Berding | Weil Community Association ALERT Newsletter
Legal News and Comments for Community Association Boards and Managers Issue #90 • April 2012
BEWARE: Filing Delays at the California Secretary of State
by Sarah H. Jenkins, Esq.
Recently we have been hearing about homeowners associations experiencing extremely long delays for the filing of business forms at the California Secretary of State, resulting in an association's corporate status being suspended. In one situation, a manager reported to us that a form sent to the Secretary of State by mail in December still had not been processed by the end of March, resulting in the association's corporate status becoming “suspended”. The Secretary of State website even reports that “[a]s a result of budget cuts, the time to process requests has increased significantly” and provides, that current processing times of a Statement of Information is currently over 3 months (for updated information on the processing time of the most common forms, see http://www.sos.ca.gov/business/be/processing-times.htm.)
Suspension of a corporate status can cause very serious consequences for a homeowner association, its board, and its members, including subjecting officers and director's to personal liability, result in the corporation losing its name, interfere with an association's collection of delinquent assessment, and cause insurance contracts to be void. A more detailed discussion of what it means for an association to lose corporate status can be found in our previous article “Suspension of a Homeowners Association Corporate Status, It's not 'Just a Technicality'”.
What forms need to be filed with the Secretary of State?
Other than failure to file the appropriate tax forms with the Franchise Tax Board, the most common reason we see for suspension of the corporate status is a failure to comply with the filing requirements of the Secretary of State. The Secretary of State filing requirements vary depending on whether the association is incorporated, unincorporated, or a stock cooperative. Each is outlined as follows:
  • Incorporated Homeowner Associations. After the original filing of the Articles of Incorporation, incorporated homeowner associations are required to file Form SI-CID “Statement by Common Interest Development Association” every 2 years. This Form SI-CID meets the filing requirements described in California Civil Code section 1363.6. In addition, the incorporated homeowner association must file Form SI-100 “Statement of Information” every two years at the same time as the Form SI-CID above. Form SI-100 meets the filing requirements set forth in California Corporate Code section 8210.
  • Unincorporated Homeowner Associations. Even though an unincorporated association is not currently required to register with the Secretary of State, every unincorporated association formed to manage a common interest development under the Davis Sterling Common Interest Development Act is required to file the Form SI-CID “Statement by Common Interest Development Association”. For an unincorporated homeowner association, the Form SI-CID needs to be filed every 2 years, but may only be filed in the month of July.
  • Stock Cooperatives. Stock cooperatives formed to manage a common interest development are also required to file the Form SI-CID every 2 years. In addition, stock cooperatives must file Form SI-200 “Statement of Information Domestic Stock and Agricultural Cooperative Corporations”. The SI-200 must be filed every year in the calendar month when the initial Articles of Incorporation were filed, or up to 5 months prior to such month.
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