Preliminary Assessment & Analysis Services
In this part of the Partners in Peril program, Mr. Tufts looks to come to the specific aid of those partners, members, or shareholders in the closely-held setting who find themselves unclear or unsure of their duties and obligations appearing in their partnership agreement, operating agreement, or shareholders agreement, including how it may also pertain to disputes that may then arise with regard to erroneous K-1s. Mr. Tufts offers owners of pass-through entities unique insights on the law of closely-held entities here in Florida. Mr. Tufts has spoken for years about LLCs, LLPs, and LLLPs, first as these entities developed in North Carolina in the 90s where he then practiced law, or during this decade, here in Florida.
Mr. Tufts was honored to serve on the estate planning subcommittee to the Florida Bar RE-FRULPA task force, which was responsible for analyzing the NCCUSL version of the revised uniform limited partnership act and addressing how that uniform law might compare with prior state law and the laws of other states. The work of that task force led to the implementation of of a new statute governing Florida limited partnerships and limited liability limited partnerships (LLLPs), which was enacted into law as Florida’s Revised Uniform Limited Partnership Act of 2005, effective January 1, 2006 (Chapter 620, Part I, Sections 620.1101 through 620.2205). This law stands in contrast to the Florida Revised Limited Liability Company Act, as most recently revised (Chapter 605 of the Florida Statutes), or even Florida’s Revised Uniform Partnership Act of 1995 (Chapter 620, Part II, Sections 620.81001 through 620.9902). With three totally different statutes governing the three entity types, each with its own style and theories, and in some situations, case law assisting in interpretation, owners may find it a bit maddening trying to figure out their respective rights and obligations.
In addition, with the changes made to how partnership entities under the Federal Tax laws will be audited by the IRS, it is imperative that all partnership or operating agreements be immediately reviewed. Because these are effective in 2018, all LLCs, LLPs, and LLLPs and other entities treated for tax purposes as partnerships need to ensure that language calling for the appointment of a "tax matters partner/member" be amended, and appropriate safeguards be instituted to reflect on the new entity-level understatements that now may be assessed at the partnership level (unless pushed-out, by way of election). It is critical that these agreements be amended as necessary to reflect on the new role of a "partnership representative" and address the due process rights of review for all "indirect" partners down the chain no longer protected by TEFRA which has been repealed.
Mr. Tufts is able to provide clients with a preliminary assessment of your operating agreements, partnership agreements, and other organizational and formation documents, using our years of experience and knowledge of the inner workings of the various statutes and trends in the law. If you are an owner or member or shareholder and are interested in a preliminary assessment being done of your formation or organizational documents, please contact us.