BILL ANALYSIS �
SB 1532
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1532 (Pavley) - As Amended: June 19, 2012
Policy Committee: Banking and
Finance Vote: 10-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill updates and standardizes various laws relating to
business filings, to facilitate implementation of California
Business Connect (CBC), an electronic filing system for business
documents being developed by the Secretary of State (SOS).
Specifically, this bill:
1)Clarifies, with respect to particular documents to be filed
with the Secretary of State, where applicable:
a) A business entity must provide in its articles of
organization the initial street address and the initial
mailing address of the entity, as well as the name and
street address of its initial agent for service of process,
as specified.
b) A business entity must provide the mailing address of
its principal office (or other specified office), if
different from the street address.
c) A business entity shall not amend its articles of
organization to amend any statement that may appear in the
original articles of organization concerning the street
address, mailing address, or name and address of the
initial agent for service of process, except as specified.
2)Deletes existing law that allows for the SOS to collect a fee
for comparing a copy of any law, resolution, record or other
document or paper with the original, or the certified copy of
the original, on file with the SOS.
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3)Provides that upon the filing of any document pursuant to any
provision of the Corporations Code for which there is a filing
fee of $25 or more, the Secretary of State shall provide a
copy without charge at the time of the filing.
4)Makes other technical and non-substantive changes.
FISCAL EFFECT
Negligible fiscal impact.
COMMENTS
1)Purpose . According to the author this measure is necessary to
update and standardize current law to prepare for the creation
of California Business Connect, a program to modernize the
Secretary of State's antiquated paper-based business filing
processes allowing customers to file documents and request
records online 24 hours a day, 7 days a week. The author
argues the new automated system, slated for implementation in
2016, will help expedite the way California does business and
provide a means to preserve the business and special filing
records of the state.
2)Support. According to the SOS, the sponsor of this measure,
California Business Connect will benefit businesses, the
economy and the taxpayers, as well as SOS and other state
government agencies. Benefits include: eliminating unnecessary
delays; providing a centralized and integrated single point of
services for business entities and special filings; ensuring
more secure processing of payment; providing online help in
completing forms; reducing the cost and time required to
establish and maintain a business; making services available
24 hours a day, seven days a week; and, allowing users to see
all filing activities related to the business over the long
term.
3)Background . Existing law provides for the formation and
governance of various business entities, including
corporations, associations, partnerships, limited
partnerships, limited liability companies and limited
liability partnerships. Each of these businesses must file
certain documents with the SOS in order to stay in good
standing with the state. These documents include articles of
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incorporation and annual statements.
The California Business Connect Feasibility Study Report,
approved by the California Technology Agency in April of 2011,
provides an overview of the problem faced by California with
respect to its current business filings system. The report
found reliance on manual labor and hard copies makes it not
only increasingly difficult to comply with current mandates
and new mandates that are created by law, but it also makes
these vital business records prone to human error and at risk
of irreparable destruction. In addition to such concerns,
the report found the time SOS takes to process and file
documents has led to an extensive backlog.
4)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081