CALIFORNIA’S REVISED UNIFORM LIMITED LIABILITY COMPANY ACT (RULLCA)
Jan. 7, 2014
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.