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54 Ohio St. L.J. 175 (1993)
The Best of Both Worlds: The Limited Liability Company

handle is hein.journals/ohslj54 and id is 201 raw text is: The Best of Both Worlds: The Limited Liability Company I. INTRODUCTION In the past few years, state legislatures have shown a renewed interest in what is perhaps the most innovative form of business association, the limited liability company (LLC). The LLC combines the limited liability feature of the corporate form of association with the tax advantages of a partnership. The earliest states to enact LLC statutes were Wyoming in 1977 and Florida in 1982.1 No other states took an immediate interest in this form of business association, primarily due to the uncertainty surrounding the Internal Revenue Service's (IRS) treatment of the LLC. The LLC was designed to provide flow-through tax advantages as in a partnership, but it was not officially known if the IRS would indeed honor such status. Recently, however, this difficulty was resolved and Colorado, Kansas, Virginia, Utah, Nevada and Texas have passed LLC Acts.2 An ABA survey has reported that, in at least seven other states, including Arizona, California, Illinois, Maryland, Michigan, New Hampshire, and Oklahoma, LLC legislation has been introduced, and significant interest exists in another 25 states.3 Given the advantages of the LLC form of business association it is not surprising that it is gaining popularity. The limited liability feature allows I ABA Group Finds States Moving In Limited Liability Companies, 23 SEC. REG. & LAW REP. 1275, 1275 (1991) [hereinafter ABA Group]. 2 Id. The LLC form of business association is not limited to the United States. Other countries include Bermuda, see General Ad. Inv. Ltd. v. Business Dev. Capital Ltd. Partnership, 620 F. Supp. 964 (S.D.N.Y. 1985); France, see Elizabeth Taylor Cosmetics Co. v. Annick Goutal, 673 F. Supp. 1238 (S.D.N.Y. 1987); Italy, see Gucci v. Gucci Shops, Inc., 688 F. Supp. 916 (S.D.N.Y. 1988); Lebanon, see Abu- Nassar v. Elders Futures, 1991 WL 45062 (S.D.N.Y.); Mexico, see MacGuire v. Commissioner, 450 F.2d 1239 (Sth Cit. 1971); Netherlands, see Hanson Trust PLC v. ML SCM Acquisition Inc., 781 F.2d 264 (2d Cir. 1986); Nigeria, see Hester Int'l Corp. v. Federal Republic of Nigeria, 879 F.2d 170 (5th Cir. 1989); Saudi Arabia, see Arabian Trading & Chem. Indus. Co. v. B.F. Goodrich Co., 823 F.2d 60 (4th Cir. 1987); Switzerland, see Cohn v. Rosenfeld, 733 F.2d 625 (9th Cir.), cert. denied, 469 U.S. 932 (1984); West Germany, see Bernstein v. N.V. Nederlandsche- Amerikaansche Stoomvaart-Maatschappij, 173 F.2d 71 (2d Cir. 1949). 3 ABA Group, supra note 1, at 1275; see also International Taxes, Field Support Unit, Litigation Process Examined by IRS Official, DAILY REP. FOR ExEcuTIvEs, January 22, 1992, at 3.

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