Amended in Senate June 25, 2015

Amended in Assembly April 14, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1471


Introduced by Assembly Member Perea

February 27, 2015


An act to amend Sections 201, 1155, 2601, 15911.06, 16906, 17701.09, 17702.03, 17707.08, and 17710.06 of the Corporations Code, relating to business.

LEGISLATIVE COUNSEL’S DIGEST

AB 1471, as amended, Perea. Business entities: filings.

(1) The General Corporation 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 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 Actbegin delete limitsend deletebegin insert limitend insert 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.

(4) The General Corporation Law, the Uniform Limited Partnership Act of 2008, and the Uniform Partnership Act of 1994 authorize a business entity formed under its respective provisions to be converted into another business entity under certain conditions, including, among others, that the execution of a statement or certificate of conversion set forth a name and street address, as specified.

This bill would specify that the statement or certificate of conversion set forth the name, mailing address, and street address of the converted entity’s agent for service of process.

(5) The California Revised Uniform Limited Liability Company Act requires a record delivered to the Secretary of State for filing under its provisions to be signed by particular individuals, as specified. The act specifically requires the person who filed a certificate of dissolution to sign a certificate of cancellation of the article of organization upon the completion of the winding up of affairs of the limited liability company, except as specified.

This bill would revise the general provisions relating to the particular individual required to sign a record, and instead require the managers to sign a certificate of cancellation of the article of organization upon the completion of the winding up of affairs of the limited liability company, except as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 201 of the Corporations Code is amended
2to read:

3

201.  

(a) The Secretary of State shall not file articles setting
4forth a name in which “bank,” “ trust,” “trustee,” or related words
5appear, unless the certificate of approval of the Commissioner of
6Business Oversight is attached thereto. This subdivision does not
7apply to the articles of any corporation subject to the Banking Law
8on which is endorsed the approval of the Commissioner of Business
9Oversight.

10(b) The Secretary of State shall not file articles which set forth
11a name which is likely to mislead the public or which is the same
12as, or resembles so closely as to tend to deceive, the name of a
13domestic corporation, the name of a foreign corporation which is
14authorized to transact intrastate business or has registered its name
15pursuant to Section 2101, a name which a foreign corporation has
16assumed under subdivision (b) of Section 2106, a name which will
17become the record name of a domestic or foreign corporation upon
18the effective date of a filed corporate instrument where there is a
19delayed effective date pursuant to subdivision (c) of Section 110
20or subdivision (c) of Section 5008, or a name which is under
21reservation for another corporation pursuant to this title, except
22that a corporation may adopt a name that is substantially the same
23as an existing domestic corporation or foreign corporation which
24is authorized to transact intrastate business or has registered its
25name pursuant to Section 2101, upon proof of consent by such
26domestic or foreign corporation and a finding by the Secretary of
27State that under the circumstances the public is not likely to be
28misled.

29(c) The use by a corporation of a name in violation of this
30section may be enjoined notwithstanding the filing of its articles
31by the Secretary of State.

32(d) Any applicant may, upon payment of the fee prescribed
33therefor in Article 3 (commencing with Section 12180) of Chapter
343 of Part 2 of Division 3 of Title 2 of the Government Code, obtain
35from the Secretary of State a certificate of reservation of any name
36not prohibited by subdivision (b), and upon the issuance of the
37certificate the name stated therein shall be reserved for a period
38of 60 days. The Secretary of State shall not, however, issue
P4    1certificates reserving the same name for two or more consecutive
260-day periods to the same applicant or for the use or benefit of
3the same person; nor shall consecutive reservations be made by
4or for the use or benefit of the same person; of names so similar
5as to fall within the prohibitions of subdivision (b).

6

SEC. 2.  

Section 1155 of the Corporations Code is amended to
7read:

8

1155.  

(a) To convert a corporation:

9(1) If the corporation is converting into a domestic limited
10partnership, a statement of conversion shall be completed on the
11certificate of limited partnership for the converted entity.

12(2) If the corporation is converting into a domestic partnership,
13a statement of conversion shall be completed on the statement of
14partnership authority for the converted entity, or if no statement
15of partnership authority is filed then a certificate of conversion
16shall be filed separately.

17(3) If the corporation is converting into a domestic limited
18liability company, a statement of conversion shall be completed
19on the articles of organization for the converted entity.

20(b) Any statement or certificate of conversion of a converting
21corporation shall be executed and acknowledged by those officers
22of the converting corporation as would be required to sign an
23officers’ certificate (Section 173), and shall set forth all of the
24following:

25(1) The name of the converting corporation and the Secretary
26of State’s file number of the converting corporation.

27(2) A statement of the total number of outstanding shares of
28each class entitled to vote on the conversion, that the principal
29terms of the plan of conversion were approved by a vote of the
30number of shares of each class which equaled or exceeded the vote
31required under Section 1152, specifying each class entitled to vote
32and the percentage vote required of each class.

33(3) The name, form, and jurisdiction of organization of the
34converted entity.

35(4) The name, mailing address, and street address of the
36converted entity’s agent for service of process. If a corporation
37qualified under Section 1505 isbegin delete designated,end deletebegin insert designated as the agent,end insert
38 no address for it shall be set forth.

39(c) For the purposes of this chapter, the certificate of conversion
40shall be on a form prescribed by the Secretary of State.

P5    1(d) The filing with the Secretary of State of a statement of
2conversion on an organizational document or a certificate of
3conversion as set forth in subdivision (a) shall have the effect of
4the filing of a certificate of dissolution by the converting
5corporation and no converting corporation that has made the filing
6is required to file a certificate of election under Section 1901 or a
7certificate of dissolution under Section 1905 as a result of that
8conversion.

9(e) Upon the effectiveness of a conversion pursuant to this
10chapter, a converted entity that is a domestic partnership, domestic
11limited partnership, or domestic limited liability company shall
12be deemed to have assumed the liability of the converting
13corporation (1) to prepare and file or cause to be prepared and filed
14all tax and information returns otherwise required of the converting
15corporation under the Corporation Tax Law (Part 11 (commencing
16with Section 23001) of Division 2 of the Revenue and Taxation
17Code) and (2) to pay any tax liability determined to be due pursuant
18to that law.

19

SEC. 3.  

Section 2601 of the Corporations Code is amended to
20read:

21

2601.  

(a) The Secretary of State shall not file articles setting
22forth a name in which “bank,” “trust,” “trustee,” or related words
23appear, unless the certificate of approval of the Commissioner of
24Business Oversight is attached to the articles. This subdivision
25does not apply to the articles of any social purpose corporation
26subject to the Banking Law on which is endorsed the approval of
27the Commissioner of Business Oversight or to which a certificate
28of approval of the Commissioner of Business Oversight is attached
29to the articles.

30(b) (1) The Secretary of State shall not file articles that set forth
31a name that is likely to mislead the public or that is the same as,
32or resembles so closely as to tend to deceive, the name of a
33domestic corporation, the name of a domestic social purpose
34corporation, or the name of a foreign corporation that is authorized
35to transact intrastate business or has registered its name pursuant
36to Section 2101, a name that a foreign corporation has assumed
37under subdivision (b) of Section 2106, a name that will become
38the record name of a corporation or social purpose corporation or
39a foreign corporation upon the effective date of a filed corporate
40instrument where there is a delayed effective date pursuant to
P6    1subdivision (c) of Section 110 or subdivision (c) of Section 5008,
2or a name that is under reservation for another corporation or social
3purpose corporation pursuant to this title, except that a social
4purpose corporation may adopt a name that is substantially the
5same as an existing corporation or social purpose corporation,
6foreign or domestic, which is authorized to transact intrastate
7business or has registered its name pursuant to Section 2101, upon
8proof of consent by the domestic or foreign corporation or social
9purpose corporation and a finding by the Secretary of State that
10under the circumstances the public is not likely to be misled. The
11use by a social purpose corporation of a name in violation of this
12section may be enjoined notwithstanding the filing of its articles
13by the Secretary of State.

14(2) A corporation formed pursuant to this division before
15January 1, 2015, may elect to change its status from a flexible
16purpose corporation to a social purpose corporation by amending
17its articles of incorporation to change its name to replace “flexible
18purpose corporation” with “social purpose corporation” and to
19replace the term “flexible purpose corporation” with “social
20purpose corporation” as applicable in any statements contained in
21the articles. For any flexible purpose corporation formed prior to
22January 1, 2015, that has not amended its articles of incorporation
23to change its status to a social purpose corporation, any reference
24in this division to social purpose corporation shall be deemed a
25reference to “flexible purpose corporation.”

26(c) Any applicant may, upon payment of the fee prescribed in
27Article 3 (commencing with Section 12180) of Chapter 3 of Part
282 of Division 3 of Title 2 of the Government Code, obtain from
29the Secretary of State a certificate of reservation of any name not
30prohibited by subdivision (b), and upon the issuance of the
31 certificate the name stated in the certificate shall be reserved for
32a period of 60 days. The Secretary of State shall not, however,
33issue certificates reserving the same name for two or more
34consecutive 60-day periods to the same applicant or for the use or
35benefit of the same person. No consecutive reservations shall be
36made by or for the use or benefit of the same person of names so
37similar as to fall within the prohibitions of subdivision (b).

38

SEC. 4.  

Section 15911.06 of the Corporations Code is amended
39to read:

P7    1

15911.06.  

(a) Upon conversion of a limited partnership, one
2of the following applies:

3(1) If the limited partnership is converting into a domestic
4limited liability company, a statement of conversion shall be
5completed on the articles of organization for the converted entity
6and shall be filed with the Secretary of State.

7(2) If the limited partnership is converting into a domestic
8partnership, a statement of conversion shall be completed on the
9statement of partnership authority for the converted entity. If no
10statement of partnership authority is filed, a certificate of
11conversion shall be filed separately with the Secretary of State.

12(3) If the limited partnership is converting into a domestic
13corporation, a statement of conversion shall be completed on the
14articles of incorporation for the converted entity and shall be filed
15with the Secretary of State.

16(4) If the limited partnership is converting to a foreign limited
17partnership or foreign other business entity, a certificate of
18conversion shall be filed with the Secretary of State.

19(b) Any certificate or statement of conversion shall be executed
20and acknowledged by all general partners and shall set forth all of
21the following:

22(1) The name of the converting limited partnership and the
23Secretary of State’s file number of the converting limited
24partnership.

25(2) A statement that the principal terms of the plan of conversion
26were approved by a vote of the partners, that equaled or exceeded
27the vote required under Section 15911.03, specifying each class
28entitled to vote and the percentage vote required of each class.

29(3) The form of organization of the converted entity.

30(4) The name, mailing address, and street address of the
31converted entity’s agent for service of process and the mailing
32address of the chief executive office of the converted entity. If a
33corporationbegin delete that has complied withend deletebegin insert qualified underend insert Section 1505
34is designated as the agent, no address for it shall be set forth.

35(c) The filing with the Secretary of State of a certificate of
36conversion or a statement of partnership authority, articles of
37organization, or articles of incorporation containing a statement
38of conversion as set forth in subdivision (a) shall have the effect
39of the filing of a certificate of cancellation by the converting limited
40partnership, and no converting limited partnership that has made
P8    1the filing is required to file a certificate of cancellation under
2Section 15902.03 as a result of that conversion.

3

SEC. 5.  

Section 16906 of the Corporations Code is amended
4to read:

5

16906.  

(a) If the converting partnership has filed a statement
6of partnership authority under Section 16303 that is effective at
7the time of the conversion, then upon conversion to a domestic
8limited partnership, limited liability company, or corporation, the
9certificate of limited partnership, articles of organization, or articles
10of incorporation filed by the converted entity, as applicable, shall
11contain a statement of conversion, in that form as may be
12prescribed by the Secretary of State. If the converting partnership
13has not filed a statement of partnership authority under Section
1416303 that is effective at the time of the conversion, upon
15conversion to a domestic limited partnership, limited liability
16company, or corporation, the converted entity may, but is not
17required to file, on its certificate of limited partnership, articles of
18organization, or articles of incorporation, a statement of conversion.
19A statement of conversion shall set forth all of the following:

20(1) The name of the converting partnership and the Secretary
21of State’s file number, if any, of the converting partnership.

22(2) A statement that the principal terms of the plan of conversion
23were approved by a vote of the partners, which equaled or exceeded
24the vote required under Section 16903.

25(3) The name, mailing address, and street address of the
26 converted entity’s agent for service of process. If a corporation
27qualified under Section 1505 isbegin delete designated,end deletebegin insert designated as the agent,end insert
28 no address for it shall be set forth.

29(b) A partnership converting to a foreign other business entity
30that has filed a statement of partnership authority under Section
3116303 that is effective at the time of conversion may file a
32certificate of conversion with the Secretary of State. The certificate
33of conversion shall contain the following:

34(1) The names of the converting partnership and the converted
35entity.

36(2) The street address of the converted entity’s chief executive
37office and of an office in this state, if any.

38(3) The form of organization of the converted entity.

39(4) The name, mailing address, and street address of the
40converted entity’s agent for service of process. If a corporation
P9    1qualified under Section 1505 is designated as the agent, no address
2for it shall be set forth.

3(c) The filing with the Secretary of State of a certificate of
4limited partnership, articles of organization, or articles of
5incorporation containing a statement of conversion as set forth in
6subdivision (a) or a certificate of conversion filed pursuant to
7subdivision (b) shall have the effect of the filing of a cancellation
8by the converting partnership of any statement of partnership
9authority filed by it.

10

SEC. 6.  

Section 17701.09 of the Corporations Code is amended
11to read:

12

17701.09.  

(a) Upon payment of the fee prescribed in Article
133 (commencing with Section 12180) of Chapter 3 of Part 2 of
14Division 3 of Title 2 of the Government Code, a person may apply
15to reserve the exclusive use of the name of a limited liability
16company or foreign limited liability company, including an
17alternative name for a foreign limited liability company whose
18name is not available. If the Secretary of State finds that the name
19applied for is available, it shall reserve the name for the applicant’s
20exclusive use for up to 60 days and issue a certificate of reservation.
21The Secretary of State shall not issue certificates reserving the
22same name for two or more consecutive 60-day periods to the same
23applicant or for the use or benefit of the same person; nor shall
24consecutive reservations be made by or for the use or benefit of
25the same person for a name so similar as to fall within the
26prohibitions of subdivision (b) of Section 17701.08.

27(b) The owner of a name reserved for a limited liability company
28or foreign limited liability company may transfer the reservation
29to another person by delivering to the Secretary of State a signed
30notice of the transfer which states the reserved name and the name
31and address of the transferee.

32

SEC. 7.  

Section 17702.03 of the Corporations Code is amended
33to read:

34

17702.03.  

(a) A record delivered to the Secretary of State for
35filing pursuant to this title shall be signed as follows:

36(1) Except as otherwise expressly provided in this title and in
37this subdivision, a record signed on behalf of a limited liability
38company shall be signed by a person authorized by the limited
39liability company.

P10   1(2) A limited liability company’s initial articles of organization
2shall be signed by at least one person acting as an organizer.

3(3) A record filed on behalf of a dissolved limited liability
4company that has no members shall be signed by the person
5winding up the limited liability company’s activities or a person
6appointed under Section 17707.04 to wind up those activities.

7(4) A certificate of cancellation under Section 17707.02 shall
8be signed by each organizer that signed the initial articles of
9organization, but a personal representative of a deceased or
10incompetent organizer may sign in the place of the decedent or
11incompetent.

12(5) A certificate of cancellation under Section 17707.08 shall
13be signed in accordance with paragraph (1) of subdivision (b) of
14Section 17707.08.

15(6) A certificate of correction shall be executed in the same
16manner in which the record being corrected was required to be
17executed.

18(b) Except as otherwise expressly provided in this title and in
19subdivision (a), any record filed under this title may be signed by
20an agent.

21(c) A limited liability company may record in the office of the
22county recorder of any county in this state, and county recorders,
23on request, shall record a certified copy of the limited liability
24company articles of organization and any exhibit or attachment,
25or any amendment or correction thereto, that has been filed in the
26office of the Secretary of State. A foreign limited liability company
27may record in the office of the county recorder of any county in
28the state a certified copy of the application for registration of the
29foreign limited liability company, or any amendment thereto, that
30has been filed in the office of the Secretary of State. The recording
31shall create a conclusive presumption in favor of any bona fide
32purchaser or encumbrancer for value of the limited liability
33company real property located in the county in which the certified
34copy has been recorded, of the statements contained therein.

35(d) If the Secretary of State determines that an instrument
36submitted for filing or otherwise submitted does not conform to
37the law and returns it to the person submitting it, the instrument
38may be resubmitted accompanied by a written opinion of a member
39of the State Bar of California submitting the instrument or
40representing the person submitting it, to the effect that the specific
P11   1provisions of the instrument objected to by the Secretary of State
2do conform to law and stating the points and authorities upon
3which the opinion is based. The Secretary of State shall rely, with
4respect to any disputed point of law, other than the application of
5Sections 17701.08, 17701.09, 17708.02, and 17708.03, upon that
6written opinion in determining whether the instrument conforms
7to law. The date of filing in that case shall be the date the
8instrument is received on resubmission.

9

SEC. 8.  

Section 17707.08 of the Corporations Code is amended
10to read:

11

17707.08.  

(a) (1) The managers shall sign and cause to be
12filed in the office of, and on a form prescribed by, the Secretary
13of State, a certificate of dissolution upon the dissolution of the
14limited liability company pursuant to Article 7 (commencing with
15Section 17707.01), unless the event causing the dissolution is that
16specified in subdivision (c) of Section 17707.01, in which case the
17persons conducting the winding up of the limited liability
18company’s affairs pursuant to Section 17707.04 shall have the
19obligation to sign and cause to be filed the certificate of dissolution.

20(2) The certificate of dissolution shall set forth all of the
21following:

22(A) The name of the limited liability company and the Secretary
23of State’s file number.

24(B) Any other information the persons filing the certificate of
25dissolution determine to include.

26(C) The event listed in Section 17707.01 causing dissolution.

27(3) If a dissolution pursuant to subdivision (b) of Section
2817707.01 is made by the vote of all of the members and a statement
29to that effect is added to the certificate of cancellation of articles
30of organization pursuant to subdivision (b), the separate filing of
31a certificate of dissolution pursuant to this subdivision is not
32required.

33(b) (1) The managers shall sign and cause to be filed in the
34office of, and on a form prescribed by, the Secretary of State, a
35certificate of cancellation of articles of organization upon the
36completion of the winding up of the affairs of the limited liability
37company pursuant to Section 17707.06, unless the event causing
38the dissolution is that specified in subdivision (c) of Section
3917707.01, in that case the persons conducting the winding up of
40the limited liability company’s affairs pursuant to Section 17707.04
P12   1shall have the obligation to sign and cause to be filed the certificate
2of cancellation of articles of organization.

3(2) The certificate of cancellation of articles of organization
4shall set forth all of the following:

5(A) The name of the limited liability company and the Secretary
6of State’s file number.

7(B) That a final franchise tax return, as described by Section
823332 of the Revenue and Taxation Code, or a final annual tax
9return, as described by Section 17947 of the Revenue and Taxation
10Code, has been or will be filed with the Franchise Tax Board, as
11required under Part 10.2 (commencing with Section 18401) of
12Division 2 of the Revenue and Taxation Code.

13(C) That upon the filing of the certificate of cancellation, the
14limited liability company shall be canceled and its powers, rights,
15and privileges shall cease.

16(D) Any other information the persons filing the certificate of
17cancellation of articles of organization determine to include.

18(3) The Secretary of State shall notify the Franchise Tax Board
19of the filing.

20(c) Upon filing a certificate of cancellation pursuant to
21subdivision (b), a limited liability company shall be canceled and
22its powers, rights, and privileges shall cease.

23

SEC. 9.  

Section 17710.06 of the Corporations Code is amended
24to read:

25

17710.06.  

(a) Upon conversion of a limited liability company,
26one of the following applies:

27(1) If the limited liability company is converting into a domestic
28limited partnership, a statement of conversion shall be completed
29on a certificate of limited partnership for the converted entity and
30shall be filed with the Secretary of State.

31(2) If the limited liability company is converting into a domestic
32partnership, a statement of conversion shall be completed on the
33statement of partnership authority for the converted entity. If no
34statement of partnership authority is filed, a certificate of
35conversion shall be filed separately with the Secretary of State.

36(3) If the limited liability company is converting into a domestic
37corporation, a statement of conversion shall be completed on the
38articles of incorporation for the converted entity and shall be filed
39with the Secretary of State.

P13   1(4) If the limited liability company is converting to a foreign
2limited liability company or foreign other business entity, a
3certificate of conversion shall be filed with the Secretary of State.

4(b) Any certificate or statement of conversion shall be executed
5and acknowledged by all members, unless a lesser number is
6provided in the articles of organization or operating agreement,
7and shall set forth all of the following:

8(1) The name of the converting limited liability company and
9the Secretary of State’s file number of the converting limited
10liability company.

11(2) A statement that the principal terms of the plan of conversion
12were approved by a vote of the members, that equaled or exceeded
13the vote required under Section 17710.03, specifying each class
14entitled to vote and the percentage vote required of each class.

15(c) A certificate of conversion shall set forth all of the following:

16(1) The name, form, and jurisdiction of organization of the
17converted entity.

18(2) The name, street address, and mailing address of the
19converted entity’s agent for service of process. If a corporation
20qualified under Section 1505 is designated as the agent, no address
21for it shall be set forth.

22(3) The street address of the converted entity’s chief executive
23office.

24(d) The filing with the Secretary of State of a certificate of
25conversion, a certificate of limited partnership, a statement of
26partnership authority, or articles of incorporation containing a
27statement of conversion as set forth in subdivision (a) shall have
28the effect of the filing of a certificate of cancellation by the
29converting limited liability company, and no converting limited
30liability company that has made the filing is required to take any
31action under Article 7 (commencing with Section 17707.01) as a
32result of that conversion.

33(e) For the purposes of this title, the certificate of conversion
34shall be on a form prescribed by the Secretary of State.



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