October 13, 2019

October 11, 2019

Subscribe to Latest Legal News and Analysis

October 10, 2019

Subscribe to Latest Legal News and Analysis

The CARULLCA Adds To Confusion About Trusts As Persons

Today's post continues my discussion of the Court of Appeal's holding in Han v. Hallberg, 2019 Cal. App. LEXIS 475 that a trust is a person that may be a partner under the California Uniform Partnership Act.  As I noted yesterday, the Court of Appeal relied heavily on the definition of "person" in the UPA.  

The California Revised Uniform Limited Liability Company Act has a different definition of "person", one that includes both trusts and trustees:

"'Person' means an individual, partnership, limited partnership, trust, a trustee of a trust, including, but not limited to, a trust described under Division 9 (commencing with Section 15000) of the Probate Code, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign. Nothing in this subdivision shall be construed to confer any rights under the California Constitution or the United States Constitution."

The inclusion of both trusts and trustees is baffling.  The CARULLCA defines "member" as "person that has become a member of a limited liability company under Section 17704.01 and has not dissociated under Section 17706.02".  Cal. Corp. Code § 17701.02(p).  If an operating agreement identifies a member as "Jane Doe, as Trustee of the Doe Family Trust", does this mean that the Trustee (Jane Doe) is a member, the Trust (Doe Family Trust) is a member or both the Trustee and the Trust are members?  Clearly, the authors of the CARULLCA did not think this through very carefully.

Thaddeus (Not Theophilus) North

Doug Cornelius at Compliance Building recently wrote about an SEC review of a FINRA disciplinary action against the Chief Compliance Officer of a brokerage firm - Thaddeus North and CCO Liability.  When I first saw Doug's post, I thought he was writing about the last novel written by one of my favorite authors - Theophilus North.  The author, Thornton Wilder, wrote this the novel in the voice of his stillborn twin brother (the protagonist's last name is a rearrangement of the first four letters of the author's name).  It is a semi-autobiographical recounting of a year that Thornton spent in Newport, Rhode Island in the 1920s.  The book is a nostalgic and gentle remembrance of a vanished age. 

© 2010-2019 Allen Matkins Leck Gamble Mallory & Natsis LLP

TRENDING LEGAL ANALYSIS


About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
Partner

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...

949-851-5428