Three Suggestions for the Texas Limited Liability Company LawExpressO (2010)
AbstractSince I began asking my students to study the Texas Business Organizations Code, I have encountered several provisions that are difficult to explain. In this article, I address the three most bothersome such provisions in the code applicable to limited liability companies: (1) The statute addressing “Transactions Involving Interested Governing Persons” actually does not address such transactions. (2) The statute applicable to agents of limited liability companies overturns nearly the entire common law of agency and leaves us with uncertainty. (3) Against the explicit provisions of the Code, legislative history, and another provision making it almost impossible procedurally, courts apply a poorly-drafted provision on corporate veil-piercing to LLCs. I recommend the legislature reverse course and draft new provisions for LLCs on these three issues. Alternately, on the last, courts should simply apply the statutes as currently drafted. These statutes stay on the books because little attention is paid to them. In the meantime, courts around the state remain confused and lawyers remain ignorant of the issues. I hope the article will raise awareness and result in change. Parts of it have already been shared with legislators. Thank you for considering it.
- Limited Liability Companies
Publication DateNovember 2, 2010
Citation InformationVal D. Ricks. "Three Suggestions for the Texas Limited Liability Company Law" ExpressO (2010)
Available at: http://works.bepress.com/val_ricks/2/