Were you able to keep track of the new legislative changes that will affect California businesses and business lawyers? Don’t worry, we did and here’s an overview of some of the key statutory changes you need to know about.
- Changes to what it takes to dissolve an LLC.
The Legislature continues to fine-tune California’s Revised Uniform Limited Liability Company Act (RULLCA). Initially, RULLCA provided that an LLC was dissolved and its activities wound up if, among other things, a majority of its members voted to dissolve. Now, dissolution will require the vote of 50 percent or more of the voting interests of the members of the LLC. A similar change was made in the requirements for completing the certificate of cancellation for a domestic LLC that hasn’t conducted any business. See Corp C §§17707.01 and 17707.02, as amended by Stats. 2016, ch 66, AB 1722 (effective January 1, 2017).
- Synching up: California conforms to federal business entity tax return due dates.
For taxable years beginning January 1, 2016, partnerships and LLCs that are classified as partnerships must file a return on the fifteenth day of the third month following the close of their taxable year. This due date also applies to single-member LLCs owned by pass-through entities. All other single-member LLCs, C corporations, and LLCs classified as corporations must file a return on the fifteenth day of the fourth month following the close of their taxable year. Do these dates sound familiar? They should, because they’re the due dates for the respective federal income tax returns. See Rev & T C §§18601, 18633, 18633.5, 23281, as amended by Stats. 2016, ch 348, AB 1775 (effective January 1, 2017).
- Back in action! New law reinstates the Board of Equalization’s interest-setting powers.
Until January 1, 2016, the State Board of Equalization, meeting as a public body, could find under certain circumstances that it was inequitable to compute interest on a monthly basis and instead would compute interest on a daily basis for electronic payments or prepayments of specified taxes, fees, and surcharges. Then those provisions expired. But they’re back! A new law reinstates the expired provisions, affecting several Revenue & Taxation Code sections. See Stats. 2016, ch 264, AB 2201 (effective January 1, 2017).
- Yes, you can use court reporters to record arbitration proceedings.
A party to an arbitration has the right to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing as the official record. The costs of using a reporter fall to the party requesting it. If for some reason the arbitrator refuses the request for a reporter, the requesting party can petition the court for an order compelling the arbitrator to grant the request. CCP §1282.5, added by Stats. 2016, ch 626, SB 1007 (effective January 1, 2017).
- New exemption from California Finance Lenders Law.
The California Finance Lenders Law (CFLL) defines a “finance lender” as anyone engaged in the business of making consumer or commercial loans. Finance lenders are licensed and regulated under California law. But there’s been an exemption from licensing and regulation for someone who makes five or fewer commercial loans in a 12-month period if the loans are incidental to that person’s business. This new law adds another exemption from regulation under the CFLL for those who make one commercial loan in a 12-month period even if it isn’t incidental to that person’s business. This new law is set to repeal on January 1, 2022. Fin C §22050.5, added by Stats. 2016, ch 478, SB 777 (effective January 1, 2017).
- No more shaking down businesses for violating accessibility standards.
The Legislature took note of data from the California Commission on Disability Access indicating that a few “highly litigious plaintiffs and attorneys” had been targeting small businesses with suits alleging violations of construction-related accessibility standards. These suits seemed to be looking for quick cash settlements, not access improvements. In response, a new law gives businesses that are proactively trying to comply with the Americans with Disabilities Act a chance to fix any violations. Civil Code §§55.53, 55.56 and several sections of the Government Code are amended and added by Stats. 2016, ch 13, SB 269 (effective May 10, 2016).
- All single-user restrooms will soon be open to all genders.
Beginning March 1, 2017, all single-user toilet facilities in any business establishment, place of public accommodation, or government agency will have to be identified as “all-gender toilet facilities” and designated for use by one occupant at a time or for family or assisted use. Those inspectors and officials responsible for code enforcement may check for compliance with this law during any inspection. Health & S C §118600, added by Stats. 2016, ch 818, AB 1732 (effective January 1, 2017).
Get more details on all of these statutory developments as well as others in the featured article of the November issue of CEB’s California Business Law Reporter, which is part of CEB’s OnLAW® Business Law Library — a virtual encyclopedia of business law. And don’t miss CEB’s upcoming live program Business Law Practice: 2016 Year in Review in various locations (and Livecast) starting on January 20, 2017.
Check out all CEBblog™ posts on business law.
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