If The Secretary of State Bounces Your Filing, Examine Your Purposes And Your Capitalization

While I haven’t taken a formal poll, I’m sure that many California corporate attorneys have had the unfortunate experience of having a filing “bounced” by the California Secretary of State’s office. Rejections are most often due to some technical deficiency in the document being filed. If the document to be filed is in the proper form and properly executed, can the Secretary of State nevertheless refuse to file it?

Pursuant to legislation enacted last year, AB 75 (Hill), the answer is now yes. This new law permits the Secretary of State to refuse a filing “based on a reasonable belief that the service or filing is being requested for an unlawful, false or fraudulent purpose, to promote or conduct an illegitimate object or purpose, or is being requested or submitted in bad faith or for the purpose of harassing or defrauding a person or entity”. Government Code § 12181.

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Published In: Administrative Agency Updates, Elections & Politics Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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