About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

59 Ohio St. L.J. 1459 (1998)
The Origins behind the Limited Liability Company

handle is hein.journals/ohslj59 and id is 1475 raw text is: OHIO STATE LAW JOURNAL Volume 59, Number 5,1998 The Origins Behind the Limited Liability Company SUSAN PACE HAMILL* ThisArticle documents the story behind and the complex origins ofthe Limited Liability Company (LLC). Using unpublished letters, memoranda, and other documents, this Article shows the inside story of the interest group activity responsible for inventing the first LLC statute in 1977, the initial battle fought by the early LLC proponents to secure partnership classfication from the Internal Revenue Service, and the organized efforts of LLC proponents in the 1990s lobbying the IRS for more favorable partnership classification rules, while encouraging the states to enact statutes. Professor Hamill offers a unique perspective on the story of the LLC through her experience as an attorney with the Chief Counsel's Office of the Internal Revenue Service (from 1990-1994) during many of the events described in the Article. This Article also offers insights into the origins of the LLC by analyzing how certain business and tax dynamics came together, resulting in the LLC entering into the American landscape Focusing on the historical evolution of corporations, this Article traces the LLC's earliest origins to the first few decades of the nineteenth century when state law power over the incorporation process cemented. Focusing on the twentieth century, this Article identifies first the modern income tax of 1913 as the LLC's modern origin, and then explores how the effective income tax burden of doing business in the corporate versus partnership forms and how the development of the market for investments in independent oil and gas drilling ventures greatly affected the timing of the LLC's invention in the 1970s. An explanation of the LLC's rise to prominence in the 1990s concludes this Article. * Associate Professor of Law, The University of Alabama School of Law. The author gratefully acknowledges the financial support of the University of Alabama Law School Foundation, the Edward Brett Randolph Fund, and the William H. Sadler Fund. The author thanks her faculty colleagues, Dean Ken Randall, Wythe Holt, Tony Freyer, Bill Brewbaker, and David Epstein for their valuable comments and appreciates the ideas from John Dzienkowski (You need to completely document the LLC's story and figure out how the story connects with the history of corporations.). The author especially appreciates Tim Coggins, the members of the Cumberland Law School Legal History Forum, and Herbert Hovenkamp for comments on an earlier drafL Special thanks goes to Howard Wathall whose friendship and patience over two long summers as I explored these topics were especially meaningful. Finally, the hard work and tireless efforts of the research assistant team, Carol Longshore, James Coomes, Wade Hartley, Mike Perrett, Rick McBride, Charles Gorham, John Donsbach, and Pete Bond, made this Article possible.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most