Business Law Information: New Ruling Allowing an LLC to adopt an ESOP
January 27, 2016 | Barna, Guzy & Steffen, Ltd.The IRS released a recent Private Letter Ruling (PLR 201538021) that surprisingly allows a Limited Liability Company (“LLC”) to adopt an ESOP. This is a new development that should be considered with caution since a PLR only applies to the taxpayer that asked for the ruling and there are some pre-requirements that may continue to create a tax problem if implemented. Here’s the story: Background The rules under the Internal Revenue Code have so far limited the use of ESOPs to C- or S-Corporations. One of the requirements for an ESOP is that it invests predominantly in qualifying employer securities. LLCs were not permitted to have ESOPs because the membership units were not considered qualifying employer securities. As a result, an LLC had to be converted to a corporation in order to utilize an ESOP. Although the process may not be all that complicated, it sometimes created adverse tax consequences for a converting owner. New developments In a the recent Private Letter Ruling mentioned above, the IRS ruled that the membership units of an LLC will be considered as qualified employer securities under the Internal Revenue Code. This means that an LLC could establish an ESOP and have it hold LLC units. The ruling is conditioned on the LLC and its units having…
Read MoreBest Ways to Prevent a Car Accident
December 31, 2015 | Adriel B. VillarrealYou can’t control anyone else’s actions behind the wheel, but you can control your own. Prevention is the key. What should you do to prevent an accident? 1. Be Cautious of Blind Spots Your side mirrors and rearview mirror can be adjusted to provide a panoramic view behind you, but there is always a chance a vehicle can enter your blind spot. This is the space where your side mirror and rearview mirror fail, leaving you with the inability to see the vehicle right next to you. Other drivers will have these blind spots, especially when you’re driving right next to them or are coming up to pass them. Looking over your shoulder before switching lanes will help you to avoid blind spot accidents. 2. Continually Scan the Road The road in front of you extends well beyond the vehicle you’re behind. Scanning the road in front of you will allow you to have enough time to react to sudden vehicle stops, accidents, animals in the road, or other road dangers that could result in an accident. 3. Avoid Fast Lanes There is a reason the fast lane is only meant for passing – there is nowhere to escape. Practicing defensive driving requires you to drive in the middle or right lane. When…
Read MoreWhat to Do If You’re Hit on a Bicycle
December 23, 2015 | Adriel B. VillarrealWhen bikes collide with vehicles, the result can be disastrous – and oftentimes, fatal. If you’re hit while riding your bicycle, it’s important to remain calm. The actions you take immediately following the accident may impact your financial recovery for damage to your bike and injuries. Follow these steps if you’re hit on a bicycle. Get Medical Attention First and foremost, get medical attention if you’re seriously injured. Your health should be your top priority, and getting medical care as soon as possible is the only way to be sure you have documentation of your injuries. Contact the Police The second most important step is to contact the police, and make sure that you wait for them to arrive at the scene. File a police report even if you don’t think you’re injured. In many cases, cyclists don’t even realize they’re injured until several hours after the accident occurs. Injuries that appear to be minor at first can progress into serious – sometimes permanent – injuries. Also, remember that if you leave the scene before the police arrive, you may not be able to identify the at-fault driver. Don’t try to negotiate with the driver or accept any blame. Just wait for police to arrive, so the accident can be documented properly…
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