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51 Bus. Law. 1 (1995-1996)
The Emergence of the Limited Liability Company

handle is hein.journals/busl51 and id is 15 raw text is: The Emergence of the Limited Liability Company By Lany E. Ribstein* Three years ago, The Business Lawyer published the first comprehensive survey of the law relating to limited liability companies (LLCs), The Limited Liability Company: A Study of the Emerging Entity. I When that article was writ- ten, only eight states had passed LLC statutes.2 There was no settled model for the LLC, no settled tax treatment beyond the rudimentary partnership tax classification of some Wyoming LLCs, and no clear recognition of LLCs outside of their formation states. Emerging aptly described the LLC form. As this Article was being written, all U.S. jurisdictions except Hawaii and Vermont had passed LLC statutes. There are Uniform3 and Prototype4 LLC laws, a comprehensive Internal Revenue Service (IRS) Revenue Procedure dealing with LLCs,5 and explicit statutory recognition of foreign LLCs in forty-eight states. Thousands of LLCs have been formed across the country, often at a greater rate than limited partner- ships.6 The LLC has emerged. *Foundation Professor of Law, George Mason University School of Law; B.A. 1968, Johns Hopkins University;J.D. 1972, University of Chicago Law School. Thanks to Allan Donn and David Neufeld for their helpful comments and the many lawyers who have contributed to the discussion on LLC-Net, the Internet discussion group on LLCs and related topics. 1. See Robert R. Keatinge et al., The Limited Liability Company: A Study of the Emerging Entity, 47 Bus. LAw. 375 (1992) [hereinafter Emerging Entity]. 2. Wyoming and Florida passed statutes in 1977 and 1982, respectively. FLA. STAT. ANN. §§ 608.401-.471 (West 1993 & Supp. 1995); WYo. STAT. §§ 17-15-101 to -136 (1989 & Supp. 1995). Colorado, Kansas, Nevada, Texas, Utah, and Virginia passed statutes be- ginning in 1990. See COLO. REV. STAT. ANN. §§ 7-80-101 to -913 (West Supp. 1995); KAN. STAT. ANN. §§ 17-7601 to -7650 (1994); NEv. Rcv. STAT. ANN. §§ 86.011 to -.571 (Michie 1994); TIEX. REV. Civ. STAT1. ANN. art. 1528n, §§ 1.01-9.02 (West Supp. 1995); UTAH CODE ANN. §§ 48-2b-101 to -156 (1994 & Supp. 1995); VA. CODE ANN. §§ 13.1-1000 to -1069 (Michie 1993 & Supp. 1995); see also Emerging Entity, supra note 1, at 378 nn.3-4. 3. UNIF. LTD. LIAB. Co. AcT (1995) [hereinafter ULLCA]. 4. PROTOTYPE LTrD. LIAB. Co. AcT (American Bar Association 1992) [hereinafter PRO- TOTYPE LLC ACT]. 5. Rev. Proc. 95-10, 1995-3 I.R.B. 20, discussed infa text accompanying notes 234-47. 6. For data on the formation of LLCs and other business entities in selected states, see Larry E. Ribstein, Statutory Forms for Closely Held Firms, 73 WASH. U. L.Q 369 (1995) [here- inafter Statutoy Forms].

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