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© 2009-2019 Dana H. Shultz, Attorney at Law

LLC Accounting – Allocations vs. Distributions

Accountant's green and white ledger page, symbolixing LLC accounting practices

An entrepreneur who was trying to prepare a limited liability company (LLC) Operating Agreement on his own (apparently using someone else’s as a template) was puzzled by the concept of “sharing losses”. I could tell right away that he was not familiar with two fundamental concepts of LLC accounting: Allocations vs. distributions.

Before going further, I need to make two disclaimers:

  1. This post is not about taxes.
  2. The following discussion is extremely simple, addressing only the most basic considerations. One of the great things about LLCs is that the members can agree to make allocations and distributions in any way they desire to meet their business needs. As a result, LLC accounting can be far more complex than the following might suggest.

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SaaS Use of Open-source Software is not Distribution (Who GNU?)

GNU logo

I recently answered a LinkedIn question about whether providing Software as a Service (SaaS) is considered a “distribution” under the open-source GNU General Public License. The question and answer (no longer available on LinkedIn) are reproduced, in slightly edited form, below.

Q. Is hosting a software as a SaaS offering considered as “distribution” under GPL / LGPL open source licenses?

A. I believe that SaaS hosting is not intended to be considered distribution.

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