In a recent post in his website entitled “New York Business Divorce,” Peter Mahler of the FarrellFritz law firm has published an excellent discussion of the difference between equity and debt as among LLCs and their members. The post is under New York law, but the lessons in it are likely to be useful in all other jurisdictions. The link to the post is https://www.nybusinessdivorce.com/2022/06/articles/llcs/a-loan-is-a-loan-is-a-loan-except-when-its-equity/
In many LLC operating agreements, provisions that give the manager or one or more members the right to request or require some or all members to make additional contributions of capital to the LLC (“capital calls”) after the LLC’s formation in order to meet current or anticipated needs are among the most important provisions in the agreement. The latest post in the excellent blawg entitled “NY Divorce,” at A Lesson In Drafting Capital Call Provisions | New York Business Divorce (nybusinessdivorce.com), provides a very helpful overview of the law and practical considerations governing capital calls.
Below is a link to an article I wrote that was recently published in the Concord Monitor.