There have been a series of changes over the past year in federal regulations that impact your old LLC operating agreement. Since I see on a regular basis operating agreements that do not incorporate the changes in the regulations, I thought I would mention a key change in this post. With the new regulations there is no longer a “tax matters partner” which you will see in most operating agreements. Instead, the LLC (partnership) must designate a Partnership Representative (the “PR”) who does not need to be a partner. The PR is similar to, but is different from, the tax matters partner. Formerly, the LLC/partnership was required to designate a tax matters partner to act as a liaison between the partnership and the IRS. That tax matters partner was required to be a general partner and could be an individual or an entity. The tax matters partner had the authority to bind the partnership, but not to bind other partners in the partnership. Also, a partner that was not the tax matters partner had rights during an examination, including certain notification rights and the right to participate in the proceeding.

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One of the things I hear over and over from distressed franchisees is that they purchased a franchise because it was a “proven business model.” Now, I don’t blame most franchisees for this thought process as they head into their franchise business purchase.  The franchise industry has done a remarkable job of marketing itself where people are preconceived to believe franchises are proven business models. Second, some franchises have been in business for a long time which naturally leads someone to believe it is a proven business model. After all, a franchise would not be in business for a long time if it were not proven, right?

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The Iowa Caucus is this coming Monday, February 1, 2016. Many in Iowa claim to be happy when the caucus is over but secretly we like all the attention because Iowa only receives this kind of attention every presidential election cycle. So who is going to win the Iowa caucuses this coming Monday? I am

Rush Nigut has been selected by his peers for inclusion in the 2016 Edition of the Best Lawyers in America© in the practice areas of Business Organizations (including LLCs and Partnerships) and Franchise Law. This is the second year in a row Rush has been recognized by the publication.

Since it was first published in

Many small family businesses become quite successful and the owners manage to accumulate significant wealth. I ran across a good post discussing the ways the upper class manages their abundance through a mix of different strategies for inheritance.

See the post from Stites on Estates here.

I don’t know why or what’s in the water but November 17th must have been my own little national start a business day as I helped people form and start four businesses today. It is days like today that certainly keep you energized as a business lawyer and it is fun to see the excitement

I was recently contacted by a business client whose employee signed a “contract” purporting to be from YELLOW PAGE IOWA that had been faxed to their business for what appeared to be a free Yellow Page or Facebook ad. The contract is misleading and deceptive and the fine print actually attempts to lock the client

A recent Wall St. Journal article discussed some of the franchise brands with higher-than-average default rates. The highest on the list? Planet Beach at a considerable 41.1.% default rate for SBA loans from 2004 through 2014 according to the article.

The franchising industry and its model of business does a wonderful job of marketing

I read an excellent post recently about The Secrets to Success in Franchising. I love what blog author Mike Sheehan had to say to start the article,

If the title of this article caught your attention because you’re looking for a magic bullet, stop reading right now. There is no such thing – for