Bar Seeks Limited Liability Status for Professionals
Titus, Nancy Raiden, THE JOURNAL RECORD
By Nancy Raiden Titus
Journal Record Staff Reporter
While some businesses have been a bit reluctant to test the advantages of organizing under the state's new Limited Liability Company Act, lawyers have pushed to get professionals in on the deal.
Such a resolution was approved Friday by the Oklahoma Bar Association's House of Delegates as part of its 1993 legislative program. The resolution, adopted during the bar's 88th annual meeting, would amend the Oklahoma Professional Corporation Act to allow professional practices to organize as limited liability companies.
A limited liability company is a cross between a corporation and a partnership. It offers its equity owners, called members, the limited liability of a corporation and the tax advantages of a partnership.
Oklahoma's law was enacted earlier this year and became effective Sept. 1. A check with the Secretary of State's office showed that several companies already have organized under the new provisions.
"Freedom of contract is the underlying premise of the limited liability company," said Kenni B. Merritt, an attorney with Crowe
Dunlevy. She discussed the new entities at the Third Annual Corporate Law Institute continuing education seminar sponsored by the University of Oklahoma.
"It is like a limited partnership with no general partner. The key to the limited liability company is that it is treated as a partnership and gets the pass-through tax treatment like a partnership but no member is personally liable for obligations of the company."
The limited liability company, also known as LLC, is allowed in some form in about 17 states and another dozen are considering it. Merritt said Oklahoma was the eighth or ninth to allow it, and acted "very progressively" when it adopted the extremely pro-business act.
Wyoming first adopted a form of limited liability company in 1977 and was followed by Florida in 1982. Interest in the concept did not begin to pick up, however, until late 1988 when the Internal Revenue Service ruled in Wyoming that the companies would be treated as partnerships for federal tax purposes. …