BILL ANALYSIS �
AB 1325
Page 1
Date of Hearing: January 10, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1325 (Lara) - As Amended: January 4, 2012
SUBJECT : Business: fictitious business name statements.
SUMMARY : Requires fictitious business name (FBN) statements to
contain language specifying that false declarations are a
misdemeanor punishable by a fine of up to $1,000, and requires
FBN statement registrants to provide specified personal
identification at the time of filing. Specifically, this bill :
1)Requires a FBN statement to contain language that states, "A
registrant who declares as true any material matter pursuant
to Section 17913 of the Business and Professions Code that the
registrant knows to be false is guilty of a misdemeanor
punishable by a fine not to exceed one thousand dollars
($1,000)."
2)States that a FBN statement registrant who declares as true
any material matter pursuant to current law governing the
content of FBN statements that the registrant knows to be
false is guilty of a misdemeanor punishable by a fine not to
exceed one thousand dollars ($1,000).
3)Requires, at the time of filing of the FBN statement, the
registrant to display a personal identification in the form of
a California driver's license or other identification
acceptable to the county clerk to adequately determine the
identity of the registrant.
4)Deems the following forms of identification acceptable for
purposes of 3), above:
a) If the registrant is a corporation, its articles of
incorporation;
b) If the registrant is a limited liability company, its
certificate of organization; or,
c) If the registrant is a limited liability partnership, a
AB 1325
Page 2
limited liability partnership statement.
5)Requires a registrant that mails a FBN statement to a county
clerk's office for filing to include the following, as
applicable:
a) A notarized certificate of identity statement, in the
case of a registrant other than a corporation of limited
liability company; or,
b) Its articles of incorporation or a notarized certificate
of identity statement, in the case of a corporation or
limited liability company.
6)Specifies that, to constitute a filing, the FBN statement must
be signed by the registrant and accompanied by a display of a
personal identification in accordance with this bill.
EXISTING LAW
1)Requires every person who regularly transacts business in
California for profit under a FBN to file and maintain a
current FBN statement.
2)Requires the FBN statement to contain specified information,
including language that states, "A registrant who declares as
true information which he or she knows to be false is guilty
of a crime."
3)Requires a FBN statement to be published in a newspaper of
general circulation in the county in which the principal place
of business of the registrant is located, except as specified,
to be signed by specified individuals, and to be filed with
the county clerk where the business is located.
4)Specifies that a registrant who declares as true any material
matter pursuant to current law governing the content of FBN
statements that he or she knows to be false is guilty of a
misdemeanor.
5)Specifies the requirements for what constitutes filing of a
FBN statement, including presentation for filing of a FBN
statement, and one copy, tender of the filing fee, and
acceptance of the statement by the county clerk.
AB 1325
Page 3
6)States that any person who executes, files, or publishes any
FBN statement, knowing that such statement is false, in whole
or in part, shall be guilty of a misdemeanor and upon
conviction thereof shall be punished by a fine not to exceed
one thousand dollars ($1,000).
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "?current law
specifies the requirements for filing a FBN statement. Current
law also specifies that it is a crime to knowingly provide false
information on the FBN application... Existing law, however,
does not require registrants to present a form of identification
to county clerk officials in order to verify that the
applicant's identity or business address matches the information
they submitted on the FBN form. The deficiency in current law
leaves room for fraudulent activity whereby registrants use the
addresses of unsuspecting Californians to file a FBN Statement.
"This bill would strengthen consumer protections and curb FBN
identity theft by amending existing law to require applicants to
present proper identification at the time of filling for a FBN."
Background .
Current law requires every person who regularly transacts
business in California for profit under a FBN to file and
maintain a current FBN statement with the county clerk in which
the principal place of business is located. This filing is
designed to protect consumers who deal with individuals or
partnerships that operate under FBNs by making available to the
public the identities of people or companies doing business
under a fictitious name.
The use of a FBN can be advantageous for individuals and
corporations because it allows operation of a business or
multiple businesses at minimal cost, without having to use a
personal name or create an entirely new legal entity for each
business.
Businesses must file the FBN statement, which is effective for
five years, within 40 days of their first transaction. An
applicant may have more than one FBN and there may be more than
AB 1325
Page 4
one registrant per FBN. All information on the FBN statement is
public record pursuant to the California Public Record Act,
including the residence address.
According to a column published in the Los Angeles Times in
2010, an elderly resident of Los Angeles County discovered her
residential address had been used without her knowledge or
consent for several FBN statements when the Los Angeles County
Registrar-Recorder/County Clerk notified her of the
registrations. Mail for the fictitious businesses and the
person who registered them began arriving at the home, which
prompted the resident to contact local government
representatives and file a complaint with the United States
Postal Service (USPS) and a report with the police. The article
notes that a person might file such false statements in order to
lend legitimacy to fraudulent business activities, because a
search of a county registrar's website would yield the
registered FBNs.
While current law sets out a variety of requirements for filing
FBN statements, it does not require registrants to provide
verifiable personal or corporate identification when doing so.
The statement also does not specify the penalty and fine for
providing false information. This bill requires those who file
FBN statements to provide identification at the time of filing,
and requires the filing form to explicitly state that providing
false information on the form is a misdemeanor punishable by a
fine of up to $1,000.
Previous legislation .
AB 1290 (Mendoza) of 2008 allows a county clerk, in the event
that the notice of pending expiration of a fictitious business
license is returned to the clerk by USPS as undeliverable, to
dispose of the returned notice without delay. This bill was
vetoed.
AB 1670 (Mendoza), Chapter 716, Statutes of 2007 revises the
conditions under which a new FBN must be filed and revises the
content of the FBN statement.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1325
Page 5
None on file
Opposition
None on file
Analysis Prepared by : Angela Mapp / B.,P. & C.P. / (916)
319-3301