 week period.

Preventative Law *Action Item*
Keep documentation of all of your FMLA leave requests and paperwork. If you are discharged while you are on FMLA leave, and you believe that the only reason you were discharged is because you took FMLA leave, consult an attorney immediately.

It’s not what you did; it’s why you did it.
Retaliation claims in Employment Law

According to the EEOC’s Report of Discrimination Charge Filings, retaliation claims have doubled since 1992. Retaliation occurs when an employer, employment agency, or labor organization takes an adverse action such as a demotion or firing, against an employee, because he or she engaged in a protected activity under the law. Although Texas is an at-will employment state, a retaliation claim may be brought where an adverse action is taken as a result of an employee complaining to anyone about alleged discrimination, threatening to file a charge of discrimination, picketing in opposition to discrimination, or refusing to obey an order reasonably believed to be discriminatory.

How do you pay less for a change order?
Negotiating your contract for custom home construction.

The three areas of a custom homebuilding contract that cause the most problems are allowances, change orders and construction delays. Change orders are a normal part of the custom home building process, and they can cause major pricing problems.

These problems often occur when the change order is done on a handshake rather than as a written order. What is to be changed and its price, when in writing and signed by both parties, prevents the very real risk of unanticipated costs at closing. In addition, an administrative cost is attached to each change order above the number of change orders agreed to in the initial contract. Therefore, negotiating for a higher number of change orders in the initial contract avoids those administrative charges during construction.

Preventative Law Action Item

Carefully read your HOA Declaration and Bylaws. They may contain regulations on how to complain, which modifications can be done to your property and how to make them. They may also provide protections for homeowners who actively participate in the HOA, such as the HOA’s Board of Directors.

Desai Law Firm, PLLC concentrates in the areas of business, employment, estate planning, and real estate law. Comments and requests for articles on a topic of interest are welcome and may be sent to ami@desailawfirm.com.

Sincerely,

Ami Desai
Desai Law Firm, PLLC
www.desailawfirm.com

Should your business be a LP/LLC or a LLC?

Business formations under the new Margin Tax

Under the former Franchise Tax scheme, many businesses formed LP/LLC combinations for favorable tax treatment. Under the new Margin Tax scheme, a single LLC entity may provide identical state tax treatment as a combination structure.

Business owners may prefer to eliminate the LP/LLC combination in order tosave costs such as preparing and filing annual state and federal tax returns and maintaining separate bank accounts. If your business is currently structured under a LP/LLC combination, the option to simplify it to an LLC may be examined if the current limited partnership does not qualify as a passive entity.

Are living trusts a scam?

When to consider creating a living trust

A living trust is appropriate for those people who have children, significant assets, desire financial privacy, have real property, or wish to leave some of their assets to a charity or a person other than the spouse. A living trust is a legal instrument, and therefore should not be purchased from a living trust salesperson. Seniors who have limited assets may be able to use a simple will to distribute them and should consult an attorney for that decision.

Living trusts are not appropriate for everyone. Some people can take care of the distribution of their assets upon death with a simple will. For example, young married couples without children and without significant assets who intend to leave all of their assets to each other can use a will rather than a living trust. Others without significant assets or those who desire to have court supervision over the administration of their assets can use a will rather than a living trust.

Desai Law Firm, PLLC concentrates in the areas of business, employment, estate planning, and real estate law. Comments and requests for articles on a topic of interest are welcome and may be sent to ami@desailawfirm.com.

Sincerely,

Ami Desai

Desai Law Firm, PLLC

www.desailawfirm.com