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NRAI Compliance Updates - June,
2004
Greetings,
It was a busy month, as legislatures
worked to finish and pass bills prior to summer recess. June
has raced in with numerous new acts of legislation effective July
1, 2004. They either replace or modify many state
business entity statutes. This list is not exhaustive, but
will key you in to some of the major changes.
The states and corresponding links to the new acts are:
Colorado http://www.state.co.us/gov_dir/leg_dir/olls/sl2004a/sl_343.htm
(more info below)
Hawaii http://www.businessregistrations.com/lawchanges/2002legislature.htm
Idaho http://www3.state.id.us/oasis/H0671.html
Massachusetts http://www.mass.gov/legis/laws/seslaw03/sl030127.htm
Court
Cases
Massachusetts Supreme Judicial Court
Taxation - Corporate Excise - Net Operating Losses
Where a corporation sought to carry forward and deduct, for state
corporate excise tax purposes, premerger net operating losses
generated by four entities it absorbed in various mergers, the
request was correctly denied by the Appellate Tax Board pursuant to
G.L.c. 63, '30(5) and 830 CMR '63.30.2(11), the Supreme Judicial
Court ruled.
- Macy's East, Inc. v. Commissioner of Revenue
Full Text of case available from Massachusetts Lawyer’s
Weekly at: http://www.masslawyersweekly.com/signup/gtwFulltext.cfm?page=ma/opin/sup/1010404.htm
Newly
Pending or Passed Legislation
Alaska
HB 285
An Act adopting the Uniform Electronic Transactions Act; repealing
certain statutes relating to electronic records and electronic
signatures; amending Rule 402, Alaska Rules of Evidence; and
providing for an effective date.
Full Text available at: http://www.legis.state.ak.us/basis/get_fulltext.asp?session=23&bill=HB285
Bill History:
May 11, 2004 awaiting transmission to Governor.
SB 389
Corporate conversion: limited liability company
An Act relating to the conversion of certain corporations to
limited liability companies; and providing for an effective
date.
Full Text available at: http://www.legis.state.ak.us/basis/get_fulltext.asp?session=23&bill=SB389
Bill History:
May 11, 2004 awaiting transmittal to Governor
California
AB 2328
An act to amend Sections 23809 and 24654 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately,
tax levy.
Full Text Available at: link
Bill History:
June 3 Referred to Com. on REV. & TAX.
May 24 In Senate. Read first time. To Com. on RLS. for
assignment.
May 24 Read third time, passed, and to Senate. (Ayes 69. Noes 5.
Page 5927.)
May 20 From committee: Do pass. (Ayes 20. Noes 0.) (May 19). Read
second time. To third reading.
May 19 In committee: Set, first hearing. Referred to APPR.
suspense file.
May 17 Re-referred to Com. on APPR.
May 13 Read second time and amended.
May 12 From committee: Amend, do pass as amended, and re-refer to
Com. on APPR. (Ayes 4. Noes 2.) (May 10).
Apr. 19 In committee: Set, first hearing. Referred to REV. &
TAX. suspense file.
Apr. 12 Re-referred to Com. on REV. & TAX.
Apr. 1 From committee chair, with author's amendments: Amend, and
re-refer to Com. on REV. & TAX. Read second time and
amended.
Mar. 4 Referred to Com. on REV. & TAX.
Feb. 20 From printer. May be heard in committee March 21.
Feb. 19 Read first time. To print.
Colorado
HB 1399
Amends laws relating to a limited liability company ("LLC") by:
Specifying the effects of and methods to modify an operating
agreement; Altering the rules governing LLC management, including
new duties for members and managers, new indemnification
obligations and rights, and new record-keeping requirements;
Changing the rules for member admission, contributions,
resignation, transfer of interests, voting, meetings, and LLC
dissolution.
Full Text available at: link
Bill History:
Signed by Governor on May 21, 2004
HB 1398
Update Title 7 Corporation Law
Amends corporate law in title 7 to: Conform with changes made by
House Bill 03-1377, except with regard to: Trade names; and
Limitations on an entity's ability to sue for the collection of its
debts; with regard to which the bill restores the law to its status
prior to the passage of House Bill 03-1377; Increase the secretary
of state's ability to flexibly accept, file, manage, and provide
access to corporate entities' documentation; Clarify and reorganize
the law without making substantive changes; Conform with
gender-neutral and other modern language conventions; and Remove
obsolete provisions. Prohibits the filing with the secretary of
state of documentation regarding "any other matter relating to the
partnership" from being deemed public notice of such matters with
regard to statements of registration, dissolution, and partnership
authority. Specifies that if either a converting or resulting
entity has or will have a constituent document filed with the
secretary of state, then the converting entity must file a
statement of conversion with the secretary of state. Requires a
plan of corporate merger to state any amendments to the constituent
documents of the surviving entity effected by the merger and a
statement of such change to be filed with the secretary of state.
Specifies requirements for the conversion or merger of a domestic
entity with or into a foreign entity. Increases from 120 to 400
days the period within which an entity may act to become reinstated
in response to a missing annual report. Automatically gives a
foreign entity that has had its authority revoked a new foreign
entity name. Modifies requirements for the transfer of the
registered true name of a foreign entity to another foreign entity.
Defines terms and makes conforming amendments.
Full Text available at: link
Bill History:
Signed by Governor May 28, 2004
HB 1448
Amend State Trade Name Registration
Repeals part 3 of article 35 of title 24, Colorado Revised
Statutes, effective May 30, 2006, relating to the registration of
trade names with the department of revenue by entities other than
those that file with the secretary of state. Repeals and reenacts
article 71 of title 7, Colorado Revised Statutes, effective May 30,
2006, to provide for a single registry for trade names maintained
by the secretary of state. Facilitates the transfer of department
of revenue trade name records to the secretary of state and
specifies the disposition of fees collected by the department of
revenue for trade name registrations and related documents.
Specifies that all persons except nonprofit entities transacting
business under a name other than the true name of the person, and
all general partnerships transacting business under a name other
than the true name of each general partner, must have an effective
statement of trade name on file in the records of the secretary of
state. Eliminates the requirement that trade names on file in the
records of the secretary of state be distinguishable on the record
from trademarks, entity names, and other trade names. Establishes
legal consequences and penalties for not having an effective
statement of trade name on file. Specifies the contents, legal
effect, effectiveness, and procedures for the withdrawal and
renewal of a statement of trade name. Allows nonprofit entities to
file statements of trade name. Allows trade name affidavits to be
recorded with county clerks and recorders and specifies the legal
effect of recording. Addresses the effectiveness of statements of
trade name filed prior to the effective date of the bill. Makes
conforming amendments.
Full Text available at: link
Bill History:
Signed by Governor May 28, 2004
Connecticut
SB 556
To provide that one or more domestic corporations may merge with
one or more domestic or foreign corporations or other entities, to
specify certain provisions to be set forth in a certificate of
dissolution in the case of a nonstock corporation without members
or with members who are not entitled to vote on the dissolution, to
provide that one or more domestic limited partnerships may merge
with one or more domestic or foreign limited partnerships and to
provide that one or more limited liability companies may merge or
consolidate with one or more domestic or foreign limited liability
companies.
Full Text available at: link
Bill History:
Signed by Governor on May 10, 2004
SB 492
An act concerning corporate fraud accountability. To clarify and
make technical changes to certain statutory provisions concerning
corporate fraud accountability and whistleblower protection.
Full Text at: link
Bill History:
Signed by Governor on May 10, 2004
HB 5216
An act concerning the formation of limited liability companies to
render professional services by licensed or certified alcohol and
drug counselors. To allow the formation of limited liability
companies to render professional services by licensed or certified
alcohol and drug counselors, but only with professionals in the
fields of medicine and surgery, occupational therapy and social
work.
Full Text available at: link
Bill History:
Signed by Governor on June 1, 2004 as Public Act No. 04-175
Delaware
HB 455
An act to amend title 29 of the Delaware code relating to
conversion transactions of not-for-profit entities. This Act is
intended to protect the public health and welfare of the citizens
of Delaware by establishing standards and procedures for the
orderly and proper disposition of its public or charitable assets
received by the State as a result of a not-for-profit healthcare
conversion transaction. The Act provides that public benefit assets
be paid to a non-profit foundation and used to benefit the health
care needs of the citizens of this State, particularly with regard
to the medically uninsured and underserved populations.
Full Text available at: link and search for HB 455
HB 463
An act to amend chapter 38, title 12 of the Delaware code relating
to statutory trusts.
Chapter 38 of Title 12 of the Delaware Code provides for creation
and treatment of statutory trusts (formerly known as
“business trusts”). A statutory trust is a separate
legal entity which can hold and manage property, such as a real
estate investment trust, and carry on other business activities.
The Code also regulates the registration of business trusts from
other jurisdictions to do business in Delaware.
The Chapter has been amended periodically to keep it current and
to maintain Delaware’s national preeminence. This bill
continues that practice by making a number of amendments, as
follows:
Section 1. This Amendment confirms the manner in which assets may
be held and accounted for.
Sections 2 through 4. These Amendments deal with the contents of
the governing instrument of a statutory trust.
Sections 5 through 11. These Amendments make certain technical and
conforming changes to the sections of the Act regarding the
execution and filing of certificates.
Sections 12 through 15. These Amendments provide the flexibility
with respect to merger, consolidation and conversion of statutory
trusts.
Section 16. This Amendment confirms the treatment under Delaware
law of statutory trusts that have converted to other business
entities.
Section 17. This Amendment provides for the transfer or
domestication of statutory trusts and other business entities in
and out of the State of Delaware
Section 18. This Section provides that the proposed Amendments of
the Act shall become effective on August 1, 2004.
Full Text available at: link and search for HB 463
Bill History:
Introduced June 9, 2004
Out of Committee on June 10, 2004
Illinois
SB 2982
Uniform Limited Partnership Act
Creates the Uniform Limited Partnership Act (2001). Provides
procedures for the formation, operation, and regulation of limited
partnerships. Repeals the Revised Uniform Limited Partnership Act.
Amends other Acts to make conforming changes.
Full Text available at: link
Bill History:
Passed both houses May 25, 2004
Kansas
SB 29
Amendments to general corporation law and laws related to other
business entities.
Full Text available at: http://www.kslegislature.org/bills/2004/29.pdf
Bill History:
Signed by Governor, May 17. 2004
SB 38
Annual report, filing of certain documents, franchise tax and
business activities of certain business entities. An act concerning
business entities; relating to annual report; filing of certain
documents; franchise tax; business activities; amending k.s.a.
56-1a156 and 56-1a502 and k.s.a. 2002 supp. 17-2036, 17-7678,
17-76,121, 17-76,139, 56-1a606, 56-1a607, 56a-1201 and 56a-1202 and
repealing the existing sections.
Full Text available at: http://www.kslegislature.org/bills/2004/38.pdf
Bill History:
Died in House Committee on May 27, 2004
SB 317
Eliminating the requirement that subpoenaed business records be
held indefinitely by the clerk of the district court.
Full Text available at: http://www.kslegislature.org/bills/2004/317.pdf
Bill History:
Signed by Governor May 20, 2004
HB 2019
State Corporation Commission prohibited from regulating high speed
Internet access/broadband service
Full Text available at: http://www.kslegislature.org/bills/2004/2019.pdf
Bill History:
5/27/04 Died in Committee
Maryland
HB 737
Requiring a stock certificate to be signed by specified officers
of a corporation; authorizing the board of directors of a
corporation to amend the charter of the corporation to effect a
reverse stock split without stockholder action under specified
circumstances; requiring the corporation to give specified written
notice of the reverse stock split to holders of record of the
combined shares of stock as of the effective date of the reverse
stock split; etc.
Full Text available at: http://mlis.state.md.us/2004rs/bills/hb/hb0737t.rtf
Bill History:
Signed by Governor or May 26, 2004 as Chapter 516
Massachusetts
HB 4833
Amends various provisions relative to laws related to public
construction by foreign corporations, taxation of property by
municipalities, consolidation and merger of limited partnerships,
powers and operation of corporations, the operation of professional
corporations, the operation of limited liability companies, and the
operation and administration of business corporations.
Full Text available at: http://www.mass.gov/legis/Hbillsrch.htm by
search for House, No. 4833. (As of the date of drafting this the
bill was not yet posted)
Bill History:
06/09/04 H Referred to the committee on House Rules, reported,
referred to the committee on Joint Rules, reported, rules suspended
and referred to the committee on Commerce and Labor
06/10/04 S Senate concurred
Public Hearing held June 15 at 10:30 in Room A-2
Minnesota
SB 1803
Uniform Limited Partnership Act 2001; business and nonprofit
corporations organization, structure and governance regulation
modifications. A bill for an act relating to business
organizations; enacting and modifying the Uniform Limited
Partnership Act of 2001; providing transitional provisions; making
conforming changes; regulating the organization, structure, and
governance of business corporations, nonprofit corporations, and
limited liability companies; appropriating money; amending
Minnesota Statutes
Full Text available at: link
Bill History: Adopted on May 15, 2004
New Jersey
SB 1601
An Act granting immunity to employers in certain circumstances and
supplementing Title 34 of the Revised Statutes.
Full Text available at: http://www.njleg.state.nj.us/2004/Bills/S2000/1601_I1.HTM
Bill History:
5/13/2004 Introduced in the Senate, Referred to Senate Labor
Committee
New York
SB 4715
Relates to the issuance of shares of professional service
corporations to individuals authorized to practice law in New York
state.
Full Text available at: http://assembly.state.ny.us/leg/?bn=S04715&sh=t
Bill History:
04/14/2003 referred to corporations, authorities and
commissions
01/07/2004 referred to corporations, authorities and
commissions
02/10/2004 ordered to third reading cal.295
05/18/2004 amended on third reading 4715a
HB 6870
Requires that education corporations obtain the consent of the
board of regents in order to operate under an assumed name and that
education corporations operating under an assumed name file a copy
of their assumed name certificate with the state education
department; restricts the use of certain terms in corporate names
that connote an educational purpose and prohibits persons or
corporations who are not authorized to do so by the legislature or
board of regents from holding themselves out as "museums" or
"aquariums" or other similar cultural institutions.
Full Text at: http://assembly.state.ny.us/leg/?bn=A06870&sh=t
Bill History:
03/12/2003 referred to corporations, authorities and
commissions
01/07/2004 referred to corporations, authorities and
commissions
05/10/2004 amend and recommit to corporations, authorities and
commissions
05/10/2004 print number 6870a
05/24/2004 reported referred to codes
05/26/2004 amend and recommit to codes
05/26/2004 print number 6870b
06/08/2004 reported referred to rules
06/08/2004 amend and recommit to rules 6870c
SB 7263
Provides that the NYC commissioner of finance must file consent
prior to the dissolution of a corporation which incurs tax
liability in NYC.
Full Text available at: http://assembly.state.ny.us/leg/?bn=S07263&sh=t
Bill History:
05/10/2004 Referred to corporations, authorities and
commissions
HB 7401
Provides that amendments to a business corporation's certificate
of incorporation must be made by a supermajority if so specified in
certain cases.
Full Text available at: http://assembly.state.ny.us/leg/?bn=A07401&sh=t
Bill History:
Signed by Governor May 13, 2004 as Chapter 93
HB 9814
Requires that requested names for limited liability companies be
cross referenced with corporations and partnerships.
Full Text available at: http://assembly.state.ny.us/leg/?bn=A09814&sh=t
Bill History:
02/24/2004 referred to corporations, authorities and
commissions
05/24/2004 reported referred to rules
06/09/2004 rules report cal.921
06/09/2004 ordered to third reading rules cal.921
06/09/2004 amended on third reading 9814a
HB 11205
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;
stipulates that 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; provides that
publication of such notice after such 120 day period shall annul
any suspension of authority to do business in this state; provides
for publication by businesses formed prior to the effective date of
such provisions; establishes the form of an affidavit of
publication and certificate of publication
Full Text available at: http://assembly.state.ny.us/leg/?bn=A11205&sh=t
History: Note this bill has been previously reported in this
newsletter, given the possible impact we intend to follow
its’ progress closely.
May 20, 2004 Amended and Substituted.
North Carolina
HB 1442
Reduce Corporate Income Taxes.
Full Text available at: link
Bill History:
05/12/2004 House, Filed
05/13/2004 House, Referred to Committee On Finance
HB 1445
An act to provide a corporate income tax exemption
Full Text available at: link
Bill History:
05/12/2004 House, Filed
05/13/2004 House, Referred to Committee On Finance
HB 1590
An act to remove the minimum franchise tax base for corporations
experiencing a net economic loss.
Full Text available at: link
Bill History:
May 20, 2004 Introduced.
HB 1655
Incentive for Higher Wages. An act to limit the corporate
deduction for excessive compensation of corporate executives
relative to rank and file employees.
Full Text available at: link
Bill History:
05/24/2004 House Filed
05/25/2004 House Referred To Committee On Finance
Previous issues of the NRAI Newsletter may be found
at: http://secure.nrai.com/dynamic_frame.asp?page=research
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National Registered Agents, Inc. (NRAI) is a professional
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