Judicial Dissolution of the Limited Liability Company: A Statutory Analysis

19 Tennessee Journal of Business Law 81 (2017)

U of Houston Law Center

69 Pages Posted: 8 Mar 2018  

Douglas K. Moll

University of Houston Law Center

Date Written: March 1, 2018

Abstract

This article, prepared for the Business Law Prof Blog 2017 Symposium, examines the statutory grounds available to members who seek judicial dissolution of an LLC in all fifty states plus the District of Columbia. I also examined the judicial dissolution grounds in five model statutes: the 1992 Prototype LLC Act, the 2011 Revised Prototype LLC Act, the 1996 Uniform LLC Act, the 2006 Revised Uniform LLC Act, and the 2013 Revised Uniform LLC Act. Two charts are provided – one that provides the judicial dissolution grounds for each statute, and one that tabulates the different approaches.

Part I summarizes the methodology used and highlights the frequency of various statutory provisions. Part II analyzes two particular provisions—dissolution if it is not reasonably practicable to carry on the LLC’s business in conformity with its governing documents, and dissolution as a result of oppressive conduct by those in control. With respect to the “not reasonably practicable” language, the article argues that the impracticability of carrying on the business in conformity with either the certificate or the operating agreement should result in dissolution, but there is confusion over which statutory articulation is consistent with this result. With respect to the oppressive conduct ground, this article provides some possible explanations for why oppression-related dissolution statutes are less common in the LLC setting than in the corporation context.

Keywords: dissolution, limited liability company, llc, reasonably practicable, practicable, oppression, unfairly prejudicial

JEL Classification: K22

Suggested Citation

Moll, Douglas, Judicial Dissolution of the Limited Liability Company: A Statutory Analysis (March 1, 2018). 19 Tennessee Journal of Business Law 81 (2017); U of Houston Law Center. Available at SSRN: https://ssrn.com/abstract=3132861

Douglas Moll (Contact Author)

University of Houston Law Center ( email )

100 Law Center
Bldg. TU2
Houston, TX 77204-6060
United States
713-743-2172 (Phone)
713-743-2238 (Fax)

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