Business entities: limited liability companies.

Plain English Breakdown

The exact amount of fees county recorders can charge is not specified in the official source material.

Rules for Limited Liability Companies

AB-683 allows LLCs to use a certification document to prove their existence and authority to certain businesses, and permits these certifications to be recorded with county recorders.

What This Bill Does

• Allows LLCs to present a certification of the company's current status and authority to licensed escrow agents, real estate brokers, and title insurance companies.
• Requires this certification to confirm specific facts about the LLC’s operating agreement or other governing documents have not been revoked, modified, or amended in ways that would make its representations incorrect.
• Permits anyone dealing with an LLC to rely on the information provided in the certification without being liable for acting based on it if they do not know it is incorrect.
• Allows recording of these certifications at county recorder's offices when related to real property within their jurisdiction.

Who It Names or Affects

• Limited Liability Companies (LLCs)
• Licensed escrow agents, real estate brokers, and title insurance companies
• County recorders

Terms To Know

Certification

A document that an LLC can use to prove its existence and authority to certain businesses.

Acknowledged Declaration

A signed statement by all authorized signers of an LLC confirming the company's current status.

Limits and Unknowns

• The bill does not specify how much the fee for recording certifications will be.
• It creates a new duty on county recorders to handle these certifications, which may require additional resources or training.

Official Summary Text

AB 683, as amended, Davies.
Business entities: limited liability companies.
Existing law, the California Revised Uniform Limited Liability Company Act, establishes procedures governing the formation and regulation of limited liability companies in this state. Existing law requires a limited liability company (LLC) to file certain information, including its articles of organization and amendments to those articles, with the Secretary of State.
This bill would authorize an LLC to present a certification of the LLC’s existence and authority to a licensed escrow agent, licensed real estate broker, and
title insurance company or underwritten title company
person or entity engaged in the business of title insurance
to establish the
present existence of the LLC and identify those with authority to act on its behalf. The bill would require the certification of LLC existence to confirm specified facts or contain certain information, including that its operating agreement or other governing documents have not been revoked, modified, or amended in a manner that would cause the representations contained in it to be incorrect. The bill would require the certification to be in the form of an acknowledged declaration signed by all authorized signers of the LLC and would permit the certification to be recorded with the county recorder, as specified.
This bill would authorize a person whose
interests
interest
may be affected by the LLC’s certification to
rely
rely, directly or indirectly, as specified,
on the representations in the certification. The bill would further provide that a person who acts in reliance upon a certification without actual knowledge that the representations contained in it are incorrect is not liable to any person for so acting. The bill would provide that any transaction and lien created thereby, entered into by the LLC’s authorized signer and a person acting in reliance upon a certification and authority, shall be enforceable against the LLC’s assets, except as specified.
This bill would also authorize a person to record a certification of LLC existence and authority that relates to an interest in real property in the county recorder in any county in which the real property is located. The bill would require the county recorder to impose a fee prescribed by law for recording that document sufficient to cover its reasonable costs. Because the bill would expand
the crime of perjury and impose a new duty on county recorders, the bill would create a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for specified reasons.

Current Bill Text

Download Bill PDF