Richard C. Keyt, JD, CPA, Passed California Bar Exam and more...

Congratulations to my son Richard C. Keyt who got the news last Friday that he was one of the 40% who passed the February 2013 California Bar exam.  As soon as Ricky is licensed in California Ricky and I intend to open a branch office in California to form California limited liability companies, prepare estate plans and do elder law.

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The Arizona Corporation Commission shut down two unregistered investment programs—one involving gold mining and the other concerning bonds.  In total, the Commission ordered the respondents to pay $641,016 in restitution and $60,000 in administrative penalties.

Brian Langebach and Earth Explorations, LLC

The Commission issued a default order against Brian Langebach of Mesa and his affiliated company, Earth Explorations, LLC, requiring them to pay $322,000 in restitution and $50,000 in administrative penalties for fraudulently offering and selling an unregistered gold mining investment program.  The Commission found that Langebach and his affiliated company—while not registered as a securities salesman or dealer—offered and sold the unregistered gold mining investment program to 23 investors in Arizona, Ohio and Utah.  The Commission found that Langebach and his company misrepresented multiple facts, including claiming that he owned and operated a mine with one of the largest gold reserves in the U.S. and that he could extract gold from the rock material or aggregate material on a cost-effective or economically viable basis by placer mining.

Marvin Wilson and True North Business Ventures, LLC

The Commission ordered Marvin Wilson of Phoenix and his Scottsdale-based company, True North Business Ventures, LLC, to pay $319,016 in restitution and $10,000 in administrative penalties for fraudulently offering and selling an unregistered bond investment program.  The Commission found that, while not registered as a securities salesman or dealer, Wilson and True North issued unregistered bonds to six investors.  The Commission found that Wilson, who was the president and chief executive officer of True North, failed to disclose to investors that his company’s sales were rapidly declining and the business was on the verge of closing.  In settling this matter, Wilson neither admitted nor denied the Commission’s findings, but agreed to the entry of the consent order.

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The Arizona Corporation Commission is warning Arizona business owners that an individual or group calling themselves “Corporate Records Service” is sending out official-looking documents advertising a service of preparing filings for corporations. This solicitation, requesting payment of a $125 fee, is not a Corporation Commission document and this organization is not in any way affiliated with the Arizona Corporation Commission.  The Corporation Commission does not require business owners and their representatives to file with “Corporate Records Service,” nor does it require the $125 fee referred to in the document.

The documents look very similar to Corporation Commission filing documents and the private firm making the solicitation intentionally creates confusion by using language that is similar to that in Corporation Commission documents.  The forms carry an official-looking time deadline for filing and include the Arizona Corporation Commission file number assigned to the business.  Further, a search of the “Corporate Records Service” return address places it as a mailbox at a UPS Store in the Ahwatukee Foothills Towne Center.

If you have received this document, please contact the Arizona Attorney General’s Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6504, or outside the Phoenix and Tucson metro areas at 1 (800) 352-8431.  To file a complaint online, please visit the Attorney General’s web site at www.azag.gov.  To file a complaint in person, the Attorney General’s Office has 37 satellite offices throughout Arizona with volunteers available to help.  Locations and hours are posted on the Attorney General’s web site.

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New Jersey business litigator Jay McDaniel posted an article on his excellent blog called “New Jersey Business Dissolution Journal” that is a must read for every person who owns an interest in an Arizona limited liability company.  Jay’s article explains the five biggest mistakes people make when they form an LLC.  The mistakes are the same mistakes I caution people against constantly when I form LLCs and advise the owners of existing LLCs.

Jay McDaniel is a business litigator whose opinions are based on years of experience representing business owners in disputes that arise from the ownership of businesses.  Jay wrote:

“Having litigated many of these matters over the years, I see the same mistakes made early in the life of the business surfacing again and again as the source of litigation.”

McDaniel’s point is that the failure to plan when companies are created can be a very expensive blunder when a dispute among owners arises.  Even though I am not a litigator (I never personally represent anybody in litigation), my experience is the same as McDaniel’s.

The list omits the mistake of not having an Operating Agreement.  The following is what McDaniel says about the lack of an Operating Agreement:

“If a business does not have one, sooner or later, it will have problems and without any point of reference whatsoever, the probability of litigation is high.  When that happens and the business is successful, the chances are that you will spend the price of a college education – at a nice private school – on the lawsuit.

Here’s Jay McDaniel’s list of the five biggest LLC formation mistakes (read the article to get the reasoning behind each mistake:

1. No operational planning
2. No contingency planning
3. No valuation planning
4. No succession planning
5. No planning for amendments to the Operating Agreement.

The post Five Expensive Mistakes When Forming a New Jersey LLC appeared first on Arizona Limited Liability Company Law.

    

A small group of Arizona lawyers who think they know what is best for Arizona and the members of Arizona limited liability companies has the goal of replacing Arizona’s good LLC law entirely with a terrible uniform model law called the “Revised Uniform Limited Liability Company Act” aka “RULLCA.”  Without doing an in depth analysis of the pros and cons of existing Arizona LLC law with the pros and cons of RULLCA or another model LLC act promulgated by the American Bar Association (the group never considered the ABA model) this group of self-appointed “LLC experts” decided:

• Arizona’s existing LLC law should be replaced.
• Arizona’s existing LLC law should be based on RULLCA.
• RULLCA is deficient so the group must substantially revise RULLCA to their satisfaction.
• The asset protection feature of Arizona Revised Statutes Section 29-655 that prevents the foreclosure of a member’s economic interest in an Arizona LLC should be eliminated and creditors of the member should be allowed to foreclose on that interest.  Read “Why the Charging Order Exclusive Remedy Must be Saved.”

I am a member of this group of Arizona lawyers, but I have been opposed to the group and its goal from day one.  The last straw for me occurred on October 4, 2012, when the group voted 11 – 4 to eliminate the charging order sole remedy and allow for the foreclosure of a member’s economic interest in an Arizona LLC.  Because I fear that this group might be successful in replacing Arizona’s good LLC law that isn’t broken with an entirely new act that would move Arizona from a good LLC law state to a bad LLC law state I created a website called Save Arizona’s LLC Law.  It would be a terrible mistake to replace our good LLC law.

To learn more about the disaster called RULLCA and why we need to fight to save Arizona’s good LLC law read my article called “The Threat.”

How You Can Help to Save Arizona’s Good LLC Law

Please help me fight to retain Arizona’s good LLC law.  We need your help now to mobilize and prepare to defend Arizona’s LLC law.  We don’t need money, but please vote in our poll and pass the word about the threat to your friends and business associates.  I’ve made it very easy for you to help our cause.  Just click on How to Join the Fight and follow the instructions.

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