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SB-263 Limited liability partnerships: limited liability companies.(2001-2002)

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SB263:v95#DOCUMENT

Senate Bill No. 263
CHAPTER 425

An act to amend Sections 16953 and 17050 of the Corporations Code, relating to business organizations.

[ Filed with Secretary of State  October 02, 2001. Approved by Governor  October 01, 2001. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 263, Johnson. Limited liability partnerships: limited liability companies.
Existing law provides for the creation of various forms of business organizations, including limited liability partnerships and limited liability companies. Existing law requires the Secretary of State to prescribe a form relative to filing with the Secretary of State of a certificate of registration by limited liability partnerships and articles of organization by limited liability companies.
This bill would require the Secretary of State to include with instructional materials provided in conjunction with these forms a notice that filing the registration will obligate the limited liability partnership or limited liability company to pay an annual tax for that calendar year to the Franchise Tax Board. The bill would require the notice to be updated annually to specify the dollar amount of the tax.

The people of the State of California do enact as follows:


SECTION 1.

 Section 16953 of the Corporations Code is amended to read:

16953.
 (a) To become a registered limited liability partnership, a partnership, other than a limited partnership, shall file with the Secretary of State a registration, executed by one or more partners authorized to execute a registration, stating all of the following:
(1) The name of the partnership.
(2) The address of its principal office.
(3) The name and address of the agent for service of process on the limited liability partnership in California.
(4) A brief statement of the business in which the partnership engages.
(5) Any other matters that the partnership determines to include.
(6) That the partnership is registering as a registered limited liability partnership.
(b) The registration shall be accompanied by a fee as set forth in subdivision (a) of Section 12189 of the Government Code.
(c) The Secretary of State shall register as a registered limited liability partnership any partnership that submits a completed registration with the required fee.
(d) The Secretary of State may cancel the filing of the registration if a check or other remittance accepted in payment of the filing fee is not paid upon presentation. Upon receiving written notification that the item presented for payment has not been honored for payment, the Secretary of State shall give a first written notice of the applicability of this section to the agent for service of process or to the person submitting the instrument. Thereafter, if the amount has not been paid by cashier’s check or equivalent, the Secretary of State shall give a second written notice of cancellation and the cancellation shall thereupon be effective. The second notice shall be given 20 days or more after the first notice and 90 days or less after the date of the original filing.
(e) A partnership becomes a registered limited liability partnership at the time of the filing of the initial registration with the Secretary of State or at any later date or time specified in the registration and the payment of the fee required by subdivision (b). A partnership continues as a registered limited liability partnership until a notice that it is no longer a registered limited liability partnership has been filed pursuant to subdivision (b) of Section 16954 or, if applicable, until it has been dissolved and finally wound up. The status of a partnership as a registered limited liability partnership and the liability of a partner of the registered limited liability partnership shall not be adversely affected by errors or subsequent changes in the information stated in a registration under subdivision (a) or an amended registration or notice under Section 16954.
(f) The fact that a registration or amended registration pursuant to this section is on file with the Secretary of State is notice that the partnership is a registered limited liability partnership and of those other facts contained therein that are required to be set forth in the registration or amended registration.
(g) The Secretary of State shall provide a form for a registration under subdivision (a), which shall include the form for confirming compliance with the optional security requirement pursuant to subdivision (c) of Section 16956. The Secretary of State shall include with instructional materials provided in conjunction with the form for a registration under subdivision (a) a notice that filing the registration will obligate the limited liability partnership to pay an annual tax for that calendar year to the Franchise Tax Board pursuant to Section 17948 of the Revenue and Taxation Code. The notice shall be updated annually to specify the dollar amount of the tax.
(h) A limited liability partnership providing professional limited liability partnership services in this state shall comply with all statutory and administrative registration or filing requirements of the state board, commission, or other agency that prescribes the rules and regulations governing the particular profession in which the partnership proposes to engage, pursuant to the applicable provisions of the Business and Professions Code relating to that profession. The state board, commission, or other agency shall not disclose, unless compelled by a subpoena or other order of a court of competent jurisdiction, any information it receives in the course of evaluating the compliance of a limited liability partnership with applicable statutory and administrative registration or filing requirements, provided that nothing in this section shall be construed to prevent a state board, commission, or other agency from disclosing the manner in which the limited liability partnership has complied with the requirements of Section 16956, or the compliance or noncompliance by the limited liability partnership with any other requirements of the state board, commission, or other agency.

SEC. 2.

 Section 17050 of the Corporations Code is amended to read:

17050.
 (a) In order to form a limited liability company, one or more persons shall execute and file articles of organization with, and on a form prescribed by, the Secretary of State and, either before or after the filing of articles of organization, the members shall have entered into an operating agreement. The person or persons who execute and file the articles of organization may, but need not, be members of the limited liability company.
(b) A limited liability company shall have one or more members.
(c) The existence of a limited liability company begins upon the filing of the articles of organization. For all purposes, a copy of the articles of organization duly certified by the Secretary of State is conclusive evidence of the formation of a limited liability company and prima facie evidence of its existence.
(d) The Secretary of State shall include with instructional materials provided in conjunction with the form for filing articles of organization under subdivision (a) a notice that filing the registration will obligate the limited liability company to pay an annual tax for that calendar year to the Franchise Tax Board pursuant to Section 17941 of the Revenue and Taxation Code. The notice shall be updated annually to specify the dollar amount of the tax.