SERIES LLCS

By , September 28, 2017 1:07 pm

Below are the title and abstract of an interesting law journal article advocating the adoption of series LLC legislation by the roughly 40 U.S. jurisdictions that have not yet done so:

17 J. Bus. & Sec. L. 207
Journal of Business & Securities Law
Spring, 2017
Meredith Pohl
Copyright © 2017 by the Michigan State University College of Law; Meredith Pohl
TAKING THE SERIES LLC SERIOUSLY: WHY STATES SHOULD ADOPT THIS INNOVATIVE BUSINESS FORM

ABSTRACT

The series LLC has gained slow, consistent popularity among states over the past two decades, and this popularity will only continue to grow with the upcoming publication of a Uniform Act. Despite this increase in adoption, there is a dearth of academic literature advising state policymakers of the benefits and risks of adopting the entity form. The series LLC could provide a much-needed economic boost for small businesses in this tough economic climate, growing the state tax base, while increasing efficiency, and decreasing bureaucratic red tape. The series LLC statute ultimately adopted by states should balance pro-creditor and pro-business interests to the fullest extent possible. This balance is best achieved by (1) constructing the statute to minimize risks in bankruptcy for businesses by incorporating many of the equity factors of substantive consolidation into the language, while (2) encouraging bankruptcy courts to adopt a rebuttable presumption of “separateness” to allow creditors a chance to rebut the presumption and recover.

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