Copyright (c) 2008 Virginia Law & Business Review Association
Virginia Law & Business Review
ARTICLE: AN ANALYSIS OF THE REVISED UNIFORM LIMITED LIABILITY COMPANY ACT
2008 Virginia Law & Business Review Asociation
3 Va. L. & Bus. Rev. 35
Larry E. Ribstein+
IN December 2006, the National Conference of Commissioners on Uniform State Laws ("NCCUSL") promulgated a Revised Uniform Limited Liability Company Act ("RULLCA"). 1 This was NCCUSL's second try at promulgating a uniform limited liability company ("LLC") law. In 1995, after nearly every state had already adopted an LLC statute, NCCUSL formulated the first Uniform Limited Liability Company Act ("ULLCA"). While it has existed for more than a decade, the original ULLCA has only been adopted in eight states, including only one major commercial jurisdiction, Illinois. 2 This dismal adoption record arose even with the rapid rise in LLC filings and corresponding increase in the demand for guidance in the regulation of the LLC form. 3
NCCUSL attributes the need for a new uniform act, and by implication the failure of ULLCA, to changes in the legal and business context of LLCs. According to NCCUSL, the key factors included the adoption of the tax classification rules, 4 the rise in demand for manager-managed LLCs, the rising popularity of single-member LLCs, and the increasing number of limited liability partnership statutes offering full limited liability protection (which present an alternative to the LLC, particularly for professional firms). 5 However, NCCUSL amended ULLCA to take account of the tax classification rules soon after its initial promulgation 6 and it offers no explanation of why the other factors demand a new act or how the new act meets those demands.
The more likely explanation of ULLCA's dismal failure, ...
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