LLC, or as an officially known limited liability company, is really quite new to the United States. In fact, in 1977, Wyoming became the first state to adopt a statute of a limited liability company. Some people think that the first might have been Nevada, LLC or Delaware, LLC. But they would be right. In this area we have the right We Wyoming to thank you for introducing the concept of a limited liability company in this country.
The term "import" in the preceding sentence raises the question. If this type of company is imported, where did it come from? The answer might surprise you. The term LLC was created in Germany in 1892. When this type of limited liability company was established in Germany, it is spreading across the globe through an interesting exceptional United States.
This does not mean that some states do not work on marriage between partnerships and corporations to allow some form of limited liability. Pennsylvania, Virginia, New Jersey, Michigan, and Ohio experimented in that respect. However, it was Wyoming that in 1977 it became the first US state to bring what would be called the real limited-liability company that has and still leads the way to new forms of entities that can be used in a business context. The latest development is a serial LLC based in Wyoming, and now it extends to five other countries. (More on Wyoming's leadership in this regard will be discussed in later articles). LLC Wyoming was processed according to the German code in 1892, as well as Panama and other Latin American forms of limited liability company.
As a result, the Wyoming Law on Limited Liability Company contains the same four requirements as required by acts in other countries: 1) the word "limited" must appear somewhere on behalf of the company; 2) the entity enjoys a completely jusristic personality; 3) the partner or partners have control over accepting additional partners; and 4) LLC must be discharged under a member's contract and provide power of attorney or sale of the deceased. This has been modified in many countries to allow the parties to continue their business if they so wish).
We often say that the LLC is quite new. Perhaps, in comparison with corporations, such a statement can be true. However, in many countries, limited liability companies have used it in most of the century to help their owners in risk management, risk planning and asset protection.
In future articles we will consider the use of limited liability companies in the United States and how they have become very popular instruments for the abovementioned purposes.