The State Statutes and the Uniform Acts

Scope of the chapter. Every LLC is a creature of the statute under which it is formed. This chapter surveys those statutes. It describes the families into which the state statutes fall, examines the two uniform acts and the Delaware act in detail, summarizes the leading non-uniform statutes, and explains how statutes are amended and how amendments apply to LLCs already in existence. It closes with the principles courts use to interpret LLC statutes and with guidance on identifying the statute that will govern a given question.

Why the statute matters. The operating agreement governs most of the relations among members and managers, and a practitioner may be tempted to treat the statute as background. That would be a mistake for four reasons. First, the statute supplies every rule the agreement does not displace, and few agreements address every question that arises. Second, each statute contains mandatory rules that no agreement can vary, and the content of those rules differs considerably among states (see infra ch. 3). Third, the statute governs the relations of the LLC and its members with third parties, including creditors, who are not bound by the agreement. Fourth, the statute determines what the agreement may validly say: a provision permitted in Delaware may be void in a state that follows the Revised Uniform Act.

Organization. The chapter proceeds in nine parts:

1. the landscape of state statutes and the families into which they fall (¶ 210);
2. the Uniform Limited Liability Company Act of 1996 (¶ 220);
3. the Revised Uniform Limited Liability Company Act (¶ 230);
4. the Delaware Limited Liability Company Act (¶ 240);
5. other leading non-uniform statutes, including those of New York, Texas, Nevada and Florida (¶ 250);
6. harmonization of the uniform acts, entity transactions and protected series (¶ 260);
7. the amendment of LLC statutes and the application of amendments to existing LLCs (¶ 270);
8. principles of statutory interpretation (¶ 280); and
9. identifying and applying the reference statute in practice (¶ 290).