Bill Text: CA SB284 | 2015-2016 | Regular Session | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Engineering and land surveying: limited liability partnerships.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Passed) 2015-08-10 - Chaptered by Secretary of State. Chapter 157, Statutes of 2015. [SB284 Detail]

Download: California-2015-SB284-Enrolled.html

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BILL NUMBER: SB 284	ENROLLED
	BILL TEXT

	PASSED THE SENATE  MAY 22, 2015
	PASSED THE ASSEMBLY  JULY 16, 2015
	AMENDED IN SENATE  MAY 5, 2015
	AMENDED IN SENATE  APRIL 22, 2015

INTRODUCED BY   Senator Cannella
   (Coauthor: Senator Bates)

                        FEBRUARY 19, 2015

   An act to amend Sections 6738 and 8729 of the Business and
Professions Code, and to amend Sections 16101, 16956, and 16959 of
the Corporations Code, relating to the practice of engineering and
land surveying.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 284, Cannella. Engineering and land surveying: limited
liability partnerships.
   The Professional Engineers Act provides for the licensure and
regulation of engineers and the Professional Land Surveyors' Act
provides for the licensure and regulation of land surveyors by the
Board for Professional Engineers, Land Surveyors, and Geologists. The
Uniform Partnership Act of 1994 authorizes the formation of
registered limited liability partnerships and foreign limited
liability partnerships as specified.
   Existing law, until January 1, 2016, authorizes persons licensed
to engage in the practice of engineering or land surveying to form
registered limited liability partnerships and foreign limited
liability partnerships and requires those partnerships to provide
security of no less than $2,000,000 for claims arising out of the
partnership's professional practice. Existing law, until January 1,
2016, also provides that engineers or land surveyors are not
prohibited from practicing or offering to practice, within the scope
of their licensure, as a limited liability partnership if specified
requirements are met, including, among others, that any offer,
promotion, or advertisement by the business that contains the name of
any individual in the business must clearly and specifically
designate the license or registration discipline of the individual
named. Existing law repeals these provisions on January 1, 2016.
   This bill would extend the operation of these provisions until
January 1, 2019.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6738 of the Business and Professions Code, as
amended by Section 1 of Chapter 634 of the Statutes of 2010, is
amended to read:
   6738.  (a) This chapter does not prohibit one or more civil,
electrical, or mechanical engineers from practicing or offering to
practice, within the scope of their license, civil (including
geotechnical and structural), electrical, or mechanical engineering
as a sole proprietorship, partnership, limited liability partnership,
firm, or corporation (hereinafter called business), if all of the
following requirements are met:
   (1) A civil, electrical, or mechanical engineer currently licensed
in this state is an owner, partner, or officer in charge of the
engineering practice of the business.
   (2) All civil, electrical, or mechanical engineering services are
performed by, or under the responsible charge of, a professional
engineer licensed in the appropriate branch of professional
engineering.
   (3) If the business name of a California engineering business
contains the name of any person, then that person shall be licensed
as a professional engineer, a licensed land surveyor, a licensed
architect, or a geologist registered under the Geologist and
Geophysicist Act (Chapter 12.5 (commencing with Section 7800)). Any
offer, promotion, or advertisement by the business that contains the
name of any individual in the business, other than by use of the name
of an individual in the business name, shall clearly and
specifically designate the license or registration discipline of each
individual named.
   (b) An out-of-state business with a branch office in this state
shall meet the requirements of subdivision (a) and shall have an
owner, partner, or officer who is in charge of the engineering work
in the branch in this state, who is licensed in this state, and who
is physically present at the branch office in this state on a regular
basis. However, the name of the business may contain the name of any
person not licensed in this state if that person is appropriately
registered or licensed in another state. Any offer, promotion, or
advertisement that contains the name of any individual in the
business, other than by use of the names of the individuals in the
business name, shall clearly and specifically designate the license
or registration discipline of each individual named.
   (c) The business name of a California engineering business may be
a fictitious name. However, if the fictitious name includes the name
of any person, the requirements of paragraph (3) of subdivision (a)
shall be met.
   (d) A person not licensed under this chapter may also be a partner
or an officer of a civil, electrical, or mechanical engineering
business if the requirements of subdivision (a) are met. Nothing in
this section shall be construed to permit a person who is not
licensed under this chapter to be the sole owner of a civil,
electrical, or mechanical engineering business, unless otherwise
exempt under this chapter.
   (e) This chapter does not prevent an individual or business
engaged in any line of endeavor other than the practice of civil,
electrical, or mechanical engineering from employing or contracting
with a licensed civil, electrical, or mechanical engineer to perform
the respective engineering services incidental to the conduct of
business.
   (f) This section shall not prevent the use of the name of any
business engaged in rendering civil, electrical, or mechanical
engineering services, including the use by any lawful successor or
survivor, that lawfully was in existence on December 31, 1987.
However, the business is subject to paragraphs (1) and (2) of
subdivision (a).
   (g) A business engaged in rendering civil, electrical, or
mechanical engineering services may use in its name the name of a
deceased or retired person provided all of the following conditions
are satisfied:
   (1) The person's name had been used in the name of the business,
or a predecessor in interest of the business, prior to and after the
death or retirement of the person.
   (2) The person shall have been an owner, partner, or officer of
the business, or an owner, partner, or officer of the predecessor in
interest of the business.
   (3) The person shall have been licensed as a professional
engineer, or a land surveyor, or an architect, or a geologist, (A) by
the appropriate licensing board if that person is operating a place
of business or practice in this state, or (B) by the applicable state
board if no place of business existed in this state.
   (4) The person, if retired, has consented to the use of the name
and does not permit the use of the name in the title of another
professional engineering business in this state during the period of
the consent. However, the retired person may use his or her name as
the name of a new or purchased business if it is not identical in
every respect to that person's name as used in the former business.
   (5) The business shall be subject to the provisions of paragraphs
(1) and (2) of subdivision (a).
   (h) This section does not affect the provisions of Sections 6731.2
and 8726.1.
   (i) A current organization record form shall be filed with the
board for all businesses engaged in rendering civil, electrical, or
mechanical engineering services.
   (j) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 2.  Section 6738 of the Business and Professions Code, as
added by Section 2 of Chapter 634 of the Statutes of 2010, is amended
to read:
   6738.  (a) This chapter does not prohibit one or more civil,
electrical, or mechanical engineers from practicing or offering to
practice within the scope of their license civil (including
geotechnical and structural), electrical, or mechanical engineering
as a sole proprietorship, partnership, firm, or corporation
(hereinafter called business), if all of the following requirements
are met:
   (1) A civil, electrical, or mechanical engineer currently licensed
in this state is an owner, partner, or officer in charge of the
engineering practice of the business.
   (2) All civil, electrical, or mechanical engineering services are
performed by, or under the responsible charge of, a professional
engineer licensed in the appropriate branch of professional
engineering.
   (3) If the business name of a California engineering business
contains the name of any person, then that person shall be licensed
as a professional engineer, a licensed land surveyor, a licensed
architect, or a geologist registered under the Geologist and
Geophysicist Act (Chapter 12.5 (commencing with Section 7800)). Any
offer, promotion, or advertisement by the business that contains the
name of any individual in the business, other than by use of the name
of an individual in the business name, shall clearly and
specifically designate the license or registration discipline of each
individual named.
   (b) An out-of-state business with a branch office in this state
shall meet the requirements of subdivision (a) and shall have an
owner, partner, or officer who is in charge of the engineering work
in the branch in this state, who is licensed in this state, and who
is physically present at the branch office in this state on a regular
basis. However, the name of the business may contain the name of any
person not licensed in this state if that person is appropriately
registered or licensed in another state. Any offer, promotion, or
advertisement that contains the name of any individual in the
business, other than by use of the names of the individuals in the
business name, shall clearly and specifically designate the license
or registration discipline of each individual named.
   (c) The business name of a California engineering business may be
a fictitious name. However, if the fictitious name includes the name
of any person, the requirements of paragraph (3) of subdivision (a)
shall be met.
   (d) A person not licensed under this chapter may also be a partner
or an officer of a civil, electrical, or mechanical engineering
business if the requirements of subdivision (a) are met. Nothing in
this section shall be construed to permit a person who is not
licensed under this chapter to be the sole owner of a civil,
electrical, or mechanical engineering business, unless otherwise
exempt under this chapter.
   (e) This chapter does not prevent an individual or business
engaged in any line of endeavor other than the practice of civil,
electrical, or mechanical engineering from employing or contracting
with a licensed civil, electrical, or mechanical engineer to perform
the respective engineering services incidental to the conduct of
business.
   (f) This section shall not prevent the use of the name of any
business engaged in rendering civil, electrical, or mechanical
engineering services, including the use by any lawful successor or
survivor, that lawfully was in existence on December 31, 1987.
However, the business is subject to paragraphs (1) and (2) of
subdivision (a).
   (g) A business engaged in rendering civil, electrical, or
mechanical engineering services may use in its name the name of a
deceased or retired person provided all of the following conditions
are satisfied:
   (1) The person's name had been used in the name of the business,
or a predecessor in interest of the business, prior to and after the
death or retirement of the person.
   (2) The person shall have been an owner, partner, or officer of
the business, or an owner, partner, or officer of the predecessor in
interest of the business.
   (3) The person shall have been licensed as a professional
engineer, or a land surveyor, or an architect, or a geologist, (A) by
the appropriate licensing board if that person is operating a place
of business or practice in this state, or (B) by the applicable state
board if no place of business existed in this state.
   (4) The person, if retired, has consented to the use of the name
and does not permit the use of the name in the title of another
professional engineering business in this state during the period of
the consent. However, the retired person may use his or her name as
the name of a new or purchased business if it is not identical in
every respect to that person's name as used in the former business.
   (5) The business shall be subject to the provisions of paragraphs
(1) and (2) of subdivision (a).
   (h) This section does not affect the provisions of Sections 6731.2
and 8726.1.
   (i) A current organization record form shall be filed with the
board for all businesses engaged in rendering civil, electrical, or
mechanical engineering services.
   (j) This section shall become operative on January 1, 2019.
  SEC. 3.  Section 8729 of the Business and Professions Code, as
amended by Section 3 of Chapter 634 of the Statutes of 2010, is
amended to read:
   8729.  (a) This chapter does not prohibit one or more licensed
land surveyors or civil engineers licensed in this state prior to
1982 (hereinafter called civil engineers) from practicing or offering
to practice, within the scope of their licensure, land surveying as
a sole proprietorship, partnership, limited liability partnership,
firm, or corporation (hereinafter called business), if the following
conditions are satisfied:
   (1) A land surveyor or civil engineer currently licensed in the
state is an owner, partner, or officer in charge of the land
surveying practice of the business.
   (2) All land surveying services are performed by or under the
responsible charge of a land surveyor or civil engineer.
   (3) If the business name of a California land surveying business
contains the name of a person, then that person shall be licensed by
the board as a land surveyor or licensed by the board in any year as
a civil engineer. Any offer, promotion, or advertisement by the
business that contains the name of any individual in the business,
other than by use of the name of the individual in the business name,
shall clearly and specifically designate the license discipline of
each individual named.
   (b) An out-of-state business with a branch office in this state
shall meet the requirements of subdivision (a) and shall have an
owner, partner, or officer who is in charge of the land surveying
work in this state, who is licensed in this state, and who is
physically present at the branch office in this state on a regular
basis. However, the name of the business may contain the name of a
person not licensed in this state, if that person is appropriately
licensed or registered in another state. Any offer, promotion, or
advertisement that contains the name of any individual in the
business, other than by use of the name of the individual in the
business name, shall clearly and specifically designate the license
or registration discipline of each individual named.
   (c) The business name of a California land surveying business may
be a fictitious name. However, if the fictitious name includes the
names of any person, the requirements of paragraph (3) of subdivision
(a) shall be met.
   (d) A person not licensed under this chapter or licensed as a
civil engineer in this state prior to 1982 may also be a partner or
an officer of a land surveying business if the conditions of
subdivision (a) are satisfied. Nothing in this section shall be
construed to permit a person who is not licensed under this chapter
or licensed as a civil engineer in this state prior to 1982 to be the
sole owner or office of a land surveying business, unless otherwise
exempt under this chapter.
   (e) This chapter does not prevent an individual or business
engaged in any line of endeavor, other than the practice of land
surveying, from employing or contracting with a licensed land
surveyor or a licensed civil engineer to perform the respective land
surveying services incidental to the conduct of business.
   (f) This section shall not prevent the use of the name of any
business engaged in rendering land surveying services, including the
use by any lawful successor or survivor, that lawfully was in
existence on June 1, 1941. However, the business is subject to the
provisions of paragraphs (1) and (2) of subdivision (a).
   (g) A business engaged in rendering land surveying services may
use in its name the name of a deceased or retired person if the
following conditions are satisfied:
   (1) The person's name had been used in the name of the business,
or a predecessor in interest of the business, prior to the death or
retirement of the person.
   (2) The person shall have been an owner, partner, or officer of
the business, or an owner, partner, or officer of the predecessor in
interest of the business.
   (3) The person shall have been licensed as a land surveyor or a
civil engineer by the board, if operating a place of business or
practice in this state, or by an applicable state board in the event
no place of business existed in this state.
   (4) The person, if retired, has consented to the use of the name
and does not permit the use of the name in the title of another land
surveying business in this state during the period of that consent,
except that a retired person may use his or her name as the name of a
new or purchased business, if that business is not identical in
every respect to that person's name as used in the former business.
   (5) The business shall be subject to paragraphs (1) and (2) of
subdivision (a).
   (h) This section does not affect Sections 6731.2 and 8726.1.
   (i) A current organization record form shall be filed with the
board for all businesses engaged in rendering professional land
surveying services.
   (j) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 4.  Section 8729 of the Business and Professions Code, as
added by Section 4 of Chapter 634 of the Statutes of 2010, is amended
to read:
   8729.  (a) This chapter does not prohibit one or more licensed
land surveyors or civil engineers licensed in this state prior to
1982 (hereinafter called civil engineers) from practicing or offering
to practice within the scope of their licensure, land surveying as a
sole proprietorship, partnership, firm, or corporation (hereinafter
called business), if the following conditions are satisfied:
   (1) A land surveyor or civil engineer currently licensed in the
state is an owner, partner, or officer in charge of the land
surveying practice of the business.
   (2) All land surveying services are performed by or under the
responsible charge of a land surveyor or civil engineer.
   (3) If the business name of a California land surveying business
contains the name of a person, then that person shall be licensed by
the board as a land surveyor or licensed by the board in any year as
a civil engineer. Any offer, promotion, or advertisement by the
business that contains the name of any individual in the business,
other than by use of the name of the individual in the business name,
shall clearly and specifically designate the license discipline of
each individual named.
   (b) An out-of-state business with a branch office in this state
shall meet the requirements of subdivision (a) and shall have an
owner, partner, or officer who is in charge of the land surveying
work in this state, who is licensed in this state, and who is
physically present at the branch office in this state on a regular
basis. However, the name of the business may contain the name of a
person not licensed in this state, if that person is appropriately
licensed or registered in another state. Any offer, promotion, or
advertisement that contains the name of any individual in the
business, other than by use of the name of the individual in the
business name, shall clearly and specifically designate the license
or registration discipline of each individual named.
   (c) The business name of a California land surveying business may
be a fictitious name. However, if the fictitious name includes the
names of any person, the requirements of paragraph (3) of subdivision
(a) shall be met.
   (d) A person not licensed under this chapter or licensed as a
civil engineer in this state prior to 1982 may also be a partner or
an officer of a land surveying business if the conditions of
subdivision (a) are satisfied. Nothing in this section shall be
construed to permit a person who is not licensed under this chapter
or licensed as a civil engineer in this state prior to 1982 to be the
sole owner or office of a land surveying business, unless otherwise
exempt under this chapter.
   (e) This chapter does not prevent an individual or business
engaged in any line of endeavor, other than the practice of land
surveying, from employing or contracting with a licensed land
surveyor or a licensed civil engineer to perform the respective land
surveying services incidental to the conduct of business.
   (f) This section shall not prevent the use of the name of any
business engaged in rendering land surveying services, including the
use by any lawful successor or survivor, that lawfully was in
existence on June 1, 1941. However, the business is subject to the
provisions of paragraphs (1) and (2) of subdivision (a).
   (g) A business engaged in rendering land surveying services may
use in its name the name of a deceased or retired person if the
following conditions are satisfied:
   (1) The person's name had been used in the name of the business,
or a predecessor in interest of the business, prior to the death or
retirement of the person.
   (2) The person shall have been an owner, partner, or officer of
the business, or an owner, partner, or officer of the predecessor in
interest of the business.
   (3) The person shall have been licensed as a land surveyor or a
civil engineer by the board, if operating a place of business or
practice in this state, or by an applicable state board in the event
no place of business existed in this state.
   (4) The person, if retired, has consented to the use of the name
and does not permit the use of the name in the title of another land
surveying business in this state during the period of that consent,
except that a retired person may use his or her name as the name of a
new or purchased business, if that business is not identical in
every respect to that person's name as used in the former business.
   (5) The business shall be subject to paragraphs (1) and (2) of
subdivision (a).
   (h) This section does not affect Sections 6731.2 and 8726.1.
   (i) A current organization record form shall be filed with the
board for all businesses engaged in rendering professional land
surveying services.
   (j) This section shall become operative on January 1, 2019.
  SEC. 5.  Section 16101 of the Corporations Code, as amended by
Section 1 of Chapter 291 of the Statutes of 2011, is amended to read:

   16101.  As used in this chapter, the following terms and phrases
have the following meanings:
   (1) "Business" includes every trade, occupation, and profession.
   (2) "Debtor in bankruptcy" means a person who is the subject of
either of the following:
   (A) An order for relief under Title 11 of the United States Code
or a comparable order under a successor statute of general
application.
   (B) A comparable order under federal, state, or foreign law
governing insolvency.
   (3) "Distribution" means a transfer of money or other property
from a partnership to a partner in the partner's capacity as a
partner or to the partner's transferee.
   (4) "Electronic transmission by the partnership" means a
communication (a) delivered by (1) facsimile telecommunication or
electronic mail when directed to the facsimile number or electronic
mail address, respectively, for that recipient on record with the
partnership, (2) posting on an electronic message board or network
that the partnership has designated for those communications,
together with a separate notice to the recipient of the posting,
which transmission shall be validly delivered upon the later of the
posting or delivery of the separate notice thereof, or (3) other
means of electronic communication, (b) to a recipient who has
provided an unrevoked consent to the use of those means of
transmission, and (c) that creates a record that is capable of
retention, retrieval, and review, and that may thereafter be rendered
into clearly legible tangible form. However, an electronic
transmission by a partnership to an individual partner is not
authorized unless, in addition to satisfying the requirements of this
section, the transmission satisfies the requirements applicable to
consumer consent to electronic records as set forth in the Electronic
Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001
(c)(1)).
   (5) "Electronic transmission to the partnership" means a
communication (a) delivered by (1) facsimile telecommunication or
electronic mail when directed to the facsimile number or electronic
mail address, respectively, which the partnership has provided from
time to time to partners for sending communications to the
partnership, (2) posting on an electronic message board or network
that the partnership has designated for those communications, and
which transmission shall be validly delivered upon the posting, or
(3) other means of electronic communication, (b) as to which the
partnership has placed in effect reasonable measures to verify that
the sender is the partner (in person or by proxy) purporting to send
the transmission, and (c) that creates a record that is capable of
retention, retrieval, and review, and that may thereafter be rendered
into clearly legible tangible form.
   (6) (A) "Foreign limited liability partnership" means a
partnership, other than a limited partnership, formed pursuant to an
agreement governed by the laws of another jurisdiction and
denominated or registered as a limited liability partnership or
registered limited liability partnership under the laws of that
jurisdiction (i) in which each partner is a licensed person or a
person licensed or authorized to provide professional limited
liability partnership services in a jurisdiction or jurisdictions
other than this state, (ii) which is licensed under the laws of the
state to engage in the practice of architecture, the practice of
public accountancy, the practice of engineering, the practice of land
surveying, or the practice of law, or (iii) which (I) is related to
a registered limited liability partnership that practices public
accountancy or, to the extent permitted by the State Bar, practices
law or is related to a foreign limited liability partnership and (II)
provides services related or complementary to the professional
limited liability partnership services provided by, or provides
services or facilities to, that registered limited liability
partnership or foreign limited liability partnership.
   (B) For the purposes of clause (iii) of subparagraph (A), a
partnership is related to a registered limited liability partnership
or foreign limited liability partnership if (i) at least a majority
of the partners in one partnership are also partners in the other
partnership, or (ii) at least a majority in interest in each
partnership hold interests in or are members of another person,
except an individual, and each partnership renders services pursuant
to an agreement with that other person, or (iii) one partnership,
directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the other
partnership.
   (7) "Licensed person" means any person who is duly licensed,
authorized, or registered under the provisions of the Business and
Professions Code to provide professional limited liability
partnership services or who is lawfully able to render professional
limited liability partnership services in this state.
   (8) (A) "Registered limited liability partnership" means a
partnership, other than a limited partnership, formed pursuant to an
agreement governed by Article 10 (commencing with Section 16951),
that is registered under Section 16953 and (i) each of the partners
of which is a licensed person or a person licensed or authorized to
provide professional limited liability partnership services in a
jurisdiction or jurisdictions other than this state, (ii) is licensed
under the laws of the state to engage in the practice of
architecture, the practice of public accountancy, the practice of
engineering, the practice of land surveying, or the practice of law,
or (iii)(I) is related to a registered limited liability partnership
that practices public accountancy or, to the extent permitted by the
State Bar, practices law or is related to a foreign limited liability
                                              partnership and (II)
provides services related or complementary to the professional
limited liability partnership services provided by, or provides
services or facilities to, that registered limited liability
partnership or foreign limited liability partnership.
   (B) For the purposes of clause (iii) of subparagraph (A), a
partnership is related to a registered limited liability partnership
or foreign limited liability partnership if (i) at least a majority
of the partners in one partnership are also partners in the other
partnership, or (ii) at least a majority in interest in each
partnership hold interests in or are members of another person, other
than an individual, and each partnership renders services pursuant
to an agreement with that other person, or (iii) one partnership,
directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the other
partnership.
   (9) "Partnership" means an association of two or more persons to
carry on as coowners a business for profit formed under Section
16202, predecessor law, or comparable law of another jurisdiction,
and includes, for all purposes of the laws of this state, a
registered limited liability partnership, and excludes any
partnership formed under Chapter 4.5 (commencing with Section 15900).

   (10) "Partnership agreement" means the agreement, whether written,
oral, or implied, among the partners concerning the partnership,
including amendments to the partnership agreement.
   (11) "Partnership at will" means a partnership in which the
partners have not agreed to remain partners until the expiration of a
definite term or the completion of a particular undertaking.
   (12) "Partnership interest" or "partner's interest in the
partnership" means all of a partner's interests in the partnership,
including the partner's transferable interest and all management and
other rights.
   (13) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited partnership, limited liability
partnership, limited liability company, association, joint venture,
government, governmental subdivision, agency, or instrumentality, or
any other legal or commercial entity.
   (14) "Professional limited liability partnership services" means
the practice of architecture, the practice of public accountancy, the
practice of engineering, the practice of land surveying, or the
practice of law.
   (15) "Property" means all property, real, personal, or mixed,
tangible or intangible, or any interest therein.
   (16) "State" means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
insular possession subject to the jurisdiction of the United States.
   (17) "Statement" means a statement of partnership authority under
Section 16303, a statement of denial under Section 16304, a statement
of dissociation under Section 16704, a statement of dissolution
under Section 16805, a statement of conversion or a certificate of
conversion under Section 16906, a statement of merger under Section
16915, or an amendment or cancellation of any of the foregoing.
   (18) "Transfer" includes an assignment, conveyance, lease,
mortgage, deed, and encumbrance.
   (19) The inclusion of the practice of architecture as a
professional limited liability partnership service permitted by this
section shall extend only until January 1, 2019.
   (20) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 6.  Section 16101 of the Corporations Code, as amended by
Section 2 of Chapter 291 of the Statutes of 2011, is amended to read:

   16101.  As used in this chapter, the following terms and phrases
have the following meanings:
   (1) "Business" includes every trade, occupation, and profession.
   (2) "Debtor in bankruptcy" means a person who is the subject of
either of the following:
   (A) An order for relief under Title 11 of the United States Code
or a comparable order under a successor statute of general
application.
   (B) A comparable order under federal, state, or foreign law
governing insolvency.
   (3) "Distribution" means a transfer of money or other property
from a partnership to a partner in the partner's capacity as a
partner or to the partner's transferee.
   (4) "Electronic transmission by the partnership" means a
communication (a) delivered by (1) facsimile telecommunication or
electronic mail when directed to the facsimile number or electronic
mail address, respectively, for that recipient on record with the
partnership, (2) posting on an electronic message board or network
that the partnership has designated for those communications,
together with a separate notice to the recipient of the posting,
which transmission shall be validly delivered upon the later of the
posting or delivery of the separate notice thereof, or (3) other
means of electronic communication, (b) to a recipient who has
provided an unrevoked consent to the use of those means of
transmission, and (c) that creates a record that is capable of
retention, retrieval, and review, and that may thereafter be rendered
into clearly legible tangible form. However, an electronic
transmission by a partnership to an individual partner is not
authorized unless, in addition to satisfying the requirements of this
section, the transmission satisfies the requirements applicable to
consumer consent to electronic records as set forth in the Electronic
Signatures in Global and National Commerce Act (15 U.S.C. Sec. 7001
(c)(1)).
   (5) "Electronic transmission to the partnership" means a
communication (a) delivered by (1) facsimile telecommunication or
electronic mail when directed to the facsimile number or electronic
mail address, respectively, which the partnership has provided from
time to time to partners for sending communications to the
partnership, (2) posting on an electronic message board or network
that the partnership has designated for those communications, and
which transmission shall be validly delivered upon the posting, or
(3) other means of electronic communication, (b) as to which the
partnership has placed in effect reasonable measures to verify that
the sender is the partner (in person or by proxy) purporting to send
the transmission, and (c) that creates a record that is capable of
retention, retrieval, and review, and that may thereafter be rendered
into clearly legible tangible form.
   (6) (A) "Foreign limited liability partnership" means a
partnership, other than a limited partnership, formed pursuant to an
agreement governed by the laws of another jurisdiction and
denominated or registered as a limited liability partnership or
registered limited liability partnership under the laws of that
jurisdiction (i) in which each partner is a licensed person or a
person licensed or authorized to provide professional limited
liability partnership services in a jurisdiction or jurisdictions
other than this state, (ii) which is licensed under the laws of the
state to engage in the practice of architecture, the practice of
public accountancy, or the practice of law, or (iii) which (I) is
related to a registered limited liability partnership that practices
public accountancy or, to the extent permitted by the State Bar,
practices law or is related to a foreign limited liability
partnership and (II) provides services related or complementary to
the professional limited liability partnership services provided by,
or provides services or facilities to, that registered limited
liability partnership or foreign limited liability partnership.
   (B) For the purposes of clause (iii) of subparagraph (A), a
partnership is related to a registered limited liability partnership
or foreign limited liability partnership if (i) at least a majority
of the partners in one partnership are also partners in the other
partnership, or (ii) at least a majority in interest in each
partnership hold interests in or are members of another person,
except an individual, and each partnership renders services pursuant
to an agreement with that other person, or (iii) one partnership,
directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the other
partnership.
   (7) "Licensed person" means any person who is duly licensed,
authorized, or registered under the provisions of the Business and
Professions Code to provide professional limited liability
partnership services or who is lawfully able to render professional
limited liability partnership services in this state.
   (8) (A) "Registered limited liability partnership" means a
partnership, other than a limited partnership, formed pursuant to an
agreement governed by Article 10 (commencing with Section 16951),
that is registered under Section 16953 and (i) each of the partners
of which is a licensed person or a person licensed or authorized to
provide professional limited liability partnership services in a
jurisdiction or jurisdictions other than this state, (ii) is licensed
under the laws of the state to engage in the practice of
architecture, practice of public accountancy, or the practice of law,
or (iii)(I) is related to a registered limited liability partnership
that practices public accountancy or, to the extent permitted by the
State Bar, practices law or is related to a foreign limited
liability partnership and (II) provides services related or
complementary to the professional limited liability partnership
services provided by, or provides services or facilities to, that
registered limited liability partnership or foreign limited liability
partnership.
   (B) For the purposes of clause (iii) of subparagraph (A), a
partnership is related to a registered limited liability partnership
or foreign limited liability partnership if (i) at least a majority
of the partners in one partnership are also partners in the other
partnership, or (ii) at least a majority in interest in each
partnership hold interests in or are members of another person, other
than an individual, and each partnership renders services pursuant
to an agreement with that other person, or (iii) one partnership,
directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the other
partnership.
   (9) "Partnership" means an association of two or more persons to
carry on as coowners a business for profit formed under Section
16202, predecessor law, or comparable law of another jurisdiction,
and includes, for all purposes of the laws of this state, a
registered limited liability partnership, and excludes any
partnership formed under Chapter 4.5 (commencing with Section 15900).

   (10) "Partnership agreement" means the agreement, whether written,
oral, or implied, among the partners concerning the partnership,
including amendments to the partnership agreement.
   (11) "Partnership at will" means a partnership in which the
partners have not agreed to remain partners until the expiration of a
definite term or the completion of a particular undertaking.
   (12) "Partnership interest" or "partner's interest in the
partnership" means all of a partner's interests in the partnership,
including the partner's transferable interest and all management and
other rights.
   (13) "Person" means an individual, corporation, business trust,
estate, trust, partnership, limited partnership, limited liability
partnership, limited liability company, association, joint venture,
government, governmental subdivision, agency, or instrumentality, or
any other legal or commercial entity.
   (14) "Professional limited liability partnership services" means
the practice of architecture, the practice of public accountancy, or
the practice of law.
   (15) "Property" means all property, real, personal, or mixed,
tangible or intangible, or any interest therein.
   (16) "State" means a state of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
insular possession subject to the jurisdiction of the United States.
   (17) "Statement" means a statement of partnership authority under
Section 16303, a statement of denial under Section 16304, a statement
of dissociation under Section 16704, a statement of dissolution
under Section 16805, a statement of conversion or a certificate of
conversion under Section 16906, a statement of merger under Section
16915, or an amendment or cancellation of any of the foregoing.
   (18) "Transfer" includes an assignment, conveyance, lease,
mortgage, deed, and encumbrance.
   (19) The inclusion of the practice of architecture as a
professional limited liability partnership service permitted by this
section shall extend only until January 1, 2019.
   (20) This section shall become operative on January 1, 2019.
  SEC. 7.  Section 16956 of the Corporations Code, as amended by
Section 7 of Chapter 634 of the Statutes of 2010, is amended to read:

   16956.  (a) At the time of registration pursuant to Section 16953,
in the case of a registered limited liability partnership, and
Section 16959, in the case of a foreign limited liability
partnership, and at all times during which those partnerships shall
transact intrastate business, every registered limited liability
partnership and foreign limited liability partnership, as the case
may be, shall be required to provide security for claims against it
as follows:
   (1) For claims based upon acts, errors, or omissions arising out
of the practice of public accountancy, a registered limited liability
partnership or foreign limited liability partnership providing
accountancy services shall comply with one, or pursuant to
subdivision (b) some combination, of the following:
   (A) Maintaining a policy or policies of insurance against
liability imposed on or against it by law for damages arising out of
claims; however, the total aggregate limit of liability under the
policy or policies of insurance for partnerships with five or fewer
licensed persons shall not be less than one million dollars
($1,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of insurance shall
be obtained for each additional licensee; however, the maximum
amount of insurance is not required to exceed five million dollars
($5,000,000) in any one designated period, less amounts paid in
defending, settling, or discharging claims as set forth in this
subparagraph. The policy or policies may be issued on a claims-made
or occurrence basis, and shall cover: (i) in the case of a
claims-made policy, claims initially asserted in the designated
period, and (ii) in the case of an occurrence policy, occurrences
during the designated period. For purposes of this subparagraph,
"designated period" means a policy year or any other period
designated in the policy that is not greater than 12 months. The
impairment or exhaustion of the aggregate limit of liability by
amounts paid under the policy in connection with the settlement,
discharge, or defense of claims applicable to a designated period
shall not require the partnership to acquire additional insurance
coverage for that designated period. The policy or policies of
insurance may be in a form reasonably available in the commercial
insurance market and may be subject to those terms, conditions,
exclusions, and endorsements that are typically contained in those
policies. A policy or policies of insurance maintained pursuant to
this subparagraph may be subject to a deductible or self-insured
retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Maintaining in trust or bank escrow, cash, bank certificates
of deposit, United States Treasury obligations, bank letters of
credit, or bonds of insurance or surety companies as security for
payment of liabilities imposed by law for damages arising out of all
claims; however, the maximum amount of security for partnerships with
five or fewer licensed persons shall not be less than one million
dollars ($1,000,000), and for partnerships with more than five
licensees rendering professional services on behalf of the
partnership, an additional one hundred thousand dollars ($100,000) of
security shall be obtained for each additional licensee; however,
the maximum amount of security is not required to exceed five million
dollars ($5,000,000). The partnership remains in compliance with
this section during a calendar year notwithstanding amounts paid
during that calendar year from the accounts, funds, Treasury
obligations, letters of credit, or bonds in defending, settling, or
discharging claims of the type described in this paragraph, provided
that the amount of those accounts, funds, Treasury obligations,
letters of credit, or bonds was at least the amount specified in the
preceding sentence as of the first business day of that calendar
year. Notwithstanding the pendency of other claims against the
partnership, a registered limited liability partnership or foreign
limited liability partnership shall be deemed to be in compliance
with this subparagraph as to a claim if within 30 days after the time
that a claim is initially asserted through service of a summons,
complaint, or comparable pleading in a judicial or administrative
proceeding, the partnership has provided the required amount of
security by designating and segregating funds in compliance with the
requirements of this subparagraph.
   (C) Unless the partnership has satisfied subparagraph (D), each
partner of a registered limited liability partnership or foreign
limited liability partnership providing accountancy services, by
virtue of that person's status as a partner, thereby automatically
guarantees payment of the difference between the maximum amount of
security required for the partnership by this paragraph and the
security otherwise provided in accordance with subparagraphs (A) and
(B), provided that the aggregate amount paid by all partners under
these guarantees shall not exceed the difference. Neither withdrawal
by a partner nor the dissolution and winding up of the partnership
shall affect the rights or obligations of a partner arising prior to
withdrawal or dissolution and winding up, and the guarantee provided
for in this subparagraph shall apply only to conduct that occurred
prior to the withdrawal or dissolution and winding up. Nothing
contained in this subparagraph shall affect or impair the rights or
obligations of the partners among themselves, or the partnership,
including, but not limited to, rights of contribution, subrogation,
or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding ten million
dollars ($10,000,000).
   (2) For claims based upon acts, errors, or omissions arising out
of the practice of law, a registered limited liability partnership or
foreign limited liability partnership providing legal services shall
comply with one, or pursuant to subdivision (b) some combination, of
the following:
   (A) Each registered limited liability partnership or foreign
limited liability partnership providing legal services shall maintain
a policy or policies of insurance against liability imposed on or
against it by law for damages arising out of claims; however, the
total aggregate limit of liability under the policy or policies of
insurance for partnerships with five or fewer licensed persons shall
not be less than one million dollars ($1,000,000), and for
partnerships with more than five licensees rendering professional
services on behalf of the partnership, an additional one hundred
thousand dollars ($100,000) of insurance shall be obtained for each
additional licensee; however, the maximum amount of insurance is not
required to exceed seven million five hundred thousand dollars
($7,500,000) in any one designated period, less amounts paid in
defending, settling, or discharging claims as set forth in this
subparagraph. The policy or policies may be issued on a claims-made
or occurrence basis, and shall cover (i) in the case of a claims-made
policy, claims initially asserted in the designated period, and (ii)
in the case of an occurrence policy, occurrences during the
designated period. For purposes of this subparagraph, "designated
period" means a policy year or any other period designated in the
policy that is not greater than 12 months. The impairment or
exhaustion of the aggregate limit of liability by amounts paid under
the policy in connection with the settlement, discharge, or defense
of claims applicable to a designated period shall not require the
partnership to acquire additional insurance coverage for that
designated period. The policy or policies of insurance may be in a
form reasonably available in the commercial insurance market and may
be subject to those terms, conditions, exclusions, and endorsements
that are typically contained in those policies. A policy or policies
of insurance maintained pursuant to this subparagraph may be subject
to a deductible or self-insured retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Each registered limited liability partnership or foreign
limited liability partnership providing legal services shall maintain
in trust or bank escrow, cash, bank certificates of deposit, United
States Treasury obligations, bank letters of credit, or bonds of
insurance or surety companies as security for payment of liabilities
imposed by law for damages arising out of all claims; however, the
maximum amount of security for partnerships with five or fewer
licensed persons shall not be less than one million dollars
($1,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of security shall
be obtained for each additional licensee; however, the maximum amount
of security is not required to exceed seven million five hundred
thousand dollars ($7,500,000). The partnership remains in compliance
with this section during a calendar year notwithstanding amounts paid
during that calendar year from the accounts, funds, Treasury
obligations, letters of credit, or bonds in defending, settling, or
discharging claims of the type described in this paragraph, provided
that the amount of those accounts, funds, Treasury obligations,
letters of credit, or bonds was at least the amount specified in the
preceding sentence as of the first business day of that calendar
year. Notwithstanding the pendency of other claims against the
partnership, a registered limited liability partnership or foreign
limited liability partnership shall be deemed to be in compliance
with this subparagraph as to a claim if within 30 days after the time
that a claim is initially asserted through service of a summons,
complaint, or comparable pleading in a judicial or administrative
proceeding, the partnership has provided the required amount of
security by designating and segregating funds in compliance with the
requirement of this subparagraph.
   (C) Unless the partnership has satisfied the requirements of
subparagraph (D), each partner of a registered limited liability
partnership or foreign limited liability partnership providing legal
services, by virtue of that person's status as a partner, thereby
automatically guarantees payment of the difference between the
maximum amount of security required for the partnership by this
paragraph and the security otherwise provided in accordance with the
provisions of subparagraphs (A) and (B), provided that the aggregate
amount paid by all partners under these guarantees shall not exceed
the difference. Neither withdrawal by a partner nor the dissolution
and winding up of the partnership shall affect the rights or
obligations of a partner arising prior to withdrawal or dissolution
and winding up, and the guarantee provided for in this subparagraph
shall apply only to conduct that occurred prior to the withdrawal or
dissolution and winding up. Nothing contained in this subparagraph
shall affect or impair the rights or obligations of the partners
among themselves, or the partnership, including, but not limited to,
rights of contribution, subrogation, or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding fifteen million
dollars ($15,000,000).
   (3) For claims based upon acts, errors, or omissions arising out
of the practice of architecture, a registered limited liability
partnership or foreign limited liability partnership providing
architectural services shall comply with one, or pursuant to
subdivision (b) some combination, of the following:
   (A) Maintaining a policy or policies of insurance against
liability imposed on or against it by law for damages arising out of
claims; however, the total aggregate limit of liability under the
policy or policies of insurance for partnerships with five or fewer
licensees rendering professional services on behalf of the
partnership shall not be less than one million dollars ($1,000,000),
and for partnerships with more than five licensees rendering
professional services on behalf of the partnership, an additional one
hundred thousand dollars ($100,000) of liability coverage shall be
obtained for each additional licensee; however, the total aggregate
limit of liability under the policy or policies of insurance is not
required to exceed five million dollars ($5,000,000). The policy or
policies may be issued on a claims-made or occurrence basis, and
shall cover: (i) in the case of a claims-made policy, claims
initially asserted in the designated period, and (ii) in the case of
an occurrence policy, occurrences during the designated period. For
purposes of this subparagraph, "designated period" means a policy
year or any other period
designated in the policy that is not greater than 12 months. The
impairment or exhaustion of the aggregate limit of liability by
amounts paid under the policy in connection with the settlement,
discharge, or defense of claims applicable to a designated period
shall not require the partnership to acquire additional insurance
coverage for that designated period. The policy or policies of
insurance may be in a form reasonably available in the commercial
insurance market and may be subject to those terms, conditions,
exclusions, and endorsements that are typically contained in those
policies. A policy or policies of insurance maintained pursuant to
this subparagraph may be subject to a deductible or self-insured
retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Maintaining in trust or bank escrow, cash, bank certificates
of deposit, United States Treasury obligations, bank letters of
credit, or bonds of insurance or surety companies as security for
payment of liabilities imposed by law for damages arising out of all
claims; however, the maximum amount of security for partnerships with
five or fewer licensees rendering professional services on behalf of
the partnership shall not be less than one million dollars
($1,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of security shall
be obtained for each additional licensee; however, the maximum amount
of security is not required to exceed five million dollars
($5,000,000). The partnership remains in compliance with this section
during a calendar year notwithstanding amounts paid during that
calendar year from the accounts, funds, Treasury obligations, letters
of credit, or bonds in defending, settling, or discharging claims of
the type described in this paragraph, provided that the amount of
those accounts, funds, Treasury obligations, letters of credit, or
bonds was at least the amount specified in the preceding sentence as
of the first business day of that calendar year. Notwithstanding the
pendency of other claims against the partnership, a registered
limited liability partnership or foreign limited liability
partnership shall be deemed to be in compliance with this
subparagraph as to a claim if within 30 days after the time that a
claim is initially asserted through service of a summons, complaint,
or comparable pleading in a judicial or administrative proceeding,
the partnership has provided the required amount of security by
designating and segregating funds in compliance with the requirements
of this subparagraph.
   (C) Unless the partnership has satisfied subparagraph (D), each
partner of a registered limited liability partnership or foreign
limited liability partnership providing architectural services, by
virtue of that person's status as a partner, thereby automatically
guarantees payment of the difference between the maximum amount of
security required for the partnership by this paragraph and the
security otherwise provided in accordance with subparagraphs (A) and
(B), provided that the aggregate amount paid by all partners under
these guarantees shall not exceed the difference. Neither withdrawal
by a partner nor the dissolution and winding up of the partnership
shall affect the rights or obligations of a partner arising prior to
withdrawal or dissolution and winding up, and the guarantee provided
for in this subparagraph shall apply only to conduct that occurred
prior to the withdrawal or dissolution and winding up. Nothing
contained in this subparagraph shall affect or impair the rights or
obligations of the partners among themselves, or the partnership,
including, but not limited to, rights of contribution, subrogation,
or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding ten million
dollars ($10,000,000).
   (4) For claims based upon acts, errors, or omissions arising out
of the practice of engineering or the practice of land surveying, a
registered limited liability partnership or foreign limited liability
partnership providing engineering or land surveying services shall
comply with one, or pursuant to subdivision (b) some combination, of
the following:
   (A) Maintaining a policy or policies of insurance against
liability imposed on or against it by law for damages arising out of
claims; however, the total aggregate limit of liability under the
policy or policies of insurance for partnerships with five or fewer
licensees rendering professional services on behalf of the
partnership shall not be less than two million dollars ($2,000,000),
and for partnerships with more than five licensees rendering
professional services on behalf of the partnership, an additional one
hundred thousand dollars ($100,000) of liability coverage shall be
obtained for each additional licensee; however, the total aggregate
limit of liability under the policy or policies of insurance is not
required to exceed five million dollars ($5,000,000). The policy or
policies may be issued on a claims-made or occurrence basis, and
shall cover: (i) in the case of a claims-made policy, claims
initially asserted in the designated period, and (ii) in the case of
an occurrence policy, occurrences during the designated period. For
purposes of this subparagraph, "designated period" means a policy
year or any other period designated in the policy that is not greater
than 12 months. The impairment or exhaustion of the aggregate limit
of liability by amounts paid under the policy in connection with the
settlement, discharge, or defense of claims applicable to a
designated period shall not require the partnership to acquire
additional insurance coverage for that designated period. The policy
or policies of insurance may be in a form reasonably available in the
commercial insurance market and may be subject to those terms,
conditions, exclusions, and endorsements that are typically contained
in those policies. A policy or policies of insurance maintained
pursuant to this subparagraph may be subject to a deductible or
self-insured retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Maintaining in trust or bank escrow, cash, bank certificates
of deposit, United States Treasury obligations, bank letters of
credit, or bonds of insurance or surety companies as security for
payment of liabilities imposed by law for damages arising out of all
claims; however, the maximum amount of security for partnerships with
five or fewer licensees rendering professional services on behalf of
the partnership shall not be less than two million dollars
($2,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of security shall
be obtained for each additional licensee; however, the maximum amount
of security is not required to exceed five million dollars
($5,000,000). The partnership remains in compliance with this section
during a calendar year, notwithstanding amounts paid during that
calendar year from the accounts, funds, Treasury obligations, letters
of credit, or bonds in defending, settling, or discharging claims of
the type described in this paragraph, provided that the amount of
those accounts, funds, Treasury obligations, letters of credit, or
bonds was at least the amount specified in the preceding sentence as
of the first business day of that calendar year. Notwithstanding the
pendency of other claims against the partnership, a registered
limited liability partnership or foreign limited liability
partnership shall be deemed to be in compliance with this
subparagraph as to a claim if, within 30 days after the time that a
claim is initially asserted through service of a summons, complaint,
or comparable pleading in a judicial or administrative proceeding,
the partnership has provided the required amount of security by
designating and segregating funds in compliance with the requirements
of this subparagraph.
   (C) Unless the partnership has satisfied subparagraph (D), each
partner of a registered limited liability partnership or foreign
limited liability partnership providing engineering services or land
surveying services, by virtue of that person's status as a partner,
thereby automatically guarantees payment of the difference between
the maximum amount of security required for the partnership by this
paragraph and the security otherwise provided in accordance with
subparagraphs (A) and (B), provided that the aggregate amount paid by
all partners under these guarantees shall not exceed the difference.
Neither withdrawal by a partner nor the dissolution and winding up
of the partnership shall affect the rights or obligations of a
partner arising prior to withdrawal or dissolution and winding up,
and the guarantee provided for in this subparagraph shall apply only
to conduct that occurred prior to the withdrawal or dissolution and
winding up. Nothing contained in this subparagraph shall affect or
impair the rights or obligations of the partners among themselves, or
the partnership, including, but not limited to, rights of
contribution, subrogation, or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding ten million
dollars ($10,000,000).
   (b) For purposes of satisfying the security requirements of this
section, a registered limited liability partnership or foreign
limited liability partnership may aggregate the security provided by
it pursuant to subparagraphs (A), (B), (C), and (D) of paragraph (1)
of subdivision (a), subparagraphs (A), (B), (C), and (D) of paragraph
(2) of subdivision (a), subparagraphs (A), (B), (C), and (D) of
paragraph (3) of subdivision (a), or subparagraphs (A), (B), (C), and
(D) of paragraph (4) of subdivision (a), as the case may be. Any
registered limited liability partnership or foreign limited liability
partnership intending to comply with the alternative security
provisions set forth in subparagraph (D) of paragraph (1) of
subdivision (a), subparagraph (D) of paragraph (2) of subdivision
(a), subparagraph (D) of paragraph (3) of subdivision (a), or
subparagraph (D) of paragraph (4) of subdivision (a), shall furnish
the following information to the Secretary of State's office, in the
manner prescribed in, and accompanied by all information required by,
the applicable section:
             TRANSMITTAL FORM FOR EVIDENCING
                       COMPLIANCE
          WITH SECTION 16956(a)(1)(D), SECTION
                     16956(a)(2)(D),
           SECTION 16956(a)(3)(D), OR SECTION
            16956(a)(4)(D) OF THE CALIFORNIA
                    CORPORATIONS CODE
      The undersigned hereby confirms       the
      following:
      _____________________________________
1.   Name of registered or foreign limited
      ______________________
      liability partnership
      _________________________________
2.   Jurisdiction where partnership is
      __________
      organized
3.   __________________________________
      Address       of principal office
      The registered or foreign limited liability
      partnership
      chooses
      to satisfy the requirements of Section
      16956 by
      confirming,
      pursuant to Section 16956(a)(1)(D),
      16956(a)(2)(D),
      16956(a)(3)(D), or 16956 (a)(4)(D) and
      pursuant to Section 16956(c),
      that, as of the most recently completed
      fiscal year, the partnership
      had
      a net worth equal to or exceeding ten
4.   million
      dollars
      ($10,000,000), in the case of a partnership
      providing
      accountancy services, fifteen million
      dollars
      ($15,000,000)
      in the case of a partnership providing
      legal services,
      or
      ten million dollars ($10,000,000), in the
      case of a
      partnership
      providing       architectural services,
      engineering services, or land surveying
      services.
      _________________________________________
5.   Title of authorized person executing this
      _____
      form
      ________________________________________
6.   Signature of authorized person executing
      __________
      this form


   (c) Pursuant to subparagraph (D) of paragraph (1) of subdivision
(a), subparagraph (D) of paragraph (2) of subdivision (a),
subparagraph (D) of paragraph (3) of subdivision (a), or subparagraph
(D) of paragraph (4) of subdivision (a), a registered limited
liability partnership or foreign limited liability partnership may
satisfy the requirements of this section by confirming that, as of
the last day of its most recently completed fiscal year, it had a net
worth equal to or exceeding the amount required. In order to comply
with this alternative method of meeting the requirements established
in this section, a registered limited liability partnership or
foreign limited liability partnership shall file an annual
confirmation with the Secretary of State's office, signed by an
authorized member of the registered limited liability partnership or
foreign limited liability partnership, accompanied by a transmittal
form as prescribed by subdivision (b). In order to be current in a
given year, the partnership form for confirming compliance with the
optional security requirement shall be on file within four months of
the completion of the fiscal year and, upon being filed, shall
constitute full compliance with the financial security requirements
for purposes of this section as of the beginning of the fiscal year.
A confirmation filed during any particular fiscal year shall continue
to be effective for the first four months of the next succeeding
fiscal year.
   (d) Neither the existence of the requirements of subdivision (a)
nor the extent of the registered limited liability partnership's or
foreign limited liability partnership's compliance with the
alternative requirements in this section shall be admissible in court
or in any way be made known to a jury or other trier of fact in
determining an issue of liability for, or to the extent of, the
damages in question.
   (e) Notwithstanding any other provision of this section, if a
registered limited liability partnership or foreign limited liability
partnership is otherwise in compliance with the terms of this
section at the time that a bankruptcy or other insolvency proceeding
is commenced with respect to the registered limited liability
partnership or foreign limited liability partnership, it shall be
deemed to be in compliance with this section during the pendency of
the proceeding. A registered limited liability partnership that has
been the subject of a proceeding and that conducts business after the
proceeding ends shall thereafter comply with paragraph (1), (2),
(3), or (4) of subdivision (a), in order to obtain the limitations on
liability afforded by subdivision (c) of Section 16306.
   (f) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 8.  Section 16956 of the Corporations Code, as added by
Section 8 of Chapter 634 of the Statutes of 2010, is amended to read:

   16956.  (a) At the time of registration pursuant to Section 16953,
in the case of a registered limited liability partnership, and
Section 16959, in the case of a foreign limited liability
partnership, and at all times during which those partnerships shall
transact intrastate business, every registered limited liability
partnership and foreign limited liability partnership, as the case
may be, shall be required to provide security for claims against it
as follows:
   (1) For claims based upon acts, errors, or omissions arising out
of the practice of public accountancy, a registered limited liability
partnership or foreign limited liability partnership providing
accountancy services shall comply with one, or pursuant to
subdivision (b) some combination, of the following:
   (A) Maintaining a policy or policies of insurance against
liability imposed on or against it by law for damages arising out of
claims; however, the total aggregate limit of liability under the
policy or policies of insurance for partnerships with five or fewer
licensed persons shall not be less than one million dollars
($1,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of insurance shall
be obtained for each additional licensee; however, the maximum
amount of insurance is not required to exceed five million dollars
($5,000,000) in any one designated period, less amounts paid in
defending, settling, or discharging claims as set forth in this
subparagraph. The policy or policies may be issued on a claims-made
or occurrence basis, and shall cover: (i) in the case of a
claims-made policy, claims initially asserted in the designated
period, and (ii) in the case of an occurrence policy, occurrences
during the designated period. For purposes of this subparagraph,
"designated period" means a policy year or any other period
designated in the policy that is not greater than 12 months. The
impairment or exhaustion of the aggregate limit of liability by
amounts paid under the policy in connection with the settlement,
discharge, or defense of claims applicable to a designated period
shall not require the partnership to acquire additional insurance
coverage for that designated period. The policy or policies of
insurance may be in a form reasonably available in the commercial
insurance market and may be subject to those terms, conditions,
exclusions, and endorsements that are typically contained in those
policies. A policy or policies of insurance maintained pursuant to
this subparagraph may be subject to a deductible or self-insured
retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Maintaining in trust or bank escrow, cash, bank certificates
of deposit, United States Treasury obligations, bank letters of
credit, or bonds of insurance or surety companies as security for
payment of liabilities imposed by law for damages arising out of all
claims; however, the maximum amount of security for partnerships with
five or fewer licensed persons shall not be less than one million
dollars ($1,000,000), and for partnerships with more than five
licensees rendering professional services on behalf of the
partnership, an additional one hundred thousand dollars ($100,000) of
security shall be obtained for each additional licensee; however,
the maximum amount of security is not required to exceed five million
dollars ($5,000,000). The partnership remains in compliance with
this section during a calendar year notwithstanding amounts paid
during that calendar year from the accounts, funds, Treasury
obligations, letters of credit, or bonds in defending, settling, or
discharging claims of the type described in this paragraph, provided
that the amount of those accounts, funds, Treasury obligations,
letters of credit, or bonds was at least the amount specified in the
preceding sentence as of the first business day of that calendar
year. Notwithstanding the pendency of other claims against the
partnership, a registered limited liability partnership or foreign
limited liability partnership shall be deemed to be in compliance
with this subparagraph as to a claim if within 30 days after the time
that a claim is initially asserted through service of a summons,
complaint, or comparable pleading in a judicial or administrative
proceeding, the partnership has provided the required amount of
security by designating and segregating funds in compliance with the
requirements of this subparagraph.
   (C) Unless the partnership has satisfied subparagraph (D), each
partner of a registered limited liability partnership or foreign
limited liability partnership providing accountancy services, by
virtue of that person's status as a partner, thereby automatically
guarantees payment of the difference between the maximum amount of
security required for the partnership by this paragraph and the
security otherwise provided in accordance with subparagraphs (A) and
(B), provided that the aggregate amount paid by all partners under
these guarantees shall not exceed the difference. Neither withdrawal
by a partner nor the dissolution and winding up of the partnership
shall affect the rights or obligations of a partner arising prior to
withdrawal or dissolution and winding up, and the guarantee provided
for in this subparagraph shall apply only to conduct that occurred
prior to the withdrawal or dissolution and winding up. Nothing
contained in this subparagraph shall affect or impair the rights or
obligations of the partners among themselves, or the partnership,
including, but not limited to, rights of contribution, subrogation,
or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding ten million
dollars ($10,000,000).
   (2) For claims based upon acts, errors, or omissions arising out
of the practice of law, a registered limited liability partnership or
foreign limited liability partnership providing legal services shall
comply with one, or pursuant to subdivision (b) some combination, of
the following:
   (A) Each registered limited liability partnership or foreign
limited liability partnership providing legal services shall maintain
a policy or policies of insurance against liability imposed on or
against it by law for damages arising out of claims; however, the
total aggregate limit of liability under the policy or policies of
insurance for partnerships with five or fewer licensed persons shall
not be less than one million dollars ($1,000,000), and for
partnerships with more than five licensees rendering professional
services on behalf of the partnership, an additional one hundred
thousand dollars ($100,000) of insurance shall be obtained for each
additional licensee; however, the maximum amount of insurance is not
required to exceed seven million five hundred thousand dollars
($7,500,000) in any one designated period, less amounts paid in
defending, settling, or discharging claims as set forth in this
subparagraph. The policy or policies may be issued on a claims-made
or occurrence basis, and shall cover (i) in the case of a claims-made
policy, claims initially asserted in the designated period, and (ii)
in the case of an occurrence policy, occurrences during the
designated period. For purposes of this subparagraph, "designated
period" means a policy year or any other period designated in the
policy that is not greater than 12 months. The impairment or
exhaustion of the aggregate limit of liability by amounts paid under
the policy in connection with the settlement, discharge, or defense
of claims applicable to a designated period shall not require the
partnership to acquire additional insurance coverage for that
designated period. The policy or policies of insurance may be in a
form reasonably available in the commercial insurance market and may
be subject to those terms, conditions, exclusions, and endorsements
that are typically contained in those policies. A policy or policies
of insurance maintained pursuant to this subparagraph may be subject
to a deductible or self-insured retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Each registered limited liability partnership or foreign
limited liability partnership providing legal services shall maintain
in trust or bank escrow, cash, bank certificates of deposit, United
States Treasury obligations, bank letters of credit, or bonds of
insurance or surety companies as security for payment of liabilities
imposed by law for damages arising out of all claims; however, the
maximum amount of security for partnerships with five or fewer
licensed persons shall not be less than one million dollars
($1,000,000), and for partnerships with more than five licensees
rendering professional services on behalf of the partnership, an
additional one hundred thousand dollars ($100,000) of security shall
be obtained for each additional licensee; however, the maximum amount
of security is not required to exceed seven million five hundred
thousand dollars ($7,500,000). The partnership remains in compliance
with this section during a calendar year notwithstanding amounts paid
during that calendar year from the accounts, funds, Treasury
obligations, letters of credit, or bonds in defending, settling, or
discharging claims of the type described in this paragraph, provided
that the amount of those accounts, funds, Treasury obligations,
letters of credit, or bonds was at least the amount specified in the
preceding sentence as of the first business day of that calendar
year. Notwithstanding the pendency of other claims against the
partnership, a registered limited liability partnership or foreign
limited liability partnership shall be deemed to be in compliance
with this subparagraph as to a claim if within 30 days after the time
                                              that a claim is
initially asserted through service of a summons, complaint, or
comparable pleading in a judicial or administrative proceeding, the
partnership has provided the required amount of security by
designating and segregating funds in compliance with the requirement
of this subparagraph.
   (C) Unless the partnership has satisfied the requirements of
subparagraph (D), each partner of a registered limited liability
partnership or foreign limited liability partnership providing legal
services, by virtue of that person's status as a partner, thereby
automatically guarantees payment of the difference between the
maximum amount of security required for the partnership by this
paragraph and the security otherwise provided in accordance with the
provisions of subparagraphs (A) and (B), provided that the aggregate
amount paid by all partners under these guarantees shall not exceed
the difference. Neither withdrawal by a partner nor the dissolution
and winding up of the partnership shall affect the rights or
obligations of a partner arising prior to withdrawal or dissolution
and winding up, and the guarantee provided for in this subparagraph
shall apply only to conduct that occurred prior to the withdrawal or
dissolution and winding up. Nothing contained in this subparagraph
shall affect or impair the rights or obligations of the partners
among themselves, or the partnership, including, but not limited to,
rights of contribution, subrogation, or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding fifteen million
dollars ($15,000,000).
   (3) For claims based upon acts, errors, or omissions arising out
of the practice of architecture, a registered limited liability
partnership or foreign limited liability partnership providing
architectural services shall comply with one, or pursuant to
subdivision (b) some combination, of the following:
   (A) Maintaining a policy or policies of insurance against
liability imposed on or against it by law for damages arising out of
claims in an amount for each claim of at least one hundred thousand
dollars ($100,000) multiplied by the number of licensed persons
rendering professional services on behalf of the partnership;
however, the total aggregate limit of liability under the policy or
policies of insurance for partnerships with five or fewer licensees
rendering professional services on behalf of the partnership shall
not be less than five hundred thousand dollars ($500,000), and for
all other partnerships is not required to exceed five million dollars
($5,000,000) in any one designated period, less amounts paid in
defending, settling, or discharging claims as set forth in this
subparagraph. On and after January 1, 2008, the total aggregate limit
of liability under the policy or policies of insurance for
partnerships with five or fewer licensees rendering professional
services on behalf of the partnership shall not be less than one
million dollars ($1,000,000), and for partnerships with more than
five licensees rendering professional services on behalf of the
partnership, an additional one hundred thousand dollars ($100,000) of
liability coverage shall be obtained for each additional licensee;
however, the total aggregate limit of liability under the policy or
policies of insurance is not required to exceed five million dollars
($5,000,000). The policy or policies may be issued on a claims-made
or occurrence basis, and shall cover: (i) in the case of a
claims-made policy, claims initially asserted in the designated
period, and (ii) in the case of an occurrence policy, occurrences
during the designated period. For purposes of this subparagraph,
"designated period" means a policy year or any other period
designated in the policy that is not greater than 12 months. The
impairment or exhaustion of the aggregate limit of liability by
amounts paid under the policy in connection with the settlement,
discharge, or defense of claims applicable to a designated period
shall not require the partnership to acquire additional insurance
coverage for that designated period. The policy or policies of
insurance may be in a form reasonably available in the commercial
insurance market and may be subject to those terms, conditions,
exclusions, and endorsements that are typically contained in those
policies. A policy or policies of insurance maintained pursuant to
this subparagraph may be subject to a deductible or self-insured
retention.
   Upon the dissolution and winding up of the partnership, the
partnership shall, with respect to any insurance policy or policies
then maintained pursuant to this subparagraph, maintain or obtain an
extended reporting period endorsement or equivalent provision in the
maximum total aggregate limit of liability required to comply with
this subparagraph for a minimum of three years if reasonably
available from the insurer.
   (B) Maintaining in trust or bank escrow, cash, bank certificates
of deposit, United States Treasury obligations, bank letters of
credit, or bonds of insurance or surety companies as security for
payment of liabilities imposed by law for damages arising out of all
claims in an amount of at least one hundred thousand dollars
($100,000) multiplied by the number of licensed persons rendering
professional services on behalf of the partnership; however, the
maximum amount of security for partnerships with five or fewer
licensees rendering professional services on behalf of the
partnership shall not be less than five hundred thousand dollars
($500,000), and for all other partnerships is not required to exceed
five million dollars ($5,000,000). On and after January 1, 2008, the
maximum amount of security for partnerships with five or fewer
licensees rendering professional services on behalf of the
partnership shall not be less than one million dollars ($1,000,000),
and for partnerships with more than five licensees rendering
professional services on behalf of the partnership, an additional one
hundred thousand dollars ($100,000) of security shall be obtained
for each additional licensee; however, the maximum amount of security
is not required to exceed five million dollars ($5,000,000). The
partnership remains in compliance with this section during a calendar
year notwithstanding amounts paid during that calendar year from the
accounts, funds, Treasury obligations, letters of credit, or bonds
in defending, settling, or discharging claims of the type described
in this paragraph, provided that the amount of those accounts, funds,
Treasury obligations, letters of credit, or bonds was at least the
amount specified in the preceding sentence as of the first business
day of that calendar year. Notwithstanding the pendency of other
claims against the partnership, a registered limited liability
partnership or foreign limited liability partnership shall be deemed
to be in compliance with this subparagraph as to a claim if within 30
days after the time that a claim is initially asserted through
service of a summons, complaint, or comparable pleading in a judicial
or administrative proceeding, the partnership has provided the
required amount of security by designating and segregating funds in
compliance with the requirements of this subparagraph.
   (C) Unless the partnership has satisfied subparagraph (D), each
partner of a registered limited liability partnership or foreign
limited liability partnership providing architectural services, by
virtue of that person's status as a partner, thereby automatically
guarantees payment of the difference between the maximum amount of
security required for the partnership by this paragraph and the
security otherwise provided in accordance with subparagraphs (A) and
(B), provided that the aggregate amount paid by all partners under
these guarantees shall not exceed the difference. Neither withdrawal
by a partner nor the dissolution and winding up of the partnership
shall affect the rights or obligations of a partner arising prior to
withdrawal or dissolution and winding up, and the guarantee provided
for in this subparagraph shall apply only to conduct that occurred
prior to the withdrawal or dissolution and winding up. Nothing
contained in this subparagraph shall affect or impair the rights or
obligations of the partners among themselves, or the partnership,
including, but not limited to, rights of contribution, subrogation,
or indemnification.
   (D) Confirming, pursuant to the procedure in subdivision (c),
that, as of the most recently completed fiscal year of the
partnership, it had a net worth equal to or exceeding ten million
dollars ($10,000,000).
   (b) For purposes of satisfying the security requirements of this
section, a registered limited liability partnership or foreign
limited liability partnership may aggregate the security provided by
it pursuant to subparagraphs (A), (B), (C), and (D) of paragraph (1)
of subdivision (a), subparagraphs (A), (B), (C), and (D) of paragraph
(2) of subdivision (a), or subparagraphs (A), (B), (C), and (D) of
paragraph (3) of subdivision (a), as the case may be. Any registered
limited liability partnership or foreign limited liability
partnership intending to comply with the alternative security
provisions set forth in subparagraph (D) of paragraph (1) of
subdivision (a), subparagraph (D) of paragraph (2) of subdivision
(a), or subparagraph (D) of paragraph (3) of subdivision (a) shall
furnish the following information to the Secretary of State's office,
in the manner prescribed in, and accompanied by all information
required by, the applicable section:
             TRANSMITTAL FORM FOR EVIDENCING
                       COMPLIANCE
          WITH SECTION 16956(a)(1)(D), SECTION
                     16956(a)(2)(D),
                           OR
              SECTION 16956(a)(3)(D) OF THE
                       CALIFORNIA
                    CORPORATIONS CODE
      The undersigned hereby confirms the
      following:
      _____________________________________
1.   Name of registered or foreign limited
      ______________________
      liability partnership
      _________________________________
2.   Jurisdiction where partnership is
      __________
      organized
3.   ____________________________
      Address of principal office
      The registered or foreign limited liability
      partnership
      chooses
      to satisfy the requirements of Section
      16956 by
      confirming,
      pursuant to Section 16956(a)(1)(D),
      16956(a)(2)(D),
      or
      16956(a)(3)(D) and pursuant to Section
      16956(c), that, as
      of
      the most recently completed fiscal year,
      the partnership
4.   had
      a net worth equal to or exceeding ten
      million
      dollars
      ($10,000,000), in the case of a partnership
      providing
      accountancy services, fifteen million
      dollars
      ($15,000,000)
      in the case of a partnership providing
      legal services,
      or
      ten million dollars ($10,000,000), in the
      case of a
      partnership
      providing architectural services.
      _________________________________________
5.   Title of authorized person executing this
      _____
      form
      ________________________________________
6.   Signature of authorized person executing
      __________
      this form


   (c) Pursuant to subparagraph (D) of paragraph (1) of subdivision
(a), subparagraph (D) of paragraph (2) of subdivision (a), or
subparagraph (D) of paragraph (3) of subdivision (a), a registered
limited liability partnership or foreign limited liability
partnership may satisfy the requirements of this section by
confirming that, as of the last day of its most recently completed
fiscal year, it had a net worth equal to or exceeding the amount
required. In order to comply with this alternative method of meeting
the requirements established in this section, a registered limited
liability partnership or foreign limited liability partnership shall
file an annual confirmation with the Secretary of State's office,
signed by an authorized member of the registered limited liability
partnership or foreign limited liability partnership, accompanied by
a transmittal form as prescribed by subdivision (b). In order to be
current in a given year, the partnership form for confirming
compliance with the optional security requirement shall be on file
within four months of the completion of the fiscal year and, upon
being filed, shall constitute full compliance with the financial
security requirements for purposes of this section as of the
beginning of the fiscal year. A confirmation filed during any
particular fiscal year shall continue to be effective for the first
four months of the next succeeding fiscal year.
   (d) Neither the existence of the requirements of subdivision (a)
nor the extent of the registered limited liability partnership's or
foreign limited liability partnership's compliance with the
alternative requirements in this section shall be admissible in court
or in any way be made known to a jury or other trier of fact in
determining an issue of liability for, or to the extent of, the
damages in question.
   (e) Notwithstanding any other provision of this section, if a
registered limited liability partnership or foreign limited liability
partnership is otherwise in compliance with the terms of this
section at the time that a bankruptcy or other insolvency proceeding
is commenced with respect to the registered limited liability
partnership or foreign limited liability partnership, it shall be
deemed to be in compliance with this section during the pendency of
the proceeding. A registered limited liability partnership that has
been the subject of a proceeding and that conducts business after the
proceeding ends shall thereafter comply with paragraph (1), (2), or
(3) of subdivision (a), in order to obtain the limitations on
liability afforded by subdivision (c) of Section 16306.
   (f) This section shall become operative on January 1, 2019.
  SEC. 9.  Section 16959 of the Corporations Code, as amended by
Section 35 of Chapter 834 of the Statutes of 2014, is amended to
read:
   16959.  (a) (1) Before transacting intrastate business in this
state, a foreign limited liability partnership shall comply with all
statutory and administrative registration or filing requirements of
the state board, commission, or agency that prescribes the rules and
regulations governing a particular profession in which the
partnership proposes to be engaged, pursuant to the applicable
provisions of the Business and Professions Code relating to the
profession or applicable rules adopted by the governing board. A
foreign limited liability partnership that transacts intrastate
business in this state shall within 30 days after the effective date
of the act enacting this section or the date on which the foreign
limited liability partnership first transacts intrastate business in
this state, whichever is later, register with the Secretary of State
by submitting to the Secretary of State an application for
registration as a foreign limited liability partnership, signed by a
person with authority to do so under the laws of the jurisdiction of
formation of the foreign limited liability partnership, stating the
name of the partnership, the street address of its principal office,
the mailing address of the principal office if different from the
street address, the name and street address of its agent for service
of process in this state in accordance with subdivision (a) of
Section 16309, a brief statement of the business in which the
partnership engages, and any other matters that the partnership
determines to include.
   (2) Annexed to the application for registration shall be a
certificate from an authorized public official of the foreign limited
liability partnership's jurisdiction of organization to the effect
that the foreign limited liability partnership is in good standing in
that jurisdiction, if the laws of that jurisdiction permit the
issuance of those certificates, or, in the alternative, a statement
by the foreign limited liability partnership that the laws of its
jurisdiction of organization do not permit the issuance of those
certificates.
   (b) The registration shall be accompanied by a fee as set forth in
subdivision (b) of Section 12189 of the Government Code.
   (c) If the Secretary of State finds that an application for
registration conforms to law and all requisite fees have been paid,
the Secretary of State shall issue a certificate of registration to
transact intrastate business in this state.
   (d) The Secretary of State may cancel the filing of the
registration 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 thereupon be effective. The second notice
shall be given 20 days or more after the first notice and 90 days or
less after the original filing.
   (e) A partnership becomes registered as a foreign limited
liability partnership at the time of the filing of the initial
registration with the Secretary of State or at any later date or time
specified in the registration and the payment of the fee required by
subdivision (b). A partnership continues to be registered as a
foreign limited liability partnership until a notice that it is no
longer so registered as a foreign limited liability partnership has
been filed pursuant to Section 16960 or, if applicable, once it has
been dissolved and finally wound up. The status of a partnership
registered as a foreign limited liability partnership and the
liability of a partner of that foreign limited liability partnership
shall not be adversely affected by errors or subsequent changes in
the information stated in an application for registration under
subdivision (a) or an amended registration or notice under Section
16960.
   (f) The fact that a registration or amended registration pursuant
to Section 16960 is on file with the Secretary of State is notice
that the partnership is a foreign limited liability partnership and
of those other facts contained therein that are required to be set
forth in the registration or amended registration.
   (g) The Secretary of State shall provide a form for a registration
under subdivision (a), which shall include the form for confirming
compliance with the optional security requirement pursuant to
subdivision (c) of Section 16956. The Secretary of State shall
include with instructional materials, provided in conjunction with
the form for registration under subdivision (a), a notice that filing
the registration will obligate the limited liability partnership to
pay an annual tax for that taxable year to the Franchise Tax Board
pursuant to Section 17948 of the Revenue and Taxation Code. That
notice shall be updated annually to specify the dollar amount of this
tax.
   (h) A foreign limited liability partnership transacting intrastate
business in this state shall not maintain any action, suit, or
proceeding in any court of this state until it has registered in this
state pursuant to this section.
   (i) Any foreign limited liability partnership that transacts
intrastate business in this state without registration is subject to
a penalty of twenty dollars ($20) for each day that unauthorized
intrastate business is transacted, up to a maximum of ten thousand
dollars ($10,000).
   (j) A partner of a foreign limited liability partnership is not
liable for the debts or obligations of the foreign limited liability
partnership solely by reason of its having transacted business in
this state without registration.
   (k) A foreign limited liability partnership, transacting business
in this state without registration, appoints the Secretary of State
as its agent for service of process with respect to causes of action
arising out of the transaction of business in this state.
   (  l  ) "Transact intrastate business" as used in this
section means to repeatedly and successively provide professional
limited liability partnership services in this state, other than in
interstate or foreign commerce.
   (m) Without excluding other activities that may not be considered
to be transacting intrastate business, a foreign limited liability
partnership shall not be considered to be transacting intrastate
business merely because its subsidiary or affiliate transacts
intrastate business, or merely because of its status as any one or
more of the following:
   (1) A shareholder of a domestic corporation.
   (2) A shareholder of a foreign corporation transacting intrastate
business.
   (3) A limited partner of a foreign limited partnership transacting
intrastate business.
   (4) A limited partner of a domestic limited partnership.
   (5) A member or manager of a foreign limited liability company
transacting intrastate business.
   (6) A member or manager of a domestic limited liability company.
   (n) Without excluding other activities that may not be considered
to be transacting intrastate business, a foreign limited liability
partnership shall not be considered to be transacting intrastate
business within the meaning of this subdivision solely by reason of
carrying on in this state any one or more of the following
activities:
   (1) Maintaining or defending any action or suit or any
administrative or arbitration proceeding, or effecting the settlement
thereof or the settlement of claims or disputes.
   (2) Holding meetings of its partners or carrying on any other
activities concerning its internal affairs.
   (3) Maintaining bank accounts.
   (4) Maintaining offices or agencies for the transfer, exchange,
and registration of the foreign limited liability partnership's
securities or maintaining trustees or depositories with respect to
those securities.
   (5) Effecting sales through independent contractors.
   (6) Soliciting or procuring orders, whether by mail or through
employees or agents or otherwise, where those orders require
acceptance without this state before becoming binding contracts.
   (7) Creating or acquiring evidences of debt or mortgages, liens,
or security interest in real or personal property.
   (8) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts.
   (9) Conducting an isolated transaction that is completed within
180 days and not in the course of a number of repeated transactions
of a like nature.
   (o) A person shall not be deemed to be transacting intrastate
business in this state merely because of its status as a partner of a
registered limited liability partnership or a foreign limited
liability company whether or not registered to transact intrastate
business in this state.
   (p) The Attorney General may bring an action to restrain a foreign
limited liability partnership from transacting intrastate business
in this state in violation of this chapter.
   (q) Nothing in this section is intended to, or shall, augment,
diminish, or otherwise alter existing provisions of law, statutes, or
court rules relating to services by a California architect,
California public accountant, California engineer, California land
surveyor, or California attorney in another jurisdiction, or services
by an out-of-state architect, out-of-state public accountant,
out-of-state engineer, out-of-state land surveyor, or out-of-state
attorney in California.
   (r) An agent designated for service of process may deliver to the
Secretary of State, on a form prescribed by the Secretary of State
for filing, a signed and acknowledged written statement of
resignation as an agent for service of process containing the name of
the foreign limited liability partnership and Secretary of State's
file number of the foreign limited liability partnership, the name of
the resigning agent for service of process, and a statement that the
agent is resigning. On filing of the statement of resignation, the
authority of the agent to act in that capacity shall cease and the
Secretary of State shall mail or otherwise provide written notice of
the filing of the statement of resignation to the foreign limited
liability partnership at its principal office.
   (s) The resignation of an agent may be effective if, on a form
prescribed by the Secretary of State containing the name of the
foreign limited liability partnership and Secretary of State's file
number for the foreign limited liability partnership and the name of
the agent for service of process, the agent disclaims having been
properly appointed as the agent.
   (t) 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 foreign limited liability partnership shall promptly file
an amended application for registration as a foreign limited
liability partnership designating a new agent.
   (u) The Secretary of State may destroy or otherwise dispose of any
resignation filed pursuant to this section after a new application
for registration as a foreign limited liability partnership is filed
pursuant to this section replacing the agent for service of process
that has resigned.
   (v) This section shall remain in effect only until January 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
  SEC. 10.  Section 16959 of the Corporations Code, as amended by
Section 36 of Chapter 834 of the Statutes of 2014, is amended to
read:
   16959.  (a) (1) Before transacting intrastate business in this
state, a foreign limited liability partnership shall comply with all
statutory and administrative registration or filing requirements of
the state board, commission, or agency that prescribes the rules and
regulations governing a particular profession in which the
partnership proposes to be engaged, pursuant to the applicable
provisions of the Business and Professions Code relating to the
profession or applicable rules adopted by the governing board. A
foreign limited liability partnership that transacts intrastate
business in this state shall within 30 days after the effective date
of the act enacting this section or the
                  date on which the foreign limited liability
partnership first transacts intrastate business in this state,
whichever is later, register with the Secretary of State by
submitting to the Secretary of State an application for registration
as a foreign limited liability partnership, signed by a person with
authority to do so under the laws of the jurisdiction of formation of
the foreign limited liability partnership, stating the name of the
partnership, the street address of its principal office, the mailing
address of the principal office if different from the street address,
the name and street address of its agent for service of process in
this state in accordance with subdivision (a) of Section 16309, a
brief statement of the business in which the partnership engages, and
any other matters that the partnership determines to include.
   (2) Annexed to the application for registration shall be a
certificate from an authorized public official of the foreign limited
liability partnership's jurisdiction of organization to the effect
that the foreign limited liability partnership is in good standing in
that jurisdiction, if the laws of that jurisdiction permit the
issuance of those certificates, or, in the alternative, a statement
by the foreign limited liability partnership that the laws of its
jurisdiction of organization do not permit the issuance of those
certificates.
   (b) The registration shall be accompanied by a fee as set forth in
subdivision (b) of Section 12189 of the Government Code.
   (c) If the Secretary of State finds that an application for
registration conforms to law and all requisite fees have been paid,
the Secretary of State shall issue a certificate of registration to
transact intrastate business in this state.
   (d) The Secretary of State may cancel the filing of the
registration 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 thereupon be effective. The second notice
shall be given 20 days or more after the first notice and 90 days or
less after the original filing.
   (e) A partnership becomes registered as a foreign limited
liability partnership at the time of the filing of the initial
registration with the Secretary of State or at any later date or time
specified in the registration and the payment of the fee required by
subdivision (b). A partnership continues to be registered as a
foreign limited liability partnership until a notice that it is no
longer so registered as a foreign limited liability partnership has
been filed pursuant to Section 16960 or, if applicable, once it has
been dissolved and finally wound up. The status of a partnership
registered as a foreign limited liability partnership and the
liability of a partner of that foreign limited liability partnership
shall not be adversely affected by errors or subsequent changes in
the information stated in an application for registration under
subdivision (a) or an amended registration or notice under Section
16960.
   (f) The fact that a registration or amended registration pursuant
to Section 16960 is on file with the Secretary of State is notice
that the partnership is a foreign limited liability partnership and
of those other facts contained therein that are required to be set
forth in the registration or amended registration.
   (g) The Secretary of State shall provide a form for a registration
under subdivision (a), which shall include the form for confirming
compliance with the optional security requirement pursuant to
subdivision (c) of Section 16956. The Secretary of State shall
include with instructional materials, provided in conjunction with
the form for registration under subdivision (a), a notice that filing
the registration will obligate the limited liability partnership to
pay an annual tax for that taxable year to the Franchise Tax Board
pursuant to Section 17948 of the Revenue and Taxation Code. That
notice shall be updated annually to specify the dollar amount of this
tax.
   (h) A foreign limited liability partnership transacting intrastate
business in this state shall not maintain any action, suit, or
proceeding in any court of this state until it has registered in this
state pursuant to this section.
   (i) Any foreign limited liability partnership that transacts
intrastate business in this state without registration is subject to
a penalty of twenty dollars ($20) for each day that unauthorized
intrastate business is transacted, up to a maximum of ten thousand
dollars ($10,000).
   (j) A partner of a foreign limited liability partnership is not
liable for the debts or obligations of the foreign limited liability
partnership solely by reason of its having transacted business in
this state without registration.
   (k) A foreign limited liability partnership, transacting business
in this state without registration, appoints the Secretary of State
as its agent for service of process with respect to causes of action
arising out of the transaction of business in this state.
   (  l  ) "Transact intrastate business" as used in this
section means to repeatedly and successively provide professional
limited liability partnership services in this state, other than in
interstate or foreign commerce.
   (m) Without excluding other activities that may not be considered
to be transacting intrastate business, a foreign limited liability
partnership shall not be considered to be transacting intrastate
business merely because its subsidiary or affiliate transacts
intrastate business, or merely because of its status as any one or
more of the following:
   (1) A shareholder of a domestic corporation.
   (2) A shareholder of a foreign corporation transacting intrastate
business.
   (3) A limited partner of a foreign limited partnership transacting
intrastate business.
   (4) A limited partner of a domestic limited partnership.
   (5) A member or manager of a foreign limited liability company
transacting intrastate business.
   (6) A member or manager of a domestic limited liability company.
   (n) Without excluding other activities that may not be considered
to be transacting intrastate business, a foreign limited liability
partnership shall not be considered to be transacting intrastate
business within the meaning of this subdivision solely by reason of
carrying on in this state any one or more of the following
activities:
   (1) Maintaining or defending any action or suit or any
administrative or arbitration proceeding, or effecting the settlement
thereof or the settlement of claims or disputes.
   (2) Holding meetings of its partners or carrying on any other
activities concerning its internal affairs.
   (3) Maintaining bank accounts.
   (4) Maintaining offices or agencies for the transfer, exchange,
and registration of the foreign limited liability partnership's
securities or maintaining trustees or depositories with respect to
those securities.
   (5) Effecting sales through independent contractors.
   (6) Soliciting or procuring orders, whether by mail or through
employees or agents or otherwise, where those orders require
acceptance without this state before becoming binding contracts.
   (7) Creating or acquiring evidences of debt or mortgages, liens,
or security interest in real or personal property.
   (8) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts.
   (9) Conducting an isolated transaction that is completed within
180 days and not in the course of a number of repeated transactions
of a like nature.
   (o) A person shall not be deemed to be transacting intrastate
business in this state merely because of its status as a partner of a
registered limited liability partnership or a foreign limited
liability company whether or not registered to transact intrastate
business in this state.
   (p) The Attorney General may bring an action to restrain a foreign
limited liability partnership from transacting intrastate business
in this state in violation of this chapter.
   (q) Nothing in this section is intended to, or shall, augment,
diminish, or otherwise alter existing provisions of law, statutes, or
court rules relating to services by a California architect,
California public accountant, or California attorney in another
jurisdiction, or services by an out-of-state architect, out-of-state
public accountant, or out-of-state attorney in California.
   (r) An agent designated for service of process may deliver to the
Secretary of State, on a form prescribed by the Secretary of State
for filing, a signed and acknowledged written statement of
resignation as an agent for service of process containing the name of
the foreign limited liability partnership and Secretary of State's
file number of the foreign limited liability partnership, the name of
the resigning agent for service of process, and a statement that the
agent is resigning. On filing of the statement of resignation, the
authority of the agent to act in that capacity shall cease and the
Secretary of State shall mail or otherwise provide written notice of
the filing of the statement of resignation to the foreign limited
liability partnership at its principal office.
   (s) The resignation of an agent may be effective if, on a form
prescribed by the Secretary of State containing the name and
Secretary of State's file number for the foreign limited liability
partnership and the name of the agent for service of process, the
agent disclaims having been properly appointed as the agent.
   (t) 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 foreign limited liability partnership shall promptly file
an amended application for registration as a foreign limited
liability partnership designating a new agent.
   (u) The Secretary of State may destroy or otherwise dispose of any
resignation filed pursuant to this section after a new application
for registration as a foreign limited liability partnership is filed
pursuant to this section replacing the agent for service of process
that has resigned.
   (v) This section shall become operative on January 1, 2019.