Business entities: limited liability companies.

Plain English Breakdown

The official source material does not provide exact details on the fees county recorders will charge for recording certifications.

Limited Liability Companies: Certification of Existence and Authority

AB-683 allows limited liability companies (LLCs) to provide a certification of their existence and authority to licensed escrow agents, real estate brokers, and title insurance companies for transactions involving real property.

What This Bill Does

• Allows LLCs to give a certificate showing they exist and who has the power to act on behalf of the company to licensed escrow agents, real estate brokers, and title insurance companies.
• Requires this certification to include specific information about the company's operating agreement and other documents that have not been changed in ways that would make the information incorrect.
• Says that anyone relying on this certificate for a transaction involving real property is protected from liability if they do not know the information in the certificate is wrong.
• Permits these certifications to be recorded with county recorders, who will charge fees to cover their costs.

Who It Names or Affects

• Limited Liability Companies (LLCs)
• Licensed escrow agents
• Real estate brokers
• Title insurance companies and underwritten title companies

Terms To Know

Certification of LLC Existence and Authority

A document provided by an LLC to show it exists and who can act on its behalf.

Acknowledged Declaration

A signed statement that is officially recognized as true.

Limits and Unknowns

• The bill does not specify the exact fees county recorders will charge for recording these certifications.
• 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
any person
a licensed escrow agent, licensed real estate broker, and title insurance company or underwritten title company
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 may be affected by the LLC’s certification to rely 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