As part of a continuing series on Spring 2017 semester courses that relate to innovation and business, this post spotlights Advanced Topics in Corporate Law: Alternative Entities.
“Today, there are 1.2 million business entities in Delaware, 25% more business entities than people. Of those 1.2 million entities, over 800,000 are LLCs. And the number of LLCs has gone up 75% in the last five years or so.” The Alternative Entities course, taught during the January intercession by Professor Don Parsons, addresses this continually evolving area of the law.
Alternative entities include Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), and statutory trusts. However, given the increasing prevalence of LLCs in the corporate world today, the focus of the course is on LLCs. LLCs are a relatively new type of business entity and were developed, in part, to avoid the double taxation issues that plague the corporate structure. Alternative entities are becoming more and more common, and they play a key role in many aspects of business law, such as mergers and acquisitions and IPOs.
Students interested in corporate and commercial law, whether they want to be a transactional attorney or a litigator, will find this course beneficial. “Students who have a basic familiarity with how alternative entities work have a leg up in the corporate department,” Professor Parsons explained. “There’s a way of thinking about these kinds of entities that’s different from corporation law.”
Because many of the alternative entities the course covers are relatively new, the course discusses how the law of alternative entities has evolved. While “freedom of contract is a buzzword for alternative entities,” Professor Parsons said, the statues underpin everything. The course will also teach students how to form an LLC and how the courts are likely to interpret the relevant documents.
Jay Stirling, a graduate who took the course in 2015, has found the course incredibly helpful in his career. “The course was a really good balance between doctrine and theory and practice,” Stirling said. “The fact that I could take some of the things that I learned in the class and use them in a workplace setting was really valuable.”
The first part of this 1 unit course will cover basics regarding alternative entities, namely, limited liability companies ("LLCs"), limited partnerships, master limited partnerships, and business trusts. We will then spend time discussing the differences between alternative entities and corporations and the basic organizational and operating agreements for a typical LLC or LP, including key provisions such as the rules for default fiduciary duties, those restricting or eliminating fiduciary duties, and those regarding the handling of conflicted transactions, exculpation, and indemnification. The second half of the course will be devoted to challenged actions of the managers or controlling members and to litigation involving the internal affairs of alternative entities. Use of laptop computers in class is prohibited. Class attendance is mandatory. Pre-requisite: Business Associations. This course is usually taught as a one-week intersession class and not during the academic semester.
Schedule (January Intercession Course)
January 3 – January 6, 9:00 am – 12:45 pm