BILL NUMBER: AB 1471 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Perea
FEBRUARY 27, 2015
An act to amend Section Sections 201
, 2601, and 17701.09 of the Corporations Code, relating
to corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 1471, as amended, Perea. Business entity name reservations.
Existing
(1) Existing law, the General
Corporations law, authorizes Law, the Social
Purpose Corporations Act, and the California Revised Uniform Limited
Liability Company Act, authorize the Secretary of State, upon
payment of a fee by the applicant, to issue a certificate of
reservation of any name, not otherwise prohibited.
The bill would make a nonsubstantive change.
change to the cross-reference of the requirement to pay a fee by
the applicant in these laws.
(2) The General Corporation Law and the Social Purpose
Corporations Act limits the Secretary of State from issuing a
certificate reserving any name that is likely to mislead the public
or the same name for 2 or more consecutive 60-day periods to the same
applicant or for the use or benefit of the same person, partnership,
firm, corporation, or social purpose corporation, as applicable.
This bill would specify that the Secretary of State may reserve
that name to the use or benefit of a person, as provided.
(3) The Social Purpose Corporations Act does not prohibit the
Secretary of State from filing articles for a social purpose
corporation subject to the Banking Law setting forth a name in which
"bank," "trust," "trustee," or related words appear, if the articles
are endorsed with the approval of the Commissioner of Financial
Institutions. Existing law reorganized the Department of Financial
Institutions and the Commissioner of Financial Institutions into the
Department of Business Oversight headed by a Commissioner of Business
Oversight.
This bill would add another basis under which the Secretary of
State is not prohibited from filing articles for a social purpose
corporation subject to the Banking Law setting forth a name in which
"bank," "trust," "trustee," or related words appear, and would change
the name of the Commissioner of Financial Institutions to the
Commissioner of Business Oversight.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 201 of the Corporations Code is amended to
read:
201. (a) The Secretary of State shall not file articles setting
forth a name in which "bank," " trust," "trustee," or related words
appear, unless the certificate of approval of the Commissioner of
Business Oversight is attached thereto. This subdivision does not
apply to the articles of any corporation subject to the Banking Law
on which is endorsed the approval of the Commissioner of Business
Oversight.
(b) The Secretary of State shall not file articles which set forth
a name which is likely to mislead the public or which is the same
as, or resembles so closely as to tend to deceive, the name of a
domestic corporation, the name of a foreign corporation which is
authorized to transact intrastate business or has registered its name
pursuant to Section 2101, a name which a foreign corporation has
assumed under subdivision (b) of Section 2106, a name which will
become the record name of a domestic or foreign corporation upon the
effective date of a filed corporate instrument where there is a
delayed effective date pursuant to subdivision (c) of Section 110 or
subdivision (c) of Section 5008, or a name which is under reservation
for another corporation pursuant to this title, except that a
corporation may adopt a name that is substantially the same as an
existing domestic corporation or foreign corporation which is
authorized to transact intrastate business or has registered its name
pursuant to Section 2101, upon proof of consent by such domestic or
foreign corporation and a finding by the Secretary of State that
under the circumstances the public is not likely to be misled.
(c) The use by a corporation of a name in violation of this
section may be enjoined notwithstanding the filing of its articles by
the Secretary of State.
(d) Any applicant may, upon payment of the fee prescribed therefor
in Article 3 (commencing with Section 12180) of Chapter 3 of Part 2
of Division 3 of Title 2 of the Government Code, obtain from the
Secretary of State a certificate of reservation of any name not
prohibited by subdivision (b), and upon the issuance of the
certificate the name stated therein shall be reserved for a period of
60 days. The Secretary of State shall not, however, issue
certificates reserving the same name for two or more consecutive
60-day periods to the same applicant or for the use or benefit of the
same person, partnership, firm or corporation;
person; nor shall consecutive reservations be made by or
for the use or benefit of the same person, partnership, firm
or corporation person; of names so similar as
to fall within the prohibitions of subdivision (b).
SEC. 2. Section 2601 of the Corporations
Code is amended to read:
2601. (a) The Secretary of State shall not file articles setting
forth a name in which "bank," "trust," "trustee," or related words
appear, unless the certificate of approval of the Commissioner of
Financial Institutions Business Oversight
is attached to the articles. This subdivision does not apply to
the articles of any social purpose corporation subject to the
Banking Law on which is endorsed the approval of the Commissioner of
Financial Institutions. Business Oversight or
to which a certificate of approval of the Commissioner of
Business Oversight is attached to the articles.
(b) (1) The Secretary of State shall not file articles that set
forth a name that is likely to mislead the public or that is the same
as, or resembles so closely as to tend to deceive, the name of a
domestic corporation, the name of a domestic social purpose
corporation, or the name of a foreign corporation that is authorized
to transact intrastate business or has registered its name pursuant
to Section 2101, a name that a foreign corporation has assumed under
subdivision (b) of Section 2106, a name that will become the record
name of a corporation or social purpose corporation or a foreign
corporation upon the effective date of a filed corporate instrument
where there is a delayed effective date pursuant to subdivision (c)
of Section 110 or subdivision (c) of Section 5008, or a name that is
under reservation for another corporation or social purpose
corporation pursuant to this title, except that a social purpose
corporation may adopt a name that is substantially the same as an
existing corporation or social purpose corporation, foreign or
domestic, which is authorized to transact intrastate business or has
registered its name pursuant to Section 2101, upon proof of consent
by the domestic or foreign corporation or social purpose corporation
and a finding by the Secretary of State that under the circumstances
the public is not likely to be misled. The use by a social purpose
corporation of a name in violation of this section may be enjoined
notwithstanding the filing of its articles by the Secretary of State.
(2) A corporation formed pursuant to this division before January
1, 2015, may elect to change its status from a flexible purpose
corporation to a social purpose corporation by amending its articles
of incorporation to change its name to replace "flexible purpose
corporation" with "social purpose corporation" and to replace the
term "flexible purpose corporation" with "social purpose corporation"
as applicable in any statements contained in the articles. For any
flexible purpose corporation formed prior to January 1, 2015, that
has not amended its articles of incorporation to change its status to
a social purpose corporation, any reference in this division to
social purpose corporation shall be deemed a reference to "flexible
purpose corporation."
(c) Any applicant may, upon payment of the fee prescribed in
Article 3 (commencing with Section 12180) of Chapter 3 of Part 2 of
Division 3 of Title 2 of the Government Code, obtain from the
Secretary of State a certificate of reservation of any name not
prohibited by subdivision (b), and upon the issuance of the
certificate the name stated in the certificate shall be reserved for
a period of 60 days. The Secretary of State shall not, however, issue
certificates reserving the same name for two or more consecutive
60-day periods to the same applicant or for the use or benefit of the
same person, partnership, firm, corporation, or social
purpose corporation. person. No consecutive
reservations shall be made by or for the use or benefit of the same
person, partnership, firm, corporation, or social purpose
corporation person of names so similar as to
fall within the prohibitions of subdivision (b).
SEC. 3. Section 17701.09 of the
Corporations Code is amended to read:
17701.09. (a) Upon payment of the fee prescribed by
Section 12190 in Article 3 (commencing with
Section 12180) of Chapter 3 of Part 2 of Division 3 of Title 2
of the Government Code, a person may apply to reserve the exclusive
use of the name of a limited liability company or foreign limited
liability company, including an alternative name for a foreign
limited liability company whose name is not available. If the
Secretary of State finds that the name applied for is available, it
shall reserve the name for the applicant's exclusive use for up to 60
days and issue a certificate of reservation. The Secretary of State
shall not issue certificates reserving the same name for two or more
consecutive 60-day periods to the same applicant or for the use or
benefit of the same person; nor shall consecutive reservations be
made by or for the use or benefit of the same person for a name so
similar as to fall within the prohibitions of subdivision (b) of
Section 17701.08.
(b) The owner of a name reserved for a limited liability company
or foreign limited liability company may transfer the reservation to
another person by delivering to the Secretary of State a signed
notice of the transfer which states the reserved name and the name
and address of the transferee.