Just to point out that LLCs and LLPs are, in their legal framing, For Profit structures.
Yes indeed, but that language is misleading.
They are "For Participant Profit" rather than "For Rentier Profit"
Very different.
There is no profit and loss within an LLP or LLC framework, and the wider you extend the framework the more stakeholders you bring in until you get rid of profit and loss (and the double entry book-keeping in which it is accounted) altogether and end up with shared surplus (and a 'shared transaction and title repository' accounting). "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Historical Background of the Limited Liability Company
LLCs are neither new nor strange to the business community in the civil law countries of Europe and Latin America. This business form has its origin in the 1892 German company law known as Gesellschaft mit beschrnkter Haftung (GmbH). German not only was the first civil code country to enact this legislation, but Germany's enactment became the discussional focal point for the countries which subsequently adopted this commercial enterprise. Molitor, Die Auslandisch Regelung der G.m.b.H. und die deutsch Reform, (1927); and 12 Zeitscrift fur auslandisches and internationales Privatrecht 341 (1938). Once established in Germany, the concept of the LLC had a very active and fast growth. Success in Germany soon caused the German model act to become the focus of extensive debate. Within a short period of time after enactment in Germany, the following countries joined the limited liability bandwagon: Portugal (1917); Brazil (1919); Chile (1923); France (1925); Turkey (1926); Cuba (1929); Argentina (1932); Uruguay (1933); Mexico (1934); Belgium (1935); Switzerland (1936); Italy ( 1936); Peru (1936); Columbia (1937); Costa Rica (1942); Guatemala (1942); and Honduras (1950). In France, by the late 1940's, the limited liability entity known as "societes de responsabilite limitee" was more popular than the more traditional stock corporation and comprised approximately one-third of all French societes. Eder, Limited Liability Firms Abroad, 13 Univ Pitt L Rev 193 (1952).
And of course there were non-profit associations, co-operatives, etc.
Though these diverse forms have proved popular and useful, have they transformed capitalism?
There has been nothing quite like a UK LLP, anywhere.
The Jersey LLP - which PWC and Ernst & Young apparently paid Simmons & Simmons (UK solicitors) over a million pounds to help get through the best parliament money can lobby - is technically a Partnership, but with a separate legal personality to that of its members. However, this legal personality is dependent on there being more than one Member: when the penultimate Member goes, then the LLP goes with him.
In England & Wales, however, unlike Jersey, and Scotland, come to that, a Partnership does not have a separate legal personality. Partners are jointly (collectively) and severally (bilaterally) liable, and in order to contract, to own property and so on, they must do so through individual partners as agents/trustees as the case may be.
That is why - strangely - while the UK Limited Liability Partnership may be called a partnership, it is legally a Corporate body, with a continuing legal existence independent of its members, like a Limited Company.
Unlike a Limited Company, however, there is no distinction between owners and their agents, the directors/management. So there is no "Principal/Agent" conflict in an LLP and no need for the prescriptive Company legislation which manages all of that.
A UK LLP is entirely 'open' - there is no need even for a written agreement (I doubt whether you'll find that anywhere else, least of all in Germany)- and in the absence of one, a single page of partnership-based principles applies by way of default.
A UK LLP offers people working together to do so collectively,to an agreed common purpose, like a partnership, but without the 'several' individual liability of partnership.
The LLP also offers limitation of liability, which is good from the point of view of members, but IMHO they should give back something to society in return for the protection. Jersey insisted on a £10k bond,as I recall..... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
