The Indiana Business Law Survey Commission was tasked to study of the desirability of Indiana enacting The Uniform Limited Partnership Act (“ULPA”), and The Revised Uniform Limited Liability Company Act (“RULLCA”). The Commission consists of 13 members appointed by the Governor, with the Secretary of State as an ex officio member. The members of the Commission included representatives of the Indiana accounting, banking, business, legal, and education communities.
The Commission coordinated its review and study of these two uniform acts with a Joint Study Committee consisting of representatives of the estate planning, taxation and business law committees of the Indiana State Bar Association. In an October 20, 2011, report submitted to the Legislative Council of the Indiana General Assembly the BLSC made the following findings and recommendations:
“With respect to the Revised Uniform Limited Liability Company Act: The whole cloth enactment of RULLCA into Indiana Law is not desirable at this time. . . .
We believe it is important to note that in the course of the study, no driving or compelling considerations or urgencies were identified or brought to our attention . . . . Neither Indiana businesses nor their professional advisors have identified any sort of major shortcoming or urgent need to update or rewrite Indiana’s current LLC statute. In fact, we received feedback to do just the opposite — to exercise care and to not recommend changes for the sake of change. . . .
Indiana should not enact a new limited liability company statute based on the 2006 Revised Uniform Limited Liability Company Act (RULLCA). The original Uniform LLC Act (1995-96) was enacted by only 9 states, and since RULLCA was rolled out by the Uniform Law Commission in 2006, only five states and the District of Columbia have enacted RULLCA. Basing a new Indiana LLC statute on RULLCA would not appear to achieve meaningful or useful uniformity, in comparison to the downside of enacting RULLCA wholecloth, as discussed in more detail in the Final Report.
In many ways, RULLCA is more complicated and less flexible than the current Indiana LLC statute, and RULLCA could present traps for the unwary, replacing a known and accepted statutory infrastructure with a new one based on a different underlying philosophy. As a result, we believe there would be a potentially steep learning curve for drafting attorneys, business owners, and their other advisors, together with the resulting costs, without sufficient corresponding perceived benefit.
The Commission independently and together with representatives of the Indiana State Bar Association studied the desirability of enacting RULLCA in Indiana and has determined that enacting RULLCA “whole cloth” into Indiana law is not desirable . . . .
Problematic Provisions or Concepts (from RULLCA) . . . Expansion of provisions regarding charging orders . . . Forcing foreclosure of the interest and permitting the creditor to become a member may not be in the best interests of the LLC or its remaining members”