Texas is experiencing unprecedented economic activity, and changes to U.S. tax laws have resulted in billions of dollars flowing into the state from sources outside the U.S. The framework for selecting which entity to use in a business structure is more important than ever in Texas, as the proper entity for business ventures and acquisitions depends upon a myriad of considerations that involve an analysis of state business law entity governance principles and U.S. and state tax laws.
Where can business lawyers turn to keep up with these evolving considerations? On May 24, attorneys and CPAs from across the state will convene in Dallas at the Park Cities Hilton for the 17th Annual “Choice, Governance & Acquisition of Entities” course, which is sponsored by the Business Law Section of the State Bar of Texas.
Founded in 2002, the course has evolved into the go-to course for choice of entity and associated issues arising in connection with structuring business ventures and mergers and acquisitions. It is a must for business lawyers. The course focuses particularly on LLCs and covers them from a variety of perspectives, including taxation, formation and documentation, governance, and mergers and acquisitions. The course also provides coverage of corporations and partnerships to facilitate choice of entity decisions.
The LLC has become the entity of choice for most Texans. In 2018, eight new LLCs were formed for every new corporation. We now have almost three times more LLCs than corporations, even though the LLC is a relatively new form of entity. LLCs are so popular because they offer governance flexibility, limited liability for owners, and they can be taxed as pass-through entities like partnerships.
The course is unique because the sessions are mostly in a panel format, with interactive discussion among a diverse group of experienced lawyers designed to integrate the relevant corporate and tax considerations. Attendees will leave the course with the tools needed to advise clients on current structuring issues. Highlights of the course include the following topics:
Legislative session: The current session of the Texas Legislature will result in changes to the Texas Business Organizations Code (the “TBOC”) that will become applicable to all Texas entities on Sept. 1. The course will analyze changes made by the Legislature in recent sessions and changes being made by four bills currently in the Legislature that affect LLCs, corporations and partnerships. The course will also cover other statutory changes expected to be made by the Legislature that affect entities, including legislation establishing a statewide business court and appellate court system using appointed judges.
Creative LLC acquisition techniques: The changes to the tax code made by the Tax Cuts and Jobs Act raise several questions regarding the possibilities for maximizing tax savings by engaging in creative LLC acquisition techniques, including questions related to bonus depreciation, the new 20 percent deduction for qualified business income, the deductibility of business interest, and limitations on certain business losses.
Drafting LLC agreements and ancillary documents: The course will focus on the corporate and tax aspects of drafting LLC company agreements and ancillary documents, and provide drafting precedent. There will be a focus on issues relating to admitting new members and accepting additional capital, structuring a private equity transaction, and buying and selling LLC interests.
Recent case law affecting fiduciary duties: The course will consider recent statutory and case law developments in Texas and Delaware relating to restricting or eliminating fiduciary duties. The speakers will provide drafting tips and pitfalls.
The course will also discuss the impact of recent state decisions on state taxation, how to mitigate the consequences of franchise tax forfeitures, choice of entity decisions for lawyers and accountants, and the risks involved in multiparty representation.
The one-day course synthesizes all of the changes in laws, analyzes recent cases, provides a framework for making structuring recommendations to clients, and offers take-away written materials including forms. Register today by visiting the event website.
Jackson Walker attorneys Steve Moore, Brady Cox and Robert Ahlander also contributed to this article.