Statutes of 2004 – 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, 2005. 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 2003–2004 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 819 (AB 1000 Dutra)
Urgency Legislation
Effective September 27, 2004

This act makes changes to the California Corporate Disclosure Act, which requires publicly traded domestic stock and foreign corporations to file a corporate disclosure statement containing specified information. AB 1000 took effect September 27, 2004, as an urgency measure. The primary changes are as follows:

Chapter 629 (AB 1776 Wiggins, Bogh, Calderon, Chan, Chavez, Correa, Houston, Montanez and Vargas)

This act provides that a foreign corporation that designates an agent for service of process pursuant to the requirements of Corporations Code § 2105(a)(4) consents to the service of any validly issued and properly served search warrant for records or documents that are in the possession of the foreign corporation and are located inside or outside of California. It defines "properly served" to mean delivery by hand, or in a manner reasonably allowing for proof of delivery if delivered by U.S. mail, overnight delivery service, or fax to a person or entity listed in Corporations Code § 2110.

Chapter 416 (AB 1859 Nakano)

This act creates a short–form cancellation process for a domestic limited liability company that filed its articles of organization on or after January 1, 2004, and meets the following requirements:

This act exempts a limited liability company that files a certificate of cancellation pursuant to this process from the requirement to obtain a tax clearance certificate and from paying the LLC annual tax for the first taxable year beginning in 2005 that is normally required pursuant to the Revenue and Taxation Code. However, it does not allow for reimbursement of taxes that have already been paid.

Chapter 376 (AB 1955 Vargas)

This act allows a domestic for–profit life insurer to be organized as a nonprofit mutual benefit corporation. A domestic life insurer organized under the Nonprofit Mutual Benefit Corporation Law would be subject to all of the provisions applicable to a domestic incorporated stock life insurer pursuant to the Insurance Code.

Chapter 354 (AB 3073 Bermudez, Wyland, Harman, Laird and Leno)
Urgency Legislation
Effective August 30, 2004

This act, which took effect August 30, 2004, as a tax levy, contains numerous provisions concerning property owned by limited liability companies. The provision of the bill that affects the Secretary of State’s office is found in newly amended Corporations Code § 17002, which specifies that a limited liability company may engage in not–for–profit activities.

Chapter 178 (SB 1746 Ackerman)

This act repeals current provisions concerning unincorporated associations, enacts new provisions, and makes conforming changes relative to the liability of members of unincorporated associations. It also exempts labor organizations, labor federations, labor councils, and labor committees that are governed by constitutions or by–laws from the provisions of the Corporations Code that regulate unincorporated associations.

Chapter 695 (SB 1913 Figueroa, Brulte, Cedillo, Machado, Murray and Vincent)

This act exempts professional corporations rendering professional services by persons licensed by the Speech–Language Pathology and Audiology Board from the requirement to obtain a certificate of registration. It also eliminates the restriction that a chiropractic corporation include in its name only the name or the last name of one or more of the present, prospective, or former shareholders and the words "chiropractic" and "corporation" or wording or abbreviations denoting corporate existence.

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Notary Public

Chapter 621 (AB 578 Leno)
Urgency Legislation
Effective September 21, 2004

This act, which took effect September 21, 2004, as an urgency measure, enacts the Electronic Recording Delivery Act of 2004. Most provisions of the bill do not affect the Secretary of State’s office. However, new Government Code § 27391(e) allows a county recorder to accept for recording a signature that is not accompanied by a notary’s seal or stamp if the electronic signature of the notary contains all of the following: the name of the notary; the words "Notary Public"; the name of the county where the bond and oath of office of the notary are filed; the sequential identification number assigned to the notary, if any; and the sequential identification number assigned to the manufacturer or vendor of the notary’s physical or electronic seal, if any.

Chapter 6 (AB 1179 Parra)
Urgency Legislation
Effective January 22, 2004

This act, which took effect on January 22, 2004, as an urgency measure, contains many public records provisions that do not affect the Secretary of State’s office. However, new Government Code § 27201.5 specifies that a notary acknowledgment shall be deemed complete for recording purposes without a photographically reproducible official seal of the notary public if the seal is present and legible, and the name of the notary, the county of the notary’s principal place of business, the notary’s telephone number, the notary’s registration number, and the notary’s commission expiration date are typed or printed in a manner that is photographically reproducible below, or immediately adjacent to, the notary’s signature in the acknowledgment.

Chapter 539 (AB 2062 Nakano)

This act includes three major provisions affecting notaries public:

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Special Filings

Chapter 173 (AB 1984 Wolk)

This act pertains to the Cache Creek Resources Management Plan. The only provision that affects the Secretary of State’s office provides that the bill shall not take effect until the date the State Mining and Geology Board notifies the Secretary of State in writing that the board has approved an ordinance adopted by the Yolo County Board of Supervisors that governs in–channel noncommercial extraction activities carried out pursuant to the Cache Creek Resources Management Plan.

Chapter 882 (AB 2445 Canciamilla)

This act requires the Secretary of State, as part of the duties associated with the Advance Health Care Directive Registry, to receive and release a person’s advance health care directive and transmit the information to the registry of another jurisdiction upon request. It requires the Secretary of State to respond by the close of business on the next business day to a request for information received from the emergency department of a general acute care hospital.

Chapter 451 (AB 2613 Haynes)

This act exempts an affiliate discount buying organization from the requirement that it maintain a $20,000 surety bond and modifies the requirements concerning the maintenance of a trust account for the deposit of contract payments received from buyers if the affiliate discount buying organization maintains a $250,000 surety bond and its parent maintains an aggregate $2,500,000 surety bond and a letter of credit for all of its affiliates that do not maintain their own surety bonds.

Chapter 557 (AB 2691 Correa and Vargas)

This act requires an immigration consultant who is required to file a surety bond to notify the Secretary of State when the surety bond is renewed and to also file additional information with the Secretary of State, as well as a copy of valid photo identification. It also requires the Secretary of State’s office to post information on its website demonstrating that an immigration consultant is in compliance with the bond requirement.

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