Business and Economy
Tue January 1, 2013
New "User Friendly" L.L.C. Act Goes Into Effect New Years Day
About 120,000 Granite Staters -- almost 10 percent of the state’s population -- are members of an LLC, or Limited Liability Corporation. But too many LLCs fail because of internal disputes, says John Cunningham, a Concord lawyer and expert on LLCs. On January 1, a revised LLC act that was signed by Governor Lynch in June will go into effect. Cunningham -- who was the principle author of the original LLC law and chaired the committee that wrote the new act -- says the new law sets out to reduce disputes between LLC members by clarifying their responsibilities. He gives this example:
Lets say that two plumbers get together and they form an LLC to conduct a business of plumbing, but one of them has an opportunity to do some moonlighting, and he does it, and the other member says what’s going on here, we got a partnership here, and you’re moonlighting?!
The former act, Cunningham says, provided little clarity for members, or legal advisors, as to who was in the right. But, Cunningham says, "under the NEW act, it’s crystal clear."
According to Cunningham, the new law is easy to understand, has explicit rules about loyalty and competition, and is "as flexible as any among the United States."
The new laws go into effect for newly formed LLCs with the New Year, and are optional for existing LLCs until January of 2014.