Symposium—Limited Liability Companies at 20
One would expect the answer to the question posed in the title to depend to a significant degree on the extent to which legislatures have developed a unique theory of limited liability companies (LLCs) or have simply borrowed from other forms. Commentators and courts often describe an LLC as a “hybrid” combining certain corporate and partnership features. This characterization invites the notion that in any given case, an LLC should be thought of either as “like a corporation” or “like a partnership.” Viewed this way, an LLC may be unique in the manner it combines certain corporate and partnership features, but is perceived as having few, if any, features that are themselves unique or that, while inspired by the corporate or partnership form, play out in a manner other than they would in the corporate or partnership form. If a provision in a state’s LLC statute was obviously borrowed from the corporate or partnership context, then it should not be surprising to see courts relying on precedent from that context on the issue, and that is often the case. However, the case law provides glimpses of a unique theory of LLCs even where a concept, such as limited liability (a corporate concept) or the charging order (a partnership concept), has been borrowed from another form. If the issue is one that is not explicitly addressed within the parameters of the LLC statute, such as how an LLC or those associated with it are to be treated under another statutory or regulatory scheme, it also should come as no surprise when courts look at how other entities have been treated and whether and to what extent LLCs should be subject to similar treatment. . . .