WPC"' 2B6J Z,|xTimes New Roman (TT)Lucida Bright Math Symbol (TT)C\  P6QP> PQP2?phoenix#C\  P6QP# choice of form article for asset protection Larry Edward RibsteinLarry Edward Ribstein 2bHeading 1Heading 1C9#W\  P6QP##C\  P6QP#Heading 2Heading 2F<#XP\  P6QXP#  #C\  P6QP#heading 3heading 3C9#XP\  P6QXP# #C\  P6QP#Default Paragraph FoDefault Paragraph Font11#XP\  P6QXP##C\  P6QP#2. vN. Normal IndentNormal Indent toc 1toc 1  ` hp x (# !T$  !T$ ` hp x (#toc 2toc 2` hp x (#4 ! 4 ! ` hp x (#toc 3toc 3` hp x (#4 !B4 !B` hp x (#26 ` |~  vfooterfooter ` hp x (#!!` hp x (#headerheader  ` hp x (#& #W\  P6QP##C\  P6QP#&` hp x (# footnote referencefootnote reference 77#W\  P6QP#  #C\  P6QP#footnote textfootnote text  2 h,parapara ;1#XP\  P6QXP##C\  P6QP#headingheadingC9#Rr\  P6QRP# #C\  P6QP#topictopicC9#^\  P6QP##C\  P6QP#titletitle>4#\  P6QP##C\  P6QP#2x<subtopicsubtopicC9#XP\  P6QXP# #C\  P6QP#divisiondivisionC9#XP\  P6QXP# #C\  P6QP#indentindent;1#&J\  P6Q&P##C\  P6QP#flush paraflush para;1#XP\  P6QXP##C\  P6QP#2>2zendnote referenceendnote reference44#XP\  P6QXP##C\  P6QP#SPSP;1#XP\  P6QXP##C\  P6QP#classclass;1#W\  P6QP##C\  P6QP#FPFP;1#XP\  P6QXP##C\  P6QP#2!pvDl&!HHC9#XP\  P6QXP##C\  P6QP#IPIP letterletter` hp x (#4 <DL!#W\  P6QP##C\  P6QP#4 <DL!` hp x (#LPLP;1#XP\  P6QXP##C\  P6QP#2X%""# $NN;1#XP\  P6QXP##C\  P6QP#PP>4#XP\  P6QXP##C\  P6QP#SHSHF<#XP\  P6QXP#  #C\  P6QP#STST C9#XP\  P6QXP# #C\  P6QP#2!%"^&TT!C9#XP\  P6QXP# #C\  P6QP#endnote textendnote text";1#XP\  P6QXP##C\  P6QP# X   E footer` hp x (#! 2/1/5   footer!4 <DL!E Heading 1#W\  P6QP#` hp x (#4 <DL!CHOOSING A BUSINESS FORM  Heading 1 flush para#XP\  P6QXP#Larry E. Ribstein, George Mason University School of Law d  !flush para! para#XP\  P6QXP#4 <DL!4 <DL!Firms that wanted to limit the liability of owners until recently had few choices. They could incorporate and take a double tax bite, follow the Subchapter S rules for single tax incorporation, or form a limited partnership, taking care to incorporate the general partner and to stay within "control rule" constraints on limited partners' participation in management. Since Revenue Ruling 8876 paved the way for limited liability with partnership taxation by approving the limited liability company (LLC) form, new alternatives have appeared. Fortyeight jurisdictions (all but Hawaii, Massachusetts and Vermont) now have LLC statutes which authorize both domestic and foreign LLCs. These statutes provide for limited liability of owners and allow firms to choose the usual default rule of direct management by members or management by managers. Also, beginning with Texas in 1992, more than half of the states now limited liability partnership (LLP) statutes, which permit general partnerships to elect a form of limited liability. Most recently the IRS has signaled a new flexibility by its Notice 9514, which proposes partnership taxation for non"publicly traded" firms as long as they are not incorporated under state law. Adoption of such a proposal would permit firms to be taxed as partnerships even if they organize under statutes that provide for three or more of the Kintner "corporate" characteristics. For example, firms could combine centralized management, continuity of life and limited liability and yet still be taxed as partnerships. The states are poised to take advantage of this new tax flexibility. Wyoming has passed a new "statutory trust" statute (referred to here as the "WST"), para"endnote reference"#XP\  P6QXP#X0X01ÍÍ d  para"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#(endnote reference(Wy. Stat. 1723101 1723121, 1723201, 1723202, 1723301 and 1723302. and Colorado has passed a "limited partnership association" statute (referred to here as the "CLPA"). para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. Stat. 763101 763117. For discussions of the earlier nineteenth century version of this form, see Wayne M. Gazur and Neil M. Goff, Assessing the Limited Liability Company, 41 Case W. Res. L. Rev. 387, 39394 (1991); Edward Schwartz, The Limited Partnership Association An Alternative to the Corporation for the Small Business with "Control" Problems? 20 Rut. L. Rev. 29 (1965). These statutes combine centralized management, continuity of life and limited liability. The WST is similar to the flexible Delaware business trust para"endnote reference"#XP\  P6QXP##"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Del. Code Ann., tit. 12, 38013820.# with some differences noted below. These developments further complicate choice of form problems for business associations. This column will give a brief overview of some of the critical choices firms must make in selecting an appropriate business form from this expanding list.  paraHeading 2#XP\  P6QXP# LIMITED LIABILITY  d   Heading 2  para#XP\  P6QXP#All of the statutes under consideration except some LLP statutes provide that members have shareholderlike immunity from liability for the firm's debts. Most LLP statutes provide that members are vicariously liable for contracttype debts, although some of the more recent statutes, including Colorado, Georgia, Indiana, Minnesota, Montana, and New York, provide for a full liability shield for all types of debts. d   paraHeading 2#XP\  P6QXP# TYPES OF FIRMS THAT CAN ADOPT THE STATUTE  d   Heading 2  para#XP\  P6QXP#In deciding what type of business association it should be, a business must consider which types it is eligible to choose. Restrictions in business association statutes include the following: d   Line of business. Most limited liability statutes provide that firms in certain lines of business, such as banking and insurance, cannot organize under the statute. These restrictions are intended to protect third parties from financial risk resulting from the more flexible forms of limited liability.  Type of business. An LLP must be a "partnership" which, under Uniform Partnership Act ("UPA") 6(1) and the Revised Uniform Partnership Act (RUPA) 202 must "carry on a business for profit" (6(1)). This excludes passive investment in property (UPA 7(2) and RUPA 202(c)(2)) and nonprofit firms. Most LLC statutes para"endnote reference"#XP\  P6QXP#."endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Ribstein & Keatinge, supra note 6, 4.10.. and the CLPA do not include these restrictions. The WST permits passive investment but not nonprofit business activities. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St. 1723102(a)(v).  Oneowner firms. Most LLC statutes require two or more members, although some, including New York, explicitly permit onemember firms. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference( Statutory provisions are collected in L. Ribstein & R. Keatinge, Ribstein & Keatinge on Limited Liability Companies, app. 41 (1995 Supp.). randke  An LLP must be a partnership, which under UPA 6 and RUPA 202 means it must have two or more members. A WST is defined as a business which is carried on by a trustee for a beneficial owner, but the trustee and the beneficial owner may be the same. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St.  1723102. A CLPA must be formed by two or more persons. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763104.  paraHeading 2#XP\  P6QXP# FORM OF MANAGEMENT  d   Heading 2  para#XP\  P6QXP#The LLP form is best suited to the standard "partnership" form of management that is, direct management by the members. None of the new business forms, however, is quite as well adapted to centralized management as the limited partnership, which can clearly identify certain persons as managers (i.e., the general partners) and ensure that only they can bind the firm. d  Although an LLPs can delegate actual management authority to one or more managers, under UPA 9 and RUPA 301 nonmanaging members may have at least apparent authority to bind the firm to ordinary transactions unless third parties know of restrictions on their authority. Even a "statement of partnership authority" under RUPA 303 limits the authority of nonmanagers only in real property transactions. LLCs can elect to be managed by managers and thereby limit the authority of nonmanagers to bind the firm in ordinary transactions. para"endnote reference"#XP\  P6QXP#/ "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Ribstein & Keatinge, supra note 4, 8.09./ This makes LLCs somewhat more suitable than LLPs for centralized management firms. However, even in LLCs it may not be clear who the "managers" are. The WST and CLPA provide by default for centralized management. A WST is managed by or under the direction of the trustee. para"endnote reference"#XP\  P6QXP# "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. Stat. 1723108. This limits the authority of nontrustees, although does not necessarily make clear who is a "trustee," particularly since one may be both a beneficial owner and a trustee. At the same time, the statute accommodates decentralized management by permitting beneficial owners to manage without being trustees. para"endnote reference"#XP\  P6QXP# "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St. 1723108. Like a business trust, a CLPA is managed by default solely by managers, who alone have the power to bind the firm. para"endnote reference"#XP\  P6QXP# "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763111. As with a WST , it may not be clear who the managers of a CLPA are, or whether members are apparently authorized to act as managers. Also, the statute raises additional questions about who is in charge by requiring two or more managers elected from among members each year, at least one manager meeting each year, and officers with certain functions. para"endnote reference"#XP\  P6QXP# "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Id. 763110. Although failure to hold meetings or elections does not necessarily affect a manager's term or association action or dissolve or terminate the association, para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Id. 763110(9). failure to have an election might cause the firm to be membermanaged. The management provisions are subject to the bylaws, para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763110. but a firm may be deemed to have violated rather than waived the statutory requirements.  paraHeading 2#XP\  P6QXP# DISSOCIATION AND DISSOLUTION  d   Heading 2  para#XP\  P6QXP#LLC members and partners can withdraw at any time and be paid the value of their interests. This may result in a high valuation of the interest for estate tax purposes. Even if the parties agree to restrict member dissociation, in valuing an interest in a familycontrolled partnership for estate tax purposes, restrictions on liquidation that are more restrictive than the limitations that would apply under the State law generally applicable to the entity in absence of the restriction are ignored. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference( I.R.C. 2704. Some LLC statutes deal with this problem by eliminating the members' default right to withdraw. para"endnote reference"#XP\  P6QXP#2"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Or. Rev. St. 63.205; Va. Code 13.11032.2 The Arizona LLC statute by default limits the valuation of an interest in a family controlled limited liability company. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Az. Rev. Stat. Ann. 29707 (C). The WST and the CLPA are both "safe" in this respect because neither provides for a default right to withdraw. para"endnote reference"#XP\  P6QXP#."endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763114(4); Wy. St. 1723112.. d   paraHeading 2#XP\  P6QXP# INTERPRETATION AND ENFORCEMENT OF CONTRACTS  d   Heading 2  para#XP\  P6QXP#An important consideration in any firm is the extent to which contracts among the members will be enforced according to the members' expectations. Most LLP statutes are based on the UPA, which does not explicitly restrict contracting among the partners and which permits partners to benefit from partnership transactions with the consent of the other members. para"endnote reference"#XP\  P6QXP# "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See UPA 21.  Although courts may strictly interpret partnership agreements to avoid waiver of fiduciary duties, para"endnote reference"#XP\  P6QXP#3"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference( See Bromberg & Ribstein, supra note 5, 6.07(h).3 there is at least a large body of partnership law to guide partners in drafting agreements. d  LLPs based on RUPA (so far including Florida, Montana, North Dakota and, to some extent, Texas) and LLCs present more problems in this regard. Both RUPA para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(RUPA 103(b). and several LLC statutes para"endnote reference"#XP\  P6QXP#2"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Uniform Limited Liability Company Act, 103(b); Ribstein & Keatinge, supra note 6, 9.04 and app. 91. An important exception is the Delaware LLC statute, which contains language like that quoted immediately below from the Wyoming statutory trust statute. Del. Code Ann. tit. 6, 181101(b).2 include restrictions on contracting, particularly regarding members' fiduciary duties. Only time, experience and litigation will tell whether these restrictions end up being more extensive than the case law under the UPA. The WST, para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St. 1723302(b). like the Delaware Business Trust statute, para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Del. Code Ann., tit. 12, 3819(b). provides that "[i]t is the policy of this chapter to give maximum effect to the principle of freedom of contract and to the enforceability of governing instruments for enforcement of contracts." The CLPA, however, provides for nonwaivability of the duty of care. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763109. Moreover, as with LLC statutes, there is relatively little case law to provide guidance on such matters as managerial duties and other interpretation issues. In order to add some predictability as to interpretation, the WST provides that trustees "shall not be held to a more rigorous standard of care than that imposed upon directors of a business corporation under the Wyoming Business Corporation Act" para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St. 1723105(b). and that trust law applies except as otherwise provided in this chapter or the governing instrument. para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Wy. St. 1723113.  The Delaware statute includes the latter provision para"endnote reference"#XP\  P6QXP#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Del. Code Ann., tit. 12, 3809.but not the former, thus suggesting that Delaware trustees are subject to a somewhat more stringent standard of care than are Wyoming trustees. Such "linkage" with other types of business associations, however, may be both unclear and inappropriate. para"endnote reference"#XP\  P6QXP# R"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Larry E. Ribstein, Linking Statutory Forms, __J. L. & CONTEMP. PROB. __ (1995).R(endnote reference( para#XP\  P6QXP# A Delaware business trust or WST is a unique type of business, calling for a specialized body of case law. For example, one might argue that passive, lockedin, beneficial owners need a higher level of fiduciary duty than public corporation shareholders, who at least can easily express dissatisfaction by selling their shares.  paraHeading 2#XP\  P6QXP# ב paraAPPLICATION OF REGULATORY STATUTES  d   Heading 2  para#XP\  P6QXP#It is not clear how regulatory statutes, such as federal securities and antidiscrimination law, will apply to these new entities. For example, a WST or CLPA interest may be a "security" under the federal securities laws para"endnote reference"#XP\  P6QXP#q"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Securities Act of 1933, 2(1), 15 U.S.C. 77b; Securities Exchange Act of 1934, 3(a)(10), 15 U.S.C.A. 78c(a)(10).q and similar state definitions. Because passive beneficial owners seem rely on the managers to produce profits, the investment may satisfy the "efforts of others" test for the existence of an "investment contracts" under the leading case of SEC v. Howey. para"endnote reference"#XP\  P6QXP#  "endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(328 U.S. 293 (1946). By contrast, because of their default rules providing for membermanagement, an LLC or LLP interest may be less likely to be a "security." para"endnote reference"#XP\  P6QXP#!"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See generally Bromberg & Ribstein, supra note 5, 2.13(e) (general partnership interests as securities); Ribstein & Keatinge, supra note 6, 14.02 (LLC interests as securities). d   paraHeading 2#XP\  P6QXP# MERGER, CONVERSION AND REGISTRATION OF EXISTING FIRMS  d   Heading 2  para#XP\  P6QXP#In choosing a limited liability form of business firms must consider how easy it is for them to convert into the new form. LLC statutes generally provide for mergers between LLCs and other types of firms, in some cases including general partnerships. para"endnote reference"#XP\  P6QXP#:""endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Ribstein & Keatinge, supra note 4, 11.13.: Some also provide for conversion of partnerships into LLCs. para"endnote reference"#XP\  P6QXP#r#"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See, e.g., Co. Rev. St. #X> PQXP##XP\  P6QXP#7801001.r Similarly, both the WST and the CLPA permit merger and conversion between the partnership form and these new business forms. para"endnote reference"#XP\  P6QXP#,$"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(Colo. Rev. St. 763117; Wy. St. 1723201. , However, because the UPA does not provide for mergers with LLCs, the interaction between LLC merger and conversion statutes and partnership law may be unclear. As a result, under partnership law dissenting partners may be able to block the transactions by insisting that the assets be sold and the proceeds applied to the payment of debts para"endnote reference"#XP\  P6QXP#^%"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See UPA #X> PQXP##XP\  P6QXP#38(1).^ or by vetoing transfer of assets to the LLC; para"endnote reference"#XP\  P6QXP#&"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See UPA 9(1). partners may be personally liable for postdissolution transactions to creditors who were not notified of the change of form; para"endnote reference"#XP\  P6QXP#'"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See UPA 35 (providing that partners continue to have predissolution authority to bind the predissolution partnership, and therefore its partners, as to those who extended credit prior to the dissolution and who lacked notice of the dissolution, and as to others where the partnership did not publish notice of dissolution). The Virginia LLC statute provides that after conversion the general partner has the liability of a member or manager. VA Code Ann. #X> PQXP##XP\  P6QXP#13.11010.1(C). However, this may not override the equally explicit UPA provision for continuation of liabilities after dissolution.or the dissolution may trigger the termination of existing contracts. d  By contrast, partners can convert to the LLP form merely by filing an LLP registration. Most LLP statutes provide for execution of the registration by a "majorityininterest" of the partners or a person authorized by a majority in interest para"endnote reference"#XP\  P6QXP#("endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See, e.g., Del. Code 1544(b). para# footnote reference##W\  P6QP#   ) footnote reference) para#XP\  P6QXP#thereby weakening the power of a dissenting minority to block the transaction. LLP statutes also eliminate holdover liability by limiting partner vicarious liability at least for copartner misconduct committed, and perhaps also for contracts entered into, while the partnership is an LLP irrespective of whether the third party has notice of the registration. para"endnote reference"#XP\  P6QXP#-)"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See, e.g., Del. Code Ann., tit. 6, 1515(b).- Moreover, since the old entity continues notwithstanding registration, contracts and other preregistration matters continue in effect.  paraHeading 2#XP\  P6QXP# INTERSTATE EFFECT  d   Heading 2  para#XP\  P6QXP#A final choiceofform issue concerns the extent to which the limited liability entity will be recognized, and its liability limitation enforced, outside the firm's state of formation. This is particularly an issue for the relatively new WST and CLPA. Since these are neither "limited liability companies" nor "limited liability partnerships," statutory provisions permitting such firms to register as foreign entities and for enforcement of formationstate law probably do not apply. para"endnote reference"#XP\  P6QXP#*"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See, e.g., Del. Code Ann., tit. 6, 18101(4) (applying to firms that are denominated as LLCs under other jurisdiction's law); Va. Code Ann. 502(4) (applying to firms registered as LLPs). Other provisions which generally permit registration as foreign LLCs of "unincorporated associations," such as Va. Code Ann. 13.1.1002, may apply to a WST or CLPA. See generally Ribstein & Keatinge, supra note 6, Chapter 13.03 and app. 131. d  In the absence of a specific statutory provision, the common law may not provide much protection to a foreign business trust. The courts may apply local law to a WST or CLPA, even in the face of an explicit agreement applying Wyoming or Colorado law. para"endnote reference"#XP\  P6QXP#+"endnote text#XP\  P6QXP#"endnote reference"#XP\  P6QXP#` hp x (#4 <DL!(endnote reference(See Greenspun v. Lindley, 36 N.Y.2d 473, 369 N.Y.S.2d 123, 330 N.E.2d 79 (1975) (Massachusetts law does not necessarily control Massachusetts business trust, although applied in present case in the absence of a showing concerning the firm's contacts with New York); Means v. Limpia Royalties, 115 S.W.2d 468 (Tex. Civ. App. 1938)(Texas law controls limited liability of Oklahoma trust). Cf. AbuNassar v. Elders Futures, Inc., 1991 U.S.Dist. LEXIS 3794 (S.D.N.Y. Mar. 28 1991)(applying Lebanese law to determine the compliance of limited liability company with formalities of organization but New York law to determine whether veil should be pierced). To be sure, such rules also applied to LLCs and yet did not stop the LLC onslaught. But it is not yet clear that business trust or limited partnership association statutes similarly will be able to overcome the interstate enforcement problem.  paraHeading 2#XP\  P6QXP# ב paraCONCLUSION  d   Heading 2  para#XP\  P6QXP#It is truly a brave new world for limited liability entities, and getting braver every day. There are many ways to limit member liability, each with its own twists. One who ventures forth into this world needs a clear destination and a road map.