What is it about 20 years of experience?

As far as I'm concerned corporate attorneys with 10 years of experience are the best (I'm biased), many people I know that have practiced for 20+ years are borderline incompetent. They have been around for a long time and have client contacts, but they aren't sharp. Old age will do that to you.

At any rate, fan from texas is correct, although LLC's are a relatively new business entity, the "corporate persona" for lack of better words still exists, from an ownership liability standpoint there isn't much difference in being a limited partner in an LP, a member of an LLC or a shareholder in an S or C corporation. An LLC simply provides a lot more flexibility in the economic distributions and structual schematics that a corporation may not provide.

Footwedge wrote:

fan_from_texas wrote:

Footwedge wrote: If you want to compare and contrast the prices of Sub S vs. LLC then show the figures.

Legalzoom will allow you to form the following:

Incorporation: $139
LLC: $149
LP: $149
LLP: $149
Non-profit corp: $139

What else do you want to see?

And what relevance does that have with the prices in 1989 in southeastern Ohio?? Why would I make up the prices that I was quoted in 1989? What is my agenda for doing so?

Explain to me exactly what your problem is here?

LJ said his dad paid a hair under $600 in 78 for a Sub S.. Sounds about right to me. In 89, the price was very close to 2K.

If I was highballed a few bucks...so be it. I chose not to open under Sub S.

Well first off I am going to go ahead and assume that the price of the fifth largest law firm in Columbus in the eighties would be more expensive than whoever in se Ohio. That being said you were being overquoted by about $1100.

I wasn't calling you a liar, I was calling your gross over generalization completely off base.

Ps typing this on a touchscreen keyboard really sucks

"If I was highballed a few bucks...so be it. I chose not to open under Sub S. "

You were highballed a crap-ton. There is no way that fees were higher then than they are now. Whether or not you elected S status is irrelevant. Form 2553 is a FREE filing. The only expense is the state filing fee and if you have representation or an agent for service of process their fee, which really shouldn't be that much. It is literally 5 minutes of work, at most.

LJ wrote:

Footwedge wrote:

fan_from_texas wrote:

Footwedge wrote: If you want to compare and contrast the prices of Sub S vs. LLC then show the figures.

Legalzoom will allow you to form the following:

Incorporation: $139
LLC: $149
LP: $149
LLP: $149
Non-profit corp: $139

What else do you want to see?

And what relevance does that have with the prices in 1989 in southeastern Ohio?? Why would I make up the prices that I was quoted in 1989? What is my agenda for doing so?

Explain to me exactly what your problem is here?

LJ said his dad paid a hair under $600 in 78 for a Sub S.. Sounds about right to me. In 89, the price was very close to 2K.

If I was highballed a few bucks...so be it. I chose not to open under Sub S.

Well first off I am going to go ahead and assume that the price of the fifth largest law firm in Columbus in the eighties would be more expensive than whoever in se Ohio. That being said you were being overquoted by about $1100.

I wasn't calling you a liar, I was calling your gross over generalization completely off base.

Ps typing this on a touchscreen keyboard really sucks

Fair enough LJ. I appreciate the responce.

But I will pose this question to you, FFT, and MH again. What is my purpose in stating that my Sub S quote was 2K? What exactly is there to gain by that? What's in it for me?

If you guys want to disagree with something, then there are a lot of other things to take issue with. Not how much was quoted to me back in 1989 to incorporate.

To FFT.....directly from Wikipedia....confirming my argument. Apology accepted in advance.

"Corporations exist in part to shield the personal assets of shareholders from personal liability for the debts or actions of a corporation. Unlike a general partnership or sole proprietorship in which the owner could be held responsible for all the debts of the corporation, a corporation traditionally limited the personal liability of the shareholders. The limits of this protection have narrowed in recent years. Shareholders are increasingly personally liable."

Pay particular attention to the last 2 sentences. People in corporate law all know this to be true.

http://en.wikipedia.org/wiki/Piercing_the_corporate_veil

"Unlike a general partnership or sole proprietorship "

Stop there.

Few people go that route anymore. Notice you mentioned "general" partnership, not a "limited" partnership or a "limited liability" partnership, in addition to a limited liability company. These aren't incredibly new business entities. They've been around for some time.

- edit, you stopped too soon with your own link, read the following:

"Piercing the corporate veil typically is most effective with smaller privately held business entities (close corporations) in which the corporation has a small number of shareholders, limited assets, and recognition of separateness of the corporation from its shareholders would promote fraud or an inequitable result."

I.E. it is FRAUD.

I've gotta grab some dinner, but ill try to check back in later to see what additional "proof" you cite. Please give me two angelfire sites and a geocities, pls, so I know its legit.

fan_from_texas wrote: I've gotta grab some dinner, but ill try to check back in later to see what additional "proof" you cite. Please give me two angelfire sites and a geocities, pls, so I know its legit.

This is what you stated up above.

"Absent fraud, it's still very difficult to pierce the corporate veil. That hasn't changed and isn't likely to change anytime soon. Despite your claims that the law has radically changed in the past 20 years, which you somehow tie into the existence of LLCs, you're wrong. Period."

Wikipedia states that you are wrong. If you don't like wiki as a source, then I will find others.

Next time you ought to be a litle more diplomatic when you claim others are wrong and that they are "out of their element".

Quotes were your words as well.

Manhattan Buckeye wrote: "Unlike a general partnership or sole proprietorship "

Stop there.

Few people go that route anymore. Notice you mentioned "general" partnership, not a "limited" partnership or a "limited liability" partnership, in addition to a limited liability company. These aren't incredibly new business entities. They've been around for some time.

- edit, you stopped too soon with your own link, read the following:

"Piercing the corporate veil typically is most effective with smaller privately held business entities (close corporations) in which the corporation has a small number of shareholders, limited assets, and recognition of separateness of the corporation from its shareholders would promote fraud or an inequitable result."

I.E. it is FRAUD.

The resident attorney here, who I have a lot of respect for , made the claim that the corporate veil laws have not changed. I said they have. Wikipedia has made it very clear who is correct.

Why FFT feels the need to question me in "being out of my element", is not really all that clear to me. I never use that type of rhetoric in debating here.

But back to the subject at hand. If you don't like the source, then call up an attorney who specializes in corporate law.

Any corporate lawyer that's been around for the past 20 years knows this.

fan_from_texas wrote: I've gotta grab some dinner, but ill try to check back in later to see what additional "proof" you cite. Please give me two angelfire sites and a geocities, pls, so I know its legit.

So wikipedia is full of shit? Haha. You cannot be serious.

"The resident attorney here, who I have a lot of respect for , made the claim that the corporate veil laws have not changed. I said they have. Wikipedia has made it very clear who is correct."

The wikipedia page you cited didn't even have a source, it was just a random throw in that the "limits of this [corporate] protection have narrowed in recent years", it wasn't differentiating a corporation, from an LLC, from any other business entity that provides limited liability for it's owners. Well, if you look at Bernie Madoff or Marc Dreier or any other clown that committed fraud in the last few years, you are looking at a narrowing protection because these fraudsters were committing fraud.

And once again, what is it about being a corporate attorney for 20 years? Is that a magical number?

Manhattan Buckeye wrote: What is it about 20 years of experience?

As far as I'm concerned corporate attorneys with 10 years of experience are the best (I'm biased), many people I know that have practiced for 20+ years are borderline incompetent. They have been around for a long time and have client contacts, but they aren't sharp. Old age will do that to you.

At any rate, fan from texas is correct, although LLC's are a relatively new business entity, the "corporate persona" for lack of better words still exists, from an ownership liability standpoint there isn't much difference in being a limited partner in an LP, a member of an LLC or a shareholder in an S or C corporation. An LLC simply provides a lot more flexibility in the economic distributions and structual schematics that a corporation may not provide.

I don't disagree with a lot of what you state here. And I don't have the expertise in knowing the advantages/disadvantages of all the different corporation set ups.

Why? Because that has never been relevant to me or what I did in making a livelyhood.

What I do know...LLC's were a lot cheaper than Sub S's in 1997. And according to my attorney, the LLC's were just as protective as the Sub S. He, specializing in corporate law, explained it quite clearly , astutely, and professionally, that the corporate veil laws were much more penetrable today.

The days of stripping one's own corporation of cash, and holding the suppliers with dick in hand...were over for these slimeballs.

That was my point.

Manhattan Buckeye wrote: "The resident attorney here, who I have a lot of respect for , made the claim that the corporate veil laws have not changed. I said they have. Wikipedia has made it very clear who is correct."

The wikipedia page you cited didn't even have a source, it was just a random throw in that the "limits of this [corporate] protection have narrowed in recent years", it wasn't differentiating a corporation, from an LLC, from any other business entity that provides limited liability for it's owners. Well, if you look at Bernie Madoff or Marc Dreier or any other clown that committed fraud in the last few years, you are looking at a narrowing protection because these fraudsters were committing fraud.

And once again, what is it about being a corporate attorney for 20 years? Is that a magical number?

Fair enough. Wiki is not cited. Probably my source would not hold up in court. But I'm finding your allegiance to the idea that liablities for corporation owners not changing quite interesting.

As for 20 years experience....I would trust that the knowledge of any professional to be greater at 20 years versus 10. A lot of people would agree with me.

Since neither you, a business consultant, nor FFT a lawyer who does not specialize in corporate law, not knowing the changes in the corporate veil laws over the past 20 years, pretty much exclamates my point.

Well...later...I am out.

You cite to a wikipedia article as "proof" that corporate veil piercing is much easier now than it was. To figure out whether courts more quickly pierce veils than they did 20 years ago, you'd have to do a state-by-state comparative analysis of the past 20 years. That would entail 100+ hours of research and tens of thousands of dollars of westlaw fees. It's not realistic to spend that much time or money on an internet dispute. Essentially, the time/cost of determining which of us is correct is going to far outweigh the value of it, so it probably isn't worth taking this further.

My initial assertion was that corporate personhood isn't a particularly new idea, and this SCOTUS decision isn't particularly surprising. While it may cause some practical problems, it's a fairly logical extension of doctrines our country has had for a long, long time.

Well one more...more proof that the Veil for LLC people is evolving.

One of the primary benefits of -- and principal reasons to organize as -- an LLC is the ability to shield the members' personal assets from claims of outsiders and other members, i.e., the members and managers have the ability, if they so elect, to limit their liability from contract and tort claims of third parties. However, this protection may not be unlimited. At least one court (albeit in an unreported decision) has held that, under the appropriate circumstances, it may "pierce the corporate veil" of the LLC and hold the members personally liable for wrongs done to third parties.

"Application of the "Entity Piercing" Doctrine to LLCs
Because there is no personally liable general partner or pursue, an LLC may be subject to the "entity piercing" doctrine. There is little case law on this issue, although there are state statutes that provide at least indirect guidance on this issue. See, e.g., Colo. Rev. Stat. 7-80-107 (applying the doctrine to LLCs)' California Corp. Code sec. 1710(b) (stating that LLC member liability is the same as corporate shareholder liability); Ill. Rev. Stat. Ch. 805, para. 180/10; Minn. Stat. Sec. 322b.303(s); N.D. Cent. Code sec. 10-32-29(3); Wis. Stat. Ann. Sec. 183.0304(2)."

http://www.firstam.com/content.cfm?id=2906

When did I become a business consultant?

Manhattan Buckeye wrote: When did I become a business consultant?

When you didn't choose Northwestern.

queencitybuckeye wrote:

Manhattan Buckeye wrote: When did I become a business consultant?

When you didn't choose Northwestern.

Have you been talking to my wife? I'm tired of her Kellogg letters asking for money!!!

Footwedge wrote: Well one more...more proof that the Veil for LLC people is evolving.

One of the primary benefits of -- and principal reasons to organize as -- an LLC is the ability to shield the members' personal assets from claims of outsiders and other members, i.e., the members and managers have the ability, if they so elect, to limit their liability from contract and tort claims of third parties. However, this protection may not be unlimited. At least one court (albeit in an unreported decision) has held that, under the appropriate circumstances, it may "pierce the corporate veil" of the LLC and hold the members personally liable for wrongs done to third parties.

"Application of the "Entity Piercing" Doctrine to LLCs
Because there is no personally liable general partner or pursue, an LLC may be subject to the "entity piercing" doctrine. There is little case law on this issue, although there are state statutes that provide at least indirect guidance on this issue. See, e.g., Colo. Rev. Stat. 7-80-107 (applying the doctrine to LLCs)' California Corp. Code sec. 1710(b) (stating that LLC member liability is the same as corporate shareholder liability); Ill. Rev. Stat. Ch. 805, para. 180/10; Minn. Stat. Sec. 322b.303(s); N.D. Cent. Code sec. 10-32-29(3); Wis. Stat. Ann. Sec. 183.0304(2)."

http://www.firstam.com/content.cfm?id=2906

Right--LLC member liability is treated the same as corporate shareholder liability. That is, courts are applying the corporate veil piercing doctrines that we've had forever for corporations to LLCs. That's what I said earlier--there isn't much real difference in personal liability between these forms. The differences tend to be default rules/tax stuff, not liability.

Footwedge wrote:

LJ wrote:

Footwedge wrote:

fan_from_texas wrote:

Footwedge wrote: If you want to compare and contrast the prices of Sub S vs. LLC then show the figures.

Legalzoom will allow you to form the following:

Incorporation: $139
LLC: $149
LP: $149
LLP: $149
Non-profit corp: $139

What else do you want to see?

And what relevance does that have with the prices in 1989 in southeastern Ohio?? Why would I make up the prices that I was quoted in 1989? What is my agenda for doing so?

Explain to me exactly what your problem is here?

LJ said his dad paid a hair under $600 in 78 for a Sub S.. Sounds about right to me. In 89, the price was very close to 2K.

If I was highballed a few bucks...so be it. I chose not to open under Sub S.

Well first off I am going to go ahead and assume that the price of the fifth largest law firm in Columbus in the eighties would be more expensive than whoever in se Ohio. That being said you were being overquoted by about $1100.

I wasn't calling you a liar, I was calling your gross over generalization completely off base.

Ps typing this on a touchscreen keyboard really sucks

Fair enough LJ. I appreciate the responce.

But I will pose this question to you, FFT, and MH again. What is my purpose in stating that my Sub S quote was 2K? What exactly is there to gain by that? What's in it for me?

If you guys want to disagree with something, then there are a lot of other things to take issue with. Not how much was quoted to me back in 1989 to incorporate.

Your purpose was to prove that people didn't organize because of cost. Part of my point in talking about the companies my dad formed were because he didn't have anything in the 70's and early 80's. He formed S-corps and dissolved them 1 or 2 years later due to inactivity or forming the company for a certain purpose (general contractor for his own building company, etc). He formed these only for protection, no other reason.

Why would you make up that you were quoted 2k? I don't think you did, you had a lawyer trying to take you for a lot of money or he just didn't do it very often. Stan Darling and Veach, Hornbeck & Campbell did them all the time and didn't charge anywhere near that. Now think about this, to have an eviction done from an eviction lawyer is $350. To have Bricker & Eckler do an eviction for you, it's over $1250. Why? Because they bill more hours and don't have a flat rate for a specialty because they are a general practice, not a specialty.

Now, where am I going with all this? I wasn't doubting you were quoting that, but I was merely telling you that $2000 was not the typical cost to incorporate in Ohio in the 80's, so cost was not a reason for people to not incorporate.

FFT, is it true that veil piercing becomes harder and harder the further you are from incorporation?

That is, if I formed an S-Corp in 1970, it would have been easier in 1975 than it is today.

fan_from_texas wrote: You cite to a wikipedia article as "proof" that corporate veil piercing is much easier now than it was. To figure out whether courts more quickly pierce veils than they did 20 years ago, you'd have to do a state-by-state comparative analysis of the past 20 years. That would entail 100+ hours of research and tens of thousands of dollars of westlaw fees. It's not realistic to spend that much time or money on an internet dispute. Essentially, the time/cost of determining which of us is correct is going to far outweigh the value of it, so it probably isn't worth taking this further.

My initial assertion was that corporate personhood isn't a particularly new idea, and this SCOTUS decision isn't particularly surprising. While it may cause some practical problems, it's a fairly logical extension of doctrines our country has had for a long, long time.

FFT..take your medicine like a man. Admit you are wrong and move on. I've had to admit that I was wrong on a couple different occasions on the other board. Given that this is the internet and all..it's really no big deal.

Wikipedia's claim is dead nuts accurate. If it wasn't, then there were be plenty of people discrediting their claim on the discussion page. That's the way it's done on that site. And if errors are found, then they are quickly corrected. Innaccurate posts are removed within a day or 2.

And keep in mind, the paragraph that I linked was not political in nature...and as such, there is no motive or agenda for the author at Wikipedia to score any points in stating the obvious.

You do not need to do any research to prove shit. Just call a lawyer or 2 who specializes in that field, and he will confirm the statement on Wiki....and it matters not if it's in Ohio, Delaware, New Jersey or any state across the country.

The laws have in fact changed...in order to keep those that incorporate from getting away with blatant fraud. This was my point...a point that you vehemently disagreed with..

You never give up. It seems that your MO is to keep posting irrelevant stuff over and over again, never admitting that you're wrong, constantly shifting the focus of the discussion . . . and then when the other person grows tired of the charade, you start with the "holier-than-thou" crap. Seriously, brah, give it a rest.

I've typed up a number of posts addressing your points in turn, but I'm starting to realize the futility of it. No matter what I say, you'll remain convinced that people in the 1980s could commit fraud and never be held personally liable, and incorporation was super expensive, and then LLCs showed up and it was suddenly cheap, so the laws rapidly changed to expand beyond the common law fraud rules, and now things are very different, and this is bad because corporations have too much power. Moreover, if anyone makes any claim to the contrary, you ramble on about a 20 year corporate lawyer.

You have no basis by which to claim that wikipedia's claim is "dead nuts accurate." You had never heard of piercing the corporate veil until yesterday, so the idea that you're going to adopt a definitive stance on it as though you're an expert is silly.

I've consistently stated that (1) incorporation is not super expensive, so the cost is unlikely to be the deterrent for people not incorporating (and by "incorporating," I mean "adopt a limited liability form of business entity"; (2) the advent of the LLC in the mid-90s didn't result in a sea-change of court opinion regarding reasons to pierce the corporate veil--it's a change of form, not in substance, and in large part, states have simply taken corporate law principles and adopted them to LLCs. The factors for piercing in LLC cases are the same as in non-LLC cases--things like thin capitalization, alter ego, sham, not observing corporate formalities, failure to maintain arms length transactions, unity of interest, etc. These factors haven't changed. They have been applied to new entities as those entities have arisen, but the fundamental test (i.e. fraud) hasn't meaningfully changed, Wikipedia cites to the contrary. Absent fraud, courts rarely (if ever) pierce the corporate veil. With fraud present, they do so routinely. This hasn't changed, and, as MB noted above, your wikipedia post supports this position.

These aren't radical propositions, and one doesn't need to be an expert in the field to know this stuff. I can walk downstairs, crack open my corporations text book, and provide you with the cites, if you'd like. Would that satisfy you? It's written by multiple professors with many years of experience in the field who are acknowledged as experts. Would that be proof enough to satisfy you that the advent of the LLC hasn't resulted in massive overhauls to veil peircing theory?

If experts in the field directly speaking on the issue won't satisfy you, I'm not sure what will, and this discussion has probably gone past the point of being worthwhile.

Back on semi-topic....it would appear that the public agrees with the decision.

http://www.gallup.com/poll/125333/Public-Agrees-Court-Campaign-Money-Free-Speech.aspx