A Few Observations on
the Reading of the Current Draft of the
Series Act Before the Uniform Laws
Commission
On Tuesday and Wednesday of
this week, I was at the annual meeting of Uniform Laws Commission where we read
the working draft of the series act and took comments thereon.
Speaking entirely for myself,
and setting aside for now remarks dealing with either the technical wording of
the act or its scope (i.e., should it be restricted to LLCs or apply to a broader
range of unincorporated business), my take on the comments divided them into three
inter-related questions:
Initially, why series?
Essentially, this question comes down to one of function, namely what is
achieved by this organizational form that cannot be achieved with already
existing forms?
Second, assuming a valid
place for the series in the range of available business organizational forms
that should be available, does the statute successfully describe the functions
and limitations of the form.
Third, even as the statute
describes the series, does it preclude the misuse of the form (i.e., the “shell
game” of assets, public disclosure of the existence of the series)?
Implicit in the third question
is the degree to which the broader public recognition of series embodied in a
uniform act will serve as a “imprimatur” of the organizational form even when
jurisdictions such as Delaware that do not and it must be anticipated will not
provide by statute for similar protections.
As to the same point but reversing the point of perspective, to what
degree should the uniform act in the states adopting it condition recognition
on the series organized in a foreign jurisdiction upon compliance with the
domestic state’s rules as to, for example, public filing of the existence of
the series, public recordation of the association of titled assets with the
series, etc.
Much work remains to be done,
and it is a fascinating project.
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