When The RULLCA Is Spun, California’s Done?


I’ve prophesized at some length about the looming catastrophe that is the California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq.  My problem is with the RULLCA itself, but with the transition being forced on LLCs formed under the current Beverly-Killea Limited Liability Company Act, Cal. Corp. Code § 17000 et seq.  On January 1, 2014, existing limited liability companies will find that their operating agreements will be out of sync with the new law and that some key rules (such as those governing indemnification) will be materially different.  See, e.g., Bill Would Mandate Indemnification Of LLC Agents, California’s New LLC Act – Call Me Laocoon, But I Foresee A Mess! and The Shades Of Samson Occum, Daniel Webster And John Marshall Haunt New LLC Act Bill.

The California Secretary of State is planning to amend its business names rules to account for the fact that the RULLCA imposes a different standard for LLC names than does the current Beverly-Killea Act and the General Corporation Law.  Here are the Secretary of State’s Notice of Proposed Regulatory Action, Initial Statement of Reasons, and Text of Proposed Regulations.  The comment period ends September 30, 2013. While I can’t fault the Secretary of State for attempting to conform its regulations to the RULLCA, some LLCs with particular attachments to their names may argue that the failure of the legislature to include a “savings clause” in the Beverly-Killea Act precludes the State from rewriting its contract with these LLCs.  In a classic case of shutting the barn-door after the horse has fled, the legislature added a savings clause, Corp. Code § 17657, when it enacted the RULLCA.  Section 19, SB 323 (Vargas), ch. 419, Stats. 2012.

Names and prophecies are a dangerous combination.  Sir Francis Bacon, who lived through all but the beginning of the reign of Queen Elizabeth I, recalled of this prophecy from his childhood:

When hempe is spun
England’s done

In his Essays, Civil and Moral, he explains the meaning as follows:

[I]t was generally conceived, that after the princes had reigned which had the principal letters of that word hempe (which were Henry, Edward, Mary, Philip, and Elizabeth), England should come to utter confusion; which, thanks be to God, is verified only in the change of the name; for that the King’s style [title] is now no more of England, but of Britain.

If you’re puzzled by the reference to the reign of Philip, I’m assuming that this is Philip of Spain who married Queen Mary.  Under the Act for the Marriage of Queen Mary, “Philip shall during the said marriage have and enjoy jointly together with the said most gracious queen his wife, the style, honour and kingly name of the  realms and dominions unto the said most noble queen appertaining . . .”.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins | Attorney Advertising

Written by:


Allen Matkins on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.