Legislators are proposing significant changes to California’s statute that governs limited liability corporations, potentially impacting many who currently incorporate an LLC into their estate plan or are considering doing so in the future. The new act will take effect in January 2014. Current business owners are advised to look carefully at the terms of their operating agreements, the new act, and their estate plan in order to take advantage of these changes.
Under the new act, LLCs will be given far more flexibility in how they are run. Instead of being forced to follow formulaic arrangements prescribed by the law, members will instead be able to decide for themselves how the business is run and operated. This may especially benefit small business owners who are looking for protection and flexibility.
While the requirements for running the business may not be decided as a matter of law, members will still need a written contract in place that addresses these matters. Existing LLC owners should have their contracts reviewed to assess the voting requirements, decide whether to allow for members who do not have an equity interest, and other matters. The new act will take effect immediately and will apply to both current and new LLCs.
If you have an interest in an LLC or are considering forming one in the future, it is vital that you contact a California estate planning attorney with an understanding of the new act. To learn more about how changes to the LLC act can impact your estate plan, contact the experienced Anaheim estate attorneys at the Law Office of James F. Roberts & Associates, APC. Call our office today at (714) 459-5481.