In the interim, advisors should alert their clients to the exposure and consider bifurcating Florida LLC membership interests into voting and nonvoting interests, converting Florida LLCs to limited partnerships or limited liability limited partnerships, moving Florida LLCs to jurisdictions that have a more stable charging order protection law, or implementing other divestment of management control strategies.
Practitioners should understand, however, that the Florida charging order rules that apply to general partnerships and limited liability partnerships actually allow a foreclosure on the partnership interest that is subject to the charging order, unlike the charging order provisions that apply to limited partnerships and limited liability limited partnerships.
The bottom line is that the Florida Supreme Court created uncertainty for the estate and business planning community that will probably be resolved by the Florida Legislature before court cases make their way back to the appellate courts, and many existing Florida LLCs that do not now provide for separate voting and nonvoting rights may be converted into voting and nonvoting structures, limited partnerships or limited liability limited partnerships, and/or be moved to other jurisdictions by reason of this decision.
Rutledge & Thomas Earl Geu, Practical Guide to the Limited Liability Limited Partnership, 1 STATE LIMITED PARTNERSHIP LAWS (Arthur Jacobson et al.
ULPA provides that the general partners will be liable, jointly and severally, for the debts and obligations of the limited partnership unless the limited partnership has elected to be a limited liability limited partnership.
For several years now, taxpayers have used a combination of trusts, limited liability companies (LLCs), limited liability partnerships (LLPs) and limited liability limited partnerships
(LLLPs) as vehicles for owning property.
Kleinberger (WG&L, 2005), comprehensively and analytically addresses the critical issues facing tax advisers on the formation, operation and dissolution of limited liability companies (LLCs) and other vehicles, such as limited liability partnerships and limited liability limited partnerships
Planning and Using Limited Liability Vehicles: Limited Liability Partnerships, Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships
ALI-ABA, March 1996 1-800-253-6397 (ext.