SACRAMENTO – Today, Assemblywoman Sharon Quirk-Silva (D-Fullerton) announced that Assembly Bill (AB) 674 has been signed by Governor Jerry Brown. AB 674 updates the definition of microenterprise and microenterprise development organizations to more accurately reflect industry practices and offer additional access to government resources and programs.
“Microenterprises represent approximately 93% of all businesses in the state. The reality is that the business landscape has changed throughout the years. As legislators it is our responsibility to ensure that the laws evolve with the changing business climate in order to provide pathways, accessibility and sustainability. In challenging economic times, it is our small businesses that function as the engine of our nation. I am honored to announce that our bill to assist microenterprise businesses has been chaptered into California law,” stated Assemblywoman Quirk-Silva.
Existing law defines “microenterprise” as a sole proprietorship, partnership, or corporation with fewer than five employees, including the owner, and generally lacking access to conventional loans, equity, or other banking services. There are approximately 3.2 million microenterprises in the State of California. These firms create jobs, generate taxes, and revitalize communities.
From 2000 to 2001, microenterprises created 62,731 jobs in the state, accounting for nearly 64% of all new employment growth. The trend continued in this most recent recession, with the number of non-employer firms increasing from 2.6 million firms reporting $137 billion in revenues for 2008, to 2.8 million firms reporting $138 billion in revenues for 2010.
AB 674 updates the existing definition by specifying that the owner of a microenterprise may be employed by another firm, adds a limited liability company to the list of legal structures under which a microenterprise may be organized, and modifies the requirement that a microenterprise generally lacks access to capital by stating that the microenterprise lacks “sufficient” access to capital, among other things.
For more information on AB 674, please contact our district office at 714-526-7272 or send us an email through asmdc.org/Quirk-Silva.