Happy Birthday Dear LLC!

The LLC turned 20 recently, and Larry Ribstein has a first-rate post on the topic. My thoughts on his thoughts are:

1. The series LLC may not be arcane, technically speaking, but I don't think it is the kind of product I would be advising the average dirt client to get into in order to save money. I'm concerned about lenders balking at dealing with them, and there is utterly no case law on veil piercing. I've been telling my clients to stay away from this vehicle, at least for now.

2. Larry also writes:
Finally, there was some discussion in the last panel session about the future of LLCs. The big question is whether abuses of the LLC form might kill the goose that has been laying the golden eggs of flexibility for 20 years. I have expressed my own concerns about abuse of the LLC (see my paper on Reverse Limited Liability).
Great point. LLCs do get abused. There was also a good article I read over the weekend by Lin Hanson (whom I mentioned here the other day) titled "Don't Use an LLC for Asset Protection." Since the title pretty much says it all, I am not going to quote Lin's article at length. It is in the ISBA Journal, a publication in a password-protected area of the Illinois State Bar Association website. I am not sure I agree entirely with Lin's conclusions (maybe because they scare me, not because the logic is faulty), but I am concerned enough about his thesis to run this by my partner, the corporate guru, and get his thoughts.

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