South Carolina Clauses Relating to Capital Calls: A Detailed Description When it comes to structuring partnerships and organizing limited liability companies (LCS), understanding the clauses relating to capital calls in South Carolina is crucial. These clauses provide guidelines on how and when additional capital contributions may be required from the partners/members of the entity. Here is a comprehensive description of South Carolina's clauses pertaining to capital calls, exploring their various types and essential keywords. 1. Background: South Carolina's statutes governing partnerships and LCS provide flexibility for members to determine the capital structure and contribution requirements. These statutes offer a framework for drafting capital call clauses within the operating agreement or partnership agreement. 2. Capital Calls: a) Definition: A capital call refers to the process of demanding additional capital from partners/members to fulfill the entity's financial needs. It may arise when the initial contributions are insufficient to cover expenses, fund investments, repay debts, or seize growth opportunities. b) Purpose: The purpose of capital calls is to ensure adequate funding for the entity's ongoing and future obligations, thereby preventing potential financial instability. 3. Types of South Carolina Clauses Relating to Capital Calls: a) Unconditional Capital Call: This clause allows the entity's management to issue a call for capital without any specified conditions or limitations. Partners/members are obligated to contribute funds promptly upon receiving a valid capital call notice. b) Conditional Capital Call: This clause sets specific conditions or triggers that warrant a capital call. For example, it may be activated when a project's budget exceeds a certain limit or the entity's reserves fall below a pre-determined level. The triggering events and conditions must be clearly defined to avoid ambiguity. c) Pro Rata Capital Call: This clause ensures that all partners/members contribute additional capital proportionally to their ownership interests. It outlines the percentage or ratio each member must contribute based on their initial capital investment or ownership stake. d) Selective Capital Call: This clause permits the entity to request capital contributions from specific partners/members, bypassing others. Such selective calls are often based on certain criteria, such as seniority, expertise, or a predetermined allocation ratio. e) Remedies for Non-Compliance: Operating agreements may include provisions on remedies for partners/members who fail to comply with a valid capital call. These remedies may involve consequences such as adjusted ownership percentages, dilution, penalties, or withdrawal options. f) Notice Requirements: The operating agreement or partnership agreement should outline the notice requirements associated with capital calls. It should specify the mode of communication, timeframes for responding to the call (if applicable), and consequences of non-response. g) Legal Authorization: South Carolina laws empower the entity and its management to make capital calls, subject to compliance with internal agreement provisions and state statutes. In conclusion, South Carolina clauses relating to capital calls provide the necessary framework for efficient fundraising within partnerships and LCS. Understanding the different types of capital call clauses allows entities to customize their operating agreements to meet specific financial needs and establish clear guidelines for partners/members. Proper utilization of capital call clauses ensures the financial stability and growth of the entity while safeguarding the rights and obligations of all stakeholders.
South Carolina Clauses Relating to Capital Calls
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S.C. Code Ann. § 33-44-504(e) provides that Section is the exclusive remedy by which a judgment creditor may satisfy a judgment out of the distributional interests in an LLC.
Section 12-6-1150 - Net capital gain; deduction from taxable income for individuals, estates, and trusts. (A) Individuals, estates, and trusts are allowed a deduction from South Carolina taxable income equal to forty-four percent of net capital gain recognized in this State during a taxable year.
South Carolina Code §12-6-2210 provides for the determination of whether taxable income of a business will be apportioned. A taxpayer whose entire business is transacted or conducted in South Carolina is subject to income tax based on the entire taxable income of the business for the taxable year.
SECTION 34-31-20. Legal rate of interest. (A) In all cases of accounts stated and in all cases wherein any sum or sums of money shall be ascertained and, being due, shall draw interest ing to law, the legal interest shall be at the rate of eight and three-fourths percent per annum.
INDIVIDUAL INCOME TAX RATES South Carolina Code §12-6-510 imposes an income tax upon the South Carolina taxable income of individuals, estates, and trusts at rates ranging from 3% to a maximum rate of 7%. There are six income brackets adjusted annually for inflation.
The gross receipts formula in Code Section 12-6-2290 provides that the taxpayer apportion its income using a fraction in which the numerator is gross receipts from within South Carolina during the taxable year and the denominator is total gross receipts from everywhere during the taxable year.
SECTION 33-44-202. Organization. (a) One or more persons may organize a limited liability company, consisting of one or more members, by delivering articles of organization to the office of the Secretary of State for filing.
An income tax is imposed annually at the rate of five percent on the South Carolina taxable income of every corporation, other than those described in Sections 12-6-540 and 12-6-550, and any other entity taxed using the rates of a corporation for federal income tax purposes, transacting, conducting, or doing business ...