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CALIFORNIA CORPORATE & SECURITIES LAW

CARULLCA Amendment Purporting To Eliminate Surprise May Do The Opposite

Readers will know that I’m no fan of California’s Revised Uniform Limited Liability Company Act (aka CARULLCA).  As originally enacted, the law was rife with technical errors.  As the legislature continues to tinker with the CARULLCA, it creates even more problems for existing California LLCs.  The legislature’s recent enactment of AB 1722 (Wagner) is yet another dispiriting legislative “fix” that is likely to increase, rather than…

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Is a Trustee Ever Just A Trustee?

Trusts are confusing.  Fundamentally, a trust describes a relationship, not a person.  Thus, the California Supreme Court has described a trust as “a fiduciary relationship with respect to property in which the person holding legal title to the property — the trustee — has an equitable obligation to manage the property for the benefit of another — the…

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Bill Would Clarify When Limited Partnership Life Begins

When does life begin for a California limited partnership?  The California Uniform Limited Partnership Act of 2008 seems to provide inconsistent answers.  The first is found in Corporations Code Section 15902.01(a). In order for a limited partnership to be formed, a certificate of limited partnership must be filed with and on a form prescribed by the Secretary…

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Before This LLC Was Formed, These Members Knew It

The new California Revised Uniform Limited Liability Company Act contains some weird inversions of time and logical order.  For example, it allows for the formation of an operating agreement even before an LLC is formed.  In defining “operating agreement”, the CRULLCA provides that the term “may include, without more, an agreement of all members to…

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Legislature Shuts The Barn Door After The Horse Has Bolted And Then Burns Down The Barn

Not many people use horses as a means of transportation in the U.S. anymore, but numerous horse related expressions and aphorisms persist in everyday speech, including: Don’t look a gift horse in the mouth; You can lead a horse to water but you can’t make it drink; A wink is as good as a nod…

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Secretary Of State Changes Forms And Procedures For LLC Filings

Novelty does not mean better.  With the change from 2013 to 2014, California repealed, albeit unconstitutionally, the Beverly-Killea Limited Liability Company Act (former California Corporations Code sections 17000 – 17657), and installed in its place the California Revised Uniform Limited Liability Company Act” (California Corporations Code sections 17701.01 – 17713.13).  See California’s New LLC Act – Call…

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California’s Revised Uniform LLC Act – Countdown To Disaster?

Previously, I’ve written about the constitutional problem arising from the legislature’s attempt to bring all existing LLCs under the newly enacted Revised Uniform Limited Liability Company Act (aka RULLCA).  See California’s New LLC Act – Call Me Laocoon, But I Foresee A Mess!  In today’s post, I discuss just a few other reasons why practitioners would…

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California’s New LLC Act – Call Me Laocoon, But I Foresee A Mess!

On Friday, Governor Brown signed SB 323 (Vargas) into law. It was chaptered by the Secretary of State the same day.  Section 20 of the bill adds the California Revised Uniform Limited Liability Company Act (RULLCA) to the Corporations Code as a new Title 2.6.  The RULLCA will become operative on January 1, 2014 (See new…

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The Shades Of Samson Occum, Daniel Webster And John Marshall Haunt New LLC Act Bill

Nearly two decades ago, I co-wrote an article describing a new form of business entity – the limited liability company – and pondering whether California would ever enact laws authorizing the organization of LLCs.  Bishop & Rizzi, “Are Limited Liability Companies Coming to California?”  13 CEB California Business Law Reporter 135 (Dec. 1991).  A few…

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