Bill Proposes Bizarre Article Attestation Requirement

The California General Corporation Law provides that one or more natural persons, partnerships, associations or corporations, domestic or foreign, may form a corporation by executing and filing articles of incorporation.  Cal. Corp. Code § 200(a).  Although these incorporators may do so with the expectation that they will become directors, officers or shareholders of the nascent corporation, many times they have no more than a parturitional  relationship to the corporation.  For example, incorporators are often lawyers or members of their staffs who provide this accouchement service for clients.  The midwiving service of actual filing the signed articles with the Secretary of State is often performed by filing service companies. 

Oxen of the sun?

Assembly Member Lorena Gonzalez recently amended a bill, AB 3075, that would require a "filer" of articles of incorporation to attest under penalty of perjury the following:

  • the purpose of the corporation is lawful; and
  • the filer is not an owner, director, officer, managing agent, or any other person acting on behalf of an employer, that has an outstanding judgment issued by the Division of Labor Standards Enforcement or a court of law for violation of any wage order or provision of the Labor Code.

As to the first requirement, Section 202(b) already requires one of two statement of purposes and prohibits any further or additional statements with respect to the purposes or powers of the corporation, except by way of limitation or as expressly required by any California law (other than the GCL) or any federal or other statute or regulation.  Section 206 further authorizes, subject to any limitation in the articles and compliance with applicable law, a corporation (other than one subject to the Banking Law or a professional corporation) may engage in any business activity.  For the reasons described above, the incorporator may have no knowledge of the actual, specific purpose for which a corporation is being birthed.

On its face, the second statement pertains to the "filer".  The term "filer" is nor defined but clearly the corporation cannot be a "filer" because it does not yet exist.  Cal. Corp. Code § 200(c) ("The corporate existence begins upon the filing of the articles . . .").  Thus, the "filer" must either be person signing the articles or the service, if any, used to physically file the articles with the Secretary of State's office.