Usha Rodrigues reminds us that my old friend Larry Ribstein used to blast Business Associations teachers who waited until the end of the semester to teach LLCs and other "uncorporations" but then explains why she still leaves LLCs to the end:
I don't leave LLCs til the end of the semester because I think they're unimportant. It's because the cases are so damn thin. It's still such a new form, I just don't see much there there. Most of them wind up being trial courts who read the statute in completely stupid ways. Blech.
So I teach corporations and partnerships emphasizing fiduciary duty, default vs. mandatory rules, and the importance of the code. In fact, one semester I confess that I would ask a question and then intone, "Look to the code!" so often I felt like a Tolkien refugee. By the time I get to the LLCs cases, which are pretty basic, the class is ready for my message: the LLC is a new form. When dealing with something new, judges look both to the organizational statutes and to the organizational forms they know as they shape the law. Plus the LLC is such an interesting mix between the corporate and partnership form, it just makes sense to get through them both before diving in.
I take a slightly different approach. I do agency, partnership, and corporate law through formation to limited liability. Then I digress to cover LLCs. Then I go back to finish corporate law. (See sample syllabus here.) Why? I agree with everything Usha says, but I frequently run out of classtime before I cover the entire syllabus. If I left LLCs to the end of the semester, there'd be a substantial risk that some semesters I'd never get to them.
OTOH, Joshua Fershee agrees with Larry:
I want students (and lawyers and courts) to treat LLCs as unique entities. Leaving them to the end of the course reinforces the idea that LLCs are hybrid entities the combine partnerships and corporations. I just don't think that's the right way to think about LLCs. ...
In my experience, teaching LLCs at the end of the course seemed to frame the LLC as an entity that is just pulling from partnership or corporate law. As such, it seemed the students were thinking that the real challenge for LLCs was figuring out whether to pull from partnership law or corporate law for an analogy. Part of the reason for that, I think, is that so many of the LLCs cases seem to think so, too. See, e.g., Flahive. As Usha would say, "Blech."
The LLC is prominent enough in today's world that I think it warrants a more prominent role in the introductory business organizations course. If we don't bring the LLCs more to the fore, we allow courts to continue to misconstrue the entity form, in part because we aren't giving students the tools they need to ensure courts understand the unique nature of the LLC.
I take his point. But I think you can solve that problem by repeatedly mentioning that courts err when they treat LLCs as mere hybrids.