[vonmoltke]

> Historically, limited liability has not been the default, but rather has been the exception. Thus, it was considered important to give the public, including service providers and potential vendors, notice of the existence of a new limited liability entity. This way, the public, in contractual dealings with the entity, knows that their legal right to sue is circumscribed to suing only the entity itself, not the people who own and control the entity. This is a real consideration for, e.g., manufacturers that provide inventory on credit.

My understanding is that there is no difference, with respect to liability, between LLCs and traditional corporations. Thus, how can you justify this requirement applying only to LLCs?

[rayiner]

LLCs were actually quite controversial when they were introduced, because they offer the limited liability of a corporation without a lot of the procedural protections to the public of the corporate form. A corporation is "less dangerous" because those procedural formalities create greater separation between corporations and their owners, reducing the risk that they will be used to simply limit liability that should rightfully be borne by the proprietor.