Steven E. Springer
CALIFORNIA’S REVISED UNIFORM LIMITED LIABILITY COMPANY ACT (RULLCA)
TIME TO REVIEW YOUR LLC OPERATING AGREEMENT?
As of January 1, 2014, California’s Revised Uniform Limited Liability Company Act (RULLCA): Cal. Corp. Code § 17701.01, et. seq., replaces Beverly-Killea (Cal. Corp. Code §17001, et. seq.. The new LLC law (RULLCA), provides for changes in many important areas of LLC law, a few examples of these changes follows: 1) The operating agreement (under RULLCA) outlines members, dissociated members, transferees, and managers and the articles outline other persons that may be necessary for the record; 2) The new law outlines the fiduciary duties of managers and member-managers, i.e., members do not owe fiduciary duties in manager-managed LLC solely by reason of being a member and the operating agreement may eliminate/limit member or manager’s liability to LLC and members for money damages except for statutorily excluded exceptions; and 3) The articles and the operating agreement must provide language that clearly demonstrates how the LLC is managed, i.e., manager-managed or managed by managers. RULLCA introduces numerous other changes to the law. LLC managers should carefully review this new law and setup a consultation with their business attorney to discuss whether the implementation of RULLCA necessitates a modification to their Articles and/or Operating agreements.