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CALIFORNIA CORPORATE & SECURITIES LAW

The Limited Liability Company Agreement That Has No Name

Practitioners under California’s Revised Uniform Limited Liability Company Act will be familiar with the concept of an “operating agreement” (Cal. Corp. Code § 17701.02(s)).  Indeed, I expect that nearly every LLC formed under the CARULLCA has, or will have, some form of operating agreement.  Practitioners, however, may be unaware that the CARULLCA also contemplates the existence of…

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New Law Attempts To Clarify Legal Status Of LLC Employee Membership Purchase And Option Plans

California Labor Code Section 407 may be a bit of a surprise to many lawyers both in and outside of the state.  It provides: Investments and the sale of stock or an interest in a business in connection with the securing of a position are illegal as against the public policy of the State and…

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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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Another Reason Not To Like California’s New LLC Act

Suppose Bob asks his lawyer, Paul, to form an LLC under California’s new Revised Uniform Limited Liability Company Act.  Paul’s paralegal, Natalie, signs the Form LLC-1 as the organizer. Natalie then quits work and claims that the LLC was to have a single member – herself.  Bob agrees that the LLC was to have one…

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