As of this month, most of New Hampshire’s small businesses—and a fair number of larger ones—will be operating under the state’s new Revised LLC Act.
One of the biggest changes involves unwritten agreements. The new law recognizes verbal and implied agreements at Limited Liability Corporations. Attorney John Cunningham helped draft the new law. He says under the old law, if a partnership went sour or an LLC dissolved, people with unwritten agreements were forced to accept the default agreement the state kept on the books.
“But there can be big problems of evidence about well…what was our oral or implied deal?" Cunningham says. "And the legislature was very aware of that, but they felt that if most small New Hampshire businesses don’t have written agreements, we really owe it to them to respect oral and implied agreements, even though we know there could be disputes about what that agreement really is.”
The first phase of the Revised LLC Act went into effect last year, and only covered businesses started in 2013. Beginning the first of this year, the law now covers all older LLCs as well.
Cunningham says the “vast majority” of small businesses won’t have to do anything. But larger operations should go over the new law with a lawyer.