Keeping track of the changes to business entity statutes is important for a company’s managers, owners, investors, and legal advisers. But it can be hard to do, considering how often the laws are amended and how many judicial decisions interpreting those laws are rendered each year. To help all interested parties keep up, CT Corporation has compiled some of the significant legislative and case law developments we have tracked and reported for you in our Resource Center during 2021.
House Bill 165, effective April 19, 2021, allowed the Secretary of State to waive the Certificate of Existence fee for business entities under certain circumstances when a state of emergency exists. Read House Bill 165.
Senate Bill 24, effective March 31, 2021, provided that a meeting of shareholders may be held by electronic communication to the extent the corporation's board authorizes and adopts guidelines to govern an electronic meeting and that a meeting of the members of a nonprofit corporation may be held by telecommunication to the extent the corporation's board adopts or amends bylaws to allow for an electronic meeting. Read Senate Bill 24.
Brown v. Hope, No. 1 CA-CV 20-0059, decided February 11, 2021. The Arizona Court of Appeals held that an individual who was not an attorney lacked standing to set aside a default judgment foreclosing on a Nevada LLC’s property. The court rejected her argument that she had standing because the LLC was defunct and revoked, and that when it ceased to exist the property became hers. The court pointed out that she has not shown that the LLC filed articles of dissolution in Nevada or wound up and distributed the LLC’s property. Therefore the LLC continued to exist.
Senate Bill 11, effective March 4, 2021, amended the business corporation act by authorizing remote shareholder meetings. Read Senate Bill 11.
Senate Bill 601, effective September 1, 2021, enacted the Uniform Limited Liability Company Act and repealed the Small Business Entity Tax Pass Through Act. The new law included a number of substantive and procedural changes including, with regards to tax treatment of LLCs, standards of conduct and new types of filings. Read Senate Bill 601.
The Woodlands Nursing & Retirement Center, Inc. v. DeQueen Therapy & Living Center, Inc., No. CV-20-321, decided June 2, 2021. The Arkansas Court of Appeals held that the trial court erred in dismissing the complaint filed by the plaintiff corporation on the grounds that its charter was suspended in its home state of Oklahoma at the time it filed its original and amended complaints. The corporation had been reinstated since in its state of incorporation and was in good standing. Because reinstatement is retroactive, the court erred in dismissing on this ground.
Assembly Bill 148, effective July 22, 2021, amended the Nonprofit Public Benefit Corporation Law regarding corporate names. Read Assembly Bill 148. (See Sec. 2 of the bill.)
Asphalt Professionals v. Fairland Liquidating Corp., No. B307394, decided April 19, 2021. The California Court of Appeal held that the trial court properly lifted the stay that prevented the plaintiff corporation from enforcing its judgment against the defendant. The stay was issued because the plaintiff was suspended.
However, the plaintiff provided a certificate of status proving that its corporate status had been revived. The court also rejected the defendant’s argument that the plaintiff lacked standing because it had a different name than when the judgment was rendered. The plaintiff provided evidence that it filed a certificate of amendment to change its name and that the Secretary of State recognized it was the same corporation as before, only with a different name. The court also rejected the defendant’s argument that the plaintiff lacked the power to change its name while it was suspended, noting that both statutory and case law allow a suspended corporation to change its name.
Harmon v. Dirubio, No. G060137, decided July 29, 2021. The California Court of Appeal affirmed the trial court’s dismissal of a Nevada corporation’s suit alleging breach of fiduciary duty. The court agreed that the corporation could not maintain its action because it was doing intrastate business in California without having qualified to do business. The corporation was in the business of producing concerts, movies, and TV shows, and the plaintiff claimed the defendant’s actions related to concerts it put on in California caused it harm.
Info Tech Corp. v. California Lawyers Group, LLP, B303468, decided August 4, 2021. The California Court of Appeal affirmed the trial court’s judgment in favor of a corporation, despite the fact its corporate powers had been suspended. The court acknowledged the trial court should not have permitted the corporation to continue litigating the case while its corporate status was forfeited. That did not require reversal of the trial court's judgment. However, because the corporation subsequently cured the forfeiture, the judgment and all other acts that took place during the forfeiture are vindicated.
House Bill 1124, effective April 19, 2021, amended provisions of the business entity laws regarding activities that constitute doing business by a foreign entity, added definitions of terms relating to electronic communications, specified how notice may be given by electronic transmission, and established requirements for remote participation in shareholders’ and directors’ meetings. Read House Bill 1124.
Senate Bill 986, effective June 14, 2021, amended (i) the business corporation law regarding remote shareholder meetings, shareholder lists, and bylaws; and (ii) the nonprofit corporation law regarding remote member meetings, member action without a meeting, member lists, and bylaws. Read Senate Bill 986.
Senate Bill 1100, effective July 13, 2021, amended the LLC law regarding annual report filing fees. Read Senate Bill 1100. (See Section 5.)
Senate Bill 1089, effective October 1, 2021, amended the business corporation law regarding shareholder liability. Read Senate Bill 1089.
Senate Bill 113, effective August 1, 2021, amended the General Corporation Law regarding corporate stock ownership. Read Senate Bill 113.
Senate Bill 114, effective August 1, 2021, amended the LLC law regarding ratification of defective LLC acts; member access to LLC information and records; member or manager delegation of rights, powers and duties; and statutory public benefit LLCs. Read Senate Bill 114.
Senate Bill 115, effective August 1, 2021, amended the Partnership Law (including LLPs) regarding the effect of partnership agreements; ratification of defective partnership acts; partner delegation of rights, powers and duties; and partner access to partnership information. Read Senate Bill 115.
Senate Bill 116, effective August 1, 2021, amended the LP law regarding ratification of defective LP acts; limited partner access to LP information and records; general partner delegation of rights, powers and duties; and statutory public benefit LPs. Read Senate Bill 116.
RSUI Indemnity Company v. Murdock, No. 154 2020, decided March 3, 2021. The Delaware Supreme Court, in what has been called a “landmark” decision concerning choice of law in the context of a directors and officers (D&O) liability insurance policy, held that Delaware law — and not California law — should be applied in a dispute over whether an excess insurer is obligated to reimburse a Delaware corporation for settlement amounts under a D&O policy where the corporation was based in California, the policy was negotiated and issued to it in California, the officers and directors lived in California, and where its only connection to Delaware was that it was incorporated there.
The court looked at various factors and found they suggested that the state of incorporation is the center of gravity of the typical D&O policy. And in balancing California’s interest — which was mainly based on physical location — against Delaware’s interest in protecting the ability of its corporate citizenry to secure D&O insurance and thereby attract the best directors and officers, the court found that Delaware had a more significant relationship to the policy and the parties.
Manichaean Capital, LLC v. Exela Technologies, Inc., C.A. No. 2020-0601, decided May 25, 2021. The Delaware Chancery Court, in an issue of first impression, held that Delaware courts will allow for outsider reverse veil piercing in limited circumstances and in circumscribed execution. The court stated that in reviewing a claim for reverse veil piercing, Delaware courts should consider the so-called “alter ego” factors that include insolvency, undercapitalization, commingling of funds, the absence of corporate formalities, and whether the subsidiary is simply a facade for the owner. The court should then ask whether the owner is utilizing the corporate form to perpetuate fraud or an injustice.
The court then held that this was one of those exceptional circumstances where a plaintiff had well pled a basis for reverse veil piercing. The plaintiffs were creditors of a corporation that was the single member of an LLC, which in turn was the single member of several subsidiaries, and the plaintiffs sought to hold the subsidiaries liable for a judgment held against the member. The court found it reasonably conceivable that the subsidiaries were alter egos and actively participated in a scheme to defraud or work an injustice against creditors, and that no innocent shareholders or creditors of the subsidiaries would be harmed by reverse veil piercing.
United Food and Commercial Workers Union and Participating Food Industry Employers Tri-State Pension Fund v. Zuckerberg, No. 404, 2020, decided September 23, 2021. The Delaware Supreme Court held that courts should ask the following three questions on a director-by-director basis when evaluating allegations of demand futility: (i)whether the director received a material personal benefit from the alleged misconduct that is the subject of the litigation demand, (ii) whether the director faces a substantial likelihood of liability on any of the claims that would be the subject of the litigation demand; and (iii) whether the director lacks independence from someone who received a material personal benefit from the alleged misconduct that would be the subject of the litigation demand or who would face a substantial likelihood of liability on any of the claims that are the subject of the litigation demand.
If the answer to any of the questions is “yes” for at least half of the members of the demand board, then demand is excused as futile. It is no longer necessary to determine whether the Aronson v. Lewis test or the Rales v. Blasband test governs a complaint’s demand-futility allegations.
Manit Holdings, LLC v. Authentix Acquisition Co., No. 354, 2020, decided September 13, 2021. The Delaware Supreme Court held that the individual right of a stockholder to seek a judicial appraisal is not among those fundamental features that cannot be waived. Accordingly, Sec. 262 of the General Corporation Law does not prohibit sophisticated and informed stockholders, who were represented by counsel and had bargaining power, from voluntarily agreeing to waive their appraisal rights in exchange for valuable consideration.
Brookfield Assets Management, Inc. v. Rosson, No. 406, 2020, decided September 20, 2021. The Delaware Supreme Court held that equity overpayment/dilution claims, absent more, are exclusively derivative and overruled Gentile v. Rossette, 906 A.2d 91 (Del. 2006), a decision holding that an overpayment transaction may be both derivative and direct where a stockholder having a majority or effective control causes the corporation to issue excessive shares of its stock in exchange for assets of the controlling stockholder that have a lesser value; and the exchange causes an increase in the percentage of the outstanding shares owned by the controlling shareholder, and a corresponding decrease in the share percentage owned by the public (minority) shareholders.
AB Stable VIII LLC v. MAPS Hotels and Resorts One LLC, No. 71, 2021, decided December 8, 2021. The Delaware Supreme Court affirmed the Chancery Court’s decision holding that a seller violated a covenant to conduct business “only in the ordinary course of business consistent with past practice” and that the buyer was therefore not obligated to close. The agreement involved the sale of 15 hotel properties. In response to the pandemic and without securing the buyer’s consent, the seller made drastic changes to its hotel operations and the buyer eventually called off the deal, relying on the seller’s failure to comply with the sales agreement. The court held that although the seller’s actions might have been reasonable in response to the pandemic, they were inconsistent with past practice and far from ordinary and required the buyer’s approval.
Senate Bill 602, effective May 7, 2021, amended the corporation law regarding appraisal rights and the timeframe for eligible entities to be able to use the name of a dissolved corporation, amended the LLC law regarding inspection of records, and clarified the applicability of the not-for-profit statutes to certain other associations. Read Senate Bill 602.
House Bill 306, effective April 29, 2021, provided that unless the Articles of Incorporation or bylaws provide otherwise, the board of directors of a for-profit corporation or a nonprofit corporation may determine that an annual or special shareholders’ or members’ meeting be held wholly or partially by means of remote communication. Read House Bill 306.
House Bill 103, effective July 1, 2021, amended the nonprofit corporation act to provide for remote meetings to the extent authorized by the board of directors. Read House Bill 103.
Senate Bill 1480, which was signed by the governor on March 23, 2021, amended the provision of the Business Corporation Act governing the contents of the annual report required to be filed by domestic and qualified foreign corporations to provide that for those corporations required to file an Employer Information Report EEO-1 with the Equal Employment Opportunity Commission, the annual report must include information that is substantially similar to the employment data reported under Section D of the corporation’s EEO-1 in a format provided by the Secretary of State. This information shall be included in the corporation’s annual report filed on and after January 1, 2023. Read Senate Bill 1480.
Indeck Energy Services, Inc. v Depodesta, 2021 IL 125733, decided July 29, 2021. The Illinois Supreme Court held that a cause of action for usurpation of a corporate opportunity requires a plaintiff to establish that the opportunity has in fact been taken. Because the funding opportunity was still available to the plaintiff at the time of trial, there was no usurpation by the defendants.
House Bill 1464, effective April 29, 2021, amended the business entity laws to (1) provide the name or assumed name of a domestic or foreign filing entity shall not contain language that falsely indicates or implies that it is, or is connected with, a government agency, and that if it does the Secretary of State may remove the name or assumed name from the records, (2) expand what qualifies as an emergency for the purposes of adopting emergency bylaws, (3) set forth the actions a corporation may take to address an emergency, including postponing a meeting or conducting a meeting by means of remote communication, (4) allow a nonprofit corporation to provide in its bylaws that it may hold meetings by means of remote communication, and (5) allow a public corporation to elect not to have a staggered board of directors if the board adopts a bylaw so providing. Read House Bill 1464.
EMC Insurance Group, Inc. v. Shepard, No. 20-0698, decided June 11, 2021. The Iowa Supreme Court affirmed the district court’s ruling that a shareholder failed to exercise his appraisal rights because he failed to obtain the written consent of the record shareholder as required by the Iowa corporation law. The court held that the record owner is the shareholder listed on the corporation’s records. In this case, the corporation’s records listed Cede & Co. as the record shareholder and not the plaintiff, who was the beneficial owner, or the brokerage firm with which he held the shares.
Senate Bill 271, effective June 29, 2021, amended the nonprofit corporation law to provide that in the discretion of the board of directors, a meeting of members may be held entirely through means of remote communication without a specific site for the meeting or partially through means of remote communication. Read Senate Bill 271.
House Bill 647, effective July 1, 2021, repealed the fees that were charged to business entities for filing articles of dissolution, certificates of cancellation, and articles of termination. Read House Bill 647.
Senate Bill 263 (cross filed with House Bill 781), effective October 1, 2021, amended the Corporations and Associations article regarding, among other things, forum selection clauses, reverse stock splits, removal of officers, meetings held by remote communication, issuance of stock, and amendments by directors. Read Senate Bill 263.
Coccoli v. Sachem Capital Partners LLC, 20-P-671, decided March 5, 2021. The Massachusetts Appeals Court rejected the argument of a non-attorney that he could individually pursue an appeal on behalf of a corporation because it had been dissolved and he was the sole beneficiary of its assets. The court noted that the legal claims of a corporation do not pass to its sole officer or shareholder upon dissolution. The clams remain personal to the corporation for the duration of the winding-up period.
BoylstonD3 LLC v. Galvin, C.A. No. 19-11489, decided October 22, 2020. The U.S. District Court in Massachusetts upheld the constitutionality of the provision of Massachusetts’ LLC Act denying foreign LLCs doing business in the state without registering the right to bring actions in state courts until they register. The court rejected the claim that the provision violated the Privileges and Immunity Clause, noting that this clause extends only to natural persons and not to corporate entities, including LLCs. The court also rejected the challenge based on the Equal Protection Clause, accepting the Secretary of the Commonwealth’s argument that both domestic and foreign LLCs must register with the state to have access to the courts, and that the penalty for domestic LLCs — the loss of separate entity status — is greater than that for foreign LLCs. The court also found that the plaintiff failed to state a claim for relief under the Due Process Clause, noting that the statute provides an unregistered foreign LLC the right to defend suits and that the plaintiff has other legitimate means available to resolve its contractual and property disputes.
Senate Bill 2626, effective March 17, 2021, provided that unless prohibited by the bylaws a corporation may hold an annual or special shareholders’ meeting by electronic transmission or remote communication. Read Senate Bill 2626.
Chadwick v. Huntoon, No. SD36850, decided September 16, 2021. The Missouri Court of Appeals held that an expelled member retained his right to receive distributions from the LLC. The operating agreement provided that an expelled member was entitled to certain monthly payments. However, the operating agreement did not say that those payments were in lieu of receiving distributions. Because the operating agreement was silent as to the effect of expulsion on the member’s interest in the LLC, the default rule of the LLC act had to be applied. And the default provision was that an expelled member was entitled to receive his distribution percentage as an assignee, although he could no longer participate in management.
Senate Bill 66, effective October 1, 2021, amended the corporation law regarding circumstances where notices to shareholders are not required, and to provide that unless the bylaws require the meeting of shareholders to be held at a place, the board of directors may determine that any meeting of shareholders may be held solely by means of remote communication, but only if the corporation implements the measures to verify that each person participating remotely as a shareholder is a shareholder and to provide those shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to them. Read Senate Bill 66.
Legislative Bill 910 (Laws of 2020), effective July 1, 2021, revised certain fees charged by the Secretary of State for filing initial and subsequent business entity documents. Read Legislative Bill 910.
Legislative Bill 253, effective July 1, 2021, amended the Nebraska Uniform Protected Series Act to provide that a protected series may not render a professional service and to clarify certain filing fees. Read Legislative Bill 253.
Legislative Bill 808 (Laws of 2020), effective July 1, 2021, provided for a procedure whereby a corporation can ratify a defective corporate action. Read Legislative Bill 808.
Senate Bill 95, effective October 1, 2021, amended the Business Associations; Securities; Commodities title regarding service of process on nonresident managers with further amendments to (i) the Private Corporations chapter regarding forum selection clauses, director and officer fiduciary duties, stockholder inspection rights, distributions to stockholders and director liability for unlawful distributions, stockholder meetings and notices, record date of stockholders, voting trusts, and indemnification; (ii) the LLC chapter regarding definitions, management, contributions, distributions, insolvency, receivership, and reorganization; and (iii) the Mergers, Conversions, Exchanges and Domestications chapter regarding definitions, approval of mergers, and stockholder dissenters' rights. Read Senate Bill 95.
Guzman v. Johnson, 137 Nev. Adv. Rep. 13, decided March 25, 2021. The Nevada Supreme Court held that a shareholder who sues a corporate director individually for breach of fiduciary duty must, under Sec. 78.138(7) of the Nevada corporation law, rebut the business judgment rule and demonstrate that the alleged breach involved intentional misconduct, fraud, or a knowing violation of the law. The court rejected the shareholder’s contention that she rebutted the business judgment rule by alleging in her complaint that the individual directors were interested parties in the transaction, citing the inherent fairness standard adopted by the court in Foster v. Arata, 325 P.2d 759 (1958). Under that standard, the mere allegation that a director was an interested party in the transaction rebuts the business judgment rule as a matter of law and shifts the burden to the director to prove the inherent fairness of the transaction. According to the court Sec. 78.138(7) precludes such a standard.
Assembly Bill 4932, effective May 12, 2021, amended the partnership law by authorizing LLPs to adopt alternate names. Read Assembly Bill 4932.
Assembly Bill 4918, effective August 24, 2021, amended the Business Corporation Act regarding remote shareholder meetings. Read Assembly Bill 4918.
Senate Bill 202, effective July 1, 2021, amended the Corporations title by authorizing registration of alternate names by business and nonprofit corporations and LLCs. Read Senate Bill 202.
Senate Bill 202, effective July 1, 2021, provided that the Articles of Incorporation of a business, nonprofit or foreign corporation and articles of organization of an LLC must contain the name under which the corporation or LLC transacts business if different from its official name. Read Senate Bill 202.
Senate Bill 3917, effective April 6, 2021, amended the business corporation law regarding electronic consents to action by directors and amended the business corporation and not-for-profit corporation laws regarding remotely held shareholder and member meetings, respectively. Read Senate Bill 3917.
Assembly Bill 213, effective October 31, 2021, amended the Not-for-Profit Corporation Law regarding director adoption of plans of merger and dissolution. Read Assembly Bill 213.
Assembly Bill 1237, effective November 8, 2021, amended the Business Corporation Law regarding electronic consents to action by directors and amends the business corporation and nonprofit corporation laws regarding remotely held shareholder and member meetings, respectively. Read Assembly Bill 1237.
Farro v. Schochet, 2021 NY Slip Op 00150, decided January 13, 2021. The New York Supreme Court, Appellate Division, held that a former member of a New York LLC whose membership was terminated by a cash-out merger, and who asserted his appraisal rights, could not bring an action alleging derivative and direct claims of breach of fiduciary duty in connection with the merger, or seek recission of the merger. Limited Liability Company Law Sec. 1002 provides that after a merger, a dissenting member’s remedy is limited to seeking an appraisal of the fair value of his or her membership interest.
Cleveland Marble Mosaic Co. v. Bette & Cring, LLC, 20-cv-01636 (N.D.N.Y. 2021), decided August 9, 2021. The U.S. District Court, Northern District of New York held that a foreign corporation was not doing business in New York and therefore could maintain its lawsuit even though it was not qualified to do business. The corporation was a subcontractor on a construction project in New York. It did not have an office in New York or advertise in New York, and it used materials constructed in Ohio and shipped to New York. In addition, in the last ten years it only participated in four projects in New York and spent a total of six months in New York. Thus, its intrastate activities were not permanent, continuous, or regular.
Aybar v. Aybar, 2021 NY Slip Op 054, decided October 7, 2021. The New York Court of Appeals held that foreign corporations do not consent to general jurisdiction in New York by registering to do business. The court examined the plain text of the provisions of the New York Business Corporation Law and found that while they plainly require a foreign corporation to register in order to do business in New York, they do not condition the right to do business on the corporation’s consenting to general jurisdiction, nor do they confer general jurisdiction to New York courts over foreign corporations that comply. The court also held that the plaintiffs’ interpretation of a 1916 decision upon which they relied was incorrect. That decision held that a foreign corporation consents to being served with process on its in-state agent for service of process. It does not hold that the corporation also consents to general jurisdiction. And the Court of Appeals has never conflated statutory consent to service with consent to general jurisdiction.
Senate Bill 507, effective in part on August 16, 2021, and in part on October 1, 2021, amended various sections of the Business Corporation Law. The amendments effective August 16 modernized the provisions governing recordkeeping requirements and the inspection of records. The amendments effective October 1 dealt with the voting entitlement of shares, director compensation, quorums, and change of name. Read Senate Bill 507.
House Bill 320, effective September 20, 2021, amended the corporation law to provide that unless the Articles of Incorporation or bylaws prohibit it, the board of directors may decide that a shareholders' meeting shall be held solely by means of remote communication. The bill also amended the nonprofit corporation law to provide that a nonprofit corporation may conduct a transaction by electronic means, except as limited by its Articles of Incorporation, bylaws, or by action of its board of directors, and to provide that unless prohibited by the Articles of Incorporation or bylaws, the board of directors may determine that any meeting of members shall be held solely by means of remote communication. Read House Bill 320.
Senate Bill 2138, effective March 31, 2021, provided that unless otherwise provided by the articles or bylaws, a meeting of the members of a nonprofit corporation may be held solely by means of remote communications. Read Senate Bill 2138.
Senate Bill 2210, effective August 1, 2021, amended provisions regarding the conversion of farming and ranching corporations and LLCs and the initial annual reports of various business entities. Read Senate Bill 2210.
Senate Bill 21, effective March 18, 2021, amended the Ohio corporation law to authorize benefit corporations. A benefit corporation is defined as a corporation that sets forth in its Articles of Incorporation one or more beneficial purposes among the purposes for which the corporation is formed. Read Senate Bill 21.
Cuyahoga County Case Management v. Clark Industrial Insulation Co., 2021 Ohio 1405, decided April 22, 2021. The Ohio Court of Appeals held that the trial court located in the county in which a voluntarily dissolved corporation’s principal office was located as set forth in its Articles of Incorporation lacked the authority to extend the period of time in which the corporation could continue for winding-up purposes. Instead, it was the county listed in the corporation’s certificate of dissolution filed with the Secretary of State that had the authority to extend the period.
Senate Bill 228, effective November 1, 2021, amended (i) the corporation law regarding a number of topics, including electronic meeting notices and document deliveries, capital stock, ratification of defective corporate acts, shareholder lists, corporate record-keeping, shareholder consent to action without a meeting, mergers and consolidations, conversions, business combinations, and shareholder appraisal rights; (ii) the LLC law regarding registered agents, managers, conversions, and authorization for public benefit LLCs; and (iii) the LP law regarding registered agents. Read Senate Bill 228.
Mallory v. Norfolk Southern Railway Company, No. 3 EAP 2021, decided December 22, 2021. The Pennsylvania Supreme Court affirmed the trial court’s holding striking down a section of the long arm statute that provides that foreign registration constitutes consent to the general jurisdiction of Pennsylvania courts. The court noted that the requirement of personal jurisdiction may be waived. Accordingly, consent to jurisdiction by waiving one's due process rights is an independent basis for jurisdiction, assuming that the consent is given voluntarily. Thus, to find that the defendant foreign corporation consented to the general jurisdiction of Pennsylvania courts when it registered to do business here, the court must conclude that it voluntarily, knowingly, and intelligently waived its due process liberty interest in not being subject to the binding judgments of a forum with which it has no meaningful contacts, ties, or relations. Although the long arm statute does provide notice that qualification constitutes consent, that notice does not render the consent voluntary. The court also noted that the US Supreme Court has made clear that foreign corporations cannot be subject to general jurisdiction in every state in which they conduct business, as they could not possibly be at home in all of them.
House Bill 6064 and Senate Bill 836, effective July 9, 2021, and July 8, 2021, respectively, amended the nonprofit corporation law regarding merger, consolidation, and conversion. Read House Bill 6064 and Senate Bill 836.
House Bill 5051 and Senate Bill 24, each effective July 13, 2021, amended the business corporation, nonprofit corporation, and LLC laws by increasing the 10-year limitation on the ability to reinstate a domestic or foreign revoked entity to 20 years. Read House Bill 5051 and Senate Bill 24.
House Bill 1090, effective March 3, 2021, amended requirements for domestic not-for-profit corporations concerning emergency bylaws and member meetings. Read House Bill 1090.
House Bill 106, effective April 7, 2021, amended the corporation law to allow a corporation to permit proxyholders to participate in meetings by remote communication and make the authorization for remote communication by shareholders and proxyholders contingent on the implementation of certain measures and record maintenance. Read House Bill 106.
Senate Bill 1203, effective September 1, 2021, amended various sections of the Business Organizations Code on issues including the following: (1) definitions of general partner, limited partner, and member, (2) permitting the governing documents of a domestic entity to include a forum selection clause for internal entity claims, (3) providing that the certificate of formation of an LLC set forth whether it initially has or does not have managers, (4) contents of restatements of a certificate of formation, (5) emergency actions that can be taken during a period of emergency, (6) actions by written consent, (7) indemnification against negligence, (8) activities that do not constitute transacting business, (9) effect of reinstatement of a filing entity’s certificate of formation, (10) determination of a corporation’s solvency or an LLC or LP’s liabilities or value of assets, (11) shareholder meetings by remote communication, and (12) governing authority of an LLC. Read Senate Bill 1203.
House Bill 2121, effective July 1, 2021, among other things, amended provisions of the Virginia Stock Corporation Act related to notices to shareholders, emergency bylaws, amendments to the Articles of Incorporation, inspection of shareholders’ lists, and approval of a plan of merger or share exchange, and amends provisions governing filings by business entities related to cancellations, abandonments, name restrictions, registered agent resignations, and entity conversions. Read House Bill 2121.
House Bill 2272 (Laws of 2019) authorized the creation of series LLCs. The bill became effective July 1, 2021, pursuant to House Bill 1149 (Laws of 2020). HB 2272 provided that an LLC may establish one or more protected series that may have different owners, managers, assets and liabilities and if certain requirements are met, including that a statement of protected series designation is filed for each series, the debts and obligations of one protected series are neither the debts nor obligations of any other protected series nor of the series LLC. Read House Bill 2272.
House Bill 2478 (Laws of 2019) effective July 1, 2021, included a new article allowing for the ratification of defective corporate acts and provisions expanding conversions. Read House Bill 2478.
Senate Bill 5005, effective July 25, 2021, amended the Business Corporation Act regarding electronic notices and consents. Read Senate Bill 5005.
Senate Bill 518, effective July 4, 2021, amended the business and nonprofit corporation, LLC, and LP laws by providing an additional ground for administrative dissolution. Read Senate Bill 518.
House Bill 2874, effective July 6, 2021, amended the Fees, Allowances and Costs; Newspapers; Legal Advertisements chapter regarding certain entity filing fee exemptions. Read House Bill 2874.
House Bill 3081, effective April 2, 2021, amended the business and nonprofit corporation laws regarding participation at shareholder and member meetings. Read House Bill 3081.
Senate Bill 38, effective July 1, 2021, provides for the formation and management of decentralized autonomous organizations. A DAO is formed under the Wyoming LLC Act, and the LLC Act applies to a DAO except where inconsistent with the DAO chapter. A DAO may form and operate for any lawful purpose, regardless of whether for profit. Read Senate Bill 38.
House Bill 148, effective July 1, 2021, increased various fees charged by the Secretary of State. Read House Bill 148.
House Bill 27, effective July 1, 2021, amended Wyoming law regarding, among other things, powers of the Secretary of State and the electronic delivery of documents by the Secretary of State, the reinstatement of foreign nonprofit corporations following revocation, and the fee for converting entities. Read House Bill 27.