AB 871: Business filings: statement of information.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-02-26
Existing law requires a corporation, a nonprofit public benefit corporation, a nonprofit mutual benefit corporation, a nonprofit religious corporation, a consumer cooperative corporation, and a limited liability company to file annually or biennially, as provided, a statement with the Secretary of State containing specified information during the calendar month during which the organizations original articles were filed or during the immediately preceding 5 calendar months. Existing law requires the Secretary of State to provide notice to each organization to comply with this provision approximately 3 months prior to the close of the applicable filing period.
This bill would instead require all corporations to file their statement of information forms by March 15th all limited liability companies to file by April 15th and all nonprofit corporations to file by May 15th of each year.
(a)Every corporation shall file, within 90 days after the filing of its original articles and annually thereafter during by the applicable filing period, date, on a form prescribed by the Secretary of State, a statement containing all of the following:
(1)The name of the corporation and the Secretary of States file number.
(2)The names and complete business or residence addresses of its incumbent directors.
(3)The number of vacancies on the board, if any.
(4)The names and complete business or residence addresses of its chief executive officer, secretary, and chief financial officer.
(5)The street address of its principal executive office.
(6)The mailing address of the corporation, if different from the street address of its principal executive office.
(7)If the address of its principal executive office is not in this state, the street address of its principal business office in this state, if any.
(8)If the corporation chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, the corporation shall include a valid electronic mail address for the corporation or for the corporations designee to receive those notices.
(9)A statement of the general type of business that constitutes the principal business activity of the corporation (for example, manufacturer of aircraft; wholesale liquor distributor; or retail department store).
(b)The statement required by subdivision (a) shall also designate, as the agent of the corporation for the purpose of service of process, a natural person residing in this state or a corporation that has complied with Section 1505 and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth that persons complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.
(c)If there has been no change in the information in the last filed statement of the corporation on file in the Secretary of States office, the corporation may, in lieu of filing the statement required by subdivisions (a) and (b), advise the Secretary of State, on a form prescribed by the Secretary of State, that no changes in the required information have occurred during the applicable filing period.
(d)For the purposes of this section, the applicable filing period date for a corporation shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months March 15. The Secretary of State shall provide a notice to each corporation to comply with this section approximately three months prior to the close of the applicable filing period. date. The notice shall state the due date for compliance and shall be sent to the last address of the corporation according to the records of the Secretary of State or to the last electronic mail address according to the records of the Secretary of State if the corporation has elected to receive notices from the Secretary of State by electronic mail. The failure of the corporation to receive the notice is not an excuse for failure to comply with this section.
(e)Whenever any of the information required by subdivision (a) is changed, the corporation may file a current statement containing all the information required by subdivisions (a) and (b). In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent.
(f)The Secretary of State may destroy or otherwise dispose of any statement filed pursuant to this section after it has been superseded by the filing of a new statement.
(g)This section shall not be construed to place any person dealing with the corporation on notice of, or under any duty to inquire about, the existence or content of a statement filed pursuant to this section.
(h)The statement required by subdivision (a) shall be available and open to the public for inspection. The Secretary of State shall provide access to all information contained in this statement by means of an online database.
(i)In addition to any other fees required, a corporation shall pay a five-dollar ($5) disclosure fee when filing the statement required by subdivision (a). One-half of the fee shall, notwithstanding Section 12176 of the Government Code, be deposited into the Business Programs Modernization Fund established in subdivision (k), and one-half shall be deposited into the Victims of Corporate Fraud Compensation Fund established in Section 2280.
(j)A corporation shall certify that the information it provides pursuant to subdivisions (a) and (b) is true and correct. No claim may be made against the state for inaccurate information contained in the statements.
(k)There is hereby established the Business Programs Modernization Fund in the State Treasury. Moneys deposited into the fund shall, upon appropriation by the Legislature, be available to the Secretary of State to further the purposes of this section, including the development and maintenance of the online database required by subdivision (h), and by subdivision (c) of Section 2117.
SEC. 2.Section 6210 of the Corporations Code is amended to read:6210.(a)Every corporation shall, within 90 days after the filing of its original articles and biennially thereafter during on the applicable filing period, date, file, on a form prescribed by the Secretary of State, a statement containing: (1) the name of the corporation and the Secretary of States file number; (2) the names and complete business or residence addresses of its chief executive officer, secretary, and chief financial officer; (3) the street address of its principal office in this state, if any; (4) the mailing address of the corporation, if different from the street address of its principal executive office or if the corporation has no principal office address in this state; and (5) if the corporation chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, a valid electronic mail address for the corporation or for the corporations designee to receive those notices.
(b)The statement required by subdivision (a) shall also designate, as the agent of the corporation for the purpose of service of process, a natural person residing in this state or any domestic or foreign or foreign business corporation that has complied with Section 1505 and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth the persons complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.
(c)For the purposes of this section, the applicable filing period for a corporation shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months May 15. The Secretary of State shall provide a notice to each corporation to comply with this section approximately three months prior to the close of the applicable filing period. date. The notice shall state the due date for compliance and shall be sent to the last address of the corporation according to the records of the Secretary of State or to the last electronic mail address according to the records of the Secretary of State if the corporation has elected to receive notices from the Secretary of State by electronic mail. Neither the failure of the Secretary of State to send the notice nor the failure of the corporation to receive it is an excuse for failure to comply with this section.
(d)Whenever any of the information required by subdivision (a) is changed, the corporation may file a current statement containing all the information required by subdivisions (a) and (b). In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent.
(e)The Secretary of State may destroy or otherwise dispose of any statement filed pursuant to this section after it has been superseded by the filing of a new statement.
(f)This section shall not be construed to place any person dealing with the corporation on notice of, or under any duty to inquire about, the existence or content of a statement filed pursuant to this section.
SEC. 3.Section 8210 of the Corporations Code is amended to read:8210.(a)Every corporation shall, within 90 days after the filing of its original articles and biennially thereafter during by the applicable filing period, date, file, on a form prescribed by the Secretary of State, a statement containing: (1) the name of the corporation and the Secretary of States file number; (2) the names and complete business or residence addresses of its chief executive officer, secretary, and chief financial officer; (3) the street address of its principal office in this state, if any; (4) the mailing address of the corporation, if different from the street address of its principal executive office or if the corporation has no principal office address in this state; and (5) if the corporation chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, a valid electronic mail address for the corporation or for the corporations designee to receive those notices.
(b)The statement required by subdivision (a) shall also designate, as the agent of the corporation for the purpose of service of process, a natural person residing in this state or any domestic or foreign or foreign business corporation that has complied with Section 1505 and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth the persons complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.
(c)For the purposes of this section, the applicable filing period date for a corporation shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months May 15. The Secretary of State shall provide a notice to each corporation to comply with this section approximately three months prior to the close of the applicable filing period. date. The notice shall state the due date for compliance and shall be sent to the last address of the corporation according to the records of the Secretary of State or to the last electronic mail address according to the records of the Secretary of State if the corporation has elected to receive notices from the Secretary of State by electronic mail. Neither the failure of the Secretary of State to send the notice nor the failure of the corporation to receive it is an excuse for failure to comply with this section.
(d)Whenever any of the information required by subdivision (a) is changed, the corporation may file a current statement containing all the information required by subdivisions (a) and (b). In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent.
(e)The Secretary of State may destroy or otherwise dispose of any statement filed pursuant to this section after it has been superseded by the filing of a new statement.
(f)This section shall not be construed to place any person dealing with the corporation on notice of, or under any duty to inquire about, the existence or content of a statement filed pursuant to this section.
SEC. 4.Section 12570 of the Corporations Code is amended to read:12570.(a)Every corporation shall, within 90 days after the filing of its original articles and annually thereafter during by the applicable filing period date in each year, file, on a form prescribed by the Secretary of State, a statement containing: (1) the name of the corporation and the Secretary of States file number; (2) the names and complete business or residence addresses of its chief executive officer or general manager, secretary, and chief financial officer; (3) the street address of its principal office in this state, if any; (4) the mailing address of the corporation, if different from the street address of its principal office in this state; and (5) if the corporation chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, the corporation shall include a valid electronic mail address for the corporation or for the corporations designee to receive those notices.
(b)The statement required by subdivision (a) shall also designate, as the agent of the corporation for the purpose of service of process, a natural person residing in this state or any domestic or foreign corporation that has complied with Section 1505 and whose capacity to act as an agent has not terminated. If a natural person is designated, the statement shall set forth the persons complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.
(c)For the purposes of this section, the applicable filing period date for a corporation shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months March 15. The Secretary of State shall provide a notice to each corporation to comply with this section approximately three months prior to the close of the applicable filing period. date. The notice shall state the due date for compliance and shall be sent to the last address of the corporation according to the records of the Secretary of State or to the last electronic mail address according to the records of the Secretary of State if the corporation has elected to receive notices from the Secretary of State by electronic mail. Neither the failure of the Secretary of State to send the notice nor the failure of the corporation to receive it is an excuse for failure to comply with this section.
(d)Whenever any of the information required by subdivision (a) is changed, the corporation may file a current statement containing all the information required by subdivisions (a) and (b). In order to change its agent for service of process or the address of the agent, the corporation must file a current statement containing all the information required by subdivisions (a) and (b). Whenever any statement is filed pursuant to this section, it supersedes any previously filed statement and the statement in the articles as to the agent for service of process and the address of the agent.
(e)The Secretary of State may destroy or otherwise dispose of any statement filed pursuant to this section after it has been superseded by the filing of a new statement.
(f)This section shall not be construed to place any person dealing with the corporation on notice of, or under any duty to inquire about, the existence or content of a statement filed pursuant to this section.
SEC. 5.Section 17702.09 of the Corporations Code is amended to read:17702.09.(a)Every limited liability company and every foreign limited liability company registered to transact intrastate business in this state shall deliver to the Secretary of State for filing within 90 days after the filing of its original articles of organization or registering to transact intrastate business and biennially thereafter during by the applicable filing period, date, on a form prescribed by the Secretary of State, a statement of information containing:
(1)The name of the limited liability company and the Secretary of States file number and, in the case of a foreign limited liability company, the name under which the foreign limited liability company is authorized to transact intrastate business in this state and the state or other jurisdiction under the laws of which it is organized.
(2)The name and street address of the agent in this state for service of process required to be maintained pursuant to Section 17701.13. If a corporate agent is designated, only the name of the agent shall be set forth.
(3)The street address of its principal office. In the case of a foreign limited liability company, the street address of its principal business office in this state, if any, and, in the case of a domestic limited liability company, the street address of the office required to be maintained pursuant to Section 17701.13.
(4)The mailing address of the limited liability company or foreign limited liability company, if different from the street address of its principal office, or principal business office in this state, or, in the case of a domestic limited liability company, the street address of the office required to be maintained pursuant to Section 17701.13.
(5)The name and complete business or residence addresses of any manager or managers and the chief executive officer, if any, appointed or elected in accordance with the articles of organization or operating agreement or, if no manager has been so elected or appointed, the name and business or residence address of each member.
(6)If the limited liability company or foreign limited liability company chooses to receive renewal notices and any other notifications from the Secretary of State by electronic mail instead of by United States mail, the limited liability company or foreign limited liability company shall include a valid electronic mail address for the limited liability company or foreign limited liability company, or for the limited liability companys or foreign limited liability companys designee to receive those notices.
(7)The general type of business that constitutes the principal business activity or the limited liability company or foreign limited liability company, such as, for example, manufacture of aircraft, wholesale liquor distributor, or retail department store.
(b)If there has been no change in the information contained in the last filed statement of information of the limited liability company or foreign limited liability company on file in the office of Secretary of State, the limited liability company or foreign limited liability company may, in lieu of filing the statement of information required by subdivision (a), advise the Secretary of State, on a form prescribed by the Secretary of State, that no changes in the required information have occurred during the applicable filing period.
(c)For purposes of this section, the applicable filing period for a limited liability company shall be the calendar month during which its original articles of organization was filed or, in the case of a foreign limited liability company, the month during which its application for registration was filed, and the immediately preceding five calendar months April 15. The Secretary of State shall provide a notice to each limited liability company or foreign limited liability company to comply with this section approximately three months prior to the close of the applicable filing period. date. The notice shall state the due date for compliance and shall be sent to the last mailing address of the limited liability company or foreign limited liability company according to the records of the Secretary of State, or if none, to the street address of the principal office, or, in the case of a domestic limited liability company, the office required to be maintained pursuant to Section 17701.13, or to the last electronic mail address according to the records of the Secretary of State if the limited liability company or foreign limited liability company has elected to receive notices from the Secretary of State by electronic mail. The failure of the limited liability company or foreign limited liability company to receive the notice shall not exempt the limited liability company or foreign limited liability company from complying with this section.
(d)Whenever any of the information required by subdivision (a) changes, other than the name and address of the agent for service of process, the limited liability company or foreign limited liability company may file a current statement containing all the information required by subdivision (a). When changing its agent for service of process or when the address of the agent changes, the limited liability company or foreign limited liability company shall file a current statement containing all the information required by subdivision (a). Whenever any statement is filed pursuant to this section, that statement supersedes any previously filed statement pursuant to this section, the statement in the original articles of organization, and the statement in any previously filed amended or restated articles of organization that have been filed, or in the case of a foreign limited liability company, in the application for registration.
(e)If a statement of information delivered to the Secretary of State for filing under this section does not contain the information required by subdivision (a), the Secretary of State shall promptly return the statement of information to the reporting limited liability company or foreign limited liability company for correction.
(f)The Secretary of State may destroy or otherwise dispose of any statement filed pursuant to this section after it has been superseded by the filing of a new statement.
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Date
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Status
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| Feb 26, 2015 | Read first time. To print. |
| Feb 27, 2015 | From printer. May be heard in committee March 29. |
| Mar 16, 2015 | Referred to Com. on B. & F. |
| Apr 6, 2015 | In committee: Hearing postponed by committee. |
| Apr 21, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0.) (April 20). Re-referred to Com. on APPR. |
| Apr 29, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jan 31, 2016 | Died pursuant to Article IV, Sec. 10(c) of the Constitution. |
| Feb 1, 2016 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
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Date
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Description
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Location
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Votes
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| Apr 20, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly 1st Extraordinary Session on Finance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
AB 871
Page 2
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 871
(Brown) – As Introduced February 26, 2015
Policy Committee: |
Banking and Finance |
Vote: |
11 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill changes the filing date for statements of information (SOIs) that various corporate entities file annually or biennially with the Secretary of State (SOS) as follows:
1) Requires all corporations to file by March 15th of each year rather than the calendar month in which the original articles of incorporation (AOI) were filed.
2) Requires all limited liability companies (LLCs) to file by April 15th biennially rather than the calendar month in which the original AOIs were filed.
3) Requires all nonprofit corporations to file by May 15th biennially rather than the calendar month in which to original AOIs were filed.
FISCAL EFFECT:
One time GF costs of approximately $2.5 million to implement systems and procedure changes, conduct outreach, and notify businesses; ongoing annual GF costs of approximately $1.0 million to staff the peak periods created by the common filing deadlines.
COMMENTS:
1) Purpose. According to the author, allowing businesses to file at the same time each year would eliminate confusion with respect to SOI due dates. The author believes this change would have a positive impact on small businesses and improve compliance with the SOI filing requirements.
2) Existing Filing Requirements. Current law requires corporate entities to file, within 90 days after the filing of its original incorporating documents and annually or biennially thereafter, an SOI with the SOS. The filing date for subsequent SOIs coincides with the anniversary of the date on which the entity's original incorporating documents were filed. The SOS provides a notice to each entity to comply with this section approximately three months prior to the close of the applicable filing period. As a result, SOI filings with the SOS are spaced relatively evenly over the course of a calendar year. Currently, the SOS processes over a million SOIs annually.
3) Penalties for Late Filing. Failure to file an SOI results in a $250 penalty levied by the Franchise Tax Board and a suspension of the entity by SOS, during which time the limited liability protections afforded to corporate entities are suspended and contracts entered into during the suspension period are potentially null and void. According to the author, approximately 141,000 entities were assessed a penalty for not filing their annual SOI between 2010 and 2011. Of these businesses, 25,000 were suspended.
4) Prior Legislation. AB 2180 (Brown) of 2014 would have changed the filing period when a corporation, a nonprofit public benefit corporation, a nonprofit mutual benefit corporation, a consumer cooperative corporation a limited liability company, foreign limited liability company, and a credit union files a SOI with the SOS to their respective tax filing day. AB 2180 was held on the Suspense File of this committee.
Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081
AB 871
Page 3
Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Matthew Dababneh, Chair
AB 871
(Brown) – As Introduced February 26, 2015
SUBJECT: Business filings: statement of information
SUMMARY: Changes the filing period when a corporation, a nonprofit public benefit corporation, a nonprofit mutual benefit corporation, a consumer cooperative corporation, a limited liability company (LLC) and a foreign LLC files a statement of information (SOI) with the Secretary of State (SOS). Specifically, this bill:
Requires all corporations to file the SOI by March 15th of each year with the SOS rather than during the calendar month of which the original articles of incorporation (AOI) was filed.
Requires all LLCs to file the SOI by April 15th biennially with the SOS rather than during the calendar month of which the original AOI was filed.
Requires all nonprofit corporations to file the SOI by May 15th biennially with the SOS rather than during the calendar month of which the original AOI was filed.
Requires the SOS to provide notice to the above listed entities 3 months prior to the applicable filing date.
EXISTING LAW:
Requires every corporation to file, within 90 days after the filing of its original articles and annually thereafter during the applicable filing period, on a form prescribed by the SOS, a statement. Specifies the filing period for a corporation shall be the calendar month which its original articles were filed and the immediately preceding five calendar months. The SOS provides a notice to each corporation to comply with this section approximately three months prior to the close of the applicable filing period. [Corporations Code, Section 1502]
Requires every nonprofit public benefit corporation, nonprofit mutual benefit corporation, limited liability company and foreign limited liability company to within 90 days after the filing of its original articles and biennially thereafter during the applicable filing period to file with the SOS. [Corporations Code, Sections 6210, 8210, and 17702.09]
Requires every consumer cooperative corporation to file within 90 days after its original articles and annually thereafter during the applicable filing period each year a form prescribed by the SOS. [Corporations Code, Section 12570]
FISCAL EFFECT: Unknown.
COMMENTS:
Need for the Bill:
According to the author, "streamlining the SOI filing dates and allowing businesses to file at the same time every year would eliminate confusion as to when a business entity's SOI is due. This change would also have a positive impact on small businesses and improve compliance with the SOI filing mandate. In addition, the natural staggering of due dates if filed with the Franchise Tax Board (FTB) filing over a 3 month period would help prevent the SOS from becoming overwhelmed with a large volume of SOIs coming in at one time of year."
Background:
Under existing law, the SOS provides filing periods, for example, corporations are required to file annually during the filing period of the calendar month during which its original AOI was filed and provides a flexibility period of 5 months from that date to file. The SOS is required to notify corporations of the filing period 3 months prior to the close of the applicable filing period.
AB 871 changes the filing periods to filing dates. Corporations and consumer cooperative corporations who file on an annual basis would be required to file a SOI on March 15th of each year with the SOS. Nonprofits who file on a biennial basis would be required to file a SOI on May 15th every other year. LLCs who also file biennially would be required to file a SOI on April 15th every other year. The SOS would be required to provide notice of this filling date 3 months prior to the date.
As of April, 2015, according to the SOS, California has almost a million active corporations and close to 600,000 active LLCs.
California Business Connect (CBC)
CBC is a six-year project that aims to increase efficiency by eliminating paper-based manual transactions and 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.
By June 30, 2016, the SOS must launch CBC. CBC will:
Automate paper–based processes and allow businesses to file and request copies of records online 24 hours a day.
Provide access to SOS records for the public and government agencies to perform functions in a more efficient manner.
Allow fee payments to be processed within one business day.
Previous Legislation
AB 2180 (Brown) would have changed the filing period when a corporation, a nonprofit public benefit corporation, a nonprofit mutual benefit corporation, a consumer cooperative corporation a limited liability company, foreign limited liability company, and a credit union files a SOI with the SOS. Died in the Assembly Appropriations Committee.
SB 1041 (Jackson, Chapter 834, Statutes of 2014) makes various technical, non-substantive, and clarifying changes throughout the Corporations Code in preparation for the SOS automated filing system. These changes include, among other things: requiring that the SOS prescribe forms for the resignation of agents for service of process; harmonizing statutes relating to the resignation of agents for service of process to provide consistency across different types of business entities; authorizing the SOS to remove and destroy records relating to agent resignations if a new agent for service of process is designated, as specified; clarifying the necessary signatures for various business filings; clarifying when foreign limited liability company registration cancellations are effective; clarifying situations wherein a penalty for otherwise delinquent annual statements would not be applied; striking requirements for the provision of additional copies of specified filings; and correcting various internal cross references.
SB 1532 (Pavley, Chapter 494, Statutes of 2012) was enacted to implement changes necessary for the California Business Connect automated system. Specifically, the bill specified that the required address information in business filings is the street address and required business entities to provide a mailing address if not the same as the street address. SB 1532 also revised requirements with respect to the maintenance of forms filed with the SOS, revised provisions relating to the assignment of filing dates and fees by the SOS, repealed specified provisions relating to special purpose corporations, and made other technical changes.
REGISTERED SUPPORT / OPPOSITION:
Support
California Society of Enrolled Agents (CSEA) (Sponsor)
California Chamber of Commerce
Opposition
None on file.
Analysis Prepared by: Kathleen O'Malley / B. & F. / (916) 319-3081
Bill Author
Bill Co-Author(s):