The North Carolina 2014 LLC Act: Changes could affect current NC LLC owners

The North Carolina Limited Liability Company Act underwent some substantial changes in 2014.

Additionally, the New LLC Act that took effect on January 1, 2014 applies to the North Carolina LLC’s formed before, on, or after January 1, 2014.

This article is the first in a series meant to provide information for NC LLC owners on some of the differences between the old LLC Act and the new LLC Act.

For example, in contrast to the old LLC Act, the new LLC Act could allow for an oral or implied agreement to amend the written Operating Agreement if the written Operating Agreement is silent on this issue.
Suppose an LLC formed in 1999 has a written Operating Agreement which does not contain language requiring amendments be in writing. Even though the requirement does not exist in the Operating Agreement, to be enforceable, modifications or amendments to the Operating Agreement would have to be in writing under the old LLC Act.

An example of an unenforceable oral amendment for this 1999 LLC might be:

In 2000, the members and company officials orally agree to change the profit sharing delineated in the 1999 Operating Agreement. For the next period of time, profit sharing is paid in accordance with the oral agreement.

However, without new agreement, oral or otherwise, the company official reverted to the original profit sharing plan as provided for in the Operating Agreement.

Outcome: The member is barred from asserting the oral agreement in 2000 altered the 1999 written Operating Agreement profit sharing provision under the old LLC Act.

The new LLC Act has changed the default rule that required all Operating Agreement amendments be in written form. So, if the above oral amendment to the 1999 LLC Operating Agreement was made in 2015 it could be enforceable, assuming the 1999 Operating Agreement is silent on oral amendments.

The above is only one example of the differences between the old LLC Act and new LLC Act. If you have questions about the parameters of your North Carolina LLC’s operating agreement in light of the new LLC Act, the business attorneys at Coward, Hicks & Siler are here to help provide answers. Let our experience be your business’s trusted guide. Our corporate and business transaction attorneys are available in all of our Western NC office locations.

Coward, Hicks & Siler, PA, is a general practice law firm, whose lawyers are authorized and licensed to provide legal services in the State of North Carolina. We serve clients throughout western state, in Franklin, Sylva, Murphy, Cherokee, Bryson City, Waynesville, Highlands, Cashiers, Cullowee, Robinsonville, Brevard, Asheville and surrounding townships.

The main content of this site is updated as necessary to ensure accuracy. Blog posts are accurate as of the date of publication and are updated with new posts in the event of changes in the law. All material found on this website is primarily intended for the purpose of marketing, and to allow visitors to compare the services offered by Coward, Hicks & Siler with those offered by similar law firms.

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Sylva, NC 28779
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Cashiers, NC 28717
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    Sylva

    705 W. Main Street
    Sylva, NC 28779
    Phone: 828-586-2147
    Facsimile: 828-586-2605

    Cashiers

    211 Cashiers School Road
    P.O. Box 1918
    Cashiers, NC 28717
    Phone: 828-743-2401
    Facsimile: 828-743-2403

    Franklin

    43 West Main Street
    Franklin, NC 28734
    Phone: ]828-524-6475
    Facsimile: 828-524-9833