Business Law Section

I would like to see the Utah statute take a more aggressive position in protecting debtor rights and have the charging order be very strong with no foreclosure rights and specifically limiting the creditor to that remedy, similar to Alaska and Florida or even Nevada. Doing this could increase revenues in the state because the Utah statute would be one people elect to use, similar to Alaska LLC and LP statutes and Nevada corporation laws. Fewer people would go to Nevada for their statuory protections.

I do like the perpetual duration and the fact that the LLC draft does not have a "business" purpose requirement, but that it can be formed for any lawful purpose.

I also would like to see the Utah statute take a much more protective approach to the assets of the debtor. In the US there are three types of asset proction statutes relative to LLCs: (1) foreclosure; (2) charging order (doesn't specify whether the charging order is the sole remedy); and (3) charging order only statutes. Utah has been one of the leaders in the asset protection arena in other contexts when it adopted trust provision providing for self-settled asset protective trusts. Our LLC statute in the contrary is as weak as it can get in this area. Utah should be a leader in asset protection in all areas, not just trusts. Failure to provide for stronger asset protections in our LLC statute will further cause domestic companies to organize elsewhere reducing our revenue.

I also like the perpetual duration, the elimination of a "business" purpose rule.