Opinion ID: 2340356
Heading Depth: 1
Heading Rank: 8

Heading: Limited-liability companies

Text: Limited-liability companies (LLCs) are business entities created to provide a corporate-styled liability shield with pass-through tax benefits of a partnership. White v. Longley, 358 Mont. 268, 244 P.3d 753, 760 (2010); Gottsacker v. Monnier, 281 Wis.2d 361, 697 N.W.2d 436, 440 (2005) (stating that [f]rom the partnership form, the LLC borrows characteristics of informality of organization and operation, internal governance by contract, direct participation by members in the company, and no taxation at the entity level. From the corporate form, the LLC borrows the characteristic of protection of members from investor-level liability. (internal citation omitted)); Elf Atochem N. America, Inc. v. Jaffari, 727 A.2d 286, 287 (Del.1999) (LLCs allow tax benefits akin to a partnership and limited liability akin to the corporate form.). Originally enacted by Wyoming in 1977, the statutorily based creature of an LLC has expanded to all 50 states and the District of Columbia as a result of a favorable Internal Revenue Service ruling. White, 244 P.3d at 760; Keith Paul Bishop & Jeffrey P. Zucker, Bishop and Zucker on Nevada Corporations and Limited Liability Companies § 16.1 & n.7 (2011) (listing the states and years of enactment). With a goal of attracting new business to Nevada, the Secretary of State, with the support of the Attorney General, proposed the adoption of the LLC in 1991 as part of a comprehensive bill, A.B. 655, to streamline the corporate law in this state. Bishop & Zucker, § 16.1; see Hearing on A.B. 655 Before the Joint Senate and Assembly Judiciary Comms., 66th Leg. (Nev., May 7, 1991). Along with Colorado, Florida, Kansas, and Wyoming, Nevada became the fifth state to enact such groundbreaking corporate legislation. Bishop & Zucker, § 16.1 n. 7.