Today's Law As Amended


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SB-1201 Beneficial owners.(2023-2024)



As Amends the Law Today


SECTION 1.

 Section 1502 of the Corporations Code is amended to read:

1502.
 (a) Every corporation shall 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 Secretary of State, a statement containing all of the following:
(1) The name of the corporation and the Secretary of State’s 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 corporation’s designee to receive those notices.
(9) A statement of the general type of business that constitutes the principal business activity of the corporation, such as, for example, manufacturer of aircraft, wholesale liquor distributor, or retail department store.
(10) A statement indicating whether any officer or any director has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code.
(11) The names and complete business or residence addresses of any beneficial owner.
(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 person’s 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 State’s 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 for a corporation shall be the calendar month during which its original articles were filed and the immediately preceding five calendar months. 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. 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.
(l) As used in this section, “beneficial owner” means a natural person for whom, directly or indirectly and through any contract arrangement, understanding, relationship, or otherwise, either of the following applies with respect to a corporation:
(l)  (1) This section shall become operative on January 1, 2022, or upon certification by the Secretary of State that California Business Connect is implemented, whichever date is earlier. The person exercises substantial control over the corporation. For the purposes of this paragraph, “substantial control” has the same meaning as set forth in Section 1010.380 of Title 31 of the Code of Federal Regulations, as published in the Federal Register, Volume 87, Number 189, on September 30, 2022. 
(2) If the Secretary of State certifies California Business Connect is implemented prior to January 1, 2022, the Secretary of State shall post notice of the certification on the homepage of its internet website and send notice of the certification to the Legislative Counsel. The person owns 25 percent or more of the equity interest of the corporation. 
(m) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

SEC. 2.

 Section 2117 of the Corporations Code is amended to read:

2117.
 (a) Every foreign corporation (other than a foreign association) qualified to transact intrastate business shall file, within 90 days after the filing of its original statement and designation of foreign corporation and annually thereafter during the applicable filing period, on a form prescribed by the Secretary of State, a statement containing all of the following:
(1) The name of the corporation as registered in California and the California Secretary of State’s 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 executive office.
(4) The mailing address of the corporation, if different from the street address of its principal executive office.
(5) The street address of its principal business office in this state, if any.
(6) 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 corporation’s designee to receive those notices.
(7) A statement of the general type of business that constitutes the principal business activity of the corporation, such as, for example, manufacturer of aircraft, wholesale liquor distributor, or retail department store.
(8) A statement indicating whether any officer or any director has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code.
(9) The names and complete business or residence addresses of any beneficial owner.
(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 the agent has not terminated. If a natural person is designated, the statement shall set forth the person’s complete business or residence street address. If a corporate agent is designated, no address for it shall be set forth.
(c) 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 the statement by means of an online database.
(d) In addition to any other fees required, a foreign corporation shall pay a five-dollar ($5) disclosure fee upon 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) of Section 1502, and one-half shall be deposited into the Victims of Corporate Fraud Compensation Fund established in Section 2280.
(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 shall 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 filing pursuant to Section 2105.
(f) Subdivisions (c), (d), (f), and (g) of Section 1502 apply to statements filed pursuant to this section, except that “articles” shall mean the filing pursuant to Section 2105, and “corporation” shall mean a foreign corporation.
(g) As used in this section, “beneficial owner” means a natural person for whom, directly or indirectly and through any contract arrangement, understanding, relationship, or otherwise, either of the following applies with respect to a corporation:
(g)  (1) This section shall become operative on January 1, 2022, or upon certification by the Secretary of State that California Business Connect is implemented, whichever date is earlier. The person exercises substantial control over the corporation. For the purposes of this paragraph, “substantial control” has the same meaning as set forth in Section 1010.380 of Title 31 of the Code of Federal Regulations, as published in the Federal Register, Volume 87, Number 189, on September 30, 2022. 
(2) If the Secretary of State certifies California Business Connect is implemented prior to January 1, 2022, the Secretary of State shall post notice of the certification on the homepage of its internet website and send notice of the certification to the Legislative Counsel. The person owns 25 percent or more of the equity interest of the corporation. 
(h) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

SEC. 3.

 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 the applicable filing period, 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 State’s 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) The name and complete business or residence addresses of any beneficial owner.
(6) (7)  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 company’s or foreign limited liability company’s designee to receive those notices.
(7) (8)  The general type of business that constitutes the principal business activity of the limited liability company or foreign limited liability company, such as, for example, manufacturer of aircraft, wholesale liquor distributor, or retail department store.
(8) (9)  (A) For a manager-managed limited liability company or a manager-managed foreign limited liability company, a statement indicating whether any manager has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code.
(B) For a member-managed limited liability company, a statement indicating whether any member has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code, unless, pursuant to subdivision (d) of Section 17701.10, a written operating agreement limits the members who are agents of the limited liability company for the purpose of its business and affairs to a specified member or specified members, in which case the statement is only required with respect to the specified member or members.
(C) For a foreign limited liability company that is not managed by a manager or managers, a statement indicating whether any member has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code, unless the member is not an agent of the foreign limited liability company for purposes of its business and affairs, in which case the statement is only required with respect to the member or members who are agents of the foreign limited liability company.
(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 the  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. 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. 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.
(g) As used in this section, “beneficial owner” means a natural person for whom, directly or indirectly and through any contract arrangement, understanding, relationship, or otherwise, either of the following applies with respect to a limited liability company or a foreign limited liability company:
(g)  (1) This section shall become operative on January 1, 2022, or upon certification by the Secretary of State that California Business Connect is implemented, whichever date is earlier. The person exercises substantial control over the entity. For the purposes of this paragraph, “substantial control” has the same meaning as set forth in Section 1010.380 of Title 31 of the Code of Federal Regulations, as published in the Federal Register, Volume 87, Number 189, on September 30, 2022. 
(2) If the Secretary of State certifies California Business Connect is implemented prior to January 1, 2022, the Secretary of State shall post notice of the certification on the home page of its internet website and send notice of the certification to the Legislative Counsel. The person owns 25 percent or more of the equity interest of an entity. 
(h) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2026.

SEC. 4.

 Section 12176 of the Government Code is amended to read:

12176.
 (a) Commencing July 1, 1992, all fees collected by the Secretary of State’s office pursuant to the Business and Professions Code, Civil Code, Code of Civil Procedure, Commercial Code, Corporations Code, Food and Agricultural Code, Harbors and Navigation Code, and this code, excluding Section 81008 of this code, shall be paid into the Secretary of State’s Business Fees Fund which was created by former Section 12181 and is hereby continued in existence in the State Treasury for the administration of that portion of the Secretary of State’s functions under these codes.
(b) It is the intent of the Legislature that moneys deposited into the Secretary of State’s Business Fees Fund shall be used to support the programs from which fees are collected. It is further the intent of the Legislature that fees shall be sufficient to cover the costs of these programs and shall be expended, commencing in the 1992-93 fiscal year, to the extent that appropriations are made in the annual Budget Act. Of the fees collected, and any interest earned thereon, in excess of the authority of the Secretary of State to expend pursuant to the annual Budget Act, up to one million dollars ($1,000,000) may remain in the Secretary of State’s Business Fee Fund. Any additional excess fees and interest earned shall be transferred to the General Fund at the end of each fiscal year.
At least weekly, all fees collected by the Secretary of State shall be paid into the State Treasury.
(c) Notwithstanding subdivisions (a) and (b), the amount of the fees collected by the Secretary of State that are increased pursuant to paragraph (2) of subdivision (g) of Section 12186, paragraph (2) of subdivision (h) of Section 12186, and paragraph (2) of subdivision (k) of Section 12190 shall be used to support the Secretary of State’s regulatory activities imposed by the act adding this subdivision and shall not be considered additional excess fees as described in subdivision (b).

SEC. 5.

 Section 12186 of the Government Code is amended to read:

12186.
 The fees for corporate filings are the following:
(a) Issuing a certificate of reservation of corporate name: Ten dollars ($10).
(b) Registering a corporate name for the calendar year pursuant to Section 2101 of the Corporations Code: Fifty dollars ($50).
(c) Filing articles of incorporation providing for shares: One hundred dollars ($100).
(d) Filing articles of incorporation not providing for shares: Thirty dollars ($30).
(e) Filing the statement and designation upon the qualification of a foreign, nonprofit, nonstock corporation, and of a foreign corporation organized for educational, religious, scientific, or charitable purposes, and not issuing shares: Thirty dollars ($30).
(f) Filing the statement and designation upon the qualification of any other foreign corporation not provided for in subdivision (e): One hundred dollars ($100).
(g) Filing (1)  Subject to paragraph (2), filing  the statement of information for every corporation pursuant to Sections 1502, 6210, 8210, 9660, and 12570 of the Corporations Code and Section 14101.6 of the Financial Code: Twenty dollars ($20).
(2) The Secretary of State may, by regulation, increase the amount of the fee described in paragraph (1) for every corporation pursuant to Sections 1502 of the Corporations Code, not to exceed the reasonable cost of any regulatory activities necessary to implement paragraph (11) of subdivision (a) of Section 1502 of the Corporations Code.
(h) Filing (1)  Subject to paragraph (2), filing  the statement of information for every foreign corporation (other than a foreign association) qualified to transact intrastate business pursuant to Section 2117 of the Corporations Code: Twenty dollars ($20).
(2) The Secretary of State may, by regulation, increase the amount of the fee described in paragraph (1), not to exceed the reasonable cost of any regulatory activities necessary to implement paragraph (9) of subdivision (a) of Section 2117 of the Corporations Code.
(i) Filing changes to any statement of information subject to subdivisions (g) and (h): No fee.
(j) Filing the statement pursuant to Section 1502.1 or 2117.1 of the Corporations Code: No fee.
(k) Filing for the merger of one corporation solely with one or more other corporations: One hundred dollars ($100).
(l) Filing for the merger of one or more corporations with one or more other types of business entities: One hundred fifty dollars ($150).
(m) Filing a certificate of amendment changing the status of a nonprofit corporation into a stock corporation: Seventy dollars ($70).
(n) Filing a certificate of election to dissolve a corporation, a certificate of dissolution of a corporation, or a certificate of surrender, or of change of address: No fee.
(o) Filing a statement of address by a foreign lending institution on or before June 30 of each year pursuant to Section 2104 of the Corporations Code: Fifty dollars ($50).
(p) Filing any other instrument by or on behalf of a corporation, unless another fee is specified by law: Thirty dollars ($30).

SEC. 6.

 Section 12190 of the Government Code is amended to read:

12190.
 The limited liability company filing fees are the following:
(a) Issuing a certificate of reservation of limited liability company name: Ten dollars ($10).
(b) Filing articles of organization of a limited liability company: Seventy dollars ($70).
(c) Filing an application for registration as a foreign limited liability company: Seventy dollars ($70).
(d) Filing a certificate of amendment to the articles of organization of a limited liability company: Thirty dollars ($30).
(e) Filing restated articles of organization of a limited liability company: Thirty dollars ($30).
(f) Filing an amendment to the application for registration as a foreign limited liability company: Thirty dollars ($30).
(g) Filing a certificate of correction for a limited liability company: Thirty dollars ($30).
(h) Filing a certificate of continuation for a limited liability company after a certificate of dissolution has been filed: Thirty dollars ($30).
(i) Filing a certificate of merger for a merger of a limited liability company with one or more other limited liability companies: Seventy dollars ($70).
(j) Filing a certificate of merger for a merger of one or more limited liability companies with one or more other business entities: One hundred fifty dollars ($150).
(k) Filing (1)  Subject to paragraph (2), filing  the statement of information of a limited liability company or of a foreign limited liability company pursuant to Section 17702.09 of the Corporations Code: Twenty dollars ($20).
(2) The Secretary of State may, by regulation, increase the amount of the fee described in paragraph (1), not to exceed the reasonable cost of any regulatory activities necessary to implement paragraph (6) of subdivision (a) of Section 17702.09 of the Corporations Code.
(l) Filing changes to any statement of information: No fee.
(m) Filing a certificate of dissolution or a certificate of cancellation of articles of organization for purposes of the dissolution of a limited liability company: No fee.
(n) Filing a certificate of cancellation for purposes of the cancellation of registration of a foreign limited liability company: No fee.
(o) Filing any instrument by or on behalf of a limited liability company, unless another fee is specified by law or the law specifies that no fee is to be charged: Thirty dollars ($30).
SEC. 7.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.