NRAI Compliance Updates - January, 2004

Greetings,

January is the month that kicks off the legislation filing season.  Most of what follows are newly introduced bills.  However, there is some important information here that shows the trend towards further governmental scrutiny of corporate entities.  I urge you to review each item that I have included this month as it may well have future bearing on your practice.

Happy New Year to all.

Robert K. Rowell
General Counsel
National Registered Agents, Inc.


Newly Introduced & Pending Legislation

Arkansas

Arkansas House Bill 1103xx

An Act to amend Arkansas law to provide for the withholding of income tax by pass-through entities on non-resident taxpayers

Current Status: January 9, 2004 referred to the Committee on Revenue & Taxation.

Full Text: Not available without subscription to Arkansas State Web Site

California

California Assembly Bill 1000

Corporations: disclosure statement.

Existing law, the General Corporation Law, requires a domestic corporation and a foreign corporation to file statements annually with the Secretary of State disclosing specified information concerning its operation and makes the information contained in the statements open to public inspection. Existing law specifies additional information that a publicly traded company is required to include in the statement.

This bill would revise these provisions, including changing the definitions for "publicly traded company" and "executive officer."

Under existing law, information required in the statement includes the name of the independent auditor used by the corporation and a description of any services performed for the corporation during the previous 24 months by the auditor or its parent corporation, or by an agent, subsidiary, corporate partner, or corporate affiliate of the auditor or its parent corporation.

This bill would instead require the corporations to disclose services performed during its 2 most recent fiscal years and the period between the end of its most recent fiscal year.

Existing law requires these corporations to provide a statement indicating whether any members of the board of directors or executive officer of the corporation has been convicted of fraud within the previous 10 years.

This bill would instead require that statement if the conviction has not been overturned or expunged.

Existing law requires a nonprofit public benefit corporation and a nonprofit mutual benefit corporation to file statements biennially with the Secretary of State disclosing specified information concerning its operation.

This bill would instead require that statements of a nonprofit public benefit corporation and a nonprofit mutual benefit corporation be filed annually. 

Current Status: January 14, 2004 read second time and amended.

Full Text accessible at: http://www.leginfo.ca.gov/pub/bill/asm/ab_0951-1000/ab_1000_bill_20040114_amended_asm.html

Florida

Florida Senate Bill 1386

Documentary Stamp Tax; exempts from tax promissory or nonnegotiable notes or other written obligations to pay money executed by agriculture producers in this state to Commodity Credit Corporation & security instruments for such notes & obligations. Amends 201.08.

Current Status: Prefiled January 6. 2004

Full Text accessible at: CLICK HERE

Illinois

Illinois Senate Bill 2136

Creates the Legal Document Preparer Act. Provides that, beginning July 1, 2005, no person shall engage in the preparation of legal documents unless the person is certified. Establishes the Board of Legal Document Preparers and outlines its duties and powers. Provides eligibility requirements for certification. Sets out the services that may be provided by a legal document preparer. Provides guidelines for the application process and the renewal of certification. Provides for disciplinary actions. Provides for a code of conduct for legal document preparers. Sets out a fee schedule. Amends the State Finance Act to provide for the Legal Document Preparer Fund.

Current Status: January 6, 2004 sent to Rules Committee

Full Text accessible at: CLICK HERE 

Indiana

Indiana Senate Bill 119

Replaces the Indiana trademark act with the model state trademark act. Repeals superseded references to and transitional provisions concerning the Indiana trademark act.

Current Status: 1/6/04 First reading: referred to Committee on Judiciary

Full Text accessible at: http://www.in.gov/legislative/bills/2004/IN/IN0119.1.html

Kentucky

Kentucky House Bill 256

An act relating to corporations to amend KRS 271B.6-220 to eliminate gender specific references.

Full Text accessible at: http://www.lrc.state.ky.us/record/04rs/HB256/bill.doc

Kentucky House Bill 112

AN ACT relating to business names. 

Amend KRS 365.015 to require the Secretary of State to remind a business entity that its assumed business name certificate is about to expire; require an individual to file a certificate of assumed name with the county clerk where that individual maintains his or her principal place of business; permit an individual to file a certificate of assumed name with the Secretary of State.

Full Text accessible at: http://www.lrc.state.ky.us/record/04rs/HB112/bill.doc

Kentucky House Bill 221

AN ACT relating to business entities. 

Create seven new sections in KRS Chapter 275, the Kentucky Limited Liability Company Act, to authorize the creation of "series" limited liability companies; provide that the word "series" shall appear in the name of the company; provide that the written operating agreement can designate members, managers, or company interests as separate series with regard to specific property, assets, debts, liabilities, or profits or losses associated therewith, of the company…

Full Text accessible at: http://www.lrc.state.ky.us/record/04rs/HB221/bill.doc

Kentucky House Bill 135

AN ACT relating to enhancing state electronic services to businesses. 

Create a new section of KRS Chapter 14 to allow the Secretary of State to accept electronic signatures as notarization for business filing requirements.

Current status: 1/14/04-reported favorably, 1st reading, to Calendar with Committee Substitute

Full Text accessible at: http://www.lrc.state.ky.us/record/04rs/HB135/bill.doc

Maine

Maine L. R. 2592 

Directing the Secretary of State To Review Model Legislation To Prevent Fraudulent Filings under the Uniform Commercial Code

Current Status: Assigned House Paper 1259 and LD 1737

Full Text accessible at: http://janus.state.me.us/legis/LawMakerWeb/externalsiteframe.asp?ID=280012008&LD=1737&Type=1

New Jersey

New Jersey House Bill 249

An Act eliminating the alternative minimum assessment under the corporation business tax, amending P. L. 2002, c. 40.

Current Status: 1/13/2004 Introduced, Referred to Assembly Appropriations Committee

Full Text accessible at: http://www.njleg.state.nj.us/2004/Bills/A0500/249_I1.HTM

New Jersey House Bill 251

An Act clarifying the deductibility of certain state taxes from entire net income taxable under the corporation business tax, amending P.L. 1945, c. 162.

Current Status: 1/13/2004 Introduced, Referred to Assembly Appropriations Committee

Full Text accessible at: http://www.njleg.state.nj.us/2004/Bills/A0500/251_I1.HTM

New York

New York SB 5902

Requires the names and business addresses of the 10 people with the most valuable interests in a limited partnership, registered limited liability partnership, limited liability company, foreign limited liability company, foreign limited partnership, foreign limited liability partnership, professional service limited liability company or foreign professional service limited liability company to be published for four successive weeks in 2 newspapers in the county where the office of such business entity is located; such publication shall occur within 120 days of the establishment of the business; requires publication of the change in the names or addresses of such 10 people; eliminates provision prohibiting such a business from maintaining any cause of action if it fails to publish any such notice in a timely manner; such a business need only be in substantial, good faith compliance in order to conduct business.

Current Status: Introduced 1/12/04 and referred to committee on Senate Corporations, Authorities, and Commissions.

Full Text accessible at: http://assembly.state.ny.us/leg/?bn=S05902&sh=t 

New York House Bill 226

Eliminates a number of filing fees imposed on businesses by the department of state pursuant to the business corporation law, the executive law and the not-for-profit corporation law; eliminates fees related to start up, merger, consolidation or dissolution of a corporation.

Current Status: January 7, 2004 referred to Committee on Corporations, Authorities and Commissions

Full Text accessible at: http://assembly.state.ny.us/leg/?bn=A00226&sh=t
NOTE: This same bill was referred to the same committee on January 8, 2003 and is notated that elimination of these fees will result in a loss of revenue to the state of approximately $8 to $10 million. Chances of passage are not good. 

New York House Bill 1625

Provides that unless the certificate of incorporation of not-for-profit corporation provides otherwise, the members of board of directors or any committee thereof may participate in the meetings of the board or committee by use of a conference telephone.

Current Status: January 7, 2004 referred to Committee on Corporations, Authorities and Commissions

Full Text accessible at: http://assembly.state.ny.us/leg/?bn=A01625&sh=t

New York Senate Bill 2493

Eliminates the requirement that limited liability companies publish their articles of organization and that limited liability partnerships publish their registrations.

Current Status: January 7, 2004 referred to Committee on Corporations, Authorities and Commissions

Full Text accessible at: http://assembly.state.ny.us/leg/?bn=S01545&sh=t

Note: This would seem to be an attempt to codify the decision that was overturned in the case of Barklee Realty Company, LLC et al. v. George E. Pataki wherein publication requirements for LLC’s being organized in New York were found to be unconstitutional.

Pennsylvania

Pursuant to Act 47 of 2003, enacted on December 23,2003, all Corporation Bureau fees other than for filings made under the Uniform Commercial Code have been increased effective immediately. Therefore, please remit the revised filing fee with your filing. 

Domestic Corporation/Association Profit and Non-Profit

Articles of Incorporation                                                   $125
(or like instrument incorporating a corporation or association)
Articles of Conversion                                                      $70
Each ancillary transaction                                                  $70
Articles of Merger, Consolidation or Division                               $70
Additional fee for each assoc. that is a party to a merger or consolidation $40
Additional fee for each association resulting from a division               $125

Foreign Corporations 

Certificates of Authority or like qualifications to do business             $250
Amended Cert of Authority of like change in qualification to do business    $250
Domestication                                                               $125
Each ancillary transaction                                                  $70
Statement of Merger or Consolidation                                        $70
Additional fee for each assoc. that is a party to a merger or consolidation $40

Fictitious Name

Registration                                                                $70
Each ancillary transaction                                                  $70

Trademark 

Registration                                                                $50
Renewal                                                                     $50
Assignment                                                                  $50

Insignia, Marked Articles and Like Matters

Registration                                                                $50
Amendment                                                                   $50

Domestic Limited Partnership 

Registration                                                                $125
Each ancillary transaction                                                  $70
Certificate of Merger, or Consolidation of Division                         $70
Additional fee for each assoc. that is a party to a merger or consolidation $40
Additional fee for each "new" association resulting from a division         $125

Foreign Limited Partnership

Registration                                                                $250
Amended registration                                                        $250
Domestication                                                               $125
Each ancillary transaction                                                  $70

Domestic Limited Liability Partnership

Registration                                                                $125
Each ancillary transaction                                                  $70
Annual registration at least                                                $240

Domestic Limited Liability Company

Certificate of Organization                                                 $125
Each ancillary transaction                                                  $70
Certificate of Merger, Consolidation or Division                            $70
Additional fee for each assoc. that is a party to a merger or consolidation $40
Additional fee for each new association resulting from a division           $125
Annual Registration at least                                                $360

Foreign Limited Liability Partnership/Limited Liability Company

Registration                                                                $250
Amended Registration                                                        $250
Domestication of Foreign Limited Liability Company                          $125
Each ancillary transaction                                                  $70
Annual Registration (Partnership) at least                                  $240
Annual Registration (Company) at least                                      $360
Change of Registered Office By Agent                                        $5

Certification Fees

Record searches listing the entity number, name, address, and file date     $15
(these may also indicate a no record)
Good standing certificates evidencing status                                $40
Plain copies                                                        $15 + $3/page
Certified copies                                                    $55 + $3/page
Engrossed certificates bearing the secretary's seal                         $70
(non-existence certs & great seals)
Printouts of the computer screen are available in the reception room      $3/page

All microfilm records are available for public inspection and copying in the corporation bureau reception room $3 per page

Service of Process, Each Defendant Named or Served                          $70

Uniform Commercial Code 

Financing Statement                                                         $84
Financing Statement Amendment                                               $84
Correction Statement                                                        $84
Attached pages to UCC-1 or UCC-3 filings NO ADDITIONAL CHARGE
UCC-11 Information Request                                                  $12
UCC-11 Copy Request $12 + $3/page of copies; and $28 if certification is requested

Other Fees

Duplicate certificates are available                                        $70
Name Reservation/Registration                                               $70
Name Availability (3 names)                                                 $15
Expedited                                                          $70/transaction
FAX (outgoing)                                                            $3/page
Business List                                                      $12 + $ .25/name


Utah

Utah House Bill 191

This bill amends the definition of "nonresident shareholder" to repeal language providing that an organization exempt under Section 01, Internal Revenue Code, is a nonresident shareholder; amends the definition of "S corporation"; repeals references to foreign sales corporations that have been repealed under federal law; and makes technical changes.

Current Status: January 15, 2004 sent for printing

Full Text accessible at: http://www.le.state.ut.us/~2004/bills/hbillint/hb0191.htm

Vermont

Vermont Senate Bill 273

Authorizes LLC’s formed under the laws of Vermont to designate a body of foreign law to govern the internal affairs of the company.

In Committee January 6, 2004

Full Text accessible at: http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/bills/intro/S-273.HTM

Virginia

Virginia House Bill 342

Business entities; conversions; mergers; registration. Requires different business entities involved in conversions or mergers to make certain filings with the State Corporation Commission (SCC). The bill expands what must be included in the application for registration, reentry, or reinstatement that must be filed with the SCC in order for a foreign business entity to transact business in Virginia. The bill also includes technical amendments.

Current Status: 01/14/04 House: Referred to Committee on Commerce and Labor

Full Text accessible at: http://leg1.state.va.us/cgi-bin/legp504.exe?041+ful+HB342

Virginia House Bill 276

Electronic filing of reports of funds or property presumed abandoned. Requires a person to electronically remit reports containing 25 or more items of funds or other property presumed abandoned to the administrator in a format prescribed by the administrator. The administrator may waive this requirement when he determines, in his discretion, that it creates an undue hardship. Current law requires the person to create such a report and remit it to the administrator without specifying the format.

Current Status: January 14, 2004 Referred to Committee for Courts of Justice

Full Text accessible at: http://leg1.state.va.us/cgi-bin/legp504.exe?041+ful+HB276

Virginia Senate Bill 131

Corporations; articles of termination of corporate existence. Removes the reference to a Virginia Code section that was repealed and adds in place thereof the classes of persons entitled to receive payments when a corporation divests itself of all of its assets. The bill also makes other technical amendments to the sections relating to articles of termination of corporate existence involving stock corporations and nonstock corporations.

Current Status: January 14, 2004 Referred to Committee on Commerce and Labor

Full Text accessible at: http://leg1.state.va.us/cgi-bin/legp504.exe?041+ful+SB131


Annual Report Developments

New Hampshire

The new mailing address for the Secretary of State of New Hampshire is:

Corporation Division
Department of State
P. O. Box 3713
Concord, NH 03302-3713

Annual Reports to be filed should be sent to:

NH Department of State
Annual Reports
P. O. Box 9529
Manchester, NH 03108-9529


Court Developments

Delaware Court of Chancery

The Delaware Court of Chancery now has its jurisdiction extended to hear and mediate technology disputes and to mediate business disputes.

More information on the Delaware Court of Chancery may be found at http://courts.state.de.us/chancery/index.htm


Previous issues of the NRAI Newsletter may be found at: http://secure.nrai.com/dynamic_frame.asp?page=research 

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