The healthcare industry is a bustling marketplace for new ventures to enter these days. Americans are demanding better quality care at a better price, and recent healthcare reforms have paved the way for disruptive technology and new businesses to make a move into the healthcare industry. There are a number of unaddressed needs and challenges in our healthcare systems that are waiting for the right innovative solution to come along.

Be Mindful of Laws and Regulations That Apply to Your Business

As you work to move your new business into the healthcare industry, keep in mind that it is one of the most highly regulated industries out there, largely because people literally depend on healthcare products and services to save their lives and keep them healthy. Not only do new ventures in healthcare need to build their businesses within the parameters of the Affordable Care Act, but many also need to engage with the Food and Drug Administration (FDA).

While these rules and regulations may seem difficult to navigate and poses potential hurdles to developing your business, they are manageable and your business will get through them. When you need help navigating the law or other regulations that affect your business, you should contact a business lawyer that specializes in those specific matters.

Join a Healthcare-Specific Incubator or Accelerator

There are a number of healthcare-industry specific startup incubators and accelerators that new ventures can apply to and utilize to help get their business off the ground. These incubators help fledgling companies make contacts with potential investors and industry leaders, assist these companies with preparing grant applications, and can offer guidance and support on how to make it big in the healthcare industry. Incubators help to develop small companies into sustainable businesses, and many new ventures use incubators as a stepping stone, and sometimes even a spring-board, to further the success of their business.

Success Doesn’t Happen Overnight

Breaking into the healthcare industry is never quick work. New companies and startups have to demonstrate that they have a useful and practical new product or service that fills a need in the market and also need to build a name and reputation for themselves. There are two main impediments that can delay how quickly a new venture can make it big in healthcare.

First, there is the time and energy requirement that goes into familiarizing others with your products and services, building relationships with industry partners, and creating a network and support structure around your business. Getting noticed isn’t easy work, and while some new entities get a lot of attention when they first enter the healthcare industry, for many new companies and startups it can take several years to establish themselves. Be persistent, resilient, and adapt and grow your business, even if it is slowly – all progress is good progress when trying to make it in the healthcare sector.

Second, regulatory requirements can take a long time to get through as the FDA is not known for its speediness. The good news is, working through the regulatory processes isn’t so much about being difficult as it is about being lengthy. While there is a lot of red tape, your business will get through it if you just stick with it and are patient.

When you need help navigating the law or other regulations that affect your business, you should contact a business lawyer that specializes in those specific matters.

What LLCs Need to Know About the Revised Uniform Limited Liability Company Act

Any manager or owner of a California LLC established after January 1, 2014 needs to be familiar with how the Revised Uniform Limited Liability Company Act (RULLCA) impacts their business.

Unanimous Approval Required When Issue Not Addressed

The RULLCA places certain restrictions on voting approval of certain issues that are not addressed specifically by the operating agreement. For instance, unanimous voting approval is required in order to:

● Merge the LLC with another entity or to convert the LLC to another type of entity.
● Dispose of LLC property, such as selling, leasing or exchanging the property.
● Amend the operating agreement.
● Do anything on behalf of the LLC that is outside of the ordinary course of business.

Because unanimous voting approval is required to do any of the above if it is not specifically provided for in the operating agreement, one member or manager of the LLC could stall out a decision to act on one of these matters by withholding their approval. Addressing these issues explicitly in a written operating agreement can circumvent a lot of potential headaches.

What The RULLCA Means for Agreements

Under the RULLCA, any agreement between the members of the LLC concerning the governance of the LLC is considered binding, which can create a lot of problems within the company if an agreement was made orally or was implied. Under the RULLCA, it is important to memorialize, in writing, any operating agreement concerning:

● Management’s rights and duties.
● The activities and conduct of the LLC.
● Relations between and among members of the LLC.
● How amendments to the operating agreement are to be made.

When matters concerning LLC governance are made in writing, there is less risk that members of the LLC will dispute the agreement, because the terms and conditions of the operating agreement have been documented.

Also, for LLCs that choose to be manager-managed, the RULLCA requires that this should be made explicit in both the operating agreement for the LLC, as well as in the the articles of organization.

Fiduciary Responsibilities under the RULLCA

Members or managers of an LLC owe fiduciary duties to one another and the LLC under the RULLCA; however, these fiduciary duties can be modified if they are modified in a written operating agreement, but they may not be eliminated altogether or modified in such a way that they are rendered manifestly unreasonable. Under Section 17704.09 of the California Corporations Code, those fiduciary duties include:

● The duty of care.
● The duty of loyalty.
● The duty of good faith and fair dealing.

When modifications to the fiduciary duties are made in the written operating agreement, they could be potentially drafted in a way that could open up individual members or managers of the LLC to liability for the LLC’s actions. This is because under the RULLCA, members or managers can lose their indemnification protections if the fiduciary duties of the members or managers are modified. LLC members and managers should make sure that they fully understand any modifications that have been made to the fiduciary duties in the written operating agreement before consenting to them.

Contact our office to speak with a senior Los Angeles business attorney for more information on what RULLCA means for your business entity today.