BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1532|
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THIRD READING
Bill No: SB 1532
Author: Pavley (D)
Amended: 4/24/12
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 4/17/12
AYES: Evans, Harman, Blakeslee, Corbett, Leno
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Business filings
SOURCE : Secretary of State
DIGEST : This bill makes legislative findings, including
that the current business filing system with the Secretary
of State (SOS) is manual, very-time consuming, and
paper-intensive for both the SOS and businesses, and that
existing law needs to be updated and standardized to more
efficiently facilitate the development of California
Business Connect (a 24-hour, online business filing
program). This bill specifies that the required address
information in business filings is the street address and
also requires the business entity to provide a mailing
address if not the same as the street address. This bill
also revises requirements with respect to the maintenance
of forms filed with the SOS, and revises provisions
relating to the assignment of filing dates and fees by the
SOS. This bill also repeals specified provisions relating
to special purpose corporations, specifically, bridge,
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ferry, wharf, chute, and pier corporations, as well as
water and canal corporations, and makes other technical
changes.
ANALYSIS : Existing law, in relevant part, requires that
the SOS, upon receipt of specified lien notice filings or
specified certificates, cause those filings or certificates
to be marked, held, and indexed upon receipt, as specified.
(Code of Civil Procedure Sections 2103(a)-(b))
This bill requires instead that the SOS shall cause the
notice filing or certificate to be filed, indexed, and
marked, as specified. (Emphasis added.)
Existing law, in relevant part, requires that the SOS file
specified instruments on the date it is received, unless
the submitting party requests a later date or, in the
judgment of the SOS, the filing is intended to coordinate
with the filing of another instrument that cannot be filed.
(Corporations Code (CORP) Sections 110(a), 5008(a), and
12214(a))
This bill provides instead that the SOS must file the
instrument on the date it is received, unless the
instrument provides that it is to be withheld from filing
until a future date or, in the judgment of the SOS, the
filing is intended to coordinate with the filing of another
document that cannot be filed.
Existing law, in relevant part, requires that the SOS file
specified instruments on the date it is received, unless
the instrument is withheld from filing for a period of time
not to exceed 90 days pursuant to a request from the
submitting party or, in the judgment of the SOS, the filing
is intended to coordinate with the filing of another
instrument that cannot be filed. (CORP Section 17062(d))
This bill provides instead that the SOS must file the
instrument on the date it is received, unless the
instrument provides that it is to be withheld from filing
until a future date not to exceed 90 days or, in the
judgment of the SOS, the filing is intended to coordinate
with the filing of another document that cannot be filed.
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Existing law requires business entities to file specified
documents with the SOS, and to disclose, among other
things, specified contact information for the entity. This
contact information includes, in relevant part, the address
of the entity's agent for service of process, or address of
the principal (or other specified) office, or both. (CORP
Sections 202(c), 1505(a)(1), 1505(a)(1), 2105(a)(2)-(3),
2602(c), 5130(c), 7130(c), 9130(c), 12310(c), 12570(c),
13226, 15901.16(d)(1), 15092.01(a)(2)-(3),
15909.02(a)(3)-(4), 16303(a)(1), 16309(a), 16953(a)(2)-(3),
16959(a)(1), 17051(a), 17051(a)(4), 17060(a)(2), 17060(d),
17451(a), 17451(a)(3), 17451(a)(5), 18200(a)(1)-(2), and
18200(b))
This bill specifies that the address required is the street
address. (Emphasis added.)
This bill requires the business entity to disclose the
mailing address of its principal office (or other specified
office), if different from the street address.
This bill requires that the business entity disclose both
its street address and its mailing address, if different
from the street address, wherever this information is not
specifically required to be disclosed in the sections
listed above.
This bill, with respect to CORP Section 13226,
specifically, also adds that the articles of incorporation
shall also disclose the name and street address of the
entity's initial agent for service of process, as
specified.
Existing law requires that a credit union specify in its
articles of incorporation, among other things, the name and
address of its initial agent for service of process, as
specified. (Financial Code Section 14101(c))
This bill amends the above subdivisions to state that the
articles shall include the name and street address.
(Emphasis added.)
This bill also adds to the information required to be
provided in the articles of incorporation the street
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address of the corporation, and the mailing address of the
corporation if different from the street address.
Existing law, in relevant part, provides that the articles
of organization of a limited liability company (LLC) may be
amended at any time, and in any manner as the members may
determine, as specified. Existing law also specifies that
a certificate of amendment to the articles must be filed to
effect specified changes. (CORP Section 17054)
Existing law, in relevant part, requires an LLC to file a
statement containing specified information on a biennial
basis, starting within 90 days of filing its original
articles of incorporation, and that whenever that
information changes, the LLC may file a current statement
with the information required, as specified. (CORP Section
17060)
This bill provides that an LLC shall not amend its articles
of organization to amend any statement that may appear in
the original articles of organization of the street
address, mailing address, or name and address of the
initial agent for service of process, except as specified.
Existing law provides for what constitutes the completion
of filing, including that the SOS has accepted the
statement, a copy of the statement, and the filing fee.
Existing law then requires the SOS to return a copy to the
filing entity with notations that indicate the file number
and filing date of the original. (CORP Section 18200(c))
This bill provides that completion of filing is reached
upon acceptance by the SOS of the statement and the filing
fee.
This bill adds that whenever the street address, mailing
address, or electronic mail address of an LLC changes, it
may file a current statement, as specified.
This bill amends the above to specify that the address that
these documents shall include is the street address.
(Emphasis added.)
This bill amends the above to require that it also specify
the street address of the corporation, as well as its
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mailing address, if different from the street address.
Existing law allows for the SOS to collect a fee for
comparing a copy of any law, resolution, record or other
document or paper with the original, or the certified copy
of the original, on file with the SOS. (Government Code
(GOV) Section 12178.1(c))
This bill deletes that provision.
Existing law provides, that upon the filing of any document
pursuant to any provision of the Corporations Code for
which there is a filing fee of $25 or more, the SOS shall
compare and certify up to two copies without charge,
provided that the copies are submitted to the SOS with the
original to be filed. (GOV Section 12185)
This bill, with respect to such filings, instead provides
that the SOS shall provide a copy without charge at the
time of the filing.
Existing law provides for special purpose corporations,
including bridge, ferry, wharf, chute, and pier
corporations, as well as water and canal corporations.
This bill repeals those provisions.
This bill also states legislative findings, declarations
and the intent of the Legislature, including that:
businesses file many documents with the SOS;
the current filing process is manual, very
time-consuming, and paper-intensive for the SOS and
businesses;
California Business Connect will replace the manual,
time-consuming, and paper-intensive process with a
program that will allow businesses to file documents and
request records via the Internet at any time of day;
existing law needs to be updated and standardized to more
efficiently facilitate the development of California
Business Connect; and
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it is the intent of the Legislature to amend applicable
provisions of law to make it easier and less expensive
for the SOS's office to design and build California
Business Connect.
This bill updates and adds various cross-references.
This bill makes other technical or nonsubstantive changes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/8/12)
California Association for Health Services at Home
Secretary of State
ARGUMENTS IN SUPPORT : The author writes:
SB 1532 updates and standardizes current law to prepare
for the creation of California Business Connect, slated
to automate business and other SOS filings online by
2016. ÝCalifornia Business Connect is] a program to
modernize the Secretary of State's antiquated paper-based
business filing processes allowing customers to file
documents and request records online 24 hours a day, 7
days a week. Specifically, among several changes, SB
1532:
Requires businesses to include the mailing, street
and physical addresses in their initial filings with
the SOS.
Modernizes the statutes to allow the SOS to supply
a free copy of filed documents in lieu of physically
comparing two documents to ensure they are identical.
Require that any request for a future file date be
included in the document to be filed.
According to the bill's sponsor, Secretary of State Debra
Bowen, the SOS "relies on two separately developed legacy
information technology systems implemented in the 1980s to
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serve as databases for most of California's business
entities. There are 23 total applications to support the
processes of tracking, recording, and retrieving the
records that Ýthe SOS] office oversees. The current
process is very manual and paper-intensive. The new
automated system will provide the foundation to expedite
the way California does business and provide a means to
preserve the business and special filing records of the
state. ? By (standardizing and) updating these laws now, it
will be less expensive and easier to design and build
California Business Connect."
RJG:mw 5/16/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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