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Karen J. Orlin
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Karen Orlin’s Answers

52 total


  • Is there anything special we should know about adding a partner or is it pretty straight forward?

    I'm a business owner in an LLC partnership, incorporated in Delaware and I have a potential investor that plans to invest a small amount in cash + "sweat equity". I'm trying to determine what needs to be done to add this individual as a partner. ...

    Karen’s Answer

    Your misunderstanding of basic principles of LLC law is too extensive for correction by a short Avvo post. Retain an attorney licensed in Delaware or other state where you maintain your primary legal residence or under the laws of which the LLC was formed. For example, an LLC has members, not partners, otherwise than for income tax purposes, an LLC is formed, not incorporated, and the interest you describe may be awardable by contract, not necessarily by operating agreement amendment, and the procedure you describe for amending the operating agreement is insufficient to effect the transaction you describe. You also should consult with the llc's CPA or tax attorney as well as an attorney experienced in handling LLC transactions, not any random attorney or Internet site attorney whom
    You have not vetted for competence.

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  • What can I do about deceitful deceptive lawyer and paid retainer? What about damages due to negligence and malpractice?

    Lawyer has taken $7000 retainer (non-refundable but remittance on execution of engagement) and provided none of contracted outcomes in agreement. What should have taken ~2 weeks is still not done 2 months later. Not adhered to any of their own rep...

    Karen’s Answer

    I do not represent parties to legal malpractice lawsuits or other disputes, whether in court, arbitration, or before The Florida Bar, as their attorney, but I do serve as an expert witness in legal ethics and fiduciary duty retained by attorneys who represent plaintiffs or defendants in legal malpractice lawsuits.

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  • Can I include a buying option to my partner in the LLC operating agreement as a way to prevent my ex from unrealistic claims?

    I am divorced pending assets division. I want to set up an llc with a friend and he will put 100% of the initial funds. To be further protected from my ex can I also put a buying option for my friend in the operating agreement for a low value. I t...

    Karen’s Answer

    If you propose to transfer, before issuance of the final divorce order, any assets currently in your name to the new llc, that transfer may be deemed by the divorce or other court having jurisdiction over those assets to be fraudulent and, if so, those assets will not be protected from claims by your husband. The assets of any llc formed by you after issuance of the final divorce order will not be subject to claims by your husband except to the extent, if any, stated in that order, e.g., for child support or alimony for which that order may hold you responsible.

    Generally, the fair market value of a membership interest in an llc the membership interests in which are not traded publicly is determined based upon criteria that your certified public accountant should explain to you.

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  • 1. Must I list the LLC line of credit as my debt. 2. Am I legally liable to the bank for my LLC credit line.

    My LLC bank in a credit line offer letter requested my personal guarantee. I signed the offer letter accepting the line of credit. But they never gave me the PG documents to sign. Its 11 months now and my LLC is very profitable and is using the cr...

    Karen’s Answer

    I recommend that you consult with an attorney licensed to practice law in FL and concentrating his or her practice in commercial finance as well as llc governance. The best and safest practice is to disclose to the second bank the circumstances that you describe in your question and thereby put the burden on the second bank and its attorney to determine whether the first bank takes the position that you are personally liable for your llc's debt to the first bank under FL law in the absence of an express written personal guaranty.

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  • Do I need a business license for a Delaware LLC

    I formed a LLC in Delaware in past and then immigrated to U.S, I have an EIN, then I got my SSN after immigrating. I understand that the LLC is considered local in Delaware, but foreign in other state, let say I am operating it in Delaware, I hav...

    Karen’s Answer

    Without focusing on the term "business license," which is confusing to most persons other than business attorneys, whether the llc must be qualified or authorized (terminology varies state by state) in any particular state depends upon the statutory requirements of that state for engaging, doing or transacting (terminology varies state to state) in that state. Many states require qualification or authorization, by filing an application and paying an annual fee to maintain qualification or authorization in the respective states, only if the llc maintains a physical office or a representative permanently residing in the respective states. Consult with an attorney licensed to practice law and concentrating on business law in each state in which you intend to have consulting clients.

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  • With my business partner's high amount of personal debt, should he form his own LLC and then have that LLC invest in my company?

    I'm forming a MMLLC -- just 2 members total. The other member says he has $60K in personal debt. Obviously I want to protect the company we're forming should he end up not paying his personal debt. His percentage in my business will be limited...

    Karen’s Answer

    I am uncertain why you are concerned about the rights of creditors of a member of a multi-member Florida llc to receive distributions with respect to one member's interest in the llc if, as and when those distributions are made when the members of a member managed Florida llc control the amount and timing of those distributions, if any, and profits can be distributed to the members of the llc by salaries under employment agreements between the llc and those members. Consult with an experienced debtor/creditor attorney licensed to practice law in Florida.

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  • What are the risks of forming a husband-wife LLC if one spouse has defaulted on student loans?

    I am forming an LLC. My question is about my spouse as a 2nd member. Our assets are separate and I will be doing the vast majority of work. My investment is out of my savings. She is investing nothing but her time but I would like her to have a sm...

    Karen’s Answer

    Of course, excluding your wife from equity ownership in the llc is the safest course, but consult with an experience corporate and llc attorney licensed to practice law in the state in which the llc is formed (which is not necessarily the state in which you reside) regarding whether the assets of an llc owned by two or more members are protected from claims of creditors of any one member (including claims guaranteed to the creditor by a governmental agency) unless each other member consents to substitution of the respective creditor for the debtor member as a member of the llc in the event that the creditor executes a judgment against the debtor member. This is an aspect of llc asset protection of which many accountants and even some business lawyers are unaware.

    Karen J. Orlin, Managing Member
    Karen J. Orlin P.L.
    (305) 794-6387
    Karen@orlinlaw.com
    www.orlinlaw.com

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  • Where can I locate guidance on legal wording of sale terms for a registration form?

    I am creating a form that 4H auction buyers will complete when registering for our annual auction. I would like to include something on the form stating that by completing and signing the form the purchaser understands and agrees to the payment t...

    Karen’s Answer

    • Selected as best answer

    Consult with an attorney licensed to practice law in the state in which you intend to conduct the auction using the respective form for signature by each prospective bidder/buyer at the auction. Even highly educated and intelligent, native English speaking and writing persons other than lawyers experienced in reviewing statutory, judicial and other legal authorities and drafting contracts for specific types of business transactions are not competent to draft or evaluate the effectiveness of contractual provisions that will stand the test of disputes between or among the parties. The second, less desirable, procedure is to obtain an auction registration form from an auction business in that state that has been in business for many years and survived successfully a myriad of disputes with bidders/buyers.

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  • Do I need to open a company or to apply for a permit if I want to sell stuff seasonally?

    I want to sell products 2-3 days out of the year at a gas station. I have already spoken to a gas station owner who's willing to rent me a space at his gas station. I will only be working 2-3 days, so I didn't want to go through the process of ope...

    Karen’s Answer

    If you reside and intend to operate your business in FL, rely only on the advice of a business attorney who, like me, is licensed to practice law in FL. Regardless whether you operate the business through a corporation or limited liability company (recommended in order to attempt, but not necessarily assure, avoidance of exposure of your assets not invested in the business to creditors of the business to the extent that insurance purchased by that business does not pay all liability to those creditors), you are required to obtain an annual business license (denominated business tax) from the county and the municipality in which you operate that business and a Florida Department of Revenue sales tax registration in addition to any special license that may be required by the federal government or the State of Florida for operation of your business based upon the nature of the products that your business will sell. If you do not incorporate or form an llc for the business and you operate the business under a business name other than your full legal name, you must register that business name with the Florida Department of State as a fictitious name, in addition to any federal or Florida registration that you may determine to effect in order to protect that name or the name of your product as a trade name or trademark. If you incorporate that business or form an llc having two or more members for that business, you must apply to the federal Internal Revenue Service on behalf of that entity for a Federal Employer Identification Number (i.e., tax id number).

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  • LLC official documents and shares

    I have created an LLC in the Delaware. The lawyer i contracted sent me the certificate of formation and that's it. Should i receive a Kit, same as the corporation, to show the shares for the members of that LLC? How do i know that the ...

    Karen’s Answer

    Ignore Mr. Doland's anwer: He refers to a corporation, not to an llc, and he does not purport to be licensed to practice law either in NY or DE.

    If the Certification of Formation of the DE llc refers to a manager (individual or entity) that is not you, your name will not appear in that document. It is not customary for llcs organized under any state law of the U.S.A. to have "kits" or "share certificates" evidencing membership interests, and the ownership of membership interests generally is governed by the LLC Agreement for the DE llc, but the LLC Agreement for the DE llc could provide for those certificates, in which case the llc's manager or managing members or executive officers, if any, should order forms of certificates from a business printing company. Your NY licensed business entity attorney should draft and advise regarding execution of the LLC Agreement and also advise whether the llc is required to be authorized to transact business in NY and, if so, the requirement of publication of notice of the request for that authorization.

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