Monday, May 21, 2012
There is No Such Thing as a Limited Liability Corporation
Okay, Lets Go Over This Again – There is No Such Thing as a
Limited Liability Corporation
It really cannot get much more clear than this – there is in no state a business organization identified as a “limited liability corporation.” Every state has a statute providing for the “limited liability company” (“LLC”) and every state as well provides for the formation of a “limited liability partnership” (“LLP”). “Corporation” and “Company” are not synonymous terms.
In the just completed 2012 Kentucky General Assembly, H.B. 341 amended KRS § 11A.010(1) to correct a reference to the “limited liability corporation” to the correct “limited liability company.” Having taken a step forward, however, that same General Assembly took two steps back. S.B. 160 (2012 Ky Acts, ch. 139) created a new statute in chapter 281. In not one but two places in that new statute it makes reference to the “limited liability corporation.” See S.B. 160, § 4. Based upon discussions with the staff of the LRC, the Reviser of Statutes is not able to correct “corporation” to read “Company.” A future General Assembly will need to amend the statutes. In the meantime, the newly created statute sets forth no affirmative rules as to limited liability companies, and there are no “limited liability corporations” to take advantage of or to be subject to the new requirements.