A limited liability company (LLC) is a hybrid entity that combines desirable characteristics of corporations, limited partnerships and general partnerships. Most significantly, LLCs offer a full liability shield and maximum flexibility with respect to federal income taxation. In 1977, Wyoming became the first state to enact an LLC statute. Wyoming Wyo. Stat. §§ 17-15-101 to 17-15-136 (1977). Since then, every state in the United States has enacted a form of LLC law. Although an LLC is not well-suited for every endeavor, it is the entity of choice in most cases.

One of the few criticisms of LLCs has been that LLC law varies significantly from state to state. The Business Law Section of the American Bar Association drafted a prototype LLC act, which was presented in 1992. In 1994, the National Conference of Commissioners on Uniform State Laws (NCCUSL) presented the Uniform Limited Liability Company Act (ULLCA) and, in 2006, the NCCUSL presented the Revised Uniform Limited Liability Company Act (RULLCA). Some states followed a particular model act, others largely crafted their own statutes. So, without question, LLC law is not uniform. For the most part, this does not present a problem because, as to the internal affairs of the LLC, the statutes are largely default rules which can be modified by way of an operating agreement.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]