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Legislative updates

Senate Bill 5077, effective January 1, 2024, amends the state UCC law including enactment of new provisions governing control of controllable electronic records, controllable accounts and controllable payment intangibles and perfection and priority of security interests therein.

Senate Bill 5004, effective July 23, 2023, amends the Business Corporation Act regarding definitions, issuance of shares, stock splits, domestic amendment, plan of merger or share exchange and mergers.

Senate Bill 5489, June 9, 2022, amends the following: (A) the business corporation law regarding definitions; record dates of shareholders; special meetings of shareholders; list of shareholders; merger; share exchange; and shareholder dissenter rights; (B) the LP law regarding definitions; transactions with partners; distributions; partner transferable interests; conversion; and merger; and (C) the LLC law regarding professional services LLCs; admission of members; member voting; member dissociation; and conversion.

Senate Bill 5034, effective January 1, 2022 except as noted in the Bill, enacts a new Washington Nonprofit Corporation Act which will apply to all domestic and qualified foreign nonprofit corporations as of the effective date. The new law includes changes covering a number of topics including electronic transmission of meeting notices and meeting procedures; governance of members, officers and directors; record keeping; filing requirements and new entity transaction types; charitable corporations and property held for charitable purposes; and Attorney General powers.

Senate Bill 5355, effective January 1, 2022, enacts provisions regarding the creation and recording of wage liens.

Senate Bill 5347, effective July 25, 2021, authorizes electronic voting by members of cooperative associations.

Senate Bill 5019, effective July 25, 2021, authorizes the Secretary of State to make reasonable rules in accordance with federal and state laws and to provide for the uniform recording of documents in cooperation with the Recording Standards Commission. The Secretary of State may make rules governing, among other things, recording duties of county recorders and county auditors; recording standards for the creation of certified copies for use as evidence; recording standards for documents related to liens; and recording standards for documents related to the uniform commercial code.

Senate Bill 5005, effective July 25, 2021, amends the Business Corporation Act regarding electronic notices and consents.

Senate Bill 6028, effective June 11, 2020, adopts the Uniform Electronic Transactions Act with authorization for electronic signatures and notarizations with conforming amendments to the business entity laws and enacts certain further amendments to the business corporation law.

Senate Bill 6037, effective June 11, 2020, amends the Business Corporation Act regarding gender diversity on the boards of directors of public companies; contents of Articles of Incorporation and Bylaws; dependency of plans or filed records on external ascertainable facts; capital shares; share options; business opportunities; conversion, merger and share exchange; domestic amendment; voting shares; and shareholder action without a meeting.

Case summaries

Member Request for LLC Records
Lott v. Lott, No. 38712-7-III, decided March 2, 2023. The Washington Court of Appeals held that an LLC did not violate Washington’s LLC law by denying a member access to records. The member requested that the LLC provide him with financial statements on an ongoing basis. The court noted that the member failed to comply with the requirements of the LLC law by not requesting the opportunity to inspect or copy the records, by not providing notice, and by requesting records that did not already exist.

Entity Status
Green v. Pierce County, No. 98768-8, decided May 27, 2021. The Washington Supreme Court held that for the purposes of the state’s Public Records Act the definition of “news media” requires an entity with a legal identity separate from an individual. Therefore, a YouTube channel owned by an individual did not meet the definition of “news media”.

PLLC Immunity
Leishman v. Wallace, No. 97734-8, decided January 28, 2021. The Washington Supreme Court held that a PLLC, retained by the Washington Attorney General to investigate an employee’s discrimination complaint was a “person” under Washington’s Anti-Slapp statute. That statute’s immunity unambiguously applies to organizations and individuals, and there is no language in the statute limiting its application when an organization or individual communicates under a contract with a government entity. The court reversed the lower court’s holding that the statute did not apply to an organization that was acting as a government contractor.

Other notices

April 2022 — The Washington Secretary of State issued a consumer alert regarding new versions of what the alert states are “old and misleading solicitations” circulating to recently registered businesses. The alert describes the solicitations and contains examples. It also includes a link to tips for preventing business identity theft. The consumer alert can be read from the Secretary of State’s website here.

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