NRAI Compliance Update - May 2006

Its been a long interval between this and the last newsletter due to travel. Thus there is a lot of material presented here. 

States that have passed legislation are:

Alabama – Business Corporation Shareholder Voting Modernization Act

Arizona – Allowing un-certificated shares

Colorado – Amendments to Title 7 of Colorado Revised Statutes

Connecticut - Adopting recent changes to the Model Business Corporation Act and the Uniform Partnership Act

Iowa - various provisions relating to business entities.

Maine – An Act Relating to Mergers and Consolidations of Corporations without Capital Stock

Missouri - Modifying fees and reinstatement processes in the event of corporate administrative dissolution and Modifying law allowing corporations to amend their articles of incorporation.

Oklahoma – Modifying the due date for the annual certificate.

Tennessee - Making a variety of changes to the "Tennessee Revised Limited Liability Company Act" and enacts the "Tennessee Revised Nonprofit Limited Liability Company Act."

Virginia – Domestication of foreign Limited Liability Company.

Also please note the five Delaware bills that have been introduced and the recent GAO Report available at: http://www.gao.gov/new.items/d06376.pdf

Lastly, a reminder that the publication requirement for New York 85-A goes into effect June 1, 2006 which requires that limited liability entities to conform with a publication requirement to include the names of the 10 persons with the most valuable ownership interests in the business entity.

Robert K. Rowell

Executive Vice-President & General Counsel

Federal Legislation

HB 5113  Bankruptcy

To amend title 11, United States Code, with respect to reform of executive compensation in corporate bankruptcies.

Full Text available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h5113ih.txt.pdf

Current Bill Status: April 6, 2006 Referred to the House Committee on the Judiciary

SR 434 Ethics

A resolution designating the week of May 22, 2006, as "National Corporate Compliance and Ethics Week."

Full Text unavailable

Current Bill Status: May 6 2006 Introduced and referred to Judiciary Committee

SB 2590  Disclosure

(a) In General-

(1) WEBSITE- Effective beginning January 1, 2007 and subject to paragraphs (2) and (3), the Office of Management and Budget shall ensure the existence and operation of a single updated searchable database website accessible by the public at no cost that includes for each entity receiving Federal funding--

(A) the name of the entity;

(B) the amount of any Federal funds that the entity has received in each of the last 10 fiscal years;

(C) an itemized breakdown of each transaction, including funding agency, program source, and a description of the purpose of each funding action;

(D) the location of the entity and primary location of performance, including the city, State, congressional district, and country;

(E) a unique identifier for each such entity and parent entity, should the entity be owned by another entity; and

(F) any other relevant information.

(2) INITIAL DATA- Effective January 1, 2007, the website shall include data for fiscal years 2006 and 2007.

(3) PREVIOUS FISCAL YEARS- Not later than January 1, 2009, information required by this section shall be posted on the website for fiscal years 1999 through 2005.

Full Text available at:  http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:s2590is.txt.pdf

Current Bill Status: April 6, 2006 Introduced and referred to Committee on Homeland Security and Governmental Affairs.

Alabama

HB 380 Shareholder Voting

Business Corporation Shareholder Voting Modernization Act, corporations, voting by shareholders, use of electronic transmission over the Internet to appoint proxies. An Act, To amend Sections 10-2B-1.40, 10-2B-7.22, and 10-2B-7.24, Code of Alabama 1975, to provide for voting of a corporation's shares by shareholders and for the designation of proxies by electronic means, including the internet.

Full Text available at: http://alisdb.legislature.state.al.us/acas/ACTIONViewResults1.asp?INST=HB380&VERSION=Enrolled

Current Bill Status: April 17, 2006 Enacted 2006-564

Arizona

HB 2327 Uncertificated Shares

Title 10, Section 626, Arizona Revised Statutes, allows the board of directors of a corporation to authorize the issuance of some or all of the shares of its classes without certificates; however, every shareholder is entitled, upon request, to receive a certificate that complies with the requirements of law.  Regardless, within a reasonable amount of time after the issuance or transfer of shares without certificates, statute requires the corporation to send a written statement to the shareholder with all pertinent information otherwise required on the certificate.

HB 2327 strikes statutory language to require a corporation to issue a certificate for shares. 

Full Text available at: http://www.azleg.gov/legtext/47leg/2r/bills/hb2327h.pdf

Current Bill Status: Signed by Governor May 11, 2006.

Colorado

SB 187 Various Amendments

The bill makes several amendments to Title 7 of the Colorado Revised Statutes concerning

corporations and associations. Among other things, the bill:

• standardizes rights of creditors, owners, and the entity with respect to dissolved business

entities;

• clarifies the rights of creditors of a corporation or nonprofit corporation;

• standardizes rules for unlawful distributions for a limited liability partnership, a limited

liability limited partnership, and a limited liability company;

• clarifies trade name laws that pertain to delinquent or dissolved entities;

• modifies the definition, contents, and operation of an operating agreement of a limited

liability company;

• clarifies the role of managers and members of a limited liability company, including

agency authority;

• modifies the voting requirements with respect to mergers and conversions; and

• clarifies the liabilities of directors and officers of a nonprofit corporation that dissolves

but continues to operate without winding up.

The bill also expands the authority of the Secretary of State to propound interrogatories to

certain entities, sets deadlines for responding to the interrogatories, and increases the penalties for

failure to respond to interrogatories. The bill would take effect July 1, 2006.

Full Text available at: http://www.leg.state.co.us/clics2006a/csl.nsf/fsbillcont3/FE46FE6F1954318D87257106007935C6?Open&file=187_enr.pdf

Current Bill Status: May 4, 2006 signed by Governor

Connecticut

HB 5441 Uniform Partnership Act

To clarify certain provisions governing the conversion of a partnership to a limited liability company and to conform certain provisions concerning partnership dissolution to the Uniform Partnership Act.

Full Text available at: http://www.cga.ct.gov/2006/ACT/PA/2006PA-00057-R00HB-05541-PA.htm

Current Bill Status: May 8, 2006 Signed by Governor.

SB 547 Model Business Corporation Act

To amend the Connecticut Business Corporation Act to adopt recent changes to the Model Business Corporation Act concerning the duties and responsibilities of corporate directors and officers and to make similar amendments to the Connecticut Revised Nonstock Corporation Act.

Full Text available at: http://www.cga.ct.gov/2006/TOB/S/2006SB-00547-R00-SB.htm

Current Bill Status: May 3, 2006 passed as Public Act 06-68 and transmitted to the Secretary of State.

Delaware

HB 414 Commercial Registered Agent

This Bill continues the practice of amending periodically the Delaware Limited Liability Company Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act. Section 1. This Section amends § 18-101(12) of the Act to confirm the broad scope of the defined term “person”.  Sections 2 and 3. These Sections amend § 18-104 of the Act to expand the types of entities that may serve as registered agents; prescribe the duties of a registered agent; require that persons or entities serving as registered agent for more than fifty entities (a “Commercial Registered Agent”) be generally open during normal business hours and have a natural person present to operate such office and communicate with the Secretary of State on request; require Delaware limited liability companies to provide registered agents with a designated natural person to receive communications from the registered agent and require the registered agent to maintain in its records the identity of such persons; authorize the Secretary of State to issue regulations to enforce these provisions; authorize the Secretary of State to bring a lawsuit in the Court of Chancery to enjoin any person or entity from acting as a registered agent, or as an officer, or director or managing agent of a registered agent, any person or entity who fails to comply with the statutory requirements, who has been convicted of a felony or any crime involving dishonesty, fraud or moral turpitude, or who has used the office of registered agent in a manner intended to defraud the public; provide that the certificate of formation or registration of a domestic or foreign limited liability company will be cancelled if it fails, within a prescribed period, to obtain and designate a new registered agent if the Court of Chancery enjoins any person or entity from acting as a registered agent for such limited liability company; and authorize the Secretary of State to make a list of registered agents available to the public.  Section 4. This Section amends § 18-203 of the Act to conform to new § 18-104(i)(4) of the Act which provides for the cancellation of a certificate of formation in the circumstances therein provided.
Section 5. This Section amends § 18-206(b) of the Act to conform to new § 18-104(i)(4) of the Act which provides for the cancellation of a certificate of formation in the circumstances therein provided.  Section 6. This Section amends § 18-209(b) of the Act to correct words used in the subsection.
Sections 7-32. Sections 7 through 32 of the Bill make technical changes to §18-212 (domestication of non-US entities), § 18-213 (transfer or continuance of domestic limited liability companies), § 18-214 (conversion of certain entities to a limited liability company) and § 18-216 (approval of conversion of a limited liability company) of the Act to conform these Sections to the parallel provisions in the Delaware General Corporation Law adopted in 2005.
Section 33. This Section amends § 18-302(d) of the Act to clarify that meetings of members of a Delaware limited liability company may be held by conference telephone or similar communications equipment unless otherwise provided in a limited liability company agreement.  Section 34. This Section amends § 18-404(d) of the Act to clarify that meetings of managers of a Delaware limited liability company may be held by conference telephone or similar communications equipment unless otherwise provided in a limited liability company agreement.  Section 35. This Section amends § 18-906 of the Act to conform to the provisions of § 18-904(e) and new § 18-104(i)(4) of the Act which provide for the cancellation of the registration of a foreign limited liability company under the circumstances therein provided.  Sections 36 and 37. These Sections amend § 18-1109 of the Act to permit the revival of a certificate of formation of a limited liability company whose certificate of formation has been cancelled pursuant to new § 18-104(i)(4).  Section 38. This Section provides that the proposed amendments in Section 1 and Sections 6 through 34 of this Bill shall become effective August 1, 2006 and that the proposed amendments in Sections 2 through 5 and Sections 35, 36 and 37 of this Bill shall become effective on January 1, 2007.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/HB+414/$file/legis.html?open

Current Bill Status: May 5, 2006 in House Judiciary Committee

HB 415 Commercial Registered Agent

This bill continues the practice of amending periodically the Delaware Revised Uniform Limited Partnership Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a section-by-section review of the proposed amendments of the Act.  Section 1. This Section amends § 17-101(14) of the Act to confirm the broad scope of the defined term “person”.  Section 2. This Section amends § 17-102(1) of the Act to confirm that the name of a limited liability limited partnership shall contain the words, abbreviation or designation required under § 17-214(a) of the Act (e.g., “LLLP”) rather than those required under § 17-102(1) (e.g., “LP”). Sections 3 and 4. These Sections amend § 17-104 of the Act to expand the types of entities that may serve as registered agents; prescribe the duties of a registered agent; require that persons or entities serving as registered agent for more than fifty entities (a “Commercial Registered Agent”) be generally open during normal business hours and have a natural person present to operate such office and communicate with the Secretary of State on request; require Delaware limited partnerships to provide registered agents with a designated natural person to receive communications from the registered agent and require the registered agent to maintain in its records the identity of such persons; authorize the Secretary of State to issue regulations to enforce these provisions; authorize the Secretary of State to bring a lawsuit in the Court of Chancery to enjoin any person or entity from acting as a registered agent, or as an officer, or director or managing agent of a registered agent, any person or entity who fails to comply with the statutory requirements, who has been convicted of a felony or any crime involving dishonesty, fraud or moral turpitude, or who has used the office of registered agent in a manner intended to defraud the public; provide that the certificate of limited partnership or registration of a domestic or foreign limited partnership will be cancelled if it fails, within a prescribed period, to obtain and designate a new registered agent if the Court of Chancery enjoins any person or entity from acting as a registered agent for such limited partnership; and authorize the Secretary of State to make a list of registered agents available to the public.  Sections 5. This Section amends § 17-203 of the Act to conform to new § 17-104(i)(4) of the Act which provides for the cancellation of a certificate of limited partnership in the circumstances therein provided. Section 6. This Section amends § 17-206(b) of the Act to conform to new § 17-104(i)(4) of the Act which provides for the cancellation of a certificate of limited partnership in the circumstances therein provided.
Sections 7-8. These Sections amend § 17-214 of the Act to confirm that a limited partnership may be formed from its inception as a limited liability limited partnership.  Sections 9-27 and 33-39. Sections 9 through 27 and Sections 33 through 39 of the bill make technical changes to §17-215 (domestication of non-US entities), § 17-216 (transfer or continuance of domestic limited partnerships), § 17-217 (conversion of certain entities to a limited partnership) and § 17-219 (approval of conversion of a limited partnership) of the Act to conform these Sections to the parallel provisions in the Delaware General Corporation Law adopted in 2005. Sections 28-32. These Sections amend § 17-217 of the Act to clarify the procedures for converting an other entity to a domestic limited liability limited partnership. Section 40. This Section amends § 17-302(e) of the Act to clarify that meetings of limited partners of a Delaware limited partnership may be held by conference telephone or similar communications equipment unless otherwise provided in a partnership agreement. Section 41. This Section amends § 17-405(d) of the Act to clarify that meetings of general partners of a Delaware limited partnership may be held by conference telephone or similar communications equipment unless otherwise provided in a partnership agreement. Section 42. This Section amends § 17-906 of the Act to conform to the provisions of § 17-904(e) and new § 17-104(i)(4) of the Act which provide for the cancellation of the registration of a foreign limited partnership under the circumstances therein provided.
Sections 43 and 44. These Sections amend § 17-1111 of the Act to permit the revival of a certificate of limited partnership of a limited partnership whose certificate of limited partnership has been cancelled pursuant to new § 17-104(i)(4). Section 45. This Section provides that the proposed amendments in Sections 1 and 2 and Sections 7 through 41 of this bill shall become effective August 1, 2006 and that the proposed amendments in Sections 3 through 6 and Sections 42, 43 and 44 of this bill shall become effective January 1, 2007.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/HB+415/$file/legis.html?open

Current Bill Status:  May 5, 2006 in House Judiciary Committee.

HB 424 Commercial Registered Agent

This bill continues the practice of amending periodically the Delaware Revised Uniform Partnership Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a Section-by-Section review of the proposed amendments of the Act. Section 1. This Section amends § 15-101(16) of the Act to confirm the broad scope of the defined term “person”. Section 2. This Section amends § 15-105(d) of the Act to conform to new § 15-111(i)(4) of the Act which provides for the cancellation of a statement of partnership existence in the circumstances therein provided. Sections 3 and 5. These Sections amend § 15-111 of the Act to expand the types of entities that may serve as registered agents; prescribe the duties of a registered agent; require that persons or entities serving as registered agent for more than fifty entities (a “Commercial Registered Agent”) be generally open during normal business hours and have a natural person present to operate such office and communicate with the Secretary of State on request; require Delaware partnerships to provide registered agents with a designated natural person to receive communications from the registered agent and require the registered agent to maintain in its records the identity of such persons; authorize the Secretary of State to issue regulations to enforce these provisions; authorize the Secretary of State to bring a lawsuit in the Court of Chancery to enjoin any person or entity from acting as a registered agent, or as an officer, or director or managing agent of a registered agent, any person or entity who fails to comply with the statutory requirements, who has been convicted of a felony or any crime involving dishonesty, fraud or moral turpitude, or who has used the office of registered agent in a manner intended to defraud the public; provide that the statement of partnership existence and statement of qualification (in each case as applicable) or statement of foreign qualification will be cancelled if it fails, within a prescribed period, to obtain and designate a new registered agent if the Court of Chancery enjoins any person or entity from acting as a registered agent for such partnership; and authorize the Secretary of State to make a list of registered agents available to the public. Section 4. This Section amends § 15-111(d) of the Act to clarify that a partnership’s statement of partnership existence and statement of qualification (in each case as applicable) will be cancelled if such partnership fails to obtain and designate a new registered agent prior to the expiration of 30 days after the filing by the registered agent of the certificate of resignation. Section 6. This Section amends § 15-407(d) of the Act to clarify that meetings of partners of a Delaware partnership may be held by conference telephone or similar communications equipment unless otherwise provided in a partnership agreement.
Sections 7-32. Sections 7 through 32 of the bill make technical changes to § 15-901 (conversion of certain entities to a domestic partnership), § 15-903 (approval of conversion of a domestic partnership), §15-904 (domestication of non-US entities) and § 15-905 (transfer or continuance of domestic partnerships) of the Act to conform these Sections to the parallel provisions in the Delaware General Corporation Law adopted in 2005. Section 33. This Section amends the Act to add a new § 15-1004 of the Act to permit the reinstatement of a statement of qualification or a statement of foreign qualification of a partnership whose statement of qualification or statement of foreign qualification has been cancelled pursuant to § 15-111(d) or new § 15-111(i)(4). Section 34. This Section amends § 15-1102(b) of the Act to conform to the provisions of § 15-111(d) and new § 15-111(i)(4) of the Act which provide for the cancellation of the registration of a foreign limited liability partnership under the circumstances therein provided. Sections 35 and 36. These Sections amend § 15-1210 of the Act to permit the revival of a statement of partnership existence of a partnership whose statement of partnership existence has been cancelled pursuant to new § 15-111(i)(4).
Section 37. This Section provides that the proposed amendments in Sections 1 and 4 and Sections 6 through 32 of this bill shall become effective August 1, 2006 and that the proposed amendments in Sections 2, 3 and 5 and Sections 33 through 36 of this bill shall become effective January 1, 2007.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/HB+424/$file/legis.html?open

Current Bill Status: May 5, 2006 in House Judiciary Committee.

HB 430 Licensing of Debt Counselor

Not-for-profit debt counseling providers may be licensed with proof of non-profit status and tax exemption.

Applications for licenses must be accompanied by a nonrefundable fee of $2,000 to credit of State Banking Commissioner Regulatory Revolving Fund, a corporate surety bond of at least $500,000, (or irrevocable letter of credit), evidence of insurance against dishonest, fraud, theft and other misconduct of at least $500,000, identification of all trust accounts with an irrevocable consent authorizing the Commissioner to review and examine the trust accounts and overdraft notification agreement similar to what is imposed on all lawyers licensed in the State of Delaware who hold client trust accounts.

This Bill specifies, in detail, the information that must be contained in license application, updated license information, denials of licensure (subject to Delaware Administrative Procedures Act), renewals of licenses and reciprocity of licensure.

The Bill regulates the counseling of consumers before signing a Debt-Management Plan, including financial analysis, identification of which creditors are expected to participate, or not participate or not grant concessions, certain disclaimers and disclosures including whether the provider is receiving any compensation from the consumer’s creditors. All Agreements must have a three business day right of cancellation with complete refund of all fees paid by consumer.

If provider communicates with consumer primarily in a language other than English the provider must furnish all disclosures and documents in that other language.

All pre-Agreement disclosures and disclaimers and Agreements may be made by electronic means if the consumer consents consistent with the Federal Electronic Signatures in Global and National Commerce Act.

The Bill regulates the fees that can be charged, depending on the services being provided, up to a not to exceed maximum.

The Bill provides for the manner of terminating Agreements.

The Bill also provides for prohibited acts by Providers that could involve or lead to collusion, conflicts of interest or other bad practices.

The Bill gives the Delaware Banking Commission full authority to investigate all consumer complaints, impose cease and desist orders, order restitution, civilly prosecute and refer cases to the Delaware attorney general for criminal prosecution.

The Bill also allows for consumers to seek civil damages individually or by class action including punitive damages and attorney’s fees.

The Act will take effect six months after enactment.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/HB+430/$file/legis.html?open

Current Bill Status: May 11, 2006 in House Economic Development/Banking & Insurance Committee.

HB 445 Trusts

This Bill continues the practice of amending periodically the Delaware Statutory Trust Act (the “Act”) to keep it current and to maintain its national preeminence. The following is a Section‑by‑Section review of the amendments of the Act.
Section 1. This Bill restores language that was inadvertently deleted by a prior amendment.
Section 2. This Bill confirms the broad scope of the defined term “person”.
Section 3. This Bill confirms that beneficial owners and trustees are bound by governing instruments whether or not executed by them.
Section 4. This Bill deletes a subsection that is duplicative of the new § 3863 of the Act added hereby.
Section 5. This Bill clarifies that duties (including fiduciary duties) may be expanded, restricted and eliminated in a governing instrument. This Bill confirms that a governing instrument may not eliminate the implied contractual covenant of good faith and fair dealing.
Section 6. This Bill clarifies the default exculpation provision in the Act by providing that it only applies with respect to breaches of fiduciary duties.
Section 7. This Bill confirms the flexibility permitted in the Act regarding exculpation.
Section 8. This Bill clarifies that meetings of beneficial owners of a Delaware statutory trust may be held by conference telephone or similar communications equipment unless otherwise provided in a governing instrument.
Section 9. This Bill clarifies that meetings of trustees of a Delaware statutory trust may be held by conference telephone or similar communications equipment unless otherwise provided in a governing instrument.
Section 10. This Bill to add a new subsection (k) to § 3806 clarifies the circumstances under which trustees, beneficial owners or officers, employees, managers or other persons designated in accordance with § 3806(b)(7) may rely on the records of, or information relating to, the statutory trust.
Section 11. This Bill makes a technical change with respect to registered agents.
Sections 12 through 14. This Bill allows the beneficial owners to vote to continue the existence of the statutory trust notwithstanding the governing instrument provides for dissolution, makes some technical changes with respect to the winding up of the affairs of a statutory trust and confirms that a statutory trust’s existence continues until the cancellation of its certificate of trust.
Sections 15, 16 and 17. This Bill makes some technical and conforming changes to the sections of the Act relating to conversion of an entity into a statutory trust and domestication of non-U.S. entities.
Section 18. This Bill confirms the flexibility permitted in the Act with respect to transfer or continuance of domestic statutory trusts.
Section 19. This Bill deletes a subsection that is duplicative of the new § 3863 of the Act added hereby.
Section 20. This Bill adds a new § 3863 of the Act relating to activities not constituting doing business in Delaware.
Section 21. This Bill provides that the proposed amendments of the Act shall become effective on August 1, 2006.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/HB+445/$file/legis.html?open

Current Bill Status:  May 11, 2006 in House Economic Development/Banking & Insurance Committee.

SB 322 Various Amendments

Section 1 Amends § 102(a)(1) to provide that the name of a Delaware corporation must be such as to distinguish it from the names (whether reserved or of record) of each other domestic or foreign corporation, partnership, limited partnership, limited liability company or statutory trust upon the records in the office of the Division of Corporations in the Department of State, except with the written consent of the person who has reserved such name or such other corporation, partnership, limited partnership, limited liability company or statutory trust.

 
Section 2 Amends § 102 to add new subsection (e), which clarifies who may reserve a name that is available for use by a domestic or foreign corporation and provides the procedures to be followed by the applicant and the Secretary of State to reserve such name.

Section 3 Amends § 141(b) to add a new provision that a resignation may be made effective upon the happening of a future event or events, coupled with authority granted in the same section to make certain resignations irrevocable. By permitting a corporation to enforce a director resignation conditioned upon the director failing to achieve a specified vote for reelection, e.g., more votes for than against, coupled with board acceptance of the resignation, these provisions permit corporations and individual directors to agree voluntarily, and give effect in a manner subsequently enforceable by the corporation, to voting standards for the election of directors which differ from the plurality default standard in Section 216. The new provisions of Section 141(b) do not, however, address whether resignations submitted in other contexts may be made irrevocable.

 
Section 4 Amends the first sentence of § 141(d) to clarify that the classified terms of directors commence after the classification of the board of directors becomes effective, thereby expressly permitting certificate of incorporation or bylaw provisions that provide for classification effective at a point in time after such provisions are adopted. The new sentence added to Section 141(d) permits the certificate of incorporation or bylaw provision that divides the directors into classes to include language authorizing the board of directors to assign members of the board already in office to the board classes at the time such classification becomes effective.
Section 5 Amends § 216 to provide that a bylaw adopted by a vote of stockholders that prescribes the required vote for the election of directors may not be altered or repealed by the board of directors. This amendment does not address any other situation in which the board of directors amends a bylaw adopted by stockholder vote.

Section 6 Amends § 371 to provide that before a foreign corporation shall have the right to do business in Delaware, the name of such foreign corporation must be such as to distinguish it from the names (whether reserved or of record) of each other domestic or foreign corporation, partnership, limited partnership, limited liability company or statutory trust upon the records in the office of the Division of Corporations in the Department of State, except with the written consent of the person who has reserved such name or such other corporation, partnership, limited partnership, limited liability company or statutory trust.

Section 7 Amends § 391 to provide that a fee of up to $75 shall be collected by and paid to the Secretary of State for accepting a corporate name reservation application as well as an application for renewal of a corporate name reservation or a notice of transfer or cancellation of a corporate name reservation.
Section 8 provides that the proposed amendments set forth in Sections 1 through 7 of this Act shall become effective on August 1, 2006.

Sections 9 and 10 Amend § 132 to expand the types of entities that may serve as registered agents; prescribe the duties of a registered agent; require that persons or entities serving as registered agent for more than 50 business entities be generally open during normal business hours and have a natural person present to operate such office and communicate with the Secretary of State on request; require Delaware corporations to provide registered agents with a designated natural person to receive communications from the registered agent and require the registered agent to maintain in its records the identity of such persons; authorize the Secretary of State to issue regulations to enforce these provisions; authorize the Secretary of State to bring a lawsuit in the Court of Chancery to enjoin from acting as a registered agent, or as an officer, or director, or managing agent of a registered agent, any person or entity who fails to comply with the statutory requirements, who has been convicted of a felony or any crime involving dishonesty, fraud or moral turpitude, or who has used the office of registered agent in a manner intended to defraud the public; and authorize the Secretary of State to make a list of registered agents available to the public.

Sections 11 through 16 are technical Amendments to § 312 to make it consistent with revisions to §§ 132, 502, 503, 510, 511, 514, and 517.

Section 17 provides that the proposed Amendments set forth in Sections 9 through 16 of this Act shall become effective on January 1, 2007.

Sections 18 through 26 Amend §§ 502, 503, 510, 511, 514, and 517 to require Delaware corporations to file a complete annual franchise tax report including, among other things, the names and addresses of all of the corporation’s directors as of the filing date of the report and the name and address of the officer who signs the report, and require the Secretary of State to declare void the charter of any corporation that fails to file a complete annual franchise tax report.

Section 27 provides that the proposed Amendments set forth in Sections 18 through 26 of this Act shall become effective on January 1, 2008.

Full Text available at: http://www.legis.state.de.us/LIS/lis143.nsf/vwLegislation/SB+322/$file/legis.html?open

Current Bill Status: May 16, 2006 in Senate Judiciary Committee.

Iowa

SB 2374 Various Amendments

A bill for an act containing various provisions relating to business entities, including limited partnerships, corporations, limited liability companies, cooperatives, and nonprofit corporations. Effective 7-1-06.

Full Text available at: http://www.legis.state.ia.us/Legislation.html and search for SF2374

Current Bill Status: April 26, 2006 Signed by Governor

Louisiana

HB 203 Conversion

An Act to enact Chapter 25 of Title 12 of the Louisiana Revised Statutes of 1950, to be comprised of R.S. 12:1601 through 1605, relative to organization of business entities; to authorize conversion of domestic business entities; to provide for application and approval requirements; to provide for certificates of conversion and for certain filing requirements; and to provide for related matters.

Full Text available at: http://www.legis.state.la.us/billdata/streamdocument.asp?did=382515

Current Bill Status: May 18, 2006 Read by title and referred to the Legislative Bureau.

HB 352 Dissolution

An Act to amend and reenact R.S. 12:142.1(A), relative to dissolution of a corporation; to provide for the qualifications for dissolution by affidavit; and to provide for related matters.

Full Text available at: http://www.legis.state.la.us/billdata/streamdocument.asp?did=381348

Current Bill Status: May 18, 2006 passed by Senate and sent to House

SB 673 Public Contract Disclosure Requirements

An Act to enact R.S. 38:2212(T), relative to letting contracts; to require certain disclosures prior to a public entity entering into a contract for public work; to require disclosure of all stockholders, partners including silent partners, officers, and members of a corporation, partnership, or other legal entity prior to entering into a contract for public work; to require disclosure of the balance sheet or proof of assets and liabilities of a corporation, partnership, or other legal entity; to provide certain penalties; and to provide for related matters.

Full Text available at: http://www.legis.state.la.us/billdata/streamdocument.asp?did=381790

Current Bill Status:  April 18, 2006 Introduced in the Senate, rules suspended, read first and second time by title and referred to the committee on Transportation, Highways and Public Works.

Maine

HB 1431/LD 2034 Not for Profit Merger

An Act Relating to Mergers and Consolidations of Corporations without Capital Stock. This amendment clarifies that a corporation without capital stock formed under the Maine Revised Statutes, Title 13 may merge or consolidate with or into a nonprofit corporation formed under Title 13-B.

Full Text available at: http://www.mainelegislature.org/legis/bills/billtexts/LD203401-1.asp

Current Bill Status: April 4, 2006 Emergency passed and signed as Public Law, Chapter 531

Michigan

HB 6008 Business Tax

A bill to amend 1975 PA 228, entitled "Single business tax act," by amending sections 39e and 73 (MCL 208.39e and 208.73), section 39e as amended by 2002 PA 622 and section 73 as amended by 1995 PA 80.

Full Text available at:  http://www.legislature.mi.gov/documents/2005-2006/billintroduced/House/pdf/2006-HIB-6008.pdf

Current Bill Status: Introduced April 27, 2006 and referred to Committee on Tax Policy.

HB 6078 Directors and Officer Liability

A bill to amend 1931 PA 328, entitled "The Michigan penal code," (MCL 750.1 to 750.568) by adding section 411u. Crimes; business crimes; crime for corporate directors or officers to knowingly deceive shareholders in financial statements; provide for and clarify penalties.

Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/House/pdf/2006-HIB-6078.pdf

Current Bill Status: May 18, 2006 referred to Judiciary Committee.

HB 6080 Directors and Officer Liability

A bill to amend 1931 PA 328, entitled "The Michigan penal code," (MCL 750.1 to 750.568) by adding section 281. A bill to amend 1931 PA 328, entitled "The Michigan penal code," (MCL 750.1 to 750.568) by adding section 281.

Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/House/pdf/2006-HIB-6080.pdf

Current Bill Status: May 18, 2006 referred to Judiciary Committee.

HB 6081 Directors and Officer Liability

A bill to amend 1927 PA 175, entitled "The code of criminal procedure," by amending section 16o of chapter XVII (MCL 777.16o), as amended by 2004 PA 457.  Criminal procedure; sentencing guidelines; sentencing guidelines for crime of defrauding corporate shareholders; enact.

Full Text available at:  http://www.legislature.mi.gov/documents/2005-2006/billintroduced/House/pdf/2006-HIB-6081.pdf

Current Bill Status: May 18, 2006 referred to Judiciary Committee.

Minnesota

HB 4154  Franchise Tax

Foreign operating corporation taxation under the corporate franchise tax modified, local government aid increased, and property tax rebate provided.

Full Text available at: http://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=H4154.0.html&session=ls84

Current Bill Status: April 19, 2006 introduced and referred to Committee on Taxes

HB 4161 Socially responsible for-profit business corporations

Minnesota Responsible Business Corporation Act adopted providing for incorporation of socially responsible for-profit business corporations.

Full Text available at: http://www.revisor.leg.state.mn.us/bin/bldbill.php?bill=H4161.0.html&session=ls84

Current Bill Status: April 24, 2006 introduced and referred to Civil Law and Elections Committee.

Missouri

SB 845 Reinstatement after administrative dissolution

Modifies fees and reinstatement processes in the event of corporate administrative dissolution.

Full Text available at: http://www.senate.mo.gov/06info/pdf-bill/tat/SB845.pdf

Current Bill Status: May 17, 2006 Signed by Senate President.

SB 1208 Amendments

This act allows the board of directors of a corporation to directly submit to its shareholders, a proposed amendment to the corporation's articles of incorporation.

Full Text available at:  http://www.senate.mo.gov/06info/pdf-bill/tat/SB1208.pdf

Current Bill Status: May 17, 2006 Signed by Senate President

SB 1479   Uniform Unincorporated Nonprofit Association Act

An Act to enact the uniform unincorporated nonprofit association act, as recommended by the general statutes commission.

Full Text available at: http://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/PDF/S1479v1.pdf

Current Bill Status: May 18, 2006 referred to Judiciary Committee.

New York

HB 11011 Name Requirements

This bill amends section 301 of the business corporations law to allow a company to register a name contain-

ing "bank" or its derivatives without the approval of the Superintendent of Banks under special circumstances.

A company name would qualify if "bank" or its derivative was contained in a registered trademark, was being used because it is the surname of

one of the founders of the company that is represented in the registered trademark, and the company name is being used in a context which clearly

denotes a purpose other than that of a bank.

Full Text available at:  http://assembly.state.ny.us/leg/?bn=A11011&sh=t

Current Bill Status: May 02, 2006 referred to corporations, authorities and commissions

HB 11050 Corporate Defendant Civil Liability

Provides that upon finding a corporate defendant liable for a criminal charge, the district attorney may simultaneously file a civil judgment against such corporate defendant.

Full Text available at: http://assembly.state.ny.us/leg/?bn=A11050&sh=t

Current Bill Status: May 2, 2006 referred to Codes Committee.

HB 11226 Tax

Eliminates obsolete provisions to the unincorporated business tax, general

corporation tax and banking corporation tax; makes technical corrections to the

unincorporated business tax and the general corporation tax.

Full Text available at: http://assembly.state.ny.us/leg/?bn=A11226&sh=t

Current Bill Status: May 4, 2006 referred to Ways and Means Committee

North Carolina

HB 1962 Franchise Tax

An Act to apply the franchise tax to certain limited liability companies and to provide a credit for additional annual report fees paid by limited liability companies subject to franchise tax.

Full Text available at: http://www.ncga.state.nc.us/Sessions/2005/Bills/House/HTML/H1962v1.html

Current Bill Status: May 15, 2006 referred to Committee on Finance.

Oklahoma

SB 1556 Annual Report

Corporations; modifying due date for annual certificate. Effective date. An Act relating to corporations; amending 18 O.S. 2001, Section 2055.2, which relates to annual certificate; modifying due date for annual certificate; deleting authorization to mail certain notice to certain agent; amending 54 O.S. 2001, Section 311.1, which relates to partnerships; modifying due date for annual certificate; deleting authorization to mail certain notice to certain agent; and providing an effective date.

Full Text available at: http://webserver1.lsb.state.ok.us/2005-06bills/SB/SB1556_ENR.RTF

Current Bill Status:  Signed by Governor April 10, 2006

Pennsylvania

HB 2587 Removal of Directors

An Act amending Title 15 (Corporations and Unincorporated Associations) of the Pennsylvania Consolidated Statutes, further providing for removal of directors and for control persons.

Full Text available at: http://www2.legis.state.pa.us/WU01/LI/BI/BT/2005/0/HB2587P3905.pdf

Current Bill Status:  April 24, 2006 referred to Commerce Committee.

Tennessee

HB 3413/SB3324 Limited Liability Companies

Business Organizations - Makes a variety of changes to the "Tennessee Revised Limited Liability Company Act" and enacts the "Tennessee Revised Nonprofit Limited Liability Company Act." - Amends TCA Title 48.

Full Text available at: http://www.legislature.state.tn.us/bills/currentga/BILL/HB3413.pdf

Current Bill Status: Signed by Governor May 5, 2006 as Chapter 620 and effective July 1, 2006

Texas

HB 155 Franchise Tax

Relating to the application, computation, and rates of the franchise tax.

Full Text available at: http://www.capitol.state.tx.us/cgi-bin/tlo/textframe.cmd?LEG=79&SESS=3&CHAMBER=H&BILLTYPE=B&BILLSUFFIX=00155&VERSION=1&TYPE=B

Current Bill Status: May 4, 2006 sent to House Ways and Means Committee

Virginia

SB 547 Limited Liability Company Domestication

Establishes a procedure by which a foreign limited liability company may become a domestic limited liability company. The provisions establishing the procedure for domestication of a foreign limited liability company become effective on November 1, 2006.  The measure also provides procedures for publishing notice of the dissolution of a limited liability company or limited partnership, and for serving a summons upon a limited liability company. The measure revises numerous provisions to update references to business entities and give limited liability companies the same rights as are provided to other forms of business entities.

Full Text available at: http://leg1.state.va.us/cgi-bin/legp504.exe?061+ful+SB547ER

Current Bill Status: April 19, 2006 Signed by Governor.

A message from Dennis Howarth, President and CEO, NRAI