Operating Agreements Limited Liability Company

News & Analysis as of

Expansion of Fiduciary Duties Will Impact Florida LLCs – Is it Time to Update Your Operating Agreement?

Amendments to the Florida Revised Limited Liability Company Act go into effect on July 1, 2015. It governs all limited liability companies in the state of Florida. Effective July 1, 2015, the Act was amended, in part, to...more

Business Court Refuses To Unwind Mediated Settlement Agreement

The Defendants in last week's decision in DeCristoforo v. Givens, 2015 NCBC 53 were hellbent on getting out from under a settlement they had agreed to at mediation. They offered a host of challenges to the validity of their...more

The Dangers of Operating An LLC Without an Operating Agreement

What could possibly go wrong if you and your fellow limited liability company owners decide to operate your LLC without an operating agreement? Lots of things, many of which could cause you significant financial pain and...more

Hampton v. Turner, C.A. No. 8963-VCN (Del. Ch. Apr. 29, 2015) (Noble, V.C.)

In a letter opinion analyzing how provisions of a limited liability company operating agreement fit together, the Court of Chancery denied defendants’ motion for summary judgment as to plaintiffs’ claim for judicial...more

Massachusetts Federal Court Holds That LLC Operating Agreement Does Not Shield Defendants from Liability for Breaching Their...

A recent decision by Judge F. Dennis Saylor of the U.S. District Court for the District of Massachusetts, Butler v. Moore, C.A. No. 10-10207-FDS U.S. Dist. LEXIS 39416 (D. Mass. Mar. 26, 2015), offers an example of how...more

How Do I Get Out of this Practice?

For years the goal of many young doctors was to gain ownership in their medical practice entity. For many, when the time came for them to “make partner,” they signed on the dotted line without fully understanding the legal...more

Eighty Five Thousand Reasons Not To Represent An LLC Without The Approval Of A Majority Of The Members (and one Other Thing)

Be sure that an LLC member has the authority to hire you before accepting the representation of the LLC in a suit by or against another LLC member. That authorization generally requires a majority of the interest of the...more

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

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

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

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

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

Grace v. Ashbridge LLC, C. A. No. 8348-VCN (Del. Ch. Dec. 31, 2013) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery dismissed an action seeking indemnification and advancement, finding that the plaintiff was not entitled to indemnification under the operating agreement of a Delaware limited...more

New California LLC Law Requires Members To Reconsider Their Operating Agreement

On January 1, 2014, California limited liability company (LLC) law changes in several respects. Unlike other new laws regulating business entities, the new LLC law does not give existing LLCs a choice as to whether to be...more

Huatuco v. Satellite Healthcare, C.A. No. 8465-VCG (Del. Ch. Dec. 9, 2013) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery granted the defendant’s motion to dismiss the plaintiff’s complaint, pursuant to which the plaintiff sought judicial dissolution of a limited liability company. The Court of...more

LLC Operating Agreements May Need Amending Under California’s New LLC Law

The California Revised Uniform Limited Liability Company Act (the “New LLC Law”) was signed into law by Governor Jerry Brown on September 21, 2012. The New LLC Law will entirely replace the current California law governing...more

New California LLC Law May Significantly Impact Existing Operating Agreements

A new California law governing limited liability companies takes effect Jan. 1, 2014. This new law may adversely affect existing California limited liability companies by effectively rewriting the terms of their operating...more

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