The Silent Llc Revolution - the Social Cost of Academic Neglect
Creighton Law Review Vol. 38, No. 1, Fall 2004
86 Pages Posted: 13 Nov 2004
The law of Business Associations usually develops slowly. The business forms that were dominant until the end of the 20th century have been in existence for centuries. However, as the new data set examined in detail demonstrates, in the last decade a revolution has taken place. Contrary to conclusions reached in leading articles published as recently as 2000, limited liability companies have now become the business form of choice for small firms in a majority of the states. In 2003, more LLCs than corporations were formed in 29 states. In 11 other states over 45% of new business filings were for LLCs.
This article explains why LLCs have become so popular and examines the state-specific peculiarities that have prevented them from overtaking corporations in a handful of important jurisdictions. The LLC revolution has been practitioner-driven. This article contends that there has been a dereliction of duty by those who usually disseminate cutting-edge developments in the law. Teaching materials, legal scholarship, curricular offerings and bar examinations have largely neglected the recent sea change in the law of business organizations.
The article concludes with a preliminary LLC research agenda for academics. The need for rationalization of questions relating to the operating agreement, issues of authority, fiduciary duties and dissolution are highlighted in hopes of stimulating more research in this area.
Keywords: Limited Liability Companies, Business Associations, Partnerships, Legal Education
JEL Classification: K20, K22
Suggested Citation: Suggested Citation