BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1471|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
CONSENT
Bill No: AB 1471
Author: Perea (D)
Amended: 6/25/15 in Senate
Vote: 21
SENATE BANKING & F.I. COMMITTEE: 7-0, 6/17/15
AYES: Block, Vidak, Galgiani, Hall, Hueso, Lara, Morrell
SENATE JUDICIARY COMMITTEE: 7-0, 6/23/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
ASSEMBLY FLOOR: 78-0, 5/4/15 (Consent) - See last page for
vote
SUBJECT: Business entities: filings
SOURCE: Secretary of State
DIGEST: This bill makes technical changes to provisions of the
Corporations Code administered by the Secretary of State (SOS).
ANALYSIS:
Existing law:
1)Requires certain business entities, including, but not limited
to, a corporation, limited partnership (LP), foreign
corporation, foreign LP, limited liability partnership (LLP),
foreign LLP, flexible purpose corporation, limited liability
company (LLC), unincorporated association, and credit union,
to make various filings with the SOS.
AB 1471
Page 2
2)Is inconsistent in what it requires to be included on the
paperwork that must be filed with the SOS when one business
entity converts to a different business entity.
3)Contains confusing and inconsistent language regarding which
persons are responsible for signing and causing to be filed a
certificate of cancellation of articles of organization upon
the completion of the winding up of the affairs of an LLC.
This bill:
1)Requires paperwork filed with the SOS related to the
conversion of one business entity into another business entity
to include the name, mailing address, and street address of
the converted entity's agent for service of process.
2)Clarifies that the managers of an LLC are responsible for
signing and causing to be filed a certificate of cancellation
of articles of organization upon the completion of the winding
up of the affairs of an LLC, except as specified.
3)Updates, corrects, clarifies, and makes other nonsubstantive
changes to the Corporations Code.
Background
AB 1471 continues a multi-year effort spearheaded by the SOS to
standardize business filing procedures and update the provisions
of the Corporations Code administered by the SOS. This bill
reduces statutory inconsistency within the Corporations Code,
updates the codes to reflect changes made by recent legislation,
and standardizes the processing and handling of specified SOS
business customer transactions. According to the SOS, "these
small but meaningful changes will pave the way for improving the
overall SOS filing experience."
AB 1471
Page 3
By removing statutory inconsistencies and standardizing filing
procedures, AB 1471 will also help smooth the way for the SOS's
California Business Connect (CBC) online filing project,
scheduled to be completed in 2016. Once implemented, CBC will
modernize and streamline the SOS's paper-based business filing
processes, and allow customers to file documents and request
records online, 24 hours a day, seven days a week.
Comments
According to the SOS, CBC is a six-year project, scheduled to be
online by June 30, 2016, that aims to increase efficiency by
eliminating paper-based manual transactions and their associated
risk of loss to vital state records. CBC will also minimize
processing delays through the creation of a uniform data entry
platform. Businesses that use CBC will be able to do many of
their transactions online, without delay, and without paying an
additional fee. Once operational, the network will automate
paper-based processes, allow businesses to file and request
copies of records online, provide the public and government
agencies access to SOS records, and allow the SOS to process fee
payments within one business day.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/25/15)
Secretary of State (source)
California Chamber of Commerce
OPPOSITION: (Verified6/25/15)
None received
ARGUMENTS IN SUPPORT: The SOS, source of this bill, states
"California Corporations Code contains filing requirements for
several different business entity types, such as domestic stock
AB 1471
Page 4
corporations, nonprofit corporations, partnerships and LLCs.
Occasionally, omnibus legislation will be enacted for each of
the individual types of entities. As a result, statute often
contains different or disjointed policies for the different
entities which can create confusion for SOS business customers
attempting to file documents in the most expeditious manner. AB
1471 simplifies filing processes for businesses in-state and
nationwide by creating consistency and efficiency in the
existing filing system."
The California Chamber of Commerce believes that this bill will
provide much needed clarity for certain filing procedures and,
in doing so, will help ensure that paper or online filing forms
will be consistently user friendly for all types of businesses.
"In this respect, we are also supportive of AB 1471's attempt to
reduce costs and time for the implementation of the California
Business Connect project, which will automate the Secretary of
State's paper-based business filing system by 2016."
ASSEMBLY FLOOR: 78-0, 5/4/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Dahle
Prepared by:Eileen Newhall / B. & F.I. / (916) 651-4102
6/26/15 13:29:07
**** END ****
AB 1471
Page 5