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NRAI Compliance Updates - November,
2005
Greetings,
As holiday time will soon be here, please find below the closing schedule for Delaware. Also be aware that the following states are closed on the day after Thanksgiving: AR, CA, CO, FL, GA, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, NC, NE, NH, NV, NM, OH, OK, PA, SC, SD, TX, UT, VT, VA, WA, WY.
Michigan is the active state this month with 9 noteworthy bills. The bill summaries and links are listed below.
Robert K. Rowell
General Counsel
New, Pending and Passed Legislation
Delaware
Holiday Closing Schedule
Thursday-Friday, November 24-25 - Thanksgiving
Monday, December 26 - Christmas
Monday, January 2, 2006 - New Year's Day
Current Issue of the Delaware Register of Regulations: http://www.legis.state.de.us/LIS/Register.nsf/vwRegisters/95/$file/November2005.pdf?openelement
Michigan
HB 5315
Would rewrite and re-arrange the provision that requires a foreign (out-of-state) corporation to comply with Sections 1021 (dealing with amended applications) and 1035 (the filing of required information) in order to merge with or enter into a share exchange with a domestic (in-state) corporation.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5315.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5316
Would amend a section addressing the dissolving of companies to say that the dissolution depends, among other things, on proof that shareholders who have entered into an agreement authorized by Section 488 are unable to agree on material matters respecting management of the corporation's affairs or are divided in voting power so as to be unable to elect successor directors. The reference to the Section 488 agreement replaces a reference to the shareholders acting under the corporation's articles of incorporation. Section 488 allows shareholders to enter into agreements to exercise the corporate powers or the management of the business, even to the extent of eliminating the board of directors or restricting their powers.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5316.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5317
Would amend a section that allows for amendments to the articles of incorporation. Some amendments can be made by the board without shareholder action; others require shareholder approval. The bill would amend language dealing with shareholder approval to say that: "Other amendments of the articles of incorporation, except as otherwise provided in this act, shall be proposed by the board and approved by the shareholders as provided in this section. The board may condition its submission of the amendment to the shareholders on any basis." The underlined portions are the new language.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5317.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5318
Would amend a section dealing with committees of a corporation created by the board to specify that a committee could create one or more subcommittees and delegate all or part of its power or authority to a subcommittee, unless prohibited by a resolution of the board, the articles of incorporation, or the bylaws.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5318.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5319 and 5320
Would specify that when a shareholder abstains from voting or submits a ballot marked "abstain," that does not count as a vote cast (unless the articles provide otherwise). This affects a section that requires actions to be authorized by "a majority of votes cast." House Bill 5320 would make a similar amendment to a section that deals with voting by a class or series of shares.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5319.pdf and
http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5320.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5321
Addresses cases where a corporation is required or desires to provide a written notice, report, statement, or communication to shareholders sharing a common address. The bill would allow them to do so if all of the following requirements were met: 1) the corporation addresses the writing to shareholders as a group, individually, or in any other form to which there are no shareholder objections; 2) the corporation gives at least 60 days notice to the shareholders sharing the common address; 3) there are no written objections from any shareholder with the common address. If there is an objection, the corporation would have to begin providing separate copies to those who have objected within 30 days of receiving the objection.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5321.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5322
Addresses when documents filed with the relevant state administrator become effective. The bill specifies that "when endorsed by the administrator, a document becomes effective as of the date of receipt, unless a subsequent effective date, not later than 90 days after the date of delivery, is set forth in the document." This rewrites the existing provision that says the document is effective when it is endorsed.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5322.pdf
Current Bill Status: November 8, 2005 referred for second reading.
HB 5323
Would amend the definition in the act of "willfully unfair and oppressive conduct" to specify that such conduct could include the termination of employment or limitations on employment benefits to the extent that the actions interfere with distributions or other shareholder interests disproportionately as to the affected shareholder. Under the act, for example, a shareholder can bring an action in the circuit court of the county in which the principal place of business or registered office of the corporation is located to establish that the acts of the directors or those in control of the corporation are illegal, fraudulent, or willfully unfair and oppressive to the corporation or to the shareholder.
Full Text available at: http://www.legislature.mi.gov/documents/2005-2006/billintroduced/house/pdf/2005-HIB-5323.pdf
Current Bill Status: November 8, 2005 referred for second reading.
New Jersey
S2793/A3967
Allows the deduction of the costs of providing employee health benefits in calculating the corporation business tax alternative minimum assessment.
Full Text available at: http://www.njleg.state.nj.us/2004/Bills/S3000/2793_I1.PDF
Current Bill Status: November 10, 2005 Introduced in the Senate, Referred to Senate Commerce Committee
Pennsylvania
SB 595
An Act amending Title 15 (Corporations and Unincorporated Associations) of the Pennsylvania Consolidated Statutes, further providing for qualifications of directors for Non-Profits organized primarily for recreational or youth development and delinquency prevention purposes for the benefit of individuals.
Full Text available at: http://www2.legis.state.pa.us/WU01/LI/BI/BT/2005/0/SB0595P1265.pdf
Current Bill Status: November 2, 2005 referred to Commerce Committee
HB 1906
An Act amending Titles 15 (Corporations and Unincorporated Associations) and 54 (Names) of the Pennsylvania Consolidated Statutes, defining "official notice"; requiring the Department of State to establish a certain Internet website; further providing for advertisements by domestic business corporations, by foreign business corporations, domestic nonprofit corporations, foreign nonprofit corporations and domestic cooperative corporation ancillaries and for fictitious name registration; and making an editorial change.
Full Text available at: http://www2.legis.state.pa.us/WU01/LI/BI/BT/2005/0/HB1906P3035.pdf
Current Bill Status: Amended and Substituted November 1, 2005
Previous issues of the NRAI Newsletter may be found
at: http://secure.nrai.com/dynamic_frame.asp?page=research
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