Law Commons^™

Anonymous Companies, William J. Moon

Faculty Scholarship

Hardly a day goes by without hearing about nefarious activities facilitated by anonymous “shell” companies. Often described as menaces to the financial system, the creation of business entities with no real operations in sun-drenched offshore jurisdictions offering “zero percent” tax rates remains in vogue among business titans, pop stars, multimillionaires, and royals. The trending headlines and academic accounts, however, have paid insufficient attention to the legal uses of anonymous companies that are both ubiquitous and almost infinite in their variations.

This Article identifies privacy as a functional feature of modern business entities by documenting the hidden virtues of anonymous companies—business …

Hitting The Trip Wire: When Does A Company Become A "Marijuana Business"?, Lauren A. Newell

Law Faculty Scholarship

Like the alcohol industry was during Prohibition, the marijuana industry is a profitable one. And, as bootlegging was then, selling marijuana in the United States is currently illegal. Despite the number of states that have legalized or decriminalized the sale of marijuana for medical or recreational use under state law, marijuana sales remain illegal as a matter of federal law under the federal Controlled Substances Act of 1970 (“CSA”). Individuals and entities that violate the CSA face substantial criminal and civil liability, including prison time and fines, alongside a host of additional negative consequences arising from business, tax, bankruptcy, and …

We Interrupt This Program...To Talk Of Transfer Restrictions, Daniel S. Kleinberger

Faculty Scholarship

A recent Iowa decision, REG Washington, LLC v. Iowa Renewable Energy LLC, is a useful first word on transfer restrictions applicable to ownership interests in a limited liability company, and more particularly transfer restrictions applicable to so-called transferable interests, i.e., economic rights. The decision’s analysis centers around the “pick your partner” principle and expressly rejects any analogy to corporate law cases addressing stock transfer restrictions. The decision raises certain issues and is hardly the last word on this topic.

How Do Llc Owners Contract Around Default Statutory Protections?, Peter Molk

UF Law Faculty Publications

Limited liability companies are built on the idea of contractual freedom. Unlike other business organization forms, most owner protections apply only by default to LLCs, which are free to waive or modify them as desired. This freedom promises economic efficiency if parties are sophisticated but raises the potential for opportunism by relatively more sophisticated managers and majority owners. While companies ranging from small landscape firms to Chrysler and Fidelity organize as LLCs, remarkably little is known about whether or how LLCs use this contractual flexibility. I analyze the operating agreements of 283 privately owned LLCs organized under Delaware and New …

Llcs And The Private Ordering Of Dispute Resolution, Peter Molk, Verity Winship

UF Law Faculty Publications

An emerging question in U.S. business law is how the organizational documents of a business entity set the rules for resolving internal disputes. This practice is routine in commercial contracts, which may specify where or how disputes must be resolved. Recent use of litigation provisions in corporation charters and bylaws have sparked controversy, ultimately leading to legislative action to preserve shareholder suits from contractual waiver. Yet despite accounting for the majority of business organizations and sharing features with corporations, non-corporate business entities and their internal dispute resolution process have been largely ignored. How do these non-corporate entities set ex ante …

Rationalizing Entity Law: Corporate Law And Alternative Entities (Part I), Mark J. Loewenstein

Publications

In this article, I consider how corporate law and limited liability company law treat five different areas: agency authority, derivative actions, formation issues, veil piercing, and oppression of minority owners. For each such area, I consider whether the law varies depending on the kind of entity involved, why that might be the case, and whether the law should be rationalized; that is, whether legislatures or the courts should seek to harmonize the law across entities. While this short article focuses primarily on corporations and limited liability companies, the issues considered here apply as well to partnerships and, where appropriate, reference …

Disputing Limited Liability, Christina L. Boyd, David A. Hoffman

All Faculty Scholarship

This project presents six years of hand-collected federal district court data to analyze the first representative sample of veil piercing litigation. Our method identifies veil piercing complaints through Westlaw's trial pleadings database and codes each case through a detailed examination of PACER records. We test a variety of hypotheses to understand how such litigations are resolved. We find that plaintiffs succeed quite often in veil piercing litigation, if success is defined as winning on motions that do not terminate a case. A variety of legal and extra-legal factors predict such interstitial veil piercing successes. Voluntary creditor causes of action promote …

Slides: Trends For Large Forest Landowners, Michael Goergen

Community-Owned Forests: Possibilities, Experiences, and Lessons Learned (June 16-19)

Presenter: Michael Goergen, Executive Vice President and CEO, Society of American Foresters, DC

21 slides

Citizenship Of Limited Liability Companies For Diversity Jurisdiction, Debra R, Cohen

Journal Articles

The limited liability company is an increasingly popular form of business organization. Due to its hybrid nature, however, the citizenship of a LLC for purposes of diversity jurisdiction is difficult to determine. Should the citizenship of a LLC be determined as if it were a corporation, in which case it has "entity" citizenship, or as if it were a partnership, in which case its citizenship is determined by the citizenship of "persons composing" the LLC?

This Article examines the history of the evolution of hybrid organizations like the LLC, and the rules for determining the citizenship of business organizations in …

Last Gasp Estate Planning: The Formation Of Family Limited Liability Entities Shortly Before Death, Walter D. Schwidetzky

All Faculty Scholarship

Family limited partnerships have been popular gift and estate tax planning vehicles for many years. In recent years, family limited liability companies (LLCs) have also become common, particularly in those states that have updated their statutes to take the check-the-box regulations into account. LLCs with more than one member are usually classified as partnerships for federal income tax purposes. In a typical structure, when there is adequate planning, the donors form a limited partnership or an LLC (jointly, 'family limited liability entity' or FLLE), to which they contribute assets expected to appreciate in value. This article will focus on such …

Limited Liability Companies In Kentucky, Second Edition, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, Scott W. Dolson, John S. Egan, Charles Fassler, Glenn D. Gunnels, C. Bradford Harris, Charles R. Keeton, Charles J. (Chaz) Lavelle, Alan K. Macdonald, Debbie R. Reiss, Thomas E. Rutledge, James C. Seiffert, William G. Strench

Continuing Legal Education Materials

The Kentucky Limited Liability Company Act, KRS Chapter 275, went into effect July 15, 1994, allowing Kentuckians to conduct business under the LLC form. With over 10,000 LLCs formed in the Commonwealth since the Act's inception, this flexible business entity has become the most popular way to conduct business in Kentucky.

The LLC has become so pervasive that business law practitioners, accountants, tax advisors and estate planners must all be well-versed in the myriad of issues and creative applications that accompany this business entity. With flexible tax-treatment and the liability protection of a traditional corporation this entity is utilized not …

Recent Irs Letter Ruling Increases Opportunities For Exempt Organizations To Use Llcs, Monica Gianni

UF Law Faculty Publications

Monica Gianni discusses how the IRS’s analysis of a private operating foundation using an LLC in LTR 9834033 indicates the IRS’s approach to LLCs with exempt organization members.

The Limited Liability Company Experiment: Unlimited Flexibility, Uncertain Role, Wayne M. Gazur

Publications

No abstract provided.

21st Annual Midwest/Midsouth Estate Planning Institute, Office Of Continuing Legal Education At The University Of Kentucky College Of Law, Turney P. Berry, Theodore B. Atlass, James E. Hargrove, Jerold I. Horn, Edwin S. Pyle, Charles J. Lavell, Lady E. Booth, Dale L. Gettelfinger, David B. Tachau, David K. Bohannon, Wiley Dinsmore

Continuing Legal Education Materials

Materials from UK/CLE's 21st Annual Midwest/Midsouth Estate Planning Institute held in July 1994.

Assessing The Limited Liability Company, Wayne M. Gazur, Neil M. Goff

Publications

The limited liability company is one of the newest forms of business organization. This form combines the limited liability of a corporation with the tax benefits normally associated with a partnership. The authors examine various implications and ramifications of this organizational form.