Interesting post by Larry Ribstein (Illinois) at Ideoblog:  The Tax Lawyers Mess Up LLCs:

One would think that an important advantage LLCs would have over corporations, since they’re based on the partnership form, would be a statutory default rule that provides for partnership-type exit at will. Then the courts wouldn’t have to provide exit through the cumbersome corporate "oppression" rules that are vague and unpredictable and sometimes trump the parties’ express agreements….

This simple logic doesn’t reckon with tax lawyers or the Internal Revenue Code. The latter provides (I won’t bore you with the details) that an interest in a business (usually this applies to family owned businesses) can be transferred at a discounted value for estate tax purposes only if the business association statute under which the business was organized restricts transfer. In other words, it’s not enough under the IRC that the business does so by agreement.

Once this tax rule became clear, the tax lawyers promoted changes in both limited partnership and LLC statutes that provided the default rules the tax lawyers needed for the discount. Then all firms, including very closely held firms, that neglected to contract around the statute were left with locked-in interests, and at the mercy of the courts, just like corporations.