BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                       AB 1471|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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          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,  

           ASSEMBLY FLOOR:  78-0, 5/4/15 (Consent) - See last page for  

           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).

          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.


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          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.


          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."  


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          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.  

          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  


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          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

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