In New Law

Senate Bill (SB) 323 – the California Revised Uniform Limited Liability Company Act (“RULLCA”)

SB 323, the California Revised Uniform Limited Liability Company Act (“RULLCA”), was signed into law and will take effect on January 1, 2014. The RULLCA will apply to all existing California limited liability companies (LLCs), as well as all foreign LLCs previously registered with the California Secretary of State, as of that date. It displaces entirely the current California law governing LLCs (known as the Beverly-Killea Limited Liability Company Act) and will be codified at California Corporations Code §§17701.01–17713.13. The new law does not require existing LLCs to file any new documents with the California Secretary of State or any other governmental agency on the occasion of its enactment. The new law will apply automatically to existing LLCs on its effective date—there is no “opt in” or “opt out” procedure. The RULLCA is a modified version of the Revised Uniform Limited Liability Company Act first promulgated by the National Conference of Commissioners on Uniform State Laws in 2006. It clarifies many issues that existed under present law and includes a more robust set of default rules on many topics which apply if the LLC operating agreement is silent. The RULLCA was intended to bring California LLC law more in line with the LLC laws of other states, making it easier for multi-state businesses to operate, both inside and outside California.

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