News & Analysis as of

California Limited Liability Company (LLC) Corporate Governance

Allen Matkins

What About Acts By Members That Are Not Apparently For Carrying On In The Ordinary Course Of An LLC's Business?

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California's version of the Revised Uniform Limited Liability Company Act provides that in the case of a member managed limited liability company provides...more

Allen Matkins

The One Where Everyone Got The Statute Wrong

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In yesterday's post, I discussed the Court of Appeal's unpublished opinion in Milks v. Affirmed Techs., LLC,  2024 WL 1502944 (Cal. Ct. App. Apr. 5, 2024), reh'g denied (Apr. 30, 2024).  That case involved claims against a...more

Allen Matkins

A California LLC Endures Forever, A Nevada LLC Not So Long

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California's Revised Uniform Limited Liability Company Act endows limited liability companies with a certain level immortality.  Corporations Code Section 17707.06(a) provides...more

Allen Matkins

California May Soon Define "Corporation" To Include That Are Not Corporations

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The California Corporations Code is a misnomer.  While the Corporations Code does in fact govern corporations, it also governs a wide variety of unincorporated entities, including general partnerships, limited partnerships,...more

Allen Matkins

Foreign Corporations Filing Actions In California May Be Required To Post Bonds When Domestic Corporations Are Not

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Under Section 1030 of the California Code of Civil Procedure, a defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and...more

Allen Matkins

California Court Opines On Fiduciary Duties Of LLC Members And Covenants Not To Compete

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Yesterday, the Fourth District Court of Appeal issued a noteworthy opinion addressing at least two significant questions.  Samuelian v. Life Generations Healthcare, LLC, 2024 WL 3878448....more

Allen Matkins

Court Holds Internal Affairs Doctrine Typically Covers Breach Of Fiduciary Claims Despite No Averment Of Fiduciary Duty

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California's Revised Uniform Limited Liability Company Act provides "The law of the state . . . under which a foreign limited liability company is formed governs all of the following: The organization of the limited liability...more

Allen Matkins

When A California Corporation Converts To A California Limited Liability Company, What Happens To Its Nevada Business License?

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NRS 107.028(1)(d) requires that a trustee under a deed of trust be a "domestic or foreign entity which holds a current state business license issued by the Secretary of State pursuant to chapter 76 of NRS".   In Mahban v....more

Allen Matkins

In Nevada, LLC Membership May Survive The Grave

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The California Revised Uniform Limited Liability Company Act (RULLCA) provides that when a member who is an individual dies, the member dissociates from the limited liability company.  Cal. Corp. Code § 17706.02(f). ...more

Allen Matkins

Not Every California Corporation Is Governed By The California General Corporation Law

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The California General Corporation Law is part of the California Corporations Code, but not every corporation incorporated in California is formed or governed by the General Corporation Law.   In fact, the Corporations Code...more

Allen Matkins

What Egregious Error Have Courts Made Nearly 9,000 Times (And Counting)?

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In a recently published article, Professors Samantha J. Prince & Joshua P. Fershée focus on the propensity to conflate corporations with limited liability companies...more

Allen Matkins

California's LLC Certificate of Cancellation - One Form That May Not Fit All

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The California Revised Uniform Limited Liability Company Act deals separately with the dissolution and cancellation of a California limited liability company and the cancellation of registration of a foreign limited liability...more

Allen Matkins

Does LLC Cancellation Constitute An Affirmative Defense?

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Section 17707.08(c) of the California Corporations Code provides...more

Allen Matkins

What Happens When An LLC Member Dies?

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To every member of a limited liability company who is a natural person, death will come "soon or late".   The California Revised Uniform Limited Liability Company Act provides that an individual dissociates as a member when...more

Allen Matkins

May A Cancelled Limited Liability Company Convey Property?

Allen Matkins on

When a California limited liability company files a certificate of cancellation its powers, rights, and privileges cease.  Cal. Corp. Code § 17707.08(b)(2)(C).  This seemingly would preclude any further activity by the LLC,...more

Allen Matkins

Does A General Partnership Terminate And Then Dissolve Or Dissolve And Then Terminate?

Allen Matkins on

In a recent unpublished opinion*, the Court of Appeal considered the question of partnership termination under the California Revised Uniform Partnership Act. Wickline v. Schweder, 2023 WL 6155353 (Cal. Ct. App. Sept. 21,...more

Allen Matkins

When The Band Breaks Up

Allen Matkins on

Last May, Andy Greene wrote an article for RollingStone magazine about the "the biggest, messiest band breakups in music history".  In the introducing his list of the 50 worst breakups, Mr. Greene observed...more

Allen Matkins

California Says Corporations And LLCs Can't Be Directors; The Securities Exchange Act Apparently Believes Otherwise

Allen Matkins on

Nine years ago, I posed the question of whether the California General Corporation Law permits corporations to serve as directors.  My answer at the time was "no" because Section 164 of the Corporations Code defines...more

Allen Matkins

Common Law And The California Revised Uniform Limited Liability Company Act

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Section 17701.7 of the California Corporations Code sets up two arguably contradictory rules.  Subdivision (b) provides that unless displaced by "particular provisions" of the California Revised Uniform Limited Liability...more

Allen Matkins

When A 20% Interest May Be a 40% Interest

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The possible application of California's Corporate Securities Law of 1968 may not be the first thing that comes to mind when amending charter documents.  However, Section 25120 of the California Corporations Code makes it...more

Allen Matkins

The Too Too Unpardonable Fault Of Conflating LLCs And Corporations

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Law Professors Samantha Prince and Joshua Fershee have recently completed an article on the importance of not conflating limited liability companies with corporations.  In An LLC By Any Other Name Is Still Not A...more

Allen Matkins

A Little Big Change For Articles Of Organization Of California LLCs

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In 2022, the California legislature amended several provisions of the California Revised Uniform Limited Liability Company Act, including Section 17702.01 which lists what must be included in the articles of organization of a...more

Allen Matkins

Court Finds Plaintiff Failed To Plead Impropriety Of LLC Distributions

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The California Revised Uniform Limited Liability Company Act defines a "distribution" as a transfer of money or other property from a "limited liability company" (Cal. Corp. Code § 17701.02(k)) to another "person" (Cal. Corp....more

Allen Matkins

How Many Offices Must A California LLC Have?

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The California Revised Uniform Limited Liability Company Act contemplates requires that a California LLC have at least two types of offices - a principal office and a designated office....more

Allen Matkins

Does The California Legislature Really Believe In the Existence Of Limited Liability Corporations?

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The California Corporations Code includes provides for the formation of corporations as well as limited liability companies.  However, it does not provide for the formation of limited liability corporations.  Oddly, however,...more

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