Operating Agreements

News & Analysis as of

Is The LLC A Party To Its Own Operating Agreement?

Is an LLC a party to its own operating agreement? California’s new Revised Uniform Limited Liability Company Act (RULLCA) defines “operating agreement” as “the agreement, whether or not referred to as an operating...more

The Florida Revised Limited Liability Company Act Action may be required by Florida LLCs by December 31, 2014

In 2013, the Florida Legislature adopted the Revised Florida Limited Liability Act. The Revised LLC Act restates the Florida laws governing LLCs in an entirely new Chapter 605, which succeeds the prior LLC Act found in...more

Oregon Limited Liability Companies: Do I Need An Operating Agreement?

Limited liability companies (“LLCs”) have become a common choice of entity in Oregon in the 20-plus years since adoption of the Oregon Limited Liability Company Act (“Act”). LLCs are formed by filing Articles of...more

Venture Capital Firm Liable For "Aiding And Abetting" Breach Of Fiduciary Duty

A recent case in the California Court of Appeals underscores the dangers that await venture capital firms brave (or foolish) enough to fund companies in the midst of internal disputes. In American Master Lease LLC v Idanta...more

Tenth Circuit Affirms Denial Of Motion To Compel Arbitration Based On Unsigned Agreement

The Tenth Circuit recently affirmed a district court’s denial of a motion to compel arbitration in a securities fraud lawsuit brought by two investors in a company. The basis for the motion to compel was an arbitration...more

Can You Replace Your Manager? Delaware Case Emphasizes the Importance of Carefully Considering LLC Agreement Provisions

Common sense might lead one to expect that a controlling stakeholder has the power to replace the manager of a limited liability company (LLC), but this might not be the case when the underlying LLC agreement provides...more

Homebuilder Series Webinar: Joint Ventures Solutions, Steve Lear [Video]

This is the second in a series of in-depth webinar discussions that cover a range of legal and business issues affecting the homebuilder industry. Homebuilders frequently use joint ventures as a means to finance...more

It Depends On The Meaning Of The Word "With"

The contractual interpretation issue before the Business Court in Schultheis v. Hatteras Capital Investment Management, LLC, 2014 NCBC 23, turned on the meaning of the word "with." Well, actually on the phrase "entering into...more

Implications of the New California LLC Act

On January 1, 2014, a new law governing limited liability companies (“LLCs”) went into effect in California. The California Revised Uniform Limited Liability Company Act (“RULLCA”)1 superseded in its entirety the prior...more

This Volte-Face Might Prove Problematical For LLCs

Under the Beverly-Killea Limited Liability Company Act, the articles of organization prevailed over conflicting provisions of a written operating agreement. Cal. Corp. Code § 17005(f) (repealed). The drafters of the...more

If It’s An LLC, Why Cite Corporate Law?

I continue to be surprised when courts refer to state laws governing corporations when the subject entity is a limited liability company. A recent example of this confusion can be found in Piatelli Co. v. Chambers, 2014 U.S....more

How California’s New LLC Law Will Impact Existing and New California LLCs

On January 1, 2014, California’s Beverly-Killea Limited Liability Company Act (“Old Act”) was superseded by the California Revised Uniform Limited Liability Company Act (“New Act”). California legislators were concerned that...more

California’s Revised Uniform Limited Liability Company Act

A new California law governing limited liability companies became effective as of January 1, 2014. The California Revised Uniform Limited Liability Company Act (RULLCA) makes significant changes in the rights and...more

U.S. Tax Court Ruling in State Conservation Tax Credit Case Requires Income Recognition

In its recently issued opinion in the case of Route 231, LLC v. Commissioner, T.C. Memo 2014-30 (2/24/14), the United States Tax Court (the “Court”) held that a transfer of state tax credits to a 1% member who had contributed...more

Minnesota Revised Uniform Limited Liability Company Act Becomes Law

In This Issue: - Forming a Limited Liability Company - Shelf LLCs - Series LLCs - Governance - Members - Operating Agreement - Standards of Conduct - Distributions - Merger, Conversion...more

Why A Form LLC-1 May Be Only Half Right

Under California’s new Revised Uniform Limited Liability Act, an LLC is formed when the California Secretary of State’s Office files the articles of organization. Cal. Corp. Code § 17702.01(d). Only five items of...more

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...more

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 Limited Liability Company Act. Paul’s paralegal, Natalie, signs the Form LLC-1 as the organizer....more

Ready or Not, the New California LLC Law is Here

The California Revised Uniform Limited Liability Company Act was effective January 1, 2014 and is codified as new Title 2.6 of the California Corporations Code starting at Section 17701. The new law incorporates a more robust...more

North Carolina’s New LLC Statute: Do We Need to Revise Our Operating Agreement?

North Carolina updated its Limited Liability Act effective January 1, 2014. One of the benefits of the limited liability company has been its flexibility. It is a creature of contract, allowing much more flexibility than the...more

California Replaces Its Limited Liability Company Act

On January 1, 2014, the California Revised Uniform Limited Liability Company Act (the New Act) replaced California’s Beverly-Killea Limited Liability Company Act (Beverly-Killea), which was adopted in 1994. The New Act is...more

Did You Know? Drafting Considerations for Delaware Limited Liability Company Operating Agreements

When choosing an entity, limited liability companies (LLCs) are an attractive option because they insulate their members from personal liability, allow governance flexibility and provide a single layer of income tax. For...more

New Measures Under California’s Uniform Limited Liability Company Act May Complicate Contracts For Real Estate Companies

On January 1, 2014, The California Revised Uniform Limited Liability Company Act (popularly known as RULLCA; Cal. Corp. Code §§17701.01-17713.13) went into effect. RULLCA, a modified version of the Revised Uniform Limited...more

Florida Adopts New Limited Liability Company Act

The Florida Legislature has adopted the Florida Revised Limited Liability Company Act (“New LLC Act”) which substantially revises Florida’s prior LLC Act. These revisions to the law have a broad impact on Limited Liability...more

California’s New LLC Law: Next Steps for California LLCs

On January 1, 2014, California’s Beverly-Killea Limited Liability Company Act (Old Act) was superseded by the California Revised Uniform Limited Liability Company Act (New Act). The New Act includes a number of substantive...more

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