Our very own Don Baker has an article on LLC capital accounting in the Summer 2010 edition of the Michigan Business Law Journal.  Here’s the intro:

With the widespread adoption of the limited liability company as a preferred entity format for non-public entities, business practitioners are forced to grapple with provisions in operating agreements that adopt detailed accounting and tax treatments generally beyond the traditional expertise of non-tax lawyers. These accounting and tax issues are not present in forming a standard corporation, but are thrust on the practitioner anytime even the most basic multi-member LLC is formed. While the “standard” LLC operating agreement approaches to these matters are at this point generally familiar (though perhaps less well understood), they are not simply “boilerplate.” I fear that we (and of course our clients) are often insufficiently aware that these provisions mandate specific economic relationships and results among the members, i.e., who gets what money. It is entirely possible that use of these standard approaches can unknowingly mandate results that are inconsistent with the client’s business “deal.”

The Journal can be found here, and the rest of the article here.

–Matt