Statutes of 2005 – Legislative Summary



Following are summaries of bills enacted into law that may directly affect filings made and business conducted with the Secretary of State’s office. Unless otherwise indicated, these measures took effect on January 1, 2006. To research other legislation that does not impact filings made or business conducted with the Secretary of State’s office but that may affect your business, please refer to the Bill Index section of the California Legislative Counsel’s website for a list of all bills introduced in the Assembly and Senate during the 2005–2006 legislative session.

The various California Codes (reflecting laws currently in effect) can be accessed through the California Law section of the California Legislative Counsel’s website.


Business Entities

Chapter 1117 (AB 643 Lowenthal)
(Statutes of 2002)

Effective January 1, 2006, a corporation formed to manage a common interest development is subject to an additional $50.00 penalty, and subsequent suspension, for failure to file the initial or biennial Statement by Common Interest Development Association. This penalty is in addition to the penalty for failure to file the initial or biennial Statement of Information. (Civil Code § 1363.6(d), Corporations Code § 8810, and Revenue and Taxation Code § 19141.)

Chapter 116 (SB 702 Ackerman)

This act adds provisions relating to unincorporated associations including termination or suspension of membership, member voting, amendments of governing documents, mergers, and dissolution. This act also provides liability for injury, damage, or harm caused by an act or omission of the association, director, officer, or agent if specific conditions are met.

Chapter 286 (AB 241 Harman)

This act provides that upon a merger, a surviving domestic or foreign corporation or other business entity assumes the tax liability of each disappearing domestic or foreign corporation or other business entity. This act also extends the Secretary of State’s authority to file the merger without a Tax Clearance Certificate from the Franchise Tax Board if the surviving business entity is a domestic limited liability company, domestic corporation, or registered limited liability partnership or a foreign limited liability company, foreign limited liability partnership, or foreign corporation that is registered or qualified to do business in California.


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Notary Public

Chapter 295 (AB 361 Runner)

This act makes it a misdemeanor for a notary public to willfully fail to perform required duties related to the notary public’s journal or willfully fail to keep the notary public seal under his or her direct and exclusive control or willfully surrender the seal to another. This act requires a court to revoke the commission of a notary public convicted of a felony, or upon conviction of any offense related to performance of the notary’s duties, and requires the surrender of the notary public’s seal to the court. The court is required to forward the seal and a certified copy of the judgment of conviction to the Secretary of State. This act provides that a notary public is guilty of forgery if the notary public issues an acknowledgment knowing it to be false. This act makes a person guilty of a misdemeanor if that person solicits, coerces, or influences a notary public to improperly maintain the notary public’s journal. This act allows no variations to the California certificate of acknowledgment.


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Special Filings

Chapter 434 (AB 1676 Richman and Nation)

This act creates the Advance Directives and Terminal Illness Decisions Program. This act requires the Secretary of State to work with the Department of Health Services and the Attorney General to develop information about end of life care, advance health care directives, and registration of the advance health care directives at the Advance Health Care Directive Registry. This act also requires links to be provided for this information on the web sites of the Secretary of State, Department of Health Services, the Attorney General, Department of Managed Health Care, Department of Insurance, Board of Registered Nursing, and the Medical Board of California.

Chapter 439 (SB 581 Figueroa)

This act amends various provisions relating to health studio service contracts, including expanding the provisions for canceling the contract. This act requires seller of health studio services for a health studio that is not yet open to hold all money received by a consumer in trust, places restrictions on drawing on, transferring or encumbering trust funds and provides for a bond issued by a surety insurer to be filed with the Secretary of State.

Chapter 633 (AB 178 Koretz, Chan, Horton and Vargas)

This act establishes the California Cigarette Fire Safety and Firefighter Protection Act. This act prohibits the sale of cigarettes unless the manufacturer of those cigarettes certifies to the State Fire Marshal that the cigarettes have been tested in accordance with standards established by the American Society of Testing and Materials. This act requires the State Fire Marshall to notify the Secretary of State if federal fire safety standards that preempt this act are enacted.


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