This Legislative Lacuna Looms Large In RULLCA


I expect that most limited liability company operating agreements specify how profits and losses are to be allocated among members.  Sometimes, they may not.  The now repealed Beverly-Killea Act provided a default provision for just this contingency, former Corp. Code § 17202.  A similar default rule can be found in the California Revised Uniform Limited Partnership Act of 2008, Cal. Corp. Code § 15905.035.

However, when the legislature enacted the new California Revised Uniform Limited Liability Company Act (RULLCA), it failed to include a default rule.  The legislature then compounded the problem by repealing the Beverly-Killea Act and thereby stripping existing LLCs of a default rule.

 Finders Bill Sails Forward But Still Faces Scrutiny In Senate Appropriations Committee

On a more positive note, AB 713 (Wagner) is continuing its progress through the legislature. Readers may recall that this bill would exclude from the definition of a “broker-dealer” an individual who is a finder, as defined, who satisfied specified requirements, including, among other things, filing an initial statement of information with the Department of Business Oversight and paying a filing fee.  The bill, which is set to be heard next Monday by the Senate Appropriations Committee, was amended late last month to clean up and clarify the conditions of the proposed exemption.



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