WELCOME to the website of the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) Drafting Committee on the proposed “second generation” Uniform Limited Liability Company Act (“ULLCA II”). This website was created (1) to facilitate persons interested in this drafting effort in obtaining information about the project and the people associated with it, and (2) to submit questions and comments regarding its drafts and reports. As the chair of the Drafting Committee, I invite your comments on the project as well as the structure and content of this website.
WHY A NEW UNIFORM ACT?
It is an appropriate time to consider a second generation uniform LLC act. More than 25 years have passed since Wyoming enacted the first modern U.S. LLC statute, and nine years have passed since NCCUSL approved the first Uniform Limited Liability Company Act (“ULLCA”). Today, every state has adopted some form of an LLC Act. State LLC statutes have evolved through several phases, with most early changes occurring in reaction to the IRS then evolving approach to LLC tax classification. The last major wave of state-by-state statutory revision began in 1997, when the IRS released the “check the box” regulations and thereby freed state LLC law from archaic tax classification constraints. Today, state LLC statutes vary substantially in how they approach various important issues and – perhaps equally significant from a practitioner’s viewpoint – in the language they employ.
Meanwhile, LLC filings have become significant in every U.S. jurisdiction, and in some states new LLC filings approach or even outnumber new corporate filings on an annual basis. Manager-managed LLCs have become a significant factor in non-publicly-traded capital markets, and increasing numbers of states provide for mergers and conversions involving LLCs and other unincorporated entities. There are predictions – both from scholars and experienced practitioners – that the LLC will supplant the corporation as the vehicle of choice for start-up closely held businesses.
DRAFTING COMMITTEE PROJECT GOALS?
Of course, NCCUSL’s very purpose is to promote uniformity in state laws of importance. Legal complexities caused by major differences in various state laws regarding the same business entity do not serve anyone’s best interests. Unnecessary complexity is harmful regardless of whether an LLC is created in and conducts business only in a single state or whether it engages in interstate business activities. The original ULLCA has been adopted in several states, and many other state LLC statutes show the influence of the Revised Uniform Partnership Act, which also strongly influenced the drafting of ULLCA. Nonetheless, many important differences continue to exist among LLC statutes. Some of those differences may reflect substantial differences in policy. Others may simply reflect different styles or moments of drafting. In addition, LLC case law has begun to develop, and that case law presents an opportunity for assessing how well particular statutory approaches are functioning to guide the courts.
The Drafting Committee’s charge is thus is not only to re-visit ULLCA but also to consider whatever instruction can be found in each state LLC statute. The Committee’s goal is to draft a new act that will incorporate the learning of the past 25 years and thereby maximize the chances for uniformity.
THE WORK OF THE DRAFTING COMMITTEE AND YOUR ROLE
A roster of the Drafting Committee and their connection to the NCCUSL drafting process is reflected under the “Committee Members” menu tab on this website. The Committee represents an important combination of NCCUSL Commissioners (including the Chair), ABA Advisors, and two co-reporters experienced in the law of LLCs and in statutory drafting. Not listed are several vitally important observers who represent other interested constituencies, including state bar associations and other organizations interested in promoting uniformity in this area. If you are interested in becoming an observer, attending our drafting sessions, or contributing in some other way, please contact me at [david.walker@drake.edu]. You may also contact me if you are interested in only some particular issues or you wish to obtain clarification about a particular drafting provision. For those purposes, however, it would be more efficient to contact either of our two reporters, Carter Bishop [cbishop@suffolk.edu] and Daniel Kleinberger [dkleinberger@wmitchell.edu]. They are responsible for preparing and revising our drafts as well as raising important issues in our drafting sessions, and they have both committed to make timely responses to any comments or questions they receive. Also, the Message Board tab on this website will allow you to post a public message, comment or question visible to all who visit this website. The reporters are electronically notified of all postings. It is not necessary for you to “login” in order to post a public message. The Message Board login feature simply facilitates identification of Committee members so if you are comfortable doing so please type your name at the end of your message.
I invite you to inform our drafting process. Your comments can and do provide a valuable window into the problems and successes with particular state LLC law provisions as well as their interstate application. Only through careful consideration of your issues and concerns can ULLCA II achieve its true potential for greater uniformity in state LLC statutes in this important area.
THIS WEBSITE
Our drafting process was initiated in March 2003, and this important work will continue until the Committee and the Conference are confident that a revised or amended ULLCA is ready for state law adoption on a broad basis. On this website you’ll find various memoranda detailing the membership of the Committee, the names and affiliations of those participating in our work and descriptions of how we work. You will also find the successive drafts of the Act as they are released, the early work of the Committee, and memoranda commenting on our efforts. I hope the innovation of this website will further enhance the Committee’s ability to identify interested parties and help us take advantage of those parties’ insights in our drafting process. Please join us.
Sincerely,
DAVID S. WALKER, Chair