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Submitted by UCS on January 2, 2023
Effective January 1, 2023, California legislation amended the following provisions: 1) termination of an LLC (Domestic or Foreign), 2) Conversion authorization, 3) the introduction of Certificates of Validation, and 4) information required on the LLC Statements of Information to set forth whether any member or manager has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law for the violation of any wage order or provision of the Labor Code (judgements or violations).
The summary of the changes are as follows:
Termination of an LLC
AB 1802 adds language to further clarify how assets inadvertently or otherwise omitted from the winding up process of a canceled limited liability company and later realized shall be used. Specifically, such assets shall be used to discharge unsatisfied liabilities, if any, known by the company, and any excess shall be distributed to the members. If assets are inadvertently or otherwise omitted from the winding up, any person authorized to wind up the affairs of a limited liability company that has filed a certificate of cancellation (termination) under Section 17707.04 may use the assets to discharge the liabilities of the limited liability company and may distribute to the members the remaining assets, if any.
This change affects termination forms for Domestic, Out of State and Short form applications.
Conversion
SB 218 authorizes the conversion of a California corporation into a foreign other business entity or foreign corporation, if also authorized by the laws of the foreign jurisdiction. A Certificate of Conversion shall be filed with the California Secretary of State if a California corporation is converting into a foreign other business entity or foreign corporation. Form CONV-1A can be submitted by mail or in person for this purpose.
The new free form amendment filings are available for the following entity types:
Certificate of Validation and Certificate of Ratification
SB 49 The bill allows California corporations to ratify or validate any otherwise legal corporate action (e.g., stock issuances, the initial election of directors, technically invalid filings, etc.) that may not have been affected in compliance with either the California Corporation Code or a company’s corporate governing documents. Importantly, any corporate act ratified or validated under this section may be made retroactively effective.
Forms will be made available under revised amendment application.
Statement of Information
AB-2431 Specifically as described below, the bill breaks the required information down regarding judgements or violations based upon variations in the management of the LLC, whether it is domestic or foreign and whether certain provisions are in the LLC’s operating agreement:
Domestic & Foreign Manager-Managed LLCs
Whether any manager has any judgements or violations.
Domestic Member-Managed LLCs
Whether any member has any judgements or violations except – If the LLC has an operating agreement limiting the members who are agents of the LLC for purpose of its business and affairs to specified members, the information is required only regarding the specified agent-members.
Foreign LLCs Not Manager-Managed
Whether any member has any judgements or violations except –If any member is not an agent of the LLC for purposes of its business and affairs, the information is required only regarding the agent-members.
New forms are available on the California Secretary of State or the UCS State Forms page by clicking here.
For questions on how these changes will affect your company, feel free to contact a Client Service Representative by emailing us at info@unitedcorporate.com or speaking with us via chat or calling (800) 899-8648.
Additional Statute Changes effective January 1, 2023
Pennsylvania – All entities will be required to file an annual report beginning in 2024
Rhode Island – LLP forms updated
Wisconsin– LLC statutes update Operating Agreement requirements
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