Professor Larry Ribstein, the country’s leading expert on LLC law, writes here and here about the "market" and competition among the states for attracting LLCs. He comments on a recent article and also links to his own extensive scholarship on the issues. An excerpt follows:
So why are LLCs drawn to Delaware’s courts if, as Manesh concludes, there’s relatively little those courts need to do for LLCs? The answer is that courts do have a lot to do for LLCs – that is, enforce their contracts. The contractual nature of LLCs increases the value of Delaware courts’ contract-enforcement technology. It is easy for a state to say in its statute that its courts will enforce contracts, but much more difficult to actually follow through on that promise, and to come up with intelligible and coherent contract-enforcement jurisprudence.