The Status and Evolution of Model Series LLC Legislation
Series LLCs have been called the next generation of pass-through entities, gaining in popularity and use as states continue to authorize them. The lack of state uniformity in the treatment and acceptance of series LLCs has lead more conservative attorneys, advisors, and clients to avoid them, believing that the uncertainties and potential risks associated with series LLCs outweigh their perceived benefits.
The National Conference of Commissioners on Uniform State Laws (“NCCUSL”) has been hard at work producing multiple drafts of a uniform law for series LLCs. While the drafters’ comments on earlier drafts left open questions regarding whether such a statute would ever be enacted,1 the most recent drafts evoke more confidence that a uniform law is indeed forthcoming. This article provides an overview of series LLCs, highlighting some of the uncertainties associated with their use, and discusses the status of the NCCUSL’s efforts in adopting a uniform law to provide increased clarity and consistency in the use and legal treatment of series LLCs.
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