The California Revised Uniform Limited Liability Company Act (RULLCA), which took effect on January 1 of last year, is fraught with drafting mysteries.  Why, for example, did the legislature deem it necessary to change the default rules with respect to whether a California LLC is member-managed or manager-managed? Why also did the legislature impose an impossible pleading standard for derivative lawsuits?  

Another mystery is Corporations Code Section 17708.9 which provides:

The Attorney General may maintain an action to enjoin a foreign limited liability company from transacting intrastate business in this state in violation of this title.

This seems fairly straightforward until one asks how a foreign LLC might transact intrastate business in California in violation of the RULLCA.  Corporations Code Section 2105(a) provides that a foreign corporation “shall not transact intrastate business without having first obtained from the Secretary of State a certificate of qualification.” Oddly, however, there is no similar prohibition in the RULLCA.  That is not to say that there are no consequences to failure to register as a foreign LLC.  Section 17708.07(a) provides that a foreign LLC transacting intrastate business in California shall not maintain an action or proceeding in California unless it has a certificate of registration.