
Investor Rights in Non-Listed LLCs
In an earlier blog post, I argued that a combination of contractual rights and non-legal factors balances the interests of the controlling insiders and outside investors in publicly-traded limited liability companies (LLCs). Since most of these non-legal factors—the firm’s ownership structure, dividend policies, board composition and board practices, market forces, and the standardization of the governance structures—are specific for listed LLCs, the situation is different in non-listed LLCs. The members of private LLCs have only legal rights and, perhaps, a promise of continued cooperation to rely upon. At the same time, given the default nature of almost all provisions … Read more