Complete Business Counsel For Privately Held Companies

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Can an LLC member receive a salary for services that is not treated as a distribution of profits?

Summary answer—Yes:  an LLC may account for regular payments to a member for services and paid ahead of payments to members as distributions of profits as guaranteed payments, essentially a salary substitute.  And like a salary, guaranteed paymen… Read More
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Why does the “active” status of a California corporation get suspended, and how is this avoided?

The right to conduct business as a corporation in California is considered a privilege which can be forfeited or suspended. When the State of California suspends a California corporation’s “active” status it is more often than not because eithe… Read More
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What is an Earn-out?

In connection with the purchase and sale of a business, including a merger transaction or sale of substantially all of a business’ assets (a merger and acquisition or “M & A” transaction) an earn-out is a mechanism to delay and make conting… Read More
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Shielding shareholders from liability for corporate acts and omissions

So you incorporated, and now the shareholders are protected from individual liability for acts of the corporation, right? Not exactly. Filing articles of organization in California or a certificate of organization in Delaware is a the necessary first… Read More
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Term sheet for a convertible debt financing

A convertible debt financing, like a preferred stock financing, is usually negotiated at first as a non-binding term sheet, rather than a full set of financing documents. The advantage of this is that it allows parties to wait and only invest in the… Read More
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The “defacto” dissolution of a California LLC; it can result in member personal liability for a judgment against the dissolved LLC

California law provides generally that members of a limited liability company (LLC) are not personally liable for LLC “debts, obligations, or other liabilities.”   There are, of course, exceptions. These include: a member’s liability under t… Read More
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What Our Clients Are Saying

I first contacted Drew for help with a business partnership issue: separate from one partner and reorganize with a new partner as an LLC. I was looking for things to get handled fast and Drew definitely came through for me. He responded to my emails… Read More
– Ayme Dickson, Managing Member, Jen’s Cakes LLC
Drew Piunti is an extremely versatile and effective attorney. He is also personable, super smart, delivers the goods and has great business sense. He has been an outstanding advisor to me personally on many occasions, [and] has been my company’s o… Read More
– Joe Flynn, Founder and Chief Strategy Officer, Lavante, Inc.

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