General Provisions of California’s LLC Act

Title 2.6, Article 1 of the Corporation Code provides general provisions of the California Revised Uniform LLC Act. Section 17701.01 named this the California Revised Uniform Limited Liability Company Act.

Section 17701.02 defines the terms “acknowledged,” “articles of organization,” “contribution,” “debtor in bankruptcy,” “designated office,” “distribution” “domestic,” “effective,” “electronic transmission by the limited liability company,” “foreign limited liability company,” “limited liability company,” “majority of the managers,” “majority of the members,” “manager,” “manager-managed limited liability company,” “member,” “member-managed limited liability company,” “membership interest,” “operating agreement,” “organization,” “organizer,” “person,” “principal office,” “record,” “state,” “transfer,” “transferable interest,” “transferee,” and “vote.”

Section 17701.04 specifies that a limited liability company is an entity distinct from its members. A limited liability company may have any lawful purpose, regardless of whether for profit, except the banking business, the business of issuing policies of insurance and assuming insurance risks, or the trust company business.

A domestic or foreign limited liability company may render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code, the Chiropractic Act, the Osteopathic Act, or the Yacht and Ship Brokers Act, if the applicable provisions of the Business and Professions Code, the Chiropractic Act, the Osteopathic Act, or the Yacht and Ship Brokers Act authorize a limited liability company or foreign limited liability company to hold that license, certificate, or registration. A limited liability company has perpetual duration.

Section 17701.05 states that a limited liability company organized under this title has all of the powers of a natural person in carrying out its business activities, including the power to engage in twenty specified actions.

Section 17701.06 provides that the law of this state governs all of the three specified items about an LLC.

Section 17701.07 says it is the policy of this title and this state to give maximum effect to the principles of freedom of contract and to the enforceability of operating agreements. Unless displaced by particular provisions of this title, the principles of law and equity supplement this title.

Section 17701.08 requires the name of a limited liability company to contain the words “limited liability company,” or the abbreviation “L.L.C.” or “LLC.” “Limited” may be abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.” The name of a limited liability company cannot be a name that the Secretary of State determines is likely to mislead the public and be distinguishable in the records of the Secretary of State from three specified names.

The name cannot include the words “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” or “corp.” and cannot include the words “insurer” or “insurance company” or any other words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks.

Section 17701.09 provides that, upon payment of the fee prescribed, a person may apply to reserve the exclusive use of the name of a limited liability company or foreign limited liability company. If the Secretary of State finds that the name applied for is available, it reserves the name for the applicant’s exclusive use for up to 60 days and issue a certificate of reservation.

The owner of a name reserved for a limited liability company or foreign limited liability company may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer which states the reserved name and the name and address of the transferee.

Section 17701.10 requires the operating agreement to govern all fifteen specified items.

Section 17701.11 explains that a limited liability company is bound by and may enforce the operating agreement. A person that becomes a member of a limited liability company is deemed to assent to the operating agreement.

Section 17701.12 allows an operating agreement to specify that its amendment requires the approval of a person that is not a party to the operating agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition. The obligations of a limited liability company and its members to a person in the person’s capacity as a transferee or dissociated member are governed by the operating agreement.

Section 17701.13 requires a limited liability company to designate and continuously maintain in this state both of the specified items. A foreign limited liability company that has a certificate of registration must designate and continuously maintain in this state an agent for service of process.

Each limited liability company is required to maintain in writing or in any other form capable of being converted into clearly legible tangible form at the office referred to all seven of the specified items of information.

Section 17701.14 allows a limited liability company or foreign limited liability company to change its designated office, its principal office, its agent for service of process, the address of its agent for service of process, its mailing address, or, in the case of a foreign limited liability company, its principal office in California by delivering to the Secretary of State for filing a statement of information.

Section 17701.15 provides that, to resign as an agent for service of process of a limited liability company or foreign limited liability company, the agent is required to deliver to the Secretary of State for filing a signed and acknowledged statement of resignation as an agent for service of process containing the name of the limited liability company or foreign limited liability company and other specified information.

The resignation of an agent may be effective if, on a form prescribed by the Secretary of State containing the name of the limited liability company and Secretary of State’s file number for the limited liability company and the name of the agent for service of process, the agent disclaims having been properly appointed as the agent.

Section 17701.16 authorizes process to be served upon limited liability companies and foreign limited liability companies as provided in this section. Personal service of a copy of any process against the limited liability company or the foreign limited liability company by delivery in either of two specified methods.

Section 17701.17 provides that a member may, in a written operating agreement or other writing, consent to be subject to the nonexclusive jurisdiction of the courts of a specified jurisdiction and the courts of this state, or the exclusive jurisdiction of the courts of this state.

Along with this consent to the jurisdiction of courts or arbitration, a member may consent to be served with legal process in the manner prescribed in the operating agreement or other writing.