2009 California Corporations Code - Section 17050-17062 :: Chapter 2. Formation

17050.  (a) In order to form a limited liability company, one or
more persons shall execute and file articles of organization with,
and on a form prescribed by, the Secretary of State and, either
before or after the filing of articles of organization, the members
shall have entered into an operating agreement. The person or persons
who execute and file the articles of organization may, but need not,
be members of the limited liability company.
   (b) A limited liability company shall have one or more members.
   (c) The existence of a limited liability company begins upon the
filing of the articles of organization. For all purposes, a copy of
the articles of organization duly certified by the Secretary of State
is conclusive evidence of the formation of a limited liability
company and prima facie evidence of its existence.
   (d) The Secretary of State shall include with instructional
materials provided in conjunction with the form for filing articles
of organization under subdivision (a) a notice that filing the
registration will obligate the limited liability company to pay an
annual tax for that taxable year to the Franchise Tax Board pursuant
to Section 17941 of the Revenue and Taxation Code. That notice shall
be updated annually to specify the dollar amount of the tax.

17051.  (a) The articles of organization shall set forth:
   (1) The name of the limited liability company.
   (2) The following statement:
   The purpose of the limited liability company is to engage in any
lawful act or activity for which a limited liability company may be
organized under the Beverly-Killea Limited Liability Company Act.
   (3) [RESERVED]
   (4) The name and address of the initial agent for service of
process on the limited liability company who meets the qualifications
specified in paragraph (1) of subdivision (b) of Section 17061,
unless a corporate agent is designated, in which case only the name
of the agent shall be set forth.
   (5) If the limited liability company is to be managed by one or
more managers and not by all its members, the statement referred to
in subdivision (b) of Section 17151. If the limited liability company
is to be managed by only one manager, the articles of organization
shall contain a statement to that effect.
   (b) It is not necessary to set out in the articles of organization
any of the powers of a limited liability company enumerated in this
title.
   (c) The articles of organization may contain any other provision
not inconsistent with law, including, but not limited to:
   (1) A provision limiting or restricting the business in which the
limited liability company may engage or the powers that the limited
liability company may exercise or both.
   (2) Provisions governing the admission of members to the limited
liability company.
   (3) The time at which the limited liability company is to
dissolve.
   (4) Any events that will cause a dissolution of the limited
liability company.
   (5) A statement of whether there are limitations on the authority
of managers or members to bind the limited liability company, and, if
so, what the limitations are.
   (6) The names of the managers of the limited liability company.
   (d) No limitation upon the business, purposes, or powers of the
limited liability company contained in or implied by the articles of
organization or the operating agreement may be asserted by any
person, except in one of the following types of proceedings:
   (1) In a proceeding by a member or the state to enjoin the doing
of unauthorized business by the limited liability company or its
managers or officers, if third parties have not acquired rights
thereby.
   (2) In a proceeding to dissolve the limited liability company.
   (3) In a derivative proceeding by the limited liability company or
by a member suing on the company's behalf against the officers or
managers of the limited liability company for violation of their
authority. However, the limitation may not be asserted if the person
asserting the limitation had actual knowledge of the limitation at
the time of the act or event complained of.
   (e) The Secretary of State may cancel the filing of articles of
organization if a check or other remittance accepted in payment of
the filing fee is not paid upon presentation. Upon receiving written
notification that the item presented for payment has not been honored
for payment, the Secretary of State shall give a first written
notice of the applicability of this section to the agent for service
of process or to the person submitting the instrument. Thereafter, if
the amount has not been paid by cashier's check or equivalent, the
Secretary of State shall give a second written notice of cancellation
and the cancellation shall be effective at that time. The second
notice shall be given 20 days or more after the first notice and 90
days or less after the original filing.

17052.  The name of each limited liability company as set forth in
its articles of organization:
   (a) Shall contain either the words "limited liability company" or
the abbreviation "LLC" or "L.L.C." as the last words in the name of
the limited liability company. The words "limited" and "company" may
be abbreviated to "Ltd." and "Co.," respectively.
   (b) May contain the name of one or more members.
   (c) Shall not be a name that the Secretary of State determines is
likely to mislead the public and shall not be the same as, or
resemble so closely as to tend to deceive, (1) the name of any
limited liability company that has filed articles of organization
pursuant to Section 17050, (2) the name of any foreign limited
liability company registered to do business in this state pursuant to
Section 17451, or (3) any name that is under reservation for another
domestic limited liability company or foreign limited liability
company pursuant to Section 17053. However, a limited liability
company may adopt a name that is substantially the same as that of an
existing domestic limited liability company or foreign limited
liability company that is registered pursuant to Section 17451 upon
proof of consent by that domestic limited liability company or
foreign limited liability company and a finding by the Secretary of
State that, under the circumstances, the public is not likely to be
misled.
   (d) Shall not contain the words "bank," "trust," "trustee,"
"incorporated," "inc.," "corporation," or "corp.," and shall not
contain the words "insurer" or "insurance company" or any other words
suggesting that it is in the business of issuing policies of
insurance and assuming insurance risks.
   (e) The use by a limited liability company or a foreign limited
liability company of a name in violation of this section may be
enjoined, notwithstanding the filing of its articles of organization
or its registration with the Secretary of State.
   (f) A limited liability company may record in the office of the
county recorder of any county in this state, and county recorders, on
request, shall record a certified copy of the limited liability
company articles of organization and any exhibits or attachments, or
any amendment or correction thereto, that has been filed in the
office of the Secretary of State. A foreign limited liability company
may record in the office of the county recorder of any county in the
state a certified copy of the limited liability company application
for registration, certificate of registration, or any amendment
thereto, that has been filed in the office of the Secretary of State.
The recording shall create a conclusive presumption in favor of any
bona fide purchaser or encumbrancer for value of the limited
liability company real property located in the county in which the
certified copy has been recorded, of the statements contained
therein.

17053.  Any applicant may, upon payment of the fee prescribed in
subdivision (a) of Section 17701, obtain from the Secretary of State
a certificate of reservation of any name not prohibited by Section
17052, and upon the issuance of the certificate the name stated
therein may be reserved for a period of 60 days. The Secretary of
State shall not issue certificates reserving the same name for two or
more consecutive 60-day periods to the same applicant or for the use
or benefit of the same person; nor shall consecutive reservations be
made by or for the use or benefit of the same person for names so
similar as to fall within the prohibitions of subdivision (c) of
Section 17052.

17054.  (a) Subject to subdivision (b) of Section 17103, the
articles of organization may be amended at any time and in any manner
as the members may determine, as long as the articles of
organization as amended contain only those provisions as it would be
lawful to insert in original articles of organization filed at the
time of the filing of the amendment. The articles of organization may
be amended regardless of whether any provision contained in the
amendment was permissible at the time of the original organization of
the limited liability company.
   (b) The articles of organization shall be amended by filing a
certificate of amendment thereto duly executed by at least one
manager, unless a greater number is provided in the articles of
organization. The certificate of amendment shall be filed with, and
on a form prescribed by, the Secretary of State, and shall set forth
all of the following:
   (1) The name and the Secretary of State's file number of the
limited liability company.
   (2) The text of the amendment to the articles of organization.
   (c) A certificate of amendment to the articles of organization
shall be filed to effect any of the following:
   (1) A change in the name of the limited liability company.
   (2) Any change in the statement referred to in subdivision (b) of
Section 17151.
   (3) Any change in the time as stated in the articles of
organization for the dissolution of the limited liability company.
   (4) Any change in the events that will cause a dissolution of the
limited liability company.
   (d) The managers shall cause to be filed a certificate of
amendment to the articles of organization within 30 days of the
discovery by any of the managers of any false or erroneous material
statement contained in the articles of organization or any amendment
thereto.
   (e) Any manager who executes a certificate of amendment shall be
liable for any statement materially inconsistent with the operating
agreement or any material misstatement of fact contained in the
certificate of amendment if the manager knew or should have known
that the statement was false when made or that the statement became
false and an amendment required by subdivision (d) was not filed, and
the person suffering the loss relied on the statement or
misstatement.
   (f) Articles of organization may be restated at any time. Restated
articles of organization shall be filed with, and on a form
prescribed by, the Secretary of State, shall be specifically
designated as restated in the heading, shall set forth the limited
liability company's name and the Secretary of State's file number,
may set forth the name and address of the agent for service of
process required to be maintained by Section 17057, unless a
corporate agent is designated, in which case only the name of the
agent shall be set forth, shall set forth all the other matters
required by Section 17051 to be set forth in the articles of
organization, and may set forth any other matters that may be set
forth as authorized by Section 17051. If restated articles of
organization include the agent for service of process, any previously
filed statements pursuant to Section 17060 are superseded as to the
agent for service of process until another statement pursuant to
Section 17060 is filed subsequent to the filing of the restated
articles of organization. If the name of the limited liability
company is to be changed by the filing of the restated articles of
organization, the old name shall also be set forth in the heading in
a manner to indicate the intent to change the name.

17055.  (a) If any document filed with the Secretary of State under
this title contains any typographical error, error of transcription,
or other technical error, or has been defectively executed, the
document may be corrected by the filing of a certificate of
correction.
   (b) A certificate of correction shall be filed with, and on a form
prescribed by, the Secretary of State, and shall set forth:
   (1) The name and the Secretary of State's file number of the
limited liability company.
   (2) The title of the document being corrected.
   (3) The name of each party to the document being corrected.
   (4) The date that the document being corrected was filed.
   (5) The provision in the document as previously filed and as
corrected and, if execution of the document was defective, the manner
in which it was defective.
   (c) A certificate of correction shall not make any other change or
amendment that would not have complied in all respects with the
requirements of this title at the time the document being corrected
was filed.
   (d) A certificate of correction shall be executed in the same
manner in which the document being corrected was required to be
executed.
   (e) A certificate of correction may not:
   (1) Change the effective date of the document being corrected.
   (2) Affect any right or liability accrued or incurred before its
filing, except that any right or liability accrued or incurred by
reason of the error or defect being corrected shall be extinguished
by the filing if the person having the right or to whom the liability
is owed has not detrimentally relied on the original document.

17056.  (a) Unless otherwise specified in any other section of this
title, any document required by this title to be executed and filed
with the Secretary of State shall be executed:
   (1) By the person or persons organizing the limited liability
company when the limited liability company has not yet been formed.
   (2) By any manager.
   (3) If the limited liability company is in the hands of a
receiver, trustee, or other court-appointed fiduciary, by that
fiduciary.
   (4) In the case of a foreign limited liability company, in the
manner required by the laws of the state of its organization.
   (b) Any person may execute any document referred to in subdivision
(a) by an attorney in fact. Powers of attorney relating to the
signing of those documents by an attorney in fact need not be sworn
to, verified, or acknowledged, and need not be filed with the
Secretary of State.
   (c) Any instrument filed with respect to a limited liability
company, other than the original articles of organization, may
provide that it is to become effective not more than 90 days after
its filing date. In case a delayed effective date is specified, the
instrument may be prevented from becoming effective by a certificate
stating that by appropriate action it has been revoked and is null
and void. This certificate shall be executed in the same manner as
the original instrument and shall be filed before the specified
effective date. In the case of a merger agreement or certificate of
merger, a certificate revoking the earlier filing need only be
executed on behalf of one of the constituent parties to the merger.
If no revocation certificate is filed, the instrument becomes
effective on the date specified.
   (d) If the Secretary of State determines that an instrument
submitted for filing or otherwise submitted does not conform to the
law and returns it to the person submitting it, the instrument may be
resubmitted accompanied by a written opinion of a member of the
State Bar of California submitting the instrument or representing the
person submitting it, to the effect that the specific provisions of
the instrument objected to by the Secretary of State does conform to
law and stating the points and authorities upon which the opinion is
based. The Secretary of State shall rely, with respect to any
disputed point of law, other than the application of Sections 17052,
17053, 17451, and 17452, upon that written opinion in determining
whether the instrument conforms to law. The date of filing in that
case shall be the date the instrument is received on resubmission.

17057.  Each limited liability company shall continuously maintain
in this state each of the following:
   (a) An office at which shall be maintained the records required by
Section 17058.
   (b) An agent in this state for service of process on the limited
liability company.

17058.  (a) Each limited liability company shall maintain in writing
or in any other form capable of being converted into clearly legible
tangible form at the office referred to in subdivision (a) of
Section 17057 all of the following:
   (1) A current list of the full name and last known business or
residence address of each member and of each holder of an economic
interest in the limited liability company set forth in alphabetical
order, together with the contribution and the share in profits and
losses of each member and holder of an economic interest.
   (2) If the articles of organization contain the statement
described in subdivision (b) of Section 17151, a current list of the
full name and business or residence address of each manager.
   (3) A copy of the articles of organization and all amendments
thereto, together with any powers of attorney pursuant to which the
articles of organization or any amendments thereto were executed.
   (4) Copies of the limited liability company's federal, state, and
local income tax or information returns and reports, if any, for the
six most recent taxable years.
   (5) A copy of the limited liability company's operating agreement,
if in writing, and any amendments thereto, together with any powers
of attorney pursuant to which any written operating agreement or any
amendments thereto were executed.
   (6) Copies of the financial statements of the limited liability
company, if any, for the six most recent fiscal years.
   (7) The books and records of the limited liability company as they
relate to the internal affairs of the limited liability company for
at least the current and past four fiscal years.
   (b) Upon request of an assessor, a domestic or foreign limited
liability company owning, claiming, possessing, or controlling
property in this state subject to local assessment shall make
available at the limited liability company's principal office in
California or at the office required to be kept pursuant to
subdivision (a) of Section 17057 or at a place mutually acceptable to
the assessor and the limited liability company, a true copy of
business records relevant to the amount, cost, and value of all
property that it owns, claims, possesses, or controls within the
county.

17059.  The power to adopt, alter, amend, or repeal the operating
agreement of a limited liability company shall be vested in the
members. The articles of organization or a written operating
agreement may prescribe the manner in which the operating agreement
may be altered, amended, or repealed.

17060.  (a) Every limited liability company and every foreign
limited liability company registered to transact intrastate business
in this state shall file within 90 days after the filing of its
original articles of organization and biennially thereafter during
the applicable filing period, on a form prescribed by the Secretary
of State, a statement containing:
   (1) The name of the limited liability company and the Secretary of
State's file number and, in the case of a foreign limited liability
company, the state under the laws of which it is organized.
   (2) The name and address of the agent for service of process
required to be maintained pursuant to subdivision (b) of Section
17057. If a corporate agent is designated, only the name of the agent
shall be set forth.
   (3) The street address of its principal executive office and, in
the case of a domestic limited liability company, of the office
required to be maintained pursuant to Section 17057.
   (4) The name and complete business or residence addresses of any
manager or managers and the chief executive officer, if any,
appointed or elected in accordance with the articles of organization
or operating agreement or, if no manager has been so elected or
appointed, the name and business or residence address of each member.
   (5) The general type of business that constitutes the principal
business activity of the limited liability company (for example,
manufacturer of aircraft; wholesale liquor distributor; or retail
department store).
   (b) If there has been no change in the information in the last
filed statement of the limited liability company on file in the
Secretary of State's office, the limited liability company may, in
lieu of filing the statement required by subdivision (a), advise the
Secretary of State, on a form prescribed by the Secretary of State,
that no changes in the required information have occurred during the
applicable filing period.
   (c) For the purposes of this section, the applicable filing period
for a limited liability company shall be the calendar month during
which its original articles of organization were filed or, in the
case of a foreign limited liability company, the month during which
its application for registration was filed, and the immediately
preceding five calendar months. The Secretary of State shall mail a
form for compliance with this section to each limited liability
company approximately three months prior to the close of the
applicable filing period. The form shall state the due date thereof
and shall be mailed to the last address of the limited liability
company according to the records of the Secretary of State. The
failure of the limited liability company to receive the form shall
not exempt the limited liability company from complying with this
section.
   (d) Whenever any of the information required by subdivision (a)
changes, other than the name and address of the agent for service of
process, the limited liability company may file a current statement
containing all the information required by subdivision (a). When
changing its agent for service of process or when the address of the
agent changes, the limited liability company shall file a current
statement containing all the information required by subdivision (a).
Whenever any statement is filed pursuant to this section changing
the name and address of the agent for service of process, that
statement supersedes any previously filed statement pursuant to this
section, the statement in the original articles of organization, and
the statement in any restated articles of organization that have been
filed, or in the case of a foreign limited liability company, in the
application for registration. Whenever restated articles of
organization are filed, the statement therein, if any, of the name
and address of the agent for service of process supersedes any
previously filed statement pursuant to this section.
   (e) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
   (f) This section shall not be construed to place any person
dealing with the limited liability company on notice of, or under any
duty to inquire about, the existence or content of a statement filed
pursuant to this section.

17061.  (a) In addition to Chapter 4 (commencing with Section
413.10) of Title 5 of Part 2 of the Code of Civil Procedure, process
may be served upon limited liability companies and foreign limited
liability companies as provided in this section.
   (b) Personal service of a copy of any process against the limited
liability company or the foreign limited liability company by
delivery (1) to any individual designated by it as agent, or (2) if
the designated agent is a corporation, to any person named in the
latest certificate of the corporate agent filed pursuant to Section
1505 at the office of the corporate agent, shall constitute valid
service on the limited liability company or the foreign limited
liability company. No change in the address of the agent for service
of process or appointment of a new agent for service of process shall
be effective until an amendment to the statement described in
Section 17060 is filed. In the case of a foreign limited liability
company that has appointed the Secretary of State as agent for
service of process by reason of subdivision (d) of Section 17456,
process shall be delivered by hand to the Secretary of State, or to
any person employed in the capacity of assistant or deputy, and shall
include one copy of the process for each defendant to be served,
together with a copy of the court order authorizing the service and
the fee therefor. The order shall set forth the address to which the
process shall be sent by the Secretary of State.
   (c) (1) If an agent for service of process has resigned and has
not been replaced or if the designated agent cannot with reasonable
diligence be found at the address designated for personal delivery of
the process, and it is shown by affidavit to the satisfaction of the
court that process against a limited liability company or foreign
limited liability company cannot be served with reasonable diligence
upon the designated agent by hand in the manner provided in Section
415.10, subdivision (a) of Section 415.20, or subdivision (a) of
Section 415.30 of the Code of Civil Procedure, the court may make an
order that the service shall be made upon a domestic limited
liability company or upon a registered foreign limited liability
company by delivering by hand to the Secretary of State, or to any
person employed in the Secretary of State's office in the capacity of
assistant or deputy, one copy of the process for each defendant to
be served, together with a copy of the order authorizing the service.
Service in this manner shall be deemed complete on the 10th day
after delivery of the process to the Secretary of State.
   (2) Upon receipt of the copy of process and the fee therefor, the
Secretary of State shall give notice of the service of the process to
the limited liability company or foreign limited liability company,
at its principal executive office, by forwarding to that office, by
registered mail with request for return receipt, the copy of the
process.
   (3) The Secretary of State shall keep a record of all process
served upon the Secretary of State under this title and shall record
therein the time of service and the action taken by the Secretary of
State. A certificate under the Secretary of State's official seal,
certifying to the receipt of process, the giving of notice to the
limited liability company or foreign limited liability company, and
the forwarding of the process pursuant to this section, shall be
competent and prima facie evidence of the service of process.
   (d) (1) The articles of organization of a limited liability
company and the application for registration of a foreign limited
liability company shall designate, as the agent for service of
process, an individual residing in this state or a corporation that
has complied with Section 1505 and whose capacity to act as an agent
has not terminated. If an individual is designated, the statement
shall set forth that person's complete business or residence address
in this state.
   (2) An agent designated for service of process may file with the
Secretary of State a signed and acknowledged written statement of
resignation as an agent. Upon filing of the statement of resignation,
the authority of the agent to act in that capacity shall cease and
the Secretary of State shall give written notice of the filing of the
statement of resignation by mail to the limited liability company or
foreign limited liability company addressed to its principal
executive office.
   (3) If an individual who has been designated agent for service of
process dies or resigns or no longer resides in the state, or if the
corporate agent for that purpose resigns, dissolves, withdraws from
the state, forfeits its right to transact intrastate business, has
its corporate rights, powers, and privileges suspended, or ceases to
exist, the limited liability company or foreign limited liability
company shall promptly file an initial or amended statement described
in Section 17060 designating a new agent.
   (e) In addition to any other discovery rights that may exist, in
any case pending in a California court in which a party seeks records
from a limited liability company formed under this title, whether or
not the limited liability company is a party, the court may order
the production in California of the books and records of the limited
liability company on those terms and conditions that the court deems
appropriate.
   (f) A member may, in a written operating agreement or other
writing, consent to be subject to the nonexclusive jurisdiction of
the courts of a specified jurisdiction, or the exclusive jurisdiction
of the courts of this state.
   (g) If a member desires to use the arbitration process, that
member may, in a written operating agreement or other writing,
consent to be nonexclusively subject to arbitration in a specified
state, or to be exclusively subject to arbitration in this state.
   (h) Along with the consent to the jurisdiction of courts or to be
subject to arbitration as provided in subdivisions (f) and (g), a
member may consent to be served with legal process in the manner
prescribed in a written operating agreement or other writing.

17062.  An instrument shall be deemed filed, and the date of filing
endorsed thereon, upon receipt by the Secretary of State of any
instrument accompanied by the fee prescribed in Chapter 15
(commencing with Section 17700). The date of filing shall be the date
the instrument is received by the Secretary of State unless the
instrument is withheld from filing for a period of time not to exceed
90 days pursuant to a request by the party submitting it for filing
or unless, in the judgment of the Secretary of State, the filing is
intended to be coordinated with the filing of some other document
that cannot be filed. The Secretary of State shall file a document as
of any requested future date not more than 90 days after its
receipt, including a Saturday, Sunday, or legal holiday, if that
document is received in the Secretary of State's office at least one
business day prior to the requested date of filing. Upon receipt and
after filing of any document under this title, the Secretary of State
may microfilm or reproduce by other techniques any filings or
documents and destroy the original filing or document. The microfilm
or other reproduction of any document under the provision of this
section shall be admissible in any court of law.