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52 Tex. Tech L. Rev. 243 (2019-2020)
An LLC Is the Key: The False Dichotomy between Inadvertent Partnerships and the Freedom of Contract

handle is hein.journals/text52 and id is 263 raw text is: AN LLC IS THE KEY: THE FALSE DICHOTOMY BETWEEN INADVERTENT PARTNERSHIPS AND THE FREEDOM OF CONTRACT Joseph K. Leahy* IN TRO DU CTION .......................................................................................... 245 I. INADVERTENT PARTNERSHIP AND THE FREEDOM OF CONTRACT: A FALSE D ICHOTOM Y ......................................................................... 256 A. The (Better) RoadNot Taken: Forming an LLC.......................... 257 1. An LLC Is Easy and Inexpensive to Form, and Easy to E x it........................................................................................ 2 5 8 a. Forming an LLC: Two Simple Steps............................... 258 i. Forming a Texas LLC............................................... 258 ii. Forming a Delaware LLC to Do Business in T exas......................................................................... 2 60 iii. An LLC Agreement Can Allow Members to Exit or D issolve an LLC ....................................................... 261 2. Forming an LLC Negates Partnership Formation................ 261 a. Filing Entities Are, By Definition, Not Partnerships...... 262 b. Exceptions Where Courts Find a Partnership to Exist in Addition to a Filing Entity Do Not Apply to Parties Who Are Considering a Joint Venture .................................... 263 B. Members and Managers ofan LLC Can Eliminate Fiduciary D uties by Contract ....................................................................... 265 C. The Delaware LLC Provides Maximum Contractual F lex ib ility .................................................................................... 26 8 II. ELIMINATING INADVERTENT PARTNERSHIPS WOULD LEAVE UNSOPHISTICATED PARTIES UNPROTECTED ...................................... 269 A. The Purpose ofPartnership Law Is to Provide Governing Rules for Co-Owned Businesses that Did Not Create Their Own ......... 270 * Professor of Law, South Texas College of Law-Houston. Thanks to Dan Kleinberger, Christine Hurt, and participants of the 2017 National Business Law Scholars Conference, including Joan Heminway, for their helpful input; to Doug Moll and Beth Miller for their support, advice, and extensive comments; and to Evan Seale and Cameron Keener for their tireless research assistance. This Article is based on an amicus brief that the author wrote and submitted pro se to the Texas Supreme Court in Energy Transfer Partners, L.P. v. Enterprise Products Partners, L.P. Amicus Brief in Support of Petitioners, Energy Transfer Partners, L.P. v. Enter. Prods. Partners, L.P., No. 17-0862 (Tex. Apr. 11, 2019) (submitted by Joseph K. Leahy). This Article was selected by the American Association of Law Schools (AALS) Section on Agency, Partnership, Unincorporated Entities, in response to a call for papers, to be presented at 2020 AALS Annual Meeting, as part of the panel entitled Agency, Partnership, LLCs and Unincorporated Associations: Entity Selection in the 21st Century. 243

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