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Spring 2021
LAW145  A  CLOSELY HELD BUSINESSES

Course Description
Limited Liability Companies (LLCs have become the most popular form of conducting a closely held business in the relatively short period since the Internal Revenue Service confirmed that they should be taxed as partnerships (unless they affirmatively elect to be taxed as corporations). LLCs are designed to combine some of the major advantages of partnerships, informality of management and pass-through taxation with those of corporations, principally limited liability for owners, with also the possibility of centralized (professional) management. As a result, the law governing LLCs is not all new but builds on the law governing the earlier forms of business entity. As a result, the initial portion of the course--agency--deals with the issues that arise when one person represents another in conducting a business (or other) activity. The first issue considered is determining when the relationship is an agency versus when the one engaged is acting as independent contractor or in some other independent capacity in services for a consideration. All employees are agents, but not all agents are employees. Once an agency is established, the issues are when the agent can bind the principal in contract, and when the principal is also liable for the torts of the agent. A major issue is the "fiduciary" duty of the agent to the principal and the duties that the principal owes the agent. The partnership portion of the course concerns similar issues in partnership businesses. The issue of when a partnership exists arises primarily in informal relationships since formation of a general partnership does not require any formalities, and is sometimes hard to distinguish from employment, loan, co-owner, or leasing arrangements. Once a general partnership is established, all partners are normally agents of the partnership in the ordinary course of its business. The issues of fiduciary duty are more complex and important in partnerships than in most other agency arrangements. Because partnership involves joint operation of a business, difficult problems arise when the partners' disagreements or other factors make continued working together inappropriate. The limited liability advantage of the corporate form for closely held businesses has now virtually disappeared since most states now have statutes that provide limited liability for owners of unincorporated businesses, including general partnerships that follow statutory formalities (LLPs). Limited partnerships (LPs) that have a managing general partner and that may be limited liability limited partnerships (LLLPs). The modern statutory provisions governing the general and limited liability partnerships and limited partnerships modify the traditional common law rules, creating complex issues in providing for the relationships among the participants. Since corporation statutes were originally designed for publicly held business, they have needed to be adapted for closely held corporations. These adaptations have sometimes analogized closely held corporations to partnerships, but significant differences remain. All of this leads to complex decisions in choice between corporate or unincorporated business form, and if the latter is chosen, among unincorporated business forms. Although some aspects of the course are covered in Business Associations, of necessity, the depth of coverage of the issues mentioned above in BA is less than in this course, because they devote major consideration to publicly held corporations. This course can be considered a substitute Business Associations for those not expecting to deal significantly with publicly held businesses or a complement to Business Associations for those who are uncertain where the future will take them.

Course Schedule
Dates Day Time Room
01-25-2021 - 04-27-2021   M  10:10 AM-11:50 AM DL

Course Frequency
This course is usually offered once every academic year

Course Information

Credits: 2
Pass/Fail Option: No
Prerequisite:
Grading: Graded
Method of Evaluation:
Graduation Requirements Fulfilled By Course:
General
Special Attributes: None
Course Delivery:
Online (all synchronous)
Special Restrictions:
Law Track(s):
Business & Taxation - Specialized
Bar Subject(s): None
Concentration(s):
Business Compliance and Sustainability (Area of Focus)   More information
Business Compliance and Sustainability (Concentration)   More information
The Business of Innovation, Law and Technology: BILT (Concentration)   More information
Course Book(s):
Textbook Required:
Yes  
  • Textbook Name: Closely Held Business Organizations: Cases, Materials, and Problems 2d
    Textbook Type: Hardcover
    Requirement: Required
    Author: Robert Ragazzo and Frances Fendler
    Publisher: American Casebook Series
    Edition: 2nd Edition
    ISBN: 978-0314275806
      
  
First Class Assignment(s):
  • Assignment: Tentative Syllabus with emphasis on the Tentative. Page references are to the Closely-Held Business Organizations Book. The Book includes references to the Statutory Supplement. January 25 Agency--pp.7-112. February 2 More Agency--pp. 112--143; Partnership pp. 143-219 February 8 More Partnership--pp. 219--312. February 15 or 22 Corporations--pp. 312-405. February 22 or 29 Corporations--pp. 405-495. March 8 Corporations--pp. 495--582- March 15 or 22 Corporations--pp. 582-665. March 29 Corporations--pp. 665-756. April 5 Corporations--pp. 756-825. April 12 Limited Partnerships--and Limited Liability Partnerships---pp. 825-929. April 19 Limited Liability Companies--pp. 938-1002. April 26 Limited Liability Companies--p-. 1002-1030.   

 
Professor(s)

MANNING, ELLIOTT


Biography
Contact Information:
Email: e.manning@miami.edu
Phone: (305)284-2961
Office: G266