Secretary of State

By Jon Ortiz
Published: Wednesday, Mar. 6, 2013 – 12:00 am
Last Modified: Wednesday, Mar. 6, 2013 – 7:33 am

The path to starting a business in California has a speed bump.

David Lerman knows all about it. Two weeks ago, he filled out a one-page registration form for a wine exporting company that he hopes to start soon.

But after dropping off the form and $85 to cover fees, he found out the secretary of state’s office has a six-week business-registration backlog.

It’s the kind of story that out-of-state business poachers, including Texas Gov. Rick Perry, use to kick dirt on California’s business climate. Similar business transactions in the Lone Star State take less than a week.

“This is a businessperson’s introduction to doing business in this state,” said Lerman, a Berkeley labor attorney. “‘Welcome to California. Now get in line.'”

Secretary of State Debra Bowen is concerned about the backlog, said spokeswoman Shannan Velayas, and intends to replace the current paper filing system with an online process akin to that used by the California DMV for vehicle registrations and license renewals.

Five years of deep budget cuts have stacked up registration filings, Velayas said, and the agency has moved employees from other units to chip away at the paperwork mountain. End-of-year documents swell the number of filings in process by five or six times.

But John Kabateck, executive director of the California chapter of the National Federation of Independent Business, said the secretary of state’s backlog exemplifies a “wall of bureaucracy” that stifles entrepreneurs.

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