Business as usual--for now: 2012 LLC act delayed until at least 2013.

• Author: Winger, R. Gary
• Position: Legal Brief

In the December issue of Utah Business, we wrote an article outlining several key changes in Utah limited liability company law due to the Utah Legislature's passing of the Utah Revised Uniform Limited Liability Company Act. Instead of going into effect this July, the new law will not go into effect until July 1, 2013 for new LLCs and January 1, 2015 for existing LLCs. For now, this means business as usual under the current law.

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The new LLC law was one of three separate, uniform acts that were adopted in 2011, the other two being the Utah Uniform Partnership Act and the Utah Uniform Limited Partnership Act. While the new LLC law had been carefully reviewed and edited by local attorneys at the time of its passage, the partnership and limited partnership laws had not. In order to allow the Utah Legislature more time to seek input from local attorneys and draft partnership laws consistent with the new LLC law, the effective date of the new LLC law and the new partnership and limited partnership laws were moved forward one year.

The new LLC law will likely be amended again before it goes into effect. The national group responsible for drafting model legislation recently adopted new LLC, partnership and limited partnership model laws to be consistent or in harmony with each other. These three types of business entities are similar enough in legal structure to merit a more consistent set of laws.

The Utah Legislature is expected to use these new model laws as templates for Utah's LLC, partnership and limited partnership laws. Thus, the new LLC law will almost certainly be revised before it takes effect next year. The changes to harmonize the law to the new partnership and limited partnership laws, however, are reportedly few and not substantive.

Postponed Changes

In our December article, we highlighted three key changes and noteworthy provisions of the new LLC law. Specifically, we noted the new law limits the amount of publicly available information that must be filed with the Utah Division of Corporations when forming an LLC, allows for more flexibility in altering or defining fiduciary duties, and provides that an operating agreement, the key governance document for LLCs, can be oral, memorialized in one or more writings or...