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NRAI Compliance Updates - March, 2007
Greetings,
Public concern with corporate conduct continues to be evidenced by the introduction of U. S. House Bill 1257 proposing shareholder votes on executive compensation.
Bills signed into law in the past month include:
Mississippi - Technical corrections to MBCA (SB 2684)
Nebraska - Duty of Directors (LB 191)
South Dakota - Conversion of entities (HB 1129), Judgment remedies LP’s (SB 77), Creditor’s Rights LLC’s (SB 78)
Virginia – Court appointed custodian (SB 1285)
As always, we will continue to monitor these activities and keep you informed.
Robert K. Rowell
General Counsel
New, Pending and Passed
Legislation
Federal Legislation
HB 1257
To amend the Securities Exchange Act of 1934 to provide shareholders with an advisory vote on executive compensation.
Full Text available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h1257ih.txt.pdf
Current Bill Status: March 8, 2007 House committee/subcommittee actions. Status: Committee Hearings Held.
HB 1365
To amend the Internal Revenue Code of 1986 to repeal the alternative minimum tax on corporations.
Full Text available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h1365ih.txt.pdf
Current Bill Status: March 7, 2007 Referred to the House Committee on Ways and Means.
Arkansas
HB 2693
An act to require the secretary of state to provide notice to registrants of corporate, fictitious, or assumed names that the registration does not grant the registrant the right to use the name in violation of a third party's trademark rights.
Full Text available at: http://www.arkleg.state.ar.us/ftproot/bills/2007/public/HB2693.pdf
Current Bill Status: March 16, 2007 returned from Insurance & Commerce Committee with a DO PASS recommendation.
California
HB 1179
Minimum annual tax: exemptions: corporations, LLC, limited partnerships, and limited liability partnerships.
Full Text available at: http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_1151-1200/ab_1179_bill_20070223_introduced.html
Current Bill Status: March 15, 2007 referred to Committee on Revenue and Taxation
HB 1546/SB 749
An act to amend Section 17942 of the Revenue and Taxation Code, relating to limited liability companies, to take effect immediately, tax levy.
Full Text available at: http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_1501-1550/ab_1546_bill_20070223_introduced.html
Current Bill Status: February 26, 2007 read first time
Colorado
HB 1135
Clarifies merger and conversion provisions. Clarifies HOUSE consolidation provisions for cooperatives. Clarifies share exchange February 1, 2007 provisions for corporations. 3rd Reading Unamended Changes, in certain instances, the term "principal office address" to "principal address" to cover individuals and persons. Establishes that a member of a limited liability company ceases to be a member upon assignment or transfer of all the member's membership HOUSE January 31, 2007 Amended 2nd Reading interest. After July 27, 2009, allows a limited partnership to elect to be a reporting entity. Requires a new limited partnership to file an annual report.
Full Text available at: LINK
Current Bill Status: March 15, 2007 Sent to the Governor.
Florida
SB 2148
Limited Liability Companies/Name; requires limited liability company name to be distinguishable on databases maintained by Corporations Div. of Department of State; provides exception; deletes name-recording requirement for department; requires name of limited liability company in company's articles of organization to satisfy certain requirements. Amends 608.406,.407. EFFECTIVE DATE: 07/01/2007.
Full Text available at: http://www.myfloridahouse.com/Sections/Documents/loaddoc.aspx?FileName=_s2148__.html&DocumentType=Bill&BillNumber=2148&Session=2007
Current Bill Status: Introduced, referred to Commerce; Judiciary -SJ 00142 on Wednesday, March 14, 2007
Georgia
SB 234
To amend Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships, and associations, so as to provide for the Secretary of State to collect a filing fee for certificates of conversion filed when a Georgia corporation, Georgia limited partnership, or Georgia limited liability company converts to a foreign corporation, foreign limited partnership, or foreign limited liability company, respectively; to provide that a certificate of conversion be filed with the Secretary of State to evidence a conversion; to allow a copy of a certificate of conversion be filed with the clerk of the superior court in any county in which a converting entity owns property; to provide for related matters; to repeal conflicting laws; and for other purposes.
Full Text available at: http://www.legis.ga.gov/legis/2007_08/fulltext/sb234.htm
Current Bill Status: February 27, 2007 Senate Read and Referred.
Illinois
HB 2644
Amends the Business Corporation Act of 1983. Makes a technical change in a Section concerning the short title.
Full Text available at: http://www.ilga.gov/legislation/95/HB/PDF/09500HB2644lv.pdf
Current Bill Status: March 14, 2007 House Placed on Calendar 2nd Reading - Short Debate
HB 2645
Amends the Limited Liability Company Act. Makes a technical change in a Section concerning service of process on a foreign limited liability company.
Full Text available at: http://www.ilga.gov/legislation/95/HB/PDF/09500HB2645lv.pdf
Current Bill Status: : March 14, 2007 House Placed on Calendar 2nd Reading - Short Debate
Iowa
HB 651
A bill for an act relating to business corporations, by providing for information required to be filed with the secretary of state and providing for shareholder voting.
Full Text available at: http://coolice.legis.state.ia.us/Cool-ICE/default.asp?Category=BillInfo&Service=Billbook&ga=82&menu=text&hbill=HF651
Current Bill Status: March 5, 2007 Introduced, placed on calendar.
Louisiana
HB 48
AN ACT To amend and reenact R.S. 47:602(A) and (G), 605(B) and (C), and 609(A) and to repeal
R.S. 47:603, relative to the corporation franchise tax; to eliminate borrowed capital from the franchise tax base; to provide for an effective date; and to provide for related matters.
Full Text available at: http://www.legis.state.la.us/billdata/streamdocument.asp?did=417598
Current Bill Status: First appeared in the Interim Calendar on 3/2/2007.
HB 52
Eliminates "borrowed capital" from the tax base of corporation franchise tax. AN ACT To amend and reenact
R.S. 47:602(A) and (G), 605(B) and (C), and 609(A) and to repeal R.S. 47:603, relative to the corporation franchise tax; to eliminate borrowed capital from the franchise tax base; to provide for an effective date; and to provide for related matters.
Full Text available at: http://www.legis.state.la.us/billdata/streamdocument.asp?did=417603
Current Bill Status: First appeared in the Interim Calendar on 3/2/2007.
Maryland
SB 990
Corporations and Associations - Charter Documents - Execution Requirements for Business Trusts. Altering the requirements for the execution of specified charter documents by business trusts; and extending to business trusts the requirements applicable to corporations and real estate investment trusts for signing, acknowledging, witnessing, attesting, and verifying specified charter documents.
Full Text available at: http://mlis.state.md.us/2007RS/bills/sb/sb0990f.pdf
Current Bill Status: March 8, 2007 Re-referred Judicial Proceedings Hearing 3/22 at 1:00 p.m.
Minnesota
HB 1608
A bill for an act relating to the Office of the Secretary of State; regulating registrations, filings, and dissolutions of certain entities; providing fees; regulating foreign limited partnership name changes; regulating notaries public
Full Text available at: http://ros.leg.mn/bin/bldbill.php?bill=H1608.0.html&session=ls85
Current Bill Status: March 1, 2007 Introduction and first reading, referred to Governmental Operations, Reform, Technology and Elections
Mississippi
SB 2684
An Act To Make Technical Corrections To The Model Business Corporation Act; To Revise Definitions Under The Act; To Clarify Notice; To Create Section 79-4-1.44, Mississippi Code Of 1972, To Authorize Householding As It Relates To Providing Individual Notices; To Revise Election Of Directors At The Annual Meeting; To Clarify Court-Ordered Meetings; To Revise Action By Written Consent In Lieu Of Meeting; To Create Section 79-4-7.48, Mississippi Code Of 1972, To Specify A Shareholder Action To Appoint A Custodian Or Receiver; To Revise Definitions; To Revise The Right To Appraisal; To Revise The Notice Of The Right To Appraisal; To Revise The Notice Of Intent To Demand Payment And The Consequences Of Voting Or Consenting; To Revise Requirements Pertaining To The Appraisal Notice And Form; To Revise The Perfection And Rights And The Right To Withdraw; To Clarify After-Acquired Shares' Obligations; To Revise Court Costs And Expenses; To Create Section 79-4-13.40, Mississippi Code Of 1972, To Limit Other Remedies; To Revise The Grounds For Judicial Dissolution; To Revise Receivership And Custodianship; To Clarify The Election To Purchase In Lieu Of Dissolution Of A Corporation; And For Related Purposes.
Full Text available at: http://billstatus.ls.state.ms.us/documents/2007/html/SB/2600-2699/SB2684SG.htm
Current Bill Status: March 15, 2007 signed by Governor
Missouri
HB 1089
Modifies provisions determining whether a substantial nexus exists with the state for certain corporations and individuals.
Full Text available at: http://www.house.mo.gov/bills071/biltxt/intro/HB1089I.htm
Current Bill Status: March 15, 2007 Referred to Special Committee on Tax Reform
Nebraska
LB 191
Change provisions relating to directors of certain corporations. FOR AN ACT relating to corporations; to amend sections 21-2095 and 44-211, Reissue Revised Statutes of Nebraska; to change provisions relating to directors; to harmonize provisions; to repeal the original sections; and to declare an emergency.
Full Text available at: http://uniweb.legislature.ne.gov/FloorDocs/Current/PDF/Final/LB191.pdf
Current Bill Status: March 7, 2007 Approved by Governor.
New York
HB 6148
Establishes the 'business trust law' as a new consolidated law regulating domestic and foreign business trusts.
Full Text available at: http://assembly.state.ny.us/leg/?bn=A06148&sh=t
Current Bill Status: March 2, 2007 Referred to Judiciary Committee
HB 6152
Relates to the rights of minority stockholders to bring direct claims for oppression on the part of the majority, by means of diverting funds or misapplying funds and depriving minority holders of profits; and allows the award of actual damages and legal fees.
Full Text available at: http://assembly.state.ny.us/leg/?bn=A06152&sh=t
Current Bill Status: March 2, 2007 referred to Corporations, Authorities and Commissions.
North Carolina
SB 576
AN ACT to amend the laws governing business entities to make various clarifying and technical changes regarding mergers and the authority of board committees.
Full Text available at: http://www.ncga.state.nc.us/Sessions/2007/Bills/Senate/HTML/S576v1.html
Current Bill Status: March 3, referred to Judiciary Committee
Oklahoma
SB 1043
Corporations; modifying requirements for certificates of incorporation. Effective date.
An Act relating to corporations; amending 18 O.S. 2001, Section 1006, as amended by Section 2, Chapter 255,
O.S.L. 2004 (18 O.S. Supp. 2006, Section 1006), which relates to the General Corporation Act; modifying requirements for certificates of incorporation; allowing certain provisions of certificate of incorporation to be made dependent upon certain facts; defining term; and providing an effective date.
Full Text available at: http://webserver1.lsb.state.ok.us/2007-08SB/SB1043_int.rtf
Current Bill Status: March 14, 2007 referred to Economic Development and Financial Services.
Oregon
HB 2826
Allows articles of incorporation delivered for filing to office of Secretary of State to contain provision authorizing or directing corporation to conduct business in environmentally and socially responsible manner. Declares emergency, effective on passage.
Full Text available at: http://www.leg.state.or.us/07reg/measures/hb2800.dir/hb2826.intro.html
Current Bill Status: March 22, 2007 Work Session scheduled.
Rhode Island
HB 5911
This act would require a limited liability company to obtain and furnish a certificate of good standing in every instance where said certificate is required by a corporation.
Full Text available at: http://www.rilin.state.ri.us/BillText07/HouseText07/H5911.pdf
Current Bill Status: March 1, 2007 Introduced, referred to House Corporations.
SB 828
This act would provide for comprehensive changes with respect to conversions of business entities.
Full Text available at: http://www.rilin.state.ri.us//BillText07/SenateText07/S0828.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
SB 830
This act would allow mergers of foreign and domestic entities with domestic corporations.
Full Text available at: http://www.rilin.state.ri.us//BillText07/SenateText07/S0830.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
SB 831
This act would provide for service of process on a foreign limited liability company whose registration has been cancelled, that service would be on the secretary of state is also instituted as an associated fee for foreign limited liability companies and foreign limited liability partnerships.
Full Text available at: http://www.rilin.state.ri.us//BillText07/SenateText07/S0831.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
SB 832
This act would require the name and address of the authorized person filing the articles of organization for a limited liability company to be included on the articles of organization, would expand due diligence notification requirements for revocation proceedings when this office has been notified that the registered office is undeliverable, amend the annual report filing requirements to establish a late filing fee penalty for limited liability company annual reports, and would revise the amendment provision to eliminate the requirement to file an amendment to reflect a change in managers.
Full Text available at: http://www.rilin.state.ri.us/BillText07/SenateText07/S0832.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
SB 834
This act would expand the types of business entities that must provide certain information when applying for a registration of a trademark.
Full Text available at: http://www.rilin.state.ri.us/BillText07/SenateText07/S0834.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
SB 835
This act would clarify indemnity provisions and procedures for dissolution under the Rhode Island Business Corporation Act, and update references to such act in The Rhode Island Limited Liability Company Act
Full Text available at: http://www.rilin.state.ri.us/BillText07/SenateText07/S0835.pdf
Current Bill Status: March 20, 2007 Scheduled for hearing and/or consideration
South Dakota
HB 1129
An Act to provide for the conversion of certain cooperatives into business corporations.
Full Text available at: http://legis.state.sd.us/sessions/2007/bills/HB1129enr.htm
Current Bill Status: March 1, 2007 Signed by Governor H.J. 728.
SB 77
An Act to provide for an exclusive remedy for judgment creditors of limited partnerships.
Full Text available at http://legis.state.sd.us/sessions/2007/bills/SB77enr.htm
Current Bill Status March 2, 2007 Signed by Governor S.J. 740.
SB 78
An Act to revise the rights of creditors of limited liability companies.
Full Text available at: http://legis.state.sd.us/sessions/2007/bills/SB78enr.htm
Current Bill Status: March 5, 2007 Signed by Governor S.J. 781.
Vermont
HB 458
Corporations; limited liability companies; electronic documentation and communication - This bill proposes to amend the corporations and limited liability companies’ statutes to address organizational and operational activities, including matters pertaining to share and stock ownership, voting, the conduct of meetings, and the use of electronic documents and means of communication.
Full Text available at: http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2008/bills/intro/H-458.HTM
Current Bill Status: March 1, 1007 Prefiled.
Virginia
HB 2142
Limited partnerships and partnerships. Prohibits the transaction of business as a limited partnership unless the business is a Virginia limited partnership or a foreign limited partnership registered to transact business in Virginia. The measure includes numerous technical amendments that ensure that terminology in the Virginia Limited Partnership Act and Partnership Act conforms to provisions of other Virginia business entity laws. Other provisions centralize and expand the delayed effective date provisions for Virginia limited partnership organizational documents; move the provisions for the conversion of a partnership to a limited partnership to the Limited Partnership Act; amend the filing fees for limited partnership and registered limited liability partnership amendments and cancellations; and transfer responsibility for the filing of amended and restated certificates of limited partnership in circuit court from the Commission to the limited partnership.
Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+HB2142ER
Current Bill Status: February 23, 2007 Passed both Houses, signed by Speaker and President.
HB 2143
Professional corporations and professional limited liability companies. Authorizes the board of directors of a professional corporation to delegate managerial duties and tasks related to the corporation’s operations to its agents, officers, and employees and, pursuant to an agreement, to other persons. An analogous amendment allows members or managers of a professional limited liability company to do likewise.
Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+HB2143ER
Current Bill Status: February 21, 2007 Passed both Houses, signed by Speaker and President.
SB 1285
Virginia Stock Corporation Act. Authorizes circuit courts to appoint a custodian or receiver for a public corporation in proceedings where the directors are deadlocked or are acting fraudulently and causing irreparable injury to the corporation. The measure establishes requirements regarding approval of interested transactions involving the acquisition or conversion of shares or assets of the corporation by a person who is the beneficial owner of 20% or more of the voting power or otherwise in an interested person. Other provisions
(i) modify the requirements for taking corporate actions without meetings, with the consent of shareholders; (ii) authorize corporations to engage in
"householding," where one copy of notices, reports, and statements are provided for all of shareholders who share a common address, with the consent of each shareholder at the address; (iii) address giving notice of appraisal rights that may be available when certain corporate actions are proposed; and (iv) establish limitations on the ability of shareholders to contest certain fundamental transactions after shareholders have approved the corporate action.
Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+SB1285ER
Current Bill Status: March 9, 2007 Approved by Governor-Chapter 165 (effective 7/1/07).
SB 1286
Virginia Nonstock Corporation Act. Updates the Virginia Nonstock Corporation Act to make several provisions consistent with changes to the Virginia Stock Corporation Act that were enacted in 2005, based upon recent amendments to the Model Business Corporation Act. Specific areas of substantive change include setting forth procedures for the approval of a business opportunity; defining "disinterested director"; permitting several corporate actions to be taken electronically; updating provisions regarding member voting and elections; staggering the terms of directors; indemnifying directors and officers; streamlining the process for combining corporations with other types of business entities; asserting claims against dissolved corporations; and confirming that provisions in corporate documents filed with the State Corporation Commission may be made dependent on statistical or market indices or other objectively ascertainable facts.
Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?071+ful+SB1286ER
Current Bill Status: March 13, 2007 signed by Speaker and President.
West Virginia
SB 565
Requiring certain partnerships and businesses provide disclosure of organizations' members' names. A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §31B-3-303a; to amend said code by adding thereto a new section, designated §31D-8- 860a; to amend said code by adding thereto a new section, designated §31E-8-813; and to amend said code by adding thereto a new section, designated §47B-3-3a, all relating to requiring any partnership, limited liability company, nonprofit corporation or business corporation conducting business in this state and receiving funds from this state to provide, upon request of any citizen and without charge, the names of its members, managers, partners or board of directors and the names of the members, managers, partners or board of directors of its parent organization, if any, as is applicable to the particular entity; and cessation of funding for failure to comply.
Full Text available at: http://www.legis.state.wv.us/Bill_Text_HTML/2007_SESSIONS/RS/BILLS/SB565%20SUB1.htm
Current Bill Status: March 10, 2007 On 2nd reading, House Calendar.
For an archive of NRAI Legislative Updates, visit
www.nrai.com and select Research Center.
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