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RULLCA Brings New LLC Laws to California in 2014

Logo of the California Secretary of State, symbolizing RULLCA (the California Revised Uniform Limited Company Act)RULLCA is an abbreviation for the California Revised Uniform Limited Liability Company Act. That Act will bring new LLC laws to the state starting January 1, 2014.

RULLCA – Up to Date and in the Mainstream

RULLCA is intended to reflect changes in LLC law during the past 20 years. Also, it will make California’s LLC law more similar to LLC law in other states.

Perhaps most interesting, the new law applies automatically to all California LLCs in existence as of the effective date. It will apply to all out-of-state LLCs that are registered in California, as of that date, as well. No new documents need be filed with the Secretary of State. The new law has neither opt-in nor opt-out procedures.

RULLCA – Constitutional Challenge Coming?

Some commentators have suggested that automatic implementation of new statutory provisions could create unexpected conflicts with existing Operating Agreements. Furthermore, some go so far as to argue that RULLCA violates the prohibition against ex post facto laws set forth in clause 1 of Article 1, Section 10 of the US Constitution.

I expect that RULLCA should not present much trouble for my clients with limited liability companies. The reason: The Operating Agreements that I prepared are pretty detailed, and the intent of references to existing statutes will be pretty clear.

If you want to learn more, Continuing Education of the Bar has prepared a concise summary of RULLCA’s history and major provisions.

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Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

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