BUSINESS ORGANIZATIONS ACT

PREFATORY NOTE

A. HISTORY OF THIS ACT IN THE CONFERENCE

This Business Organizations Act (“Business Organizations Act” or “Act”) has been prepared pursuant to the following resolution of the Executive Committee of the National Conference of Commissioners on Uniform State Laws:

RESOLVED, that a drafting committee be formed to prepare common provisions for business organizations in the following areas: definitions; the mechanics of filings; names of entities, registered agents and registered offices; qualification of foreign entities; administrative powers of the Secretary of State; and the META provisions on merger, interest exchanges, conversions, domestications and divisions . . . .

Formation of the Drafting Committee was based on the recommendations of the May 3, 2006 Report of a Joint Study Committee on an Omnibus Business Organizations Code co-sponsored by the Conference and the American Bar Association (“ABA”), and co-chaired by Harriet Lansing of the Conference and William H. Clark, Jr., of the ABA. The Report can be found online at:

http://www.law.upenn.edu/bll/archives/ulc/oboc/committee -report3may2006.htm

The Study Committee’s Report included a recommendation that a Business Organizations Code address:

(1) common definitions; (2) the mechanics of filings (e.g. what constitutes a filing and the legal effect of a filing); (3) names of entities, registered agents, and registered offices; (4) qualification of foreign entities; (5) administrative powers of the Secretary of State (annual reports, filing officer responsibilities and administrative dissolution); and (6) the META provisions on merger, interest exchanges, conversions, domestications and divisions.

The Executive Committee’s resolution implements that portion of the Study Committee’s recommendation.

A second recommendation of the Study Committee which has also been followed is that this drafting project be a collaborative effort with the ABA (as was the work of the Study Committee itself). The Study Committee Report noted that NCCUSL “has traditionally drafted acts governing unincorporated entities and the ABA . . . has traditionally drafted corporate entity statutes.” Since the Act deals with both unincorporated and incorporated entities, there was consensus, according to the Study Committee Report, on “the desirability of having this project conducted as a joint project between NCCUSL and the American Bar Association”. This Act is actually the work of two Drafting Committees, one a NCCUSL Drafting Committee chaired by Timothy Berg, and the other an ABA Drafting Committee chaired by William H. Clark, Jr.

Thus this Act represents a continuation of the NCCUSL/ABA collaboration with respect to the law governing business (and other) entities. Two earlier products of this collaboration are the Model Entity Transaction Act (“META”) (approved by the Conference at its 2005 Annual Meeting, with amendments resulting from the action of various ABA entities approved by the Conference at its 2007 Annual Meeting) and the Model Registered Agents Act (“MRRA”) (approved by the Conference at it 2006 Annual Meeting). Pursuant to the Executive Committee resolution, those Acts are incorporated into this project. The substantive provisions of MRRA comprise Part Four of this Act (“Registered Agent; Registered Office”). The substantive provisions of META will be added to this Act as a separate Article Two. META and MRAA definitions of general applicability have been incorporated into Section 1-102 (“Definitions”) of this Act.

This Act was submitted to the NCCUSL Style Committee meeting on January 24, 2008 and most recently at its meeting May 15-18, 2008. The 2008 Annual Meeting will be the Conference’s second consideration of the Act.

B. COVERAGE OF THE ACT

1. Overview of Act’s Coverage.

The Act’s coverage follows the topics outlined in the Study Committee recommendation and the Executive Committee resolution, with the exception that coverage of META has been deferred, to be incorporated as a separate article.

The Act consists of six seven Parts, as follows:

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Under the Study Committee’s recommendations, this Act would ultimately constitute a “hub” linked to entity specific articles as “spokes”, with each spoke incorporating those provisions of the respective ABA model acts or NCCUSL uniform acts which are not common provisions dealt with in the hub. For example, Article 3 would consist of those provisions of the ABA Revised Model Business Corporation Act other than provisions such as filing mechanics, corporate name, registered agents and offices, and qualification of foreign corporations addressed by the generic provisions of Article One—the hub. 1 At the end of the Act, a listing of possible Articles Three through Ten foreshadows this potential development.

2. State of the Law to Which This Act is Directed.

As noted in the Study Committee Report, the last two decades have seen substantial activity in the area of entity law, with the number of different types of business and non-profit entities increasing substantially and traditional entity statutes attracting substantial revision. NCCUSL has substantially revised its Uniform Partnership Act (1997) and Uniform Limited Partnership Act (1997) and is in the course of the completion of a revision of its Uniform Limited Liability Company Act. In the nonprofit area, NCCUSL in 1996 promulgated a Uniform Unincorporated Nonprofit Association Act, providing a statutory framework for an area previously governed largely by common law. Two new statutes nearing completion are a Uniform Statutory Trust Entity Act, dealing with business trusts, and the Uniform Limited Cooperative Associations Act. The limited liability partnership provided for in Article 10 of the Uniform Partnership Act (1997), though a form of general partnership, represents such an important development that the states that retain the 1914 Uniform Partnership Act have added limited liability partnership provisions to their general partnership statutes. In the corporate arena, the Model Business Corporation Act was entirely revised in 1984 and continues to be revised periodically by the Business Law Section of the ABA. In 2002, a new Chapter 9 was added, allowing for domestications and cross-entity conversions. Meanwhile the ABA has a major revision of the Model Nonprofit Corporation Act underway.

As the range of entity statutes has expanded, an interest has developed in rationalizing and harmonizing common provisions. Four states, Texas, Pennsylvania, Colorado, and Alabama have pursued projects reflecting that interest. The most extensive is the Texas Business Organizations Code, which is effective for all new entities formed after December 31, 2005 and for all entities as of January 1, 2010.

While the experience of statutory development in those states is important in drafting this Act, this Act draws most heavily on existing NCCUSL uniform acts and the ABA model corporate acts. Not only do the definitions provisions of META and MRAA provide the source for a substantial portion of the definitions in Section 1-102, the substantive provisions of MRAA have been largely carried over into Part 4 (“Registered Agent”) and provisions of the Uniform Limited Liability Company Act (as well as parallel provisions of other uniform acts) provide the pattern for most provisions of Part 5 (“Qualification of Foreign Entity”). The starting point for the “Mechanics of Filing” provisions of Part 2 of this Act were the provisions of Appendix A-1 of META, which in turn drew heavily on the filing mechanics of the Revised Model Business Corporation Act.

3. What the Act will accomplish.

As the Study Committee Report noted, this Act will meet a practical, perceived need for a single code setting forth common provisions for the existing major for-profit and non-profit entities, and, to the greatest extent feasible, modernizing and harmonizing the various entity statutes. Certainly such a code will promote better understanding of the various types of entities, reduce transaction and compliance costs caused by confusing and unnecessary inconsistencies between entity statutes, and enhance interstate commerce by for-profit and non-profit organizations.

BUSINESS ORGANIZATIONS ACT

[ARTICLE] 1

GENERAL PROVISIONS

[PART] 1

GENERAL PROVISIONS

SECTION 1-101. SHORT TITLE. This [act] may be cited as the Business Organizations Act. 2

SECTION 1-102. DEFINITIONS. In this [act]:

(1) “[Annual] [Biennial] report” means the report required by Section 1-210.

(2) “Business corporation” means a domestic business corporation incorporated under or subject to [Article] 3 or a foreign business corporation.

(3) “Debtor in bankruptcy” means a person that is the subject of:

(A) an order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or

(B) a comparable order under federal, state, or foreign law governing insolvency.

(4) “Distribution” means a transfer of property from an entity to an interest holder of the entity in the recipient’s capacity as an interest holder. The term includes a dividend, the redemption or purchase of an ownership interest, and a liquidating distribution. The term does not include the transfer of an interest in the entity 3 .

(5) “Domestic”, with respect to an entity, means an entity whose internal affairs are governed by the law of this state.

(6) “Effective date”, when referring to a record filed by the [Secretary of State], means the time and date determined in accordance with Section 1-204.

(7) “Electronic transmission” or “electronically transmitted” means any process of

communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient. 4

(7) (8) “Entity” means:

(A) a business corporation;

(B) a nonprofit corporation;

(C) a general partnership, including a limited liability partnership;

(D) a limited partnership, including a limited liability limited partnership; 5

(E) a limited liability company;

(F) a statutory trust entity or similar trust 6 ;

(G) an unincorporated nonprofit association;

[(H) a general cooperative association;]

(I) a limited cooperative association; or

(J) any other person that has a legal existence separate from any interest holder of that person or has the power to acquire an interest in real property in its own name, but the term does not include:

(i) an individual;

(ii) a testamentary, inter vivos, or charitable trust, with the exception of a statutory trust entity or similar trust;

(iii) an association or relationship that is not a partnership solely by reason of [Section 202(c) of the Revised Uniform Partnership Act] [Section 7 of the Uniform Partnership Act] or a similar provision of the law of another jurisdiction;

(iv) a decedent’s estate; or

(v) a government, a governmental subdivision, agency, or instrumentality, or a quasi-governmental instrumentality.

(8) (9) “Entity filing” means a record meeting the requirements of Section 1-201 delivered for filing to the [Secretary of State] pursuant to Section 1-202.

(9) (10) “Filed record” means a record filed by the [Secretary of State] pursuant to this [act].

(10) (11) “Filing entity” means an entity that is formed by filing a public organic record.

(11) (12) “Foreign”, with respect to an entity, means an entity whose internal affairs are governed by the law of a jurisdiction other than this state.

[(12) (13) “General cooperative association” means a domestic general cooperative association formed under or subject to [cite statute of this state under which an incorporated cooperative association is formed] or a foreign general cooperative association.]

(13) (14) “General partnership” means a domestic general partnership formed under or subject to [Article] 5 or a foreign general partnership. The term includes a limited liability partnership.

(14) (15) “Governance interest” means a right under the organic law or organic rules of an unincorporated entity, other than as a governor, agent, assignee, or proxy, to:

(A) receive or demand access to information concerning, or the books and records of, the entity;

(B) vote for the election of the governors of the entity; or

(C) receive notice of or vote on issues involving the internal affairs of the entity.

(15) (16) “Governor” means:

(A) a director of a business corporation;

(B) a director or trustee of a nonprofit corporation;

(C) a general partner of a general partnership;

(D) a general partner of a limited partnership;

(E) a manager of a manager-managed limited liability company;

(F) a member of a member-managed limited liability company;

[(G) a director of a general cooperative association;]

(H) a director of a limited cooperative association;

(I) a trustee of a statutory trust entity; or

(J) any individual under whose authority the powers of an entity are exercised and under whose direction the business and affairs of the entity are managed pursuant to its organic law and organic rules.

(16) (17) “Interest” means:

(A) a share in a business corporation;

(B) a membership in a nonprofit corporation;

(C) a partnership interest in a general partnership;

(D) a partnership interest in a limited partnership;

(E) a membership interest in a limited liability company;

(F) a membership in an unincorporated nonprofit association;

[(G) a share in a general cooperative association;]

(H) a member’s interest in a limited cooperative association;

(I) a beneficial interest in a statutory trust entity; or

(J) a governance interest or transferable interest in any other type of unincorporated entity. 7

(17) (18) “Interest holder” 8 means:

(A) a shareholder of a business corporation;

(B) a member of a nonprofit corporation;

(C) a general partner of a general partnership;

(D) a general partner of a limited partnership;

(E) a limited partner of a limited partnership;

(F) a member of a limited liability company;

(G) a member of an unincorporated nonprofit association;

[(H) a shareholder of a general cooperative association;]

(I) a member of a limited cooperative association;

(J) a beneficiary of a statutory trust entity; or

(K) any other direct holder of an interest.

(18) (19) “Jurisdiction”, as used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.

(19) (20) “Jurisdiction of organization” of an entity means the jurisdiction whose law includes the organic law of the entity.

(20) (21) “Limited cooperative association” means a domestic limited cooperative association formed under or subject to [Article] 8 or a foreign limited cooperative association

(21) (22) “Limited liability company” means a domestic limited liability company formed under or subject to [Article] 7 or a foreign limited liability company.

(22) (23) “Limited liability limited partnership” means a domestic limited liability limited partnership formed under or subject to [Article] 6 or a foreign limited liability limited partnership.

(23) (24) “Limited liability partnership” means a domestic limited liability partnership registered under or subject to [Article] 5 or a foreign limited liability partnership.

(24) (25) “Limited partnership” means a domestic limited partnership formed under or subject to [Article] 6, or foreign limited partnership. The term includes a limited liability limited partnership.

(25) (26) “Nonfiling entity” means an entity that is not formed by filing a public organic record.

(26) (27) “Nonprofit corporation” means a domestic nonprofit corporation incorporated under or subject to [Article] 4 or foreign nonprofit corporation.

(27) (28) “Organic law” means the statutes of an entity’s jurisdiction of organization that govern the internal affairs of the entity.

(28) (29) “Organic rules” means the public organic record and private organic rules of an entity.

(29) (30) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, statutory trust entity, association, limited cooperative association, [general cooperative association,] joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(30) (31) “Principal office” means the office, in or outside this state, designated by a filing entity as its principal office in the record most recently delivered by the entity to the [Secretary of State] for filing and filed by the [Secretary of State] that contains that designation.

(31) (32) “Private organic rules” means the rules, whether or not in a record, that govern the internal affairs of an entity, are binding on all of its interest holders 9 , and are not part of its public organic record, if any. The term includes the bylaws of a business corporation or nonprofit corporation, a written or oral partnership agreement 10 , and the operating agreement of a limited liability company.

(32) (33) “Proceeding” includes a civil action, arbitration, mediation, administrative proceeding, criminal prosecution, administrative prosecution, and investigatory action.

(33) (34) “Public organic record” means the record, the public filing of which creates an entity and any amendment or restatement of that record. The term includes:

(A) the articles of incorporation of a business corporation;

(B) the articles of incorporation of a nonprofit corporation;

(C) the certificate of limited partnership of a limited partnership;

(D) the certificate of organization of a limited liability company;

[(E) the articles of incorporation of a general cooperative association;]

(F) the articles of organization of a limited cooperative association; and

(G) the certificate of trust of a statutory trust entity

(34) (35) “Qualified foreign entity” means a foreign entity that is authorized to do business in this state pursuant to a statement of registration filed by the [Secretary of State].

(35) (36) “Receipt” means actual receipt. “Receive” has a corresponding meaning.

(36) (37) “Record”, used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(37) (38) “Registered agent” means a commercial registered agent as defined in Section 1-401(2) or a noncommercial registered agent as defined in Section 1-401(3).

(38) (39) “Sign” means, with present intent to authenticate or adopt a record:

(A) to execute or adopt a tangible symbol; or

(B) to attach to or logically associate with the record an electronic symbol, sound, or process.

(39) (40) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

(41) “Statutory trust entity” means a domestic statutory trust entity formed under or subject to [Article] 10 or a foreign statutory trust entity 11 .

(40) (42) “Transferable interest” means the right under an unincorporated entity’s organic law to receive distributions from the entity.

(41) (43) “Type”, with regard to an entity, means a generic form of entity:

(A) recognized at common law; or

(B) organized under an organic law, whether or not some entities organized under that organic law are subject to provisions of that law that create different categories of the form of entity.

(42) (44) “Unincorporated nonprofit association” means a domestic unincorporated nonprofit association formed under or subject to [Article] 9 or a foreign unincorporated nonprofit association.

Legislative Note: If a state that uses a term for the public organic record of a particular entity different from that set forth in the list in subsection (34), it should substitute its own term. Some state, for example, use the term “articles of organization” for the public organic document of a limited liability company and would substitute that term for “certificate of organization” in subsection (34(E), and, if the state adopts Section 1-211, Alternative A, in Section 1-211(b)(14).

Comment

In general. Many of the definitions in this section were developed for use in the Model Entity Transactions Act (META). Definitions that are common to this Act and META are:

“domestic” (corresponding to the META term “domestic entity”)

“entity”

“filing entity”

“foreign” (corresponding to the META term “foreign entity”)

“governance interest”

“governor”

“interest”

“interest holder”

“jurisdiction of organization”

“organic law”

“organic rules”

“person”

“private organic rules”

“public organic document record”

“qualified foreign entity”

“record”

“sign”

“transferable interest”

“type”

The comments below with respect to defined terms taken from META are substantively the same as the corresponding comments in META.

Other definitions in this Act were developed for use in the Model Registered Agents Act (MRRA). Part 4 of this Act is derived from MRRA and contains definitions of the following MRRA terms:

“appointment of agent”

“commercial registered agent”

“noncommercial registered agent”

“nonqualified foreign entity”

“nonresident limited liability partnership statement”

“registered agent filing”

“Registered agent” is a term defined in this Section by reference to Part 4.

“Domestic.” [(5)] – The term “domestic”, with respect to an entity, means in this Act an entity whose internal affairs are governed by the organic laws of the adopting state. Except in the case of general partnerships and unincorporated nonprofit associations, this will mean an entity that is formed, organized, or incorporated under domestic law. In the case of a general partnership organized under the Uniform Partnership Act (1997) (RUPA), it will mean a general partnership whose governing law under RUPA § 106 is the law of the adopting state. Under RUPA § 106 the governing law is determined by the location of the partnership’s chief executive office, except for limited liability partnerships where the governing law is the state where the statement of qualification is filed. It is a factual question whether the activities and organization of an unincorporated nonprofit association make it a domestic or foreign entity.

This definition is patterned after Model Entity Transactions Act § 102(8) (“domestic entity”), a term which is also defined in Model Registered Agents Act § 2(3).

“Electronic transmission” or “electronically transmitted.” [(7)] – “Electronic transmission” or “electronically transmitted” includes both communication systems which in the normal course produce paper, such as facsimiles, as well as communication systems which transmit and permit the retention of data which is then subject to subsequent retrieval and reproduction in written form. Electronic transmission is intended to be broadly construed and include the evolving methods of electronic delivery, including electronic transmissions via the Internet, as well as data stored and delivered to computer diskettes. The phrase is not intended to include voice mail and other similar system which do not automatically provide for the retrieval of data in printed or typewritten form.

This definition is drawn from Revised Model Business Corporation Act § 1.40(7A) and the foregoing comment is tracks the Official Comment of the Revised Model Business Corporation Act to that subsection.

“Entity.” [ (7) (8)] – This definition determines the overall scope of the Act.

This definition is intended to include all forms of private organizations, regardless of whether organized for profit, and artificial legal persons other than those excluded by paragraphs (J)(i)-(v). Thus, this definition is broader than the definition of “business entity” in, e.g., Code of Ala. § 10-15-2(2) which does not include nonprofit entities. This definition does not exclude regulated entities such as public utilities, banks and insurance companies.

Inter vivos and testamentary trusts are treated in many states as having a separate legal existence, but they have been excluded from the definition of “entity.” Trusts that carry on a business, however, such as a Massachusetts trust, real estate investment trust, Illinois land trust, or other common law or statutory business trusts are “entities.”

Section 4 of the Uniform Unincorporated Nonprofit Association Act gives an unincorporated nonprofit association the power to acquire an estate in real property and thus an unincorporated nonprofit association organized in a state that has adopted that act will be an “entity.” At common law, an unincorporated nonprofit association was not a legal entity and did not have the power to acquire real property. Most states that have not adopted the Uniform Act have nonetheless modified the common law rule, but states that have not adopted the Uniform Act should analyze whether they should modify the definition of “entity” to add an express reference to unincorporated nonprofit associations.

There is some question as to whether a partnership subject to the Uniform Partnership Act (1914) (UPA) is an entity or merely an aggregation of its partners. That question has been resolved by Section 201 of the Uniform Partnership Act (1997) (RUPA), which makes clear that a general partnership is an entity with its own separate legal existence. Section 8 of UPA gives partnerships subject to it the power to acquire estates in real property and thus such a partnership will be an “entity.” As a result, all general partnerships will be “entities” regardless of whether the state in which they are organized has adopted RUPA.

Paragraph (J) (i) of this definition excludes a sole proprietorship from the concept of “entity.”

Paragraph (J)(iii) of this definition excludes from the concept of an “entity” any form of co-ownership of property or sharing of returns from property that is not a partnership under RUPA § 202(c) or UPA § 7. In that connection, Section 202(c) of RUPA provides in part:

In determining whether a partnership is formed, the following rules apply:

(1) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.

(2) The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

A virtually identical provision appears in UPA § 7(3)-(4).

Limited liability partnerships and limited liability limited partnerships are “entities” because they are general partnerships and limited partnerships, respectively, that have made the additional required election claiming LLP or LLLP status. A limited liability partnership is not, therefore, a separate type of entity from the underlying general or limited partnership that has elected limited liability partnership status.

This definition is patterned after Model Entity Transactions Act § 102(12) (“entity”). The same definition appears in the Model Registered Agents Act § 2(4).

“Filing entity.” [(10) (11)] – Whether an entity is a filing entity is determined by reference to whether its legal existence is attributable to the filing of a record with the state filing officer. While the statute refers to an entity that is “formed,” it is intended to encompass corporations which are “incorporated” and limited liability companies which are “organized” as well as entities such as limited partnerships which are “formed” by a filing required by the organic law governing the entity. Business trusts (sometimes referred to as “statutory trusts”) present a special problem. In some states, for example, a business trust is a filing entity, while in other states business trusts are recognized only by common law. Under section 201(a) of the 2007 NCCUSL Annual Meeting Draft of the proposed Uniform Statutory Trust Entity Act, a statutory trust entity formed under that act would be formed by delivery of a certificate of trust to the appropriate filing officer, and would be a filing entity.

The term does not include a limited liability partnership because an election filed by a general partnership claiming that status (e.g., a statement of qualification under Uniform Partnership Act (1997), § 1001) does not create the entity. A limited liability limited partnership, on the other hand, is a filing entity because the underlying limited partnership is created by filing a certificate of limited partnership.

This definition is patterned after Model Entity Transactions Act § 102(13) (“filing entity”). A similar definition appears in Model Registered Agents Act § 2(5). See also Model Business Corporation Act § 1.40(9B) (“filing entity”).

“Foreign.” [(11) (12)] – The term “foreign”, with respect to an entity, includes any non-domestic entity of any type. Where a foreign entity is a filing entity, the entity is governed by the laws of the state of filing. A nonfiling foreign entity is governed by the laws of the state governing its internal affairs. It is a factual question whether a general partnership whose internal affairs are governed by the Uniform Partnership Act (1914) (UPA) is a domestic or foreign partnership. A UPA partnership will likely be deemed to be a domestic entity where the greatest nexus of contacts are found. Similar issues arise with respect to determining the domestic or foreign status of unincorporated nonprofit associations. The domestic or foreign characterization of partnerships under the Uniform Partnership Act (1997) (RUPA) that have not registered as limited liability partnerships will be governed by RUPA § 106(a) (“state where the partnership’s chief executive office is located”).

This definition is patterned after Model Entity Transactions Act § 102(14) (“foreign entity”). The same definition is found in Model Registered Agents Act § 2(6).

“Governance interest.” [(14) (15)] – A governance interest is typically only part of the interest that a person will hold in an entity and is usually coupled with a transferable interest (or economic rights). However, memberships in some nonprofit corporations and unincorporated nonprofit associations consist solely of governance interests and memberships in other nonprofit entities may not include either governance interests or transferable interests. In some unincorporated business entities, there is a more limited right to transfer governance interests than there is to transfer transferable interests. An interest holder in such an unincorporated business entity who transfers only a transferable interest and retains the governance interest will also retain the status of an interest holder. Whether a transferee who acquires only a transferable interest will acquire the status of an interest holder is determined by the definition of “interest holder.”

Shares in a business corporation that are nonvoting nonetheless have a governance interest because they entitle the holder to certain rights of access to information and to certain statutory voting rights on amendments of the articles of incorporation.

Governors of an entity have the kinds of rights listed in the definition of “governance interest” by reason of their position with the entity. For a governor to have a “governance interest,” however, requires that the governor also have those rights for a reason other than the governor’s status as such. A manager who is not a member in a limited liability company, for example, will not have a governance interest, but a manager who is a member will have a governance interest arising from the ownership of a membership interest.

This definition is patterned after Model Entity Transactions Act § 102(15) and Model Registered Agents Act § 2(8) (“governance interest”).

“Governor.” [(15) (16)] – This term has been chosen to provide a way of referring to a person who has the authority under an entity’s organic law to make management decisions regarding the entity that is different from any of the existing terms used in connection with particular types of entities. Compare Colo. § 7-90-102(35.7) which uses the term “manager” to refer to this concept, even though “manager” is also a term of art in connection with limited liability companies. Depending on the type of entity or its organic rules, the governors of an entity may have the power to act on their own authority, or they may be organized as a board or similar group and only have the power to act collectively, and then only through a designated agent. In other words, a person having only the power to bind the organization pursuant to the instruction of the governors is not a governor. Under the organic rules, particularly those of unincorporated entities, most or all of the management decisions may be reserved to the members or partners. Thus, if a manager of a limited liability company were limited to having authority to execute management decisions made by the members and did not have any authority to make independent management decisions, the manager would not be a governor under this definition.

Except as described above, the term “governor” includes:

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This definition is patterned after Model Entity Transactions Act § 102(16) and Model Registered Agents Act § 2(9) (“governor”).

“Interest.” [(16) (17)] – In the usual case, the interest held by an interest holder will include both a governance interest and a transferable interest (or economic rights). Members in many nonprofit corporations or unincorporated nonprofit associations do not have a transferable interest because they do not receive distributions, but they nonetheless may hold a governance interest in which case they would have the status of interest holders under the Act. An interest holder in an unincorporated business entity may transfer all or part of the interest holder’s transferable interest without the transferee acquiring the governance interest of the transferor. In that case, whether the transferor will retain the status of an interest holder will be determined by the applicable organic law and the transferee will have the status of an interest holder under paragraph (B) of this definition. That paragraph will also apply to subsequent transferees from the original transferee.

The term “interest” includes:

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This definition is patterned after Model Entity Transactions Act § 102(17) and Model Registered Agents Act § 2(10) (“interest”).

“Interest holder.” [(17) (18)] – This Act does not refer to “equity” interests or “equity” owners or holders because the term “equity” could be confusing in the case of a nonprofit entity whose members do not have an interest in the assets or results of operations of the entity but only have a right to vote on its internal affairs. Compare Code of Ala. § 10-15-2(4) (“equity owner”).

The term “interest holder” includes:

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This definition is patterned after Model Entity Transactions Act § 102(19) (“interest holder”). See also Model Business Corporation Act § 1.40(13B) (“interest holder”).

“Jurisdiction of organization.” [(19) (20)] – The term “jurisdiction of organization” refers to the jurisdiction whose laws include the organic law of the entity.

This definition is patterned after Model Entity Transactions Act § 102(21) and Model Registered Agents Act § 2(12) (“jurisdiction of organization”).

“Organic law.” [(27) (28)] – Organic law means statutes other than this Act that govern the internal affairs of an entity. Organic law includes the entity specific articles of this Act, but does not include Article 2 based on the Model Business Entity Transaction Act. Entity laws in a few states purport to require that some of their internal governance rules applicable to a domestic entity also apply to a foreign entity with significant ties to the state. See, e.g., Cal. Gen. Corp. Law § 2115, N.Y. N-PCL §§ 1318-1321, 15 Pa.C.S. § 6145. Such a “sticky fingers” law is included within the definition of “organic law” for purposes of the Act.

This definition is patterned after Model Entity Transactions Act § 102(27) and Model Registered Agents Act § 2(16) (“organic law”). See also Model Business Corporation Act § 1.40(15B) (“organic law”).

“Organic rules.” [(28) (29)] – The term “organic rules” means an entity’s public organic document and its private organic rules.

This definition is patterned after Model Entity Transactions Act § 102(28) and Model Registered Agents Act § 2(17) (“organic rules”).

“Person.” [(29) (30)] – The term “person” has the standard meaning of that term in uniform acts.

“Private organic rules.” [(31) (32)] – The term private “organic rules” is intended to include all governing rules of an entity that are binding on all of its interest holders, whether or not in written form, except for the provisions of the entity’s public organic document, if any. The term is intended to include agreements in “record” form as well as oral partnership agreements and oral operating agreements among LLC members. Where private organic rules have been amended or restated, the term means the private organic rules as last amended or restated.

The term “private organic rules” includes:

•

•

•

•

•

•

•

•

This definition is patterned after Model Entity Transactions Act § 102(31) and Model Registered Agents Act § 2(19) (“private organic rules”). Compare Model Business Corporation Act § 1.40(17A) (“private organic document”).

“Public organic record”. ” [(33) (34)] – A “public organic record” is a record that is filed publicly to form, organize, incorporate, or otherwise create an entity. The term does not include a statement of partnership authority filed under Section 303 of the Uniform Partnership Act (1997) or any of the other statements that may be filed under that act since those statements do not create a new entity. A limited liability partnership is the same entity as the partnership that files the statement. For the same reason, the term also does not include a statement of qualification filed under Section 1001 of that act to become a limited liability partnership. Similarly, the term does not include a statement of authority filed under Section 5 of the Uniform Unincorporated Nonprofit Association Act or a statement appointing an agent filed under Section 10 of that act. Where a public organic record has been amended or restated, the term means the public organic record as last amended or restated.

The term “public organic record” includes:

•

•

•

•

•

•

•

In those states where a deed of trust or other instrument is publicly filed to create a business trust, that filing will constitute a public organic record. But in those states where a business trust is not created by a public filing, the deed of trust or similar record will be part of the private organic rules of the business trust.

This definition is patterned after Model Entity Transactions Act § 102(33) and Model Registered Agents Act § 2(20) (“public organic document”).

“Qualified foreign entity.” [(34) (35)] – A qualified foreign entity is a foreign entity for which there is a foreign-qualification document in effect in the adopting state.

This definition is patterned after Model Entity Transactions Act § 102(34) and Model Registered Agents Act § 2(21) (“qualified foreign entity”).

“Record.” [(36) (37)] – The term “record” has the standard meaning of that term in uniform acts.

“Registered agent.” [(37) (38)] – This term is used in the Act to refer to agents for service of process in contexts where it is not necessary to differentiate between commercial registered agents and noncommercial registered agents.

The definition is patterned after Model Registered Agents Act § 2(23).

“Sign.” [(38) (39)] – The term “sign” has the standard meaning of that term in uniform acts.

“Transferable interest.” [(40) (41)] – The term “transferable interest” is taken from Section 102(22) of the Uniform Limited Partnership Act (2001).

This definition is patterned after Model Entity Transactions Act § 102(38) (“transferable interest”).

“Type.” [(42) (43)] – The term “type” has been developed in an attempt to distinguish different legal forms of entities. It is sometimes difficult to decide whether one is dealing with a different form of entity or a variation of the same form. For example, a limited partnership, although it has been defined as a partnership, is a different type of entity from a general partnership, while a limited liability partnership is not a different type of entity from a general partnership. In some states cooperative corporations are categories of business corporations or nonprofit corporations, while in other states cooperatives are a separate type of entity.

This definition is patterned after Model Entity Transactions Act § 102(39) (“type”).

SECTION 1-103. APPLICABILITY. This [article] applies to entities created under or recognized by another [article] of this [act].

SECTION 1-104. DELIVERY OF RECORD. Except as otherwise provided in this [act], delivery of a record includes delivery by hand, mail by the United States Postal Service, commercial delivery, and electronic transmission, and is effective when sent. However,

delivery to the [Secretary of State] is effective only when the record is actually received by the [Secretary of State].

Comment

This section is derived from the definition of “deliver” in section 1.40(5) of the Revised Model Business Corporation Act. Language has been added to provide that delivery is generally effective when sent, but, in the case of delivery to the Secretary of State, only upon actual receipt. 12

SECTION 1-105. POWERS OF [SECRETARY OF STATE]. The [Secretary of State] shall have the power to adopt rules to carry out the purposes of this [act], and for the efficient performance of the duties of the [Secretary of State] under this [act]. 13

[SECTION 1-106. ENTITIES EXCLUDED. This [act] does not apply to the following [entity] [entities]: [Insert type or types of entities to which the [act] does not apply]]. 14

[PART] 2

FILING

SECTION 1-201. ENTITY FILING REQUIREMENTS.

(a) To be filed by the [Secretary of State] pursuant to this [act], an entity filing must be delivered to the office of the [Secretary of State] for filing and must satisfy the other provisions of this [act] and the following requirements:

(1) The entity filing in the office of the [Secretary of State] must be required or permitted by this [act].

(2) The entity filing must be in a record.

(3) The words in the entity filing must be in English and numbers must be in Arabic or Roman numerals, but the name of the entity need not be in English if written in English letters or Arabic or Roman numerals.

(4) The entity filing must state the name and capacity, if any, of the individual who signed it but need not contain a seal, attestation, acknowledgment, or verification.

(b) If a law other than this [act] prohibits the disclosure by the [Secretary of State] of information contained in an entity filing, the [Secretary of State] shall accept the filing if it otherwise complies with this section but may redact that information.

[(c) When an entity filing is delivered to the office of the [Secretary of State] for filing, any fee required under this [act] and any franchise tax, license fee, or penalty required to be paid under this [act] or law other than this [act] must be paid in a manner permitted by the [Secretary of State] or by that law.]

(d) An entity filing of a corporation must be signed:

(1) by the chair of the board of directors, by its president, or by another of its officers;

(2) if directors have not been selected or the corporation has not been formed, by an incorporator; or

(3) if the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

(e) An entity filing of an entity other than a corporation must be signed:

(1) by a person with authority to sign under the organic law of the entity; or

(2) if the entity is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary. 15

(f) If a provision of this [act] permits any of the terms of a plan or a filed entity filing to be dependent on facts objectively ascertainable outside the plan or filed entity filing, the following rules apply:

(1) As used in this subsection:

(A) “Filed record” means a record filed with the [Secretary of State] under any provision of this title except Section 1-212.

(B) “Plan” means a plan of domestication, business conversion, entity conversion, merger or membership exchange.

(2) The manner in which the facts will operate upon the terms of the plan or filed record must be set forth in the plan or filed record.

(3) The facts may include:

(A) any of the following that is available in a nationally recognized news or information medium either in print or electronically

(i) statistical or market indices;

(ii) market prices of any security or group of securities;

(iii) interest rates;

(iv) currency exchange rates; or

(v) similar economic or financial data;

(B) a determination or action by any person or body, including the entity or any other party to a plan or filed record; and

(C) the terms of, or actions taken under, an agreement to which the entity is a party, or any other agreement or record. 16

Legislative Note: Omit subsection (c) if this requirement is adequately covered by other law.

Comment

The records filed under this Act are referred to as “entity filings” in order to encompass filings under corporation laws, which are typically referred to as “articles,” and filings under limited partnership and other unincorporated entity laws, which are typically referred to as “certificates.”

The provisions of this Part are derived from Appendix A-1 of META. The comments are adapted from comments to the sections of META Appendix A-1.

1. Form of records.

A record may be filed in typewritten or printed form through physical delivery to the Secretary of State or by electronic transmission. Electronic transmission includes the evolving methods of electronic delivery, including facsimile transmissions, electronic transmissions between computers via modems and filings through delivery of magnetic tapes or computer diskettes, all as may be permitted by the Secretary of State. To be eligible for filing, a record must be typed or printed or electronically transmitted in a format that can be retrieved or reproduced in typewritten or printed form and in the English language (except to the limited extent permitted by subsection (a)(4)). 17 The Secretary of State is not authorized to prescribe forms (except to the extent permitted by Section 1-203) and as a result may not reject entity filings on the basis of form (see Section 1-207) if they contain the information called for by the specific statutory requirement and meet the minimal formal requirements of this section.

2. Signature.

To be filed a record must be signed by the appropriate person. No specific officer is designated as the appropriate person to sign in the case of a corporation. Similarly, an unincorporated entity is given the authority to designate the person to sign on its behalf. See Section 1-102 for a description of the manner in which a record may be “signed.”

The requirement in some state statutes that entity filings must be acknowledged or verified as a condition for filing has been eliminated. These requirements serve little purpose in connection with entity filings filed under organic laws. On the other hand, many organizations, like lenders or title companies, may desire that specific records include acknowledgements, verifications, or seals; subsection (a)(4) does not prohibit the addition of these forms of execution and their use is not intended to affect the eligibility of the record for filing.

3. Contents.

A record must be filed by the Secretary of State if it contains the information required by this Act.. In view of the very limited discretion granted to Secretaries of State under this section and, Section 1-207(a) which defines the Secretary of State’s role as “ministerial,” Section 1-207(d)(3) provides that no inference or presumption arises from the fact that the Secretary of State accepted a document for filing. See the Comments to Sections 1-207 and 1-209.

SECTION 1-202. DELIVERY TO [SECRETARY OF STATE]. Delivery of an entity filing to the [Secretary of State] may be made by electronic transmission as permitted by the [Secretary of State]. If an entity filing is delivered for filing in written form and not transmitted electronically, the [Secretary of State] may require one exact or conformed copy to be delivered with the entity filing.

Comment

Number of copies. The Secretary of State is permitted to require an exact or conformed copy if the record is being filed in typewritten or printed form, providing the secretary of state flexibility to determine whether or not such copies serve any purpose. There is no such requirement with respect to records transmitted electronically.

SECTION 1-203. FORMS.

(a) The [Secretary of State] may prescribe adopt 18 and furnish on request forms for entity filings required or permitted to be made by this [act], but, except as otherwise provided in subsection (b), their use is not required.

(b) The [Secretary of State] may require that [an annual] [a biennial] report and a cover sheet for any entity filing be on forms prescribed by the [Secretary of State].

Comment

As described in the Comments to Section 1-201, records are entitled to filing if they meet the substantive and formal requirements of this Act. In these circumstances it is not appropriate to vest the Secretary of State with general authority to establish mandatory forms for use under the Act. This section authorizes (but does not require) the Secretary of State to prepare forms suitable for filing under the Act. However, the use of these forms is permissive and cannot be required by the Secretary of State. The Secretary of State is authorized to prescribe forms for [annual] [biennial] reports, however, and for cover sheets for entity filings.

SECTION 1-204. EFFECTIVE TIME AND DATE. Except as otherwise provided in Section 1-205, an entity filing is effective:

(1) on the date and at the time of its filing by the [Secretary of State];

(2) on the date of filing and at the time specified in the entity filing as its effective time, if later than the effective time for filing under paragraph (1);

(3) at a specified delayed effective time and date not more than 90 days after the date of filing if permitted by this [act]; or

(4) if a delayed effective date as permitted by this [act] is specified, but no time is specified, at 12:01 a.m. on the date specified.

Comment

Records accepted for filing become effective at the date and time of filing, or at another specified time on that date, unless a delayed effective date is selected.

Section 1-207(b) requires Secretaries of State to maintain some means of recording the date and time of delivery of an entity filing, and that the recording of that date and time constitutes filing. That provision gives express statutory authority to the common practice of most Secretaries of State of ignoring processing time and treating a record as filed as of the date and time it is delivered for filing even though it may not be reviewed and accepted for filing until several days after delivery. That section contemplates that time of delivery, as well as the date, will be routinely recorded.

Under paragraph (1) of this section, in the absence of provision for a delayed effective date, an entity filing becomes effective on the date and time of filing by the Secretary of State. Since under 1-207(b), the date and time of filing is the recorded date and time of delivery of the entity filing, together these provisions eliminate any doubt about situations involving same-day transactions in which a record, for example, a statement of merger, if delivered for filing on the morning of the day the merger is to become effective. 19

Paragraph (3) does not authorize or contemplate the retroactive establishment of an effective date before the date of filing.

SECTION 1-205. WITHDRAWAL OF FILING BEFORE EFFECTIVENESS.

(a) The parties to an entity filing may withdraw the filing before it takes effect.

(b) To withdraw an entity filing the parties to the filing must deliver to the [Secretary of State] for filing a statement of withdrawal.

(c) A statement of withdrawal must:

(1) be signed on behalf of each party to the action or transaction by an individual authorized by this [act] to act on behalf of that party;

(2) state the nature of the entity filing to be withdrawn, the date of the filing, and the parties to the filing; and

(3) state that the entity filing has been withdrawn in accordance with the agreement of the parties.

(d) On the delivery for filing to the [Secretary of State] of a statement of withdrawal, the action or transaction evidenced by the original entity filing does not take effect. 20

Comment

This provision is considerably broader in scope than section 11.08 of the Revised Model Business Corporation Act (“Abandonment of Merger or Share Exchange”), on which it is patterned.

SECTION 1-206. CORRECTING FILING.

(a) A person that delivered an entity filing to the [Secretary of State] for filing may correct the filing if:

(1) the filing at the time of filing contained an inaccuracy;

(2) the filing was defectively signed; or

(3) the electronic transmission of the filing to the [Secretary of State] was defective.

(b) An entity filing is corrected by filing with the [Secretary of State] a statement of correction that:

(1) describes the filing to be corrected and states its filing date or has attached a copy of the filing;

(2) specifies the inaccuracy or defect to be corrected; and

(3) corrects the inaccuracy or defect.

(c) A statement of correction is effective as of the effective date of the entity filing that it corrects except as to persons relying on the uncorrected filing and adversely affected by the correction. As to those persons, the statement of correction is effective when filed.

Comment

This section permits making corrections in entity filings without re-filing the entire record. Under subsection (c), the correction relates back to the original effective date of the entity filing being corrected, except as to persons relying on the original entity filing and adversely affected by the correction. As to these persons, the effective date of the statement of correction is the date the statement is filed.

An entity filing may be corrected either because it contains an inaccuracy or because it was defectively executed (including defects in optional forms of execution that do not affect the eligibility of the original record for filing). In addition, the entity filing may be corrected if its electronic transmission was defective. This is intended to cover the situation where an electronic filing is made but, due to a defect in transmission, the filed record is later discovered to be inconsistent with the record intended to be filed. If no filing is made because of a defect in transmission, a statement of correction may not be used to make a retroactive filing. Therefore, an entity making an electronic filing should take steps to confirm that the filing was received by the Secretary of State.

A provision in a entity filing setting an effective date may be corrected under this section, but the corrected effective date must comply with the requirements of this Act limiting delayed effective dates to within 90 days after filing. A corrected effective date is thus measured from the date of the original filing of the record being corrected, i.e., it cannot be before the date of filing of the record or more than 90 day thereafter.

SECTION 1-207. DUTY OF [SECRETARY OF STATE] TO FILE; REMEDY FOR [SECRETARY OF STATE]’S REFUSAL TO FILE.

(a) The [Secretary of State] shall file an entity filing delivered to the [Secretary of State] for filing which satisfies Section 1-201. The duty of the [Secretary of State] to file entity filings under this section is ministerial 21 .

(b) The [Secretary of State] files an entity filing by recording it as filed on the date and at the time of its delivery filing 22 . After filing an entity filing, the [Secretary of State] shall deliver to the domestic or foreign entity or its representative a copy of the entity filing with an acknowledgement of the date and time of filing.

(c) If the [Secretary of State] refuses to file an entity filing, the [Secretary of State] shall return the entity filing or provide notice not later than [five] business 23 days after the filing is delivered, together with a brief explanation in a record of the reason for the refusal. The entity filing may be resubmitted accompanied by an opinion in the form of a record from a lawyer admitted to practice in this state stating why the entity filing does satisfy those requirements and the authorities upon which the opinion is based. The [Secretary of State] may rely with respect to any disputed point of law upon the opinion in determining whether the entity filing conforms to law.

(d) If the [Secretary of State] refuses to file an entity filing delivered for filing, and as an alternative to resubmitting the entity filing under subsection (c), or following a refusal to file the entity filing after it is resubmitted under subsection (c), the person that submitted the entity filing may appeal the refusal to the Superior Court under the following procedures:

(1) The appeal is commenced by petitioning the court to compel filing of the entity filing and by attaching to the petition the entity filing and the explanation of the [Secretary of State] for the refusal to file.

(2) The court may summarily order the [Secretary of State] to file the entity filing or take other action the court considers appropriate.

(3) The final decision of the court may be appealed as in other civil proceedings. 24

(d) (e) The filing of or refusal to file an entity filing does not:

(1) affect the validity or invalidity of the entity filing in whole or in part;

(2) affect the correctness or incorrectness of information contained in the entity filing; or

(3) create a presumption that the entity filing is valid or invalid or that information contained in the entity filing is correct or incorrect.

Comment

1. Filing duty in general.

Under this section the Secretary of State is required to file a entity filing if it “satisfies the requirements of Section 1-201.” The purpose of this language is to limit the discretion of the Secretary of State to a ministerial role in reviewing the contents of entity filings. If the entity filing submitted is in the form prescribed and contains the information required by Section 1-201 and the applicable provision of this Act, the Secretary of State must file it. Consistently with this approach, subsection (a) states explicitly that the filing duty of the Secretary of State is ministerial and subsection (d) provides that the filing of an entity filing by the Secretary of State does not affect the validity or invalidity of any provision contained in the filing and does not create any presumption with respect to any provision. Persons adversely affected by provisions in an entity filing may test their validity in a proceeding appropriate for that purpose. Similarly, the attorney general of the state may also question the validity of provisions of entity filings filed with the Secretary of State in an independent suit brought for that purpose; in neither case should any presumption or interference be drawn about the validity of the provision from the fact that the Secretary of State accepted the entity filing for filing.

2. Mechanics of filing.

Subsection (b) provides that when the Secretary of State files an entity filing, the Secretary of State records it as filed on the date and time of delivery to the Secretary of State, retains the original record for the state’s records, and delivers a copy of the record to the entity or its representative with an acknowledgement of the date and time of filing. In the case of a record transmitted electronically, delivery may be made by electronic transmission. The copy returned will be the exact or conformed copy if one has been required by the Secretary of State, or will be a copy made by the Secretary of State if an exact of conformed copy was not required. Of course, a person desiring a certified copy of any filed record may obtain it from the office of the Secretary of State by paying the fee prescribed in Section 1-210(b).

3. Elimination of certificates and similar records.

Subsection (b) provides that acceptance of a filing is evidenced merely by the Secretary of State’s delivery of a copy of the entity filing with an acknowledgment of the date and time of filing. The Act does not provide for the Secretary of State to issue a formal certificate of filing. A copy of the filed record together with an acknowledgment of the date and time of filing should sufficiently indicate that the entity filing has been accepted for filing.

4. Rejection of document by Secretary of State.

Because of the simplification of formal filing requirements and the limited discretion granted to the Secretary of State by this Act, it is probable that rejection of entity filings will occur only rarely. Subsection (c) provides that if the Secretary of State does reject an entity filing, the Secretary of State must return it to the entity or its representative within five days together with a brief written explanation of the reason for rejection. In the case of an entity filing delivered by electronic transmission, rejection of the filing may be made electronically by the Secretary of State or by a mailing to the entity.

SECTION 1-208. EVIDENTIARY EFFECT OF COPY OF FILED DOCUMENT. A certificate from the [Secretary of State] delivered with a copy of an entity filing filed by the [Secretary of State], is conclusive evidence that the original entity filing is on file with the [Secretary of State] 25 .

Comment

This section is patterned on Revised Model Business Corporation Act section 1.27.

SECTION 1-209. CERTIFICATE OF EXISTENCE OR REGISTRATION.

(a) Any person may apply to the [Secretary of State] to furnish a certificate of existence for a domestic filing entity or a certificate of registration for a foreign filing entity.

(b) A certificate of existence or registration sets forth:

(1) the domestic filing entity’s name or the foreign filing entity’s name used in this state;

(2) that the domestic filing entity is duly formed under the law of this state, the date of its formation, and the period of its duration if less than perpetual, or that the foreign filing entity is registered to transact business in this state;

(3) that all fees, taxes, and penalties owed to this state have been paid, if

(A) payment is reflected in the records of the [Secretary of State]; and

(B) nonpayment affects the existence or registration of the domestic or foreign corporation;

(4) that its most recent [annual] [biennial] report required by Section 1-212 has been filed with the [Secretary of State];

(5) that the entity has not been dissolved; and

(6) other facts of record in the office of the [Secretary of State] that may be requested by the applicant.

(c) Subject to any qualification stated in the certificate, a certificate of existence or registration issued by the [Secretary of State] may be relied upon as conclusive evidence that the domestic filing entity is in existence or the foreign filing entity is registered to do business in this state. 26

Comment

This section is patterned on RMBCA section 1.28. In addition to substituting generic terms for the corporate specific terms used in section 1.28, this section uses the term “registration” in connection with foreign entities, rather than “authorization.” This is because this Act provides in Part 5 for “registration” of foreign entities, rather than for application for a certificate of authorization, which is the procedure under RMBCA Chapter 15.

SECTION 1-208 1-210. SIGNING CONSTITUTES AFFIRMATION. Signing an entity filing required or permitted to be made under this [act] constitutes an affirmation under the penalties of perjury that the facts stated in the filing are true in all material respects.

Comment

This section makes it a criminal offense for any person to sign a document that he knows is false in any material respect with intent that the document be submitted for filing to the secretary of state. As provided in Section 1-102, “sign” includes any manual, facsimile, conformed or electronic signature.

SECTION 1-209 1-211. DELIVERY BY [SECRETARY OF STATE]. Except as otherwise provided by Section 1-602 or by law other than this [act], the [Secretary of State] may deliver any record to a person by delivering or mailing it to the person who submitted it, to 27 the address of the person’s registered agent, to the principal office address of the person, or to another address that the person provided the [Secretary of State] for delivery.

Comment

This section recognizes the various methods by which the Secretary of State may deliver a record.

SECTION 1-210 1-212. [ANNUAL] [BIENNIAL] REPORT FOR [SECRETARY OF STATE].

(a) Each domestic filing entity and qualified foreign entity shall deliver to the [Secretary of State] for filing [an annual] [a biennial] report that sets forth:

(1) the name of the entity and the jurisdiction under whose law it is incorporated or organized;

(2) the name and address of its registered agent in this state;

(3) the address of its principal office; and

(4) the names and addresses of its governors.

(b) Information in the [annual] [biennial] report must be current as of the date the report is signed on behalf of the entity.

(c) The first [annual] [biennial] report must be delivered to the [Secretary of State] between [January 1 and March 15] 28 of the year following the calendar year in which the domestic filing entity was formed or the foreign filing entity registered to do business in this state. Subsequent [annual] [biennial] reports must be delivered to the [Secretary of State] between [January 1 and March 15] of each [second] calendar year thereafter.

(d) If [an annual] [a biennial] report does not contain the information required by this [part], the [Secretary of State] shall promptly notify the reporting domestic or qualified foreign entity in a record and return the report to it for correction.

Comment

This section is modeled on section 16.22 of the Revised Model Business Corporation Act.

[SECTION 1-211 1-213. FEES.

Alternative A

(a) The [Secretary of State] shall collect the following fees for copying and certifying the copy of any entity filing filed under this [act] 29 :

(1) $____ per page for copying; and

(2) $____ for the certificate.

(b) The [Secretary of State] shall collect the following fees when an entity filing is delivered for filing:

(1) Statement of merger, $ [ ].

(2) Statement of withdrawal of merger, $ [ ].

(3) Statement of interest exchange, $ [ ].

(4) Statement of withdrawal of interest exchange, $ [ ].

(5) Statement of conversion, $ [ ].

(6) Statement of withdrawal of conversion, $ [ ].

(7) Statement of domestication, $ [ ].

(8) Statement of withdrawal of domestication, $ [ ].

(9) [Annual] [Biennial] report, $ [ ].

(10) Articles of incorporation of a business corporation, $ [ ].

(11) Articles of incorporation of a nonprofit corporation, $ [ ].

(12) Statement of qualification of a limited liability partnership, $ [ ].

(13) Certificate of limited partnership of a limited partnership, $ [ ].

(14) Certificate of organization of a limited liability company, $ [ ].

(15) Articles of incorporation of a general cooperative association, $ [ ].

(16) Articles of organization of a limited cooperative association, $ [ ].

(17) Certificate of trust of a statutory trust entity, $ [ ].

(18) Other public organic document, $ [ ].

(19) Commercial-registered-agent listing statement, $ [ ].

(20) Commercial-registered-agent termination statement, $ [ ].

(21) Registered agent statement of change, $ [ ].

(22) Registered agent statement of resignation, no fee

(23) Statement appointing an agent for service of process, $ [ ].

(24) Foreign entity registration statement, $ [ ].

(25) Amendment of foreign entity registration statement, $ [ ].

(26) Notice of cancellation of foreign entity registration statement, $ [ ].

[( 27)] [other entity filings, $ [ ]. ]

(c) The withdrawal of an entity filing before effectiveness under section 1-205 or the correction of an entity filing under section 1-206 shall not result in a refund of previously paid filing fees. 30

Alternative B

The [Secretary of State] shall adopt rules, in accordance with [the state’s administrative procedure act] setting fees for statements for entity filings authorized to be delivered for filing in the office of the [Secretary of State] under this [act] and for copying and certifying a copy of any entity filing under this [act].]

End of Alternatives

Legislative Note: If this state includes fees of this kind in a general statute, add these fees to that statute and omit this section. If this state sets fees of this kind by administrative rule, select Alternative B.

Comment

This section establishes the filing fees for all documents that may be filed under the Act. The dollar amounts for each document should be inserted by each state as it adopts the Act.

Subsection (b) establishes standard fees for copying filed documents and certifying that the copies are true copies. The dollar amounts for these services should be conformed to the fees charged for similar services under other provisions of law.

[PART] 3

NAME OF ENTITY

SECTION 1-301. PERMITTED NAMES.

(a) Except as otherwise provided in subsection (b), the name of a domestic filing entity, and the name under which a foreign filing entity may register to do business in this state must be distinguishable on the records of the [Secretary of State] from any:

(1) name of another domestic filing entity or limited liability partnership 31 ;

(2) name of a foreign filing entity or foreign limited liability partnership that is registered to do business in this state under [Part] 5;

(3) name that is reserved under Section 1-302;

(4) name that is registered under Section 1-303; and

(5) assumed name registered under [this state’s assumed name statute].

(b) Subsection (a) does not apply if the other entity or the person for which the name is reserved or registered, as appropriate, consents in a record to the use of the name and submits an undertaking in a form satisfactory to the [Secretary of State] to change its name to a name that is distinguishable on the records of the [Secretary of State] from the any name for which the application was made in any of the categories of names in subsection (a). 32

(c) Except as otherwise provided in subsection (d), in determining whether a name is the same as or not distinguishable on the records of the [Secretary of State] from the name of another entity, words, phrases, or abbreviations indicating the type of entity, such as “corporation”, “corp.”, “incorporated”, “Inc.”, “professional corporation”, “PC”, “Limited”, “Ltd.”, “limited partnership”, “limited liability partnership”, “LLP”, “registered limited liability partnership”, “RLLP”, “limited liability limited partnership”, “LLLP”, “registered limited liability limited partnership”, “RLLLP”, “limited liability company”, or “LLC”, may not be taken into account. 33

(d) The holder of a name under subsection (a) may consent in a record to the use of a name that is not distinguishable on the records of the [Secretary of State] from its name except for the addition of a word, phrase, or abbreviation indicating the type of entity described in subsection (c). In such a case, the holder need not change its own name pursuant to subsection (b).

(e) An entity name may not contain the words [insert prohibited words] “bank”, “banking”, “credit union”, “insurance”, or words of similar import, without the prior approval of the [appropriate state officer].

(f) An entity name may not:

(1) misrepresent the type of entity;

(2) misrepresent an affiliation with a government or governmental entity, whether state, regional, local, federal, or foreign;

(3) misrepresent the geographic location of the entity; or

(4) contain language that is obscene or scandalous. 34

Legislative Note: Add specific words that this state does not permit an entity to use as part of its name, such as “bank”, “banking”, “credit union”, “insurance”, or words of similar import, without approval by the appropriate state agency.

Comment

This section adopts the “distinguishable on the records” test for availability of an entity name and rejects the “deceptively similar” test widely used in the past.. The section is patterned on Revised Model Business Corporation Act section 4.01.

SECTION 1-302. TYPES OF ENTITIES; NAME REQUIREMENTS. 35

(a) The name of a corporation or foreign corporation must contain: the word "corporation," "incorporated," “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.,” or words or abbreviations of like import in another language.

(b) The name of a limited partnership:

(1) may contain the name of any partner.

(2) if the limited partnership is not a limited liability limited partnership must contain the phrase “limited partnership” or the abbreviation “L.P.”or “LP” and may not contain the phrase “limited liability limited partnership” or the abbreviation “LLLP” or “L.L.L.P.”.

(3) if the limited partnership is a limited liability limited partnership must contain the phrase “limited liability limited partnership” or the abbreviation “LLLP” or “L.L.L.P.” and must not contain the abbreviation “L.P.”or “LP.”

(c) The name of a limited liability company must contain the words “limited liability company” or “limited company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”. “Limited” may be abbreviated as “Ltd.”, and “company” may be abbreviated as “Co.”.

(d) The name of a limited liability partnership must end with “Registered Limited Liability Partnership,” “R.L.L.P.,” “L.L.P.,” “RLLP,” or “LLP.”

(e) The name of a statutory trust set forth in its certificate of trust may contain the words: “company”, “association”, “club”, “foundation”, “fund”, “institute”, “society”, “union”, “syndicate”, “limited”, or “trust”, or words or abbreviations of similar import, and may contain the name of a beneficial owner, a trustee, or any other person.

(f) The name of a limited cooperative association must contain the words “limited cooperative association” or “limited cooperative” or the abbreviation “L.C.A.” or “LCA”. “Limited” may be abbreviated as “Ltd.”. “Cooperative” may be abbreviated as “Co-op” or “Coop”. “Association” may be abbreviated as “Assoc.” or “Assn.”.

Comment

1. Corporations.

Subsection (a) is drawn from Model Business Corporation Act, section 4.01(a). Note that section 401 of the Revised Model NonProfit Corporation Act, the “Names” provision of that Act, does not have a parallel “corporateness” language requirement. (This is true of the Second Edition as well as the new Third Edition.)

2. Limited Partnerships.

Subsection (b)(1)) is drawn from Uniform Limited Partnership Act (2001), section 108(a)-(c). Predecessor law, Revised Uniform Limited Partnership Act (RULPA) (1985) Section 102, prohibited the use of a limited partner’s name in the name of a limited partnership except in unusual circumstances. That approach derived from the 1916 Uniform Limited Partnership Act and has become antiquated. In 1916, most business organizations were either unshielded (e.g., general partnerships) or partially shielded (e.g., limited partnerships), and it was reasonable for third parties to believe that an individual whose own name appeared in the name of a business would “stand behind” the business. Today most businesses have a full shield (e.g., corporations, limited liability companies, most limited liability partnerships), and corporate, LLC and LLP statutes generally pose no barrier to the use of an owner’s name in the name of the entity. This Code eliminates the restriction of RULPA(1985) restriction and puts limited partnerships on equal footing with these other “shielded” entities.

3. Limited Liability Companies.

Subsection (c) is drawn from Revised Uniform Limited Liability Company Act (2006), section 108(a).

4. Limited Liability Partnerships.

This section is drawn from Uniform Partnership Act (1997) (RUPA), section 1002.

5. Statutory Trust Entities.

This section is drawn from the 2008 Draft of the Uniform Statutory Trust Act, section 207(b). The drafting committee comments indicate that it considered, but opted not to require, a traditional limited liability appellation. Such a requirement would be inconsistent with current practice under the Delaware Act. For example, the names of mutual funds typically do not contain a limited liability appellation, though Section 35(d) of the Investment Company Act of 1940, which is applicable to a statutory trust that is a registered investment company, prohibits “materially deceptive or misleading” names. 15 U.S.C. §80a-34(d). See also Rule 35d-1, 17 C.F.R. §270.35d-1 (listing types of names that have been deemed “materially deceptive or misleading”).

6. Limited Cooperative Associations.

This section is drawn from section 109(b) of the 2007 Final Draft of the Uniform Limited Cooperative Association Act.

SECTION 1-302. 1-303 RESERVATION OF NAME.

(a) A person may reserve the exclusive use of an entity name by delivering an application to the [Secretary of State] for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the [Secretary of State] finds that the entity name applied for is available, the [Secretary of State] shall reserve the name for the applicant’s exclusive use for a [120-day] period.

(b) The owner of a reserved entity name may transfer the reservation to another person by delivering to the [Secretary of State] a signed notice in a record of the transfer that states the name and address of the transferee.

Comment

This section is patterned on Model Business Corporation Act section 4.02. It should be noted that the Texas Business Organizations Code, section 5.105, unlike the Model Business Corporation Act provision, allows renewal of reservation of names for successive 120 day periods, by filing an application for renewal during the 30 day period preceding expiration of the reservation.

SECTION 1-303 1-304. REGISTRATION OF NAME.

(a) A foreign filing entity or foreign limited liability partnership not registered to do business in this state under [Part] 5 may register its name, or an alternate name required by Section 1-506, if the name is distinguishable upon the records of the [Secretary of State] from the names that are not available under Section 1-301.

(b) To register its name or an alternate name required by Section 1-506, a foreign filing entity or foreign limited liability partnership must deliver to the [Secretary of State] for filing an application setting forth its name, or its name with any addition required by Section 1-506 and the state or country and date of its formation. If the [Secretary of State] finds that the name applied for is available, the [Secretary of State] shall register the name for the applicant’s exclusive use.

(c) The registration of a name under this section is effective for one year after the last day of the month in which the application was filed date of filing 36 .

(d) A foreign entity whose name registration is effective may renew the registration for successive one-year periods by delivering, not earlier than [three months] 37 before the expiration of the registration year, to the [Secretary of State] for filing a renewal application that complies with this section. When filed, the renewal application renews the registration for a succeeding one-year period.

(e) A foreign entity whose name registration is effective may register as a foreign filing entity or foreign registered limited liability partnership under the registered name or consent in a signed record to the use of that name by a domestic filing entity or registered limited liability partnership formed under this [act] or by another foreign filing entity or foreign limited liability partnership authorized to do business in this state 38 .

Comment

This section is patterned on section 4.03 of the Revised Model Business Corporation Act. 39

[PART] 4

REGISTERED AGENT

SECTION 1-401. DEFINITIONS. In this [part]:

(1) “Appointment of agent” means a statement appointing an agent for service of process filed by a nonqualified foreign entity or domestic nonfiling entity under Section 1-411.

(2) “Commercial registered agent” means an individual listed under Section 1-405.

(3) “Noncommercial registered agent” means a person that is not listed as a commercial registered agent under Section 1-405 and is:

(A) an individual or domestic or foreign entity that serves in this state as the agent for service of process of an entity; or

(B) an individual who holds the office or other position in an entity that is designated as the agent for service of process pursuant to Section 1-404(a)(2)(B).

(4) “Nonqualified foreign entity” means a foreign entity that is not a qualified foreign entity.

(5) “Nonresident limited liability partnership statement” means:

(A) a statement of qualification of a domestic limited liability partnership that does not have an office in this state; or

(B) a statement of foreign qualification of a foreign limited liability partnership that does not have an office in this state.

(6) “Registered agent filing” means:

(A) the public organic record of a domestic filing entity;

(B) a nonresident limited liability partnership statement;

(C) a registration statement filed pursuant to Section 1-503; or

(D) an appointment of a registered agent.

(7) “Represented entity” means:

(A) a domestic filing entity;

(B) a domestic or qualified foreign limited liability partnership that does not have an office in this state;

(C) a qualified foreign entity;

(D) a domestic or foreign unincorporated nonprofit association for which an appointment of an agent has been filed;

(E) a domestic nonfiling entity for which an appointment of an agent has been filed; or

(F) a nonqualified foreign entity for which an appointment of an agent has been filed.

Comment

“Appointment of agent.” [(1)] – An appointment of agent is an optional filing that may be made by an entity that does not otherwise make a public filing in the state naming an agent for service of process. If a state has not enacted the Uniform Unincorporated Nonprofit Association Act, paragraph (A) of this definition should be omitted.

“Commercial registered agent.” [(2)] – A commercial registered agent is an individual or entity that is in the business of serving as a registered agent in the state and that files a listing statement under Section 1-404. Being listed as a commercial registered agent is voluntary and persons serving as registered agents are not required to be listed under Section 1-405. The benefits to the registered agent of being listed under Section 1-405, however, are substantial and most registered agents will elect to be so listed. Although this definition and Section 1-405 do not expressly require that a foreign entity that is listed as a commercial registered agent be qualified to do business in the state, the activity of serving as a registered agent is one that requires such registration.

“Noncommercial registered agent.” [(3)] – A noncommercial registered agent is a person that serves as an agent for service of process but that is not listed under Section 1-405. All agents for service of process that are not commercial registered agents are noncommercial registered agents.

This definition is patterned after Model Registered Agents Act § 2(13) (“noncommercial registered agent”).

“Nonqualified foreign entity.” [(4)] – A nonqualified foreign entity is a foreign entity which has not registered with the [Secretary of State] to do business in this state.

This definition is patterned after Model Entity Transactions Act § 102(26) “nonqualified foreign entity”). See also Model Registered Agents Act § 2(14) (“nonqualified foreign entity”).

“Nonresident limited liability partnership statement.” [(5)] – A nonresident limited liability partnership statement is the filing that is made by a limited liability partnership under Section 1001 of the Uniform Partnership Act (1997).

This definition is patterned after Model Registered Agents Act § 2(15) (“nonresident limited liability partnership statement”).

“Registered agent filing.” [(6)]– Some states require that filings in addition to those listed in this definition, such as articles of amendment or articles of merger, state the registered agent information of the entity making the filing. In states where that is the case, this definition should be amended to add the following additional provision:

“(E) any other filing with the [Secretary of State] under an entity’s organic law that must include the information required by Section 1-404(a).”

“Represented entity.” [(7)]– This definition lists the various classes of entities for which registered agents act as agents for service of process.

SECTION 1-402. ENTITIES REQUIRED TO DESIGNATE AND MAINTAIN REGISTERED AGENT. Each domestic registered limited liability partnership, domestic filing entity, or qualified foreign entity, or domestic registered limited liability partnership that does not maintain a place of business in this state shall designate and continuously maintain a registered agent in this state. 40

Comment

This section is derived from Texas Business Organizations Code Section 5.201(a). A similar provision appears in the Draft Alabama Business and Nonprofit Entity Code as Section 10A-1-5.31. The Model Registered Agents Act, from which this [Part] of this Act is largely drawn, does not contain a provision mandating which entities must designate a registered agent, leaving that to the specific entity statutes. The Texas statute and the Alabama Draft attempt to do that in the “Hub”. This would ultimately entail deletions in the respective entity statutes.

Like the Texas statute, this section covers domestic and qualified foreign filing entities. It also covers, as does the Alabama Draft, registered limited liability partnerships in the circumstances in which RLLPs are required to maintain an agent for service of process under Uniform Partnership Act (2001) Section 1001 (c)(3) (domestic RLLP) or Section 1102(a)(3) (foreign RLLP), even though those sections do not use the term “registered agent.”

Notice that the Model Registered Agent does provide for elective designation of a registered agent by domestic nonfiling entities and by nonqualifed foreign entities. Model Registered Agent Act Section. 12. Those provisions have been imported into this Act as Section 1-410, below.

SECTION 1-403. ADDRESSES IN FILINGS. If a provision of this [act] other than Section 1-410(a)(4) requires that a filing state an address, the filing must state:

(1) a street address in this state; and

(2) a mailing address in this state, if different from the address described in paragraph (1).

Comment

When this Act requires that a filing state an address, the address used must always be a geographic location. Where a person uses a post office box as its mailing address, paragraph (2) requires that the post office box address also be stated.

This section, and the accompanying Comment, is derived from Model Registered Agent Act Section 4.

SECTION 1-404. APPOINTMENT OF REGISTERED AGENT.

(a) A registered agent filing must state:

(1) the name of the represented entity’s commercial registered agent; or

(2) if the entity does not have a commercial registered agent:

(A) the name and address of the entity’s noncommercial registered agent; or

(B) the title of an office or other position with the entity if service of process is to be sent to the person holding that office or position, and the address of the business office of that person.

(b) The appointment of a registered agent pursuant to subsection (a)(1) or (2)(A) is an affirmation by the represented entity that the agent has consented to serve.

[(c) The [Secretary of State] shall make available in a record as soon as practicable a daily list of filings that contain the name of a registered agent. The list must:

(1) be available for at least 14 calendar days;

(2) list in alphabetical order the names of the registered agents; and

(3) state the type of filing and name of the represented entity making the filing.]

Legislative Note: Subsection (c) may be omitted if (i) the records of the Secretary of State or equivalent officer are searchable electronically in a manner that permits filings to be identified by the date of the filing and by the name of the registered agent named in the filing, and (ii) the searchable database is updated frequently.

Comment

Subsection (a)(1) gives an entity the option of listing just the name of its commercial registered agent in a registered agent filing and omitting the address of the registered agent. If the commercial registered agent subsequently changes its address, that change will be reflected in the filing made by the agent under Section 1-404, as amended under Section 1-408, but no change will be necessary in the registered agent filing of any of the entities represented by the commercial registered agent. The address of an entity’s commercial registered agent may be ascertained from the records of the Secretary of State by consulting its listing under Section 1-404.

The address of an entity’s noncommercial registered agent is usually not a business address of the represented entity. On the other hand, subsection 1-403(a)(2)(B) permits an entity to designate a person within the organization, such as its general counsel, to serve as its registered agent; and in that circumstance the address of the registered agent may very well be a business address of the represented entity.

The addresses required by subsection (a) to be stated in a registered agent filing must satisfy the requirements in Section 1-402.

Subsection (b) avoids the need to include with a registered agent filing a consent of the registered agent to serve as such.

Subsection (c) creates a procedure that will permit registered agents to determine if they have been named in filings of which they were not aware by periodically consulting the list prepared by the Secretary of State. Subsection (c) requires the registered agents to be listed in alphabetical order to facilitate the use of the list by registered agents and also to indicate the type of filing (e.g., articles of incorporation, certificates of limited partnership, appointments of agents under Section 1-410 of this Act, etc.) in which each registered agent is named. Subsection (c) will not be necessary under the circumstances described in the Legislative Note because registered agents may consult the regular database maintained by the Secretary of State to verify when they have been named as a registered agent.

Subsection (a) is a generalization of Section 5.01 of the Model Business Corporation Act, Section 114 of the Uniform Limited Partnership Act, and Section 108 of the Uniform Limited Liability Company Act.

This section and the accompanying Comment is derived from Section 5 of the Model Registered Agents Act.

SECTION 1-405. LISTING OF COMMERCIAL REGISTERED AGENT.

(a) An individual or entity may become listed as a commercial registered agent by filing with the [Secretary of State] a commercial-registered-agent listing statement signed by or on behalf of the individual or entity which states:

(1) the name of the individual or the name, type, and jurisdiction of organization of the entity;

(2) that the individual or entity is in the business of serving as a commercial registered agent in this state; and

(3) the address of a place of business of the individual or entity in this state to which service of process and other notice and documents being served on or sent to entities represented by the individual or entity may be delivered.

(b) A commercial-registered-agent listing statement may include the information regarding acceptance of service of process in a form other than a written record by the agent as provided for in Section 1-412(d).

(c) If the name of an individual or entity filing a commercial-registered-agent listing statement is not distinguishable on the records of the [Secretary of State] from the name of another commercial registered agent listed under this section, the person shall adopt a fictitious name that is distinguishable and use that name in its statement and when it does business in this state as a commercial registered agent.

(d) A listing statement takes effect on filing by the [Secretary of State].

(e) The [Secretary of State] shall note the filing of the commercial-registered-agent listing statement in the index of filings maintained by the [Secretary of State] for each entity represented by the agent at the time of the filing. The statement has the effect of deleting the address of the agent from the filing of each of those entities.

Legislative Note: If the Secretary of State or equivalent officer is not able to identify from the records maintained by the Secretary of State or equivalent officer all of the entities represented by a registered agent, subsection (e) should be amended to read:

“(e) The commercial registered agent listing statement must be accompanied by a list in alphabetical order of the entities represented by the person. The [Secretary of State] shall note the filing of the commercial registered agent listing statement in the index of filings maintained by the [Secretary of State] for each listed entity. The statement has the effect of deleting the address of the registered agent from the registered agent filing of each of those entities.”

Comment

This section is a substantial simplification of practice because it removes the need to amend the filed record of every entity represented by a commercial registered agent when the agent changes its address.

Subsection (a)(3) only permits a commercial registered agent to list one address where service of process and other notices may be sent to entities represented by the agent. This may require a change in practice for registered agents who have previously maintained more than one address in a state and have permitted represented entities to choose which address they would use in their registered agent filings. A corporation, for example, located in one part of a state might include in its articles of incorporation an address for its registered agent which is the address of an office of the agent located close to the corporation and which is different than the address used by a corporation in another part of the state which has the same registered agent but uses a different office of the agent. In the example given, the registered agent will need to pick just one address in the state where all service of process will be sent to it. If a commercial registered agent wishes to maintain more than one office in a state where service of process will be received by it, it can accomplish that result by organizing separate entities to conduct its business in the state and filing separate statements for each entity under this section.

The address required by subsection (a)(3) to be stated in a commercial registered agent listing statement must satisfy the requirements in Section 1-402 above. .

Subsection (e) is a transitional provision that deals with the effect on the entities represented by a registered agent at the time the agent is first listed under this section. The effect is to amend the registered agent filing of each such entity to delete the address of the registered agent consistent with Section 1-403(a)(1).

This section is drawn from Section 6 of the Model Registered Agents Act, which in turn is patterned generally after 15 Pa. Consol. Stat. § 109.

Comment

This section provides a procedure for a commercial registered agent to withdraw from the business of providing registered agent services. Use of the procedure in this section will terminate the status of the registered agent as the agent for service of process of all the entities represented by the agent. Thus, the procedure in this section differs from the procedure in Section 1-409, which permits a registered agent to resign with respect to just a single represented entity instead of resigning generally with respect to all of its represented entities.

This section and its accompanying comment is derived from Section 7 of the Model Registered Agents Act.

SECTION 1-406. TERMINATION OF LISTING OF COMMERCIAL REGISTERED AGENT.

(a) A commercial registered agent may terminate its listing as a commercial registered agent by delivering to the [Secretary of State] for filing a commercial-registered-agent termination statement signed by or on behalf of the agent which states:

(1) the name of the agent as currently listed under Section 1-405; and

(2) that the agent is no longer in the business of serving as a commercial registered agent in this state.

(b) A commercial registered agent termination statement takes effect at 12:01 am on the 31st day after the day on which it is filed.

(c) The commercial registered agent promptly shall furnish each entity represented by the agent with notice in a record of the filing of the commercial-registered-agent termination statement.

(d) When a commercial-registered-agent termination statement takes effect, the commercial registered agent ceases to be an agent for service of process on each entity formerly represented by it. Until an entity formerly represented by a terminated commercial registered agent appoints a new registered agent, service of process may be made on the entity pursuant to Section 1-412. Termination of the listing of a commercial registered agent under this section does not affect any contractual rights a represented entity has against the agent or that the agent has against the entity.

Comment

This section provides a procedure for a commercial registered agent to withdraw from the business of providing registered agent services. Use of the procedure in this section will terminate the status of the registered agent as the agent for service of process of all the entities represented by the agent. Thus, the procedure in this section differs from the procedure in Section 1-409, which permits a registered agent to resign with respect to just a single represented entity instead of resigning generally with respect to all of its represented entities.

This section and its accompanying comment is derived from Section 7 of the Model Registered Agents Act.

SECTION 1-407. CHANGE OF REGISTERED AGENT BY ENTITY.

(a) A represented entity may change the information on file under Section 1-404(a) by delivering to the [Secretary of State] for filing a statement of change signed on behalf of the entity which states:

(1) the name of the entity; and

(2) the information that is to be in effect as a result of the filing of the statement of change.

(b) The interest holders or governors of a domestic entity need not approve the filing of:

(1) a statement of change under this section; or

(2) a similar filing changing the registered agent or registered office of the entity in any other jurisdiction.

(c) The appointment of a registered agent pursuant to subsection (a) is an affirmation by the represented entity that the agent has consented to serve.

(d) A statement of change under this section takes effect on delivery to the [Secretary of State] for filing.

(e) As an alternative to using the procedures in this section, a represented entity may change the information on file under Section 1-404(a) by amending its most recent registered agent filing in the manner provided by the laws of this state other than this [act] for amending that filing.

Comment

Changes of the registered agent or the office address of a registered agent are usually routine matters that do not affect the rights of the interest holders of the represented entity. This section permits those changes to be made without a formal amendment of an entity’s public organic document, without approval of its interest holders, and, indeed, even without formal approval by its governors (i.e., the persons managing the entity’s affairs, such as the board of directors of a corporation).

Subsection (c) avoids the need to file with a statement of change a consent of the new registered agent being designated.

Subsection (e) makes clear that the procedures in this section are not exclusive. A common way in which an entity changes its registered agent or registered office is to include the change in an amendment of its public organic document.

Subsection (a) is a generalization of Section 5.02(a) of the Model Business Corporation Act, Section 115 of the Uniform Limited Partnership Act, and Section 109 of the Uniform Limited Liability Company Act. As to subsection (c), compare Section 5.02(a)(5) of the Model Business Corporation Act. Subsection (d) is patterned after Section 115(b) of the Uniform Limited Partnership Act.

This section, and the accompanying comment, is derived from Section 8 of the Model Registered Agents Act.

SECTION 1-408. CHANGE OF NAME OR ADDRESS BY NONCOMMERCIAL REGISTERED AGENT.

(a) If a noncommercial registered agent changes its name or its address as currently in effect with respect to a represented entity pursuant to Section 1-404(a), the agent shall deliver to the [Secretary of State] for filing, with respect to each entity represented by the agent, a statement of change signed by or on behalf of the agent which states:

(1) the name of the entity;

(2) the name and address of the agent;

(3) if the name of the agent has changed, its new name; and

(4) if the address of the agent has changed, the new address.

(b) A statement of change under this section takes effect on delivery to the [Secretary of State] for filing.

(c) A noncommercial registered agent shall promptly furnish the represented entity with notice in a record of the filing of a statement of change and the changes made by the filing.

Comment

This section permits a noncommercial registered agent to change the name and address of the agent that appears in the registered agent filing of an entity represented by the agent. Because the noncommercial registered agent is not listed under Section 1-404, the agent will not be able to use the procedures in Section 338 which permit commercial registered agents to make only one filing to change their name and address for all entities represented by them. Thus the noncommercial registered agent will need to make a filing under this section for each entity represented by the agent.

An address included in a statement of change must satisfy the requirements in Section 1-402.

This section is derived from Model Registered Agent Act section 9, which in turn is patterned after 15 Pa Consol. Stat. § 108.

SECTION 1-409. CHANGE OF NAME, ADDRESS, OR TYPE OF ORGANIZATION BY COMMERCIAL REGISTERED AGENT.

(a) If a commercial registered agent changes its name, its address as listed under Section 1-405(a), or its type or jurisdiction of organization, the agent shall deliver to the [Secretary of State] for filing a statement of change signed by or on behalf of the agent which states:

(1) the name of the agent as listed under Section 1-405(a);

(2) if the name of the agent has changed, its new name;

(3) if the address of the agent has changed, the new address; and

(4) if the type or jurisdiction of organization of the agent has changed, the new type or jurisdiction of organization.

(b) A commercial registered agent’s filing of a statement of change under subsection (a) is effective to change the information regarding the agent with respect to each entity represented by the agent.

(c) A statement of change under this section takes effect on delivery to the [Secretary of State] for filing.

(d) A commercial registered agent promptly shall furnish each entity represented by it notice in a record of the filing of a statement of change relating to the name or address of the agent and the changes made by the filing.

(e) If a commercial registered agent changes its address without filing a statement of change as required by this section, the [Secretary of State] may cancel the listing of the agent under Section 1-405. A cancellation under this subsection has the same effect as a termination under Section 1-406. Promptly after canceling the listing of an agent, the [Secretary of State] shall serve notice in a record in the manner provided in Section 1-412(b) or (c) on:

(1) each entity represented by the agent, stating that the agent has ceased to be an agent for service of process on the entity and that, until the entity appoints a new registered agent, service of process may be made on the entity as provided in Section 1-412; and

(2) the agent, stating that the listing of the agent has been canceled under this section.

Comment

This section permits a commercial registered agent to make a single filing that has the effect of changing the name or address of the agent for all of the entities represented by it.

An address included in a statement of change must satisfy the requirements in Section 1-402.

Subsection (e) provides a procedure by which the Secretary of State may cancel the listing of a commercial registered agent when the Secretary of State learns that the agent has changed its address without amending its listing as a commercial registered agent. When the Secretary of State acts to cancel the listing of a commercial registered agent, the Secretary of State is required to notify both (i) the entities represented by the agent that they no longer have a valid registered agent and (ii) the agent that it no longer is listed as a commercial registered agent. Unlike in the case of a resignation under Section 11 which is initiated by the registered agent and thus does not require a notice from the Secretary of State to the agent, notice by the Secretary of State to the agent is needed under this section so that the agent has notice that its representation of the entities it previously represented has terminated under Section 335.

This section is derived from section 10 of the Model Registered Agents Act, which in turn is patterned after 15 Pa.Consol. Stat. § 109(b).

SECTION 1-410. RESIGNATION OF REGISTERED AGENT.

(a) A registered agent may resign as agent for a represented entity by delivering to the [Secretary of State] for filing a statement of resignation signed by or on behalf of the agent which states:

(1) the name of the entity;

(2) the name of the agent;

(3) that the agent resigns from serving as agent for service of process for the entity; and

(4) the name and address of the person to which the agent will send the notice required by subsection (c).

(b) A statement of resignation takes effect on the earlier of the 31st day after the day on which it is filed or the appointment of a new registered agent for the represented entity.

(c) A registered agent promptly shall furnish the represented entity notice in a record of the date on which a statement of resignation was filed.

(d) When a statement of resignation takes effect, the registered agent ceases to have responsibility for any matter tendered to it as agent for the represented entity. The resignation does not affect any contractual rights the entity has against the agent or that the agent has against the entity.

(e) A registered agent may resign with respect to a represented entity whether or not the entity is in good standing.

Comment

Resignation under this section may be accomplished solely by action of the registered agent and does not require the cooperation or consent of the represented entity. Whether a resignation violates a contract between the registered agent and the represented entity is beyond the scope of this Act and subsection (d) preserves whatever claims a represented entity may have against its registered agent for a wrongful termination. Even if a resignation were to violate such a contract, the resignation would still be effective if the provisions of this section are followed.

Resignation under this section relates only to the entity named in the statement of resignation. Thus, the procedure in this section differs from the procedure in Section 1-405 which terminates the status of the agent as agent for all of the entities represented by it.

The requirements of Section 1-402 with respect to addresses do not apply to subsection (a)(4) because the registered agent may not have all the required information available.

Subsection (b) delays the effectiveness of a statement of resignation for 31 days to allow the notice of the resignation that must be sent under subsection (c) to reach the represented entity and to allow the represented entity to arrange for a substitute registered agent.

Subsection (e) makes clear that a registered agent may resign with respect to an entity that is not in good standing and supersedes the contrary administrative practice in some states of refusing to accept any filings with respect to an entity that is not in good standing until the problem with the entity’s standing is cured.

Subsection (a) is a generalization of Section 5.03(a) of the Model Business Corporation Act, Section 116(a) of the Uniform Limited Partnership Act, and Section 110(a) of the Uniform Limited Liability Company Act. Subsection (b) is a generalization of Section 5.03(c) of the Model Business Corporation Act, Section 116(c) of the Uniform Limited Partnership Act, and Section 110(c) of the Uniform Limited Liability Company Act. Subsection (c) is derived from Section 5.03(b) of the Model Business Corporation Act, Section 116(b) of the Uniform Limited Partnership Act, and Section 110(b) of the Uniform Limited Liability Company Act, except that notice under this Act is to be given by the resigning registered agent rather than the Secretary of State.

This section and the accompanying comment are derived from section 11 of the Model Registered Agents Act.

SECTION 1-411. APPOINTMENT OF REGISTERED AGENT BY NONQUALIFIED FOREIGN ENTITY OR NONFILING DOMESTIC ENTITY.

(a) A nonqualified foreign entity or a domestic nonfiling entity may deliver to the [Secretary of State] for filing a statement appointing an agent for service of process signed on behalf of the entity which states:

(1) the name, type, and jurisdiction of organization of the entity; and

(2) the information required by Section 1-404(a).

(b) A statement appointing an agent for service of process takes effect on filing by the [Secretary of State] and is effective for five years after the date of filing unless canceled earlier.

(c) Appointment of a registered agent under this section does not qualify a nonqualified foreign entity to do business in this state and is not sufficient alone to create personal jurisdiction over the nonqualified foreign entity in this state.

(d) A statement appointing an agent for service of process may not be rejected for filing because the name of the entity filing the statement is not distinguishable on the records of the [Secretary of State] from the name of another entity appearing in those records. The filing of such a statement does not make the name of the entity filing the statement unavailable for use by another entity.

(e) An entity that has filed a statement appointing an agent for service of process may cancel the statement by delivering to the [Secretary of State] for filing a statement of cancellation that states the name of the entity and that the entity is canceling its appointment of an agent for service of process in this state. The statement takes effect on filing by the [Secretary of State].

(f) A statement appointing an agent for service of process for a nonqualified foreign entity terminates on the date the entity becomes a qualified foreign entity.

Comment

Filing under this section is elective, and no inference should be drawn from the failure of an entity to make such a filing.

This section and the accompanying comment are drawn from Section 12 of the Model Registered Agents Act. Subsection (a), in turn, is patterned after Section 10 of the Uniform Unincorporated Nonprofit Association Act.

SECTION 1-412. SERVICE OF PROCESS ON ENTITY.

(a) A registered agent is an agent of the represented entity authorized to receive service of any process, notice, or demand required or permitted by law to be served on the entity.

(b) If an entity that previously filed a registered agent filing with the [Secretary of State] no longer has a registered agent, or if its registered agent cannot with reasonable diligence be served, the entity may be served by registered or certified mail, return receipt requested, addressed to the governors of the entity by name at its principal office in accordance with any applicable judicial rules and procedures. The names of the governors and the address of the principal office may be as shown in the most recent [annual] [biennial] report filed with the [Secretary of State]. Service is perfected under this subsection on the earliest of:

(1) the date the entity receives the mail;

(2) the date shown on the return receipt, if signed on behalf of the entity; or

(3) five days after its deposit with the United States Postal Service, if correctly addressed and with sufficient postage.

(c) If process, notice, or demand cannot be served on an entity pursuant to subsection (a) or (b), service of process may be made by handing a copy to the manager, clerk, or other individual in charge of any regular place of business or activity of the entity if the individual served is not a plaintiff in the action.

(d) Service of process, notice, or demand on a registered agent must be written record, except that service may be made on a commercial registered agent in other forms, and subject to such requirements, as the agent has stated in its listing under Section 1-405 that it will accept.

(e) Service of process, notice, or demand may be perfected by any other means permitted by law other than this [act].

Comment

Subsection (c) provides a means for serving process on an entity that cannot be served under subsection (a) or (b). Some entity organic laws require that service of process in that circumstance be made on the Secretary of State, but that leaves unanswered the question of what the Secretary of State should do with the process. Subsection (c) is patterned after Pa. R.Civ.Proc. 423(3) and 424(2). A similar approach is taken by Fed. R.Civ.Proc. 4(h)(1).

Subsections (a) and (d) are a generalization of Section 5.04(a) and (c) of the Model Business Corporation Act, Section 117(a) and (f) of the Uniform Limited Partnership Act, and Section 111(a) and (e) of the Uniform Limited Liability Company Act. Subsection (b) is a generalization of Section 5.04(b) of the Model Business Corporation Act.

This section is derived from Section 13 of the Model Registered Agents Act.

SECTION 1-413. DUTIES OF REGISTERED AGENT. The duties of a registered agent are:

(1) to forward to the represented entity at the address most recently supplied to the agent by the entity any process, notice, or demand that is served on the agent;

(2) to provide the notices required by this [act] to the entity at the address most recently supplied to the agent by the entity;

(3) if the agent is a noncommercial registered agent, to keep current the information required by Section 1-404(a) in the most recent registered agent filing for the entity; and

(4) if the agent is a commercial registered agent, to keep current the information listed for it under Section 1-405(a).

Comment

This section is limited to prescribing the duties of a registered agent under this Act. An agent may undertake other responsibilities to a represented entity, such as by contract or course of dealing, but those duties will be determined under other law.

The Delaware General Corporation Law has been amended to add a new Section 132(b)(1), 8 Del. Code § 132(b)(1), requiring a registered agent to be generally available in the state to accept service of process. It was not considered necessary to include that provision in the Act because Section 341 provides alternative means of serving process if a registered agent cannot with reasonable diligence be served.

The Delaware General Corporation has also been amended to require a represented corporation to notify its registered agent when the corporation changes its business address and to permit a registered agent to resign if it is not supplied with current contact information. 8 Del. Code § 132(d). Section 339 of the Act provides registered agents with a broader right to resign than is available under the Delaware amendment.

This section is derived from Section 14 of the Model Registered Agents Act.

SECTION 1-414. JURISDICTION AND VENUE. The appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state. The address of the agent does not determine venue in an action or proceeding involving the entity.

Comment

As discussed in the Introduction to the Act, one of the purposes of the Act is to eliminate the registered office address as a means of determining where venue is to be laid in an action involving a represented entity. Consistent with that purpose, this section makes clear that the address of a registered agent does not determine venue. This section may be inconsistent with other law or procedural rules in a state, and thus existing law on venue should be reviewed when this Act is considered for adoption in a state. Compare Cooper v. Chevron U.S.A., Inc., 132 N.M. 382, 49 P.3d 61 (N.M. 2002) (applying New Mexico statute permitting venue “in the county where the statutory agent designated by the foreign corporation resides”).

This section is drawn from Section 15 of the Model Registered Agents Act.

[PART] 5

FOREIGN ENTITIES

SECTION 1-501. GOVERNING LAW.

(a) The law of the state or other jurisdiction in which a foreign entity is a domestic entity governs:

(1) the internal affairs of the entity; and

(2) the liability of an interest holder as interest holder and governor as governor for the liabilities of the entity.

(b) A foreign entity is not precluded from registering to do business in this state because of any difference between the laws of the jurisdiction under which the entity is formed and the laws of this state.

(c) Registration of a foreign entity to do business in this state does not authorize it to engage in any activity or exercise any power that a domestic entity of the same type may not engage in or exercise in this state.

Comment

This section is a generalized version of Uniform Limited Partnership Act (2001) Section 901, Revised Uniform Limited Liability Company Act Section 801, Uniform Limited Cooperative Association Act (2007 Draft), Section 1301, and Uniform Statutory Trust Act (2006 Draft), Section 701. The Model Business Corporation Act and the Model NonProfit Corporation Act do not contain an explicit parallel provision.

SECTION 1-502. EFFECT OF FAILURE TO REGISTER TO DO BUSINESS IN THIS STATE.

(a) A foreign filing entity or foreign limited liability partnership doing business in this state may not maintain 41 an action or proceeding in this state unless it has registered to do business in this state.

(b) The failure of a foreign filing entity or foreign limited liability partnership to register to do business in this state does not impair the validity of a contract or act of the foreign filing entity or foreign limited liability partnership or preclude it from defending an action or proceeding in this state.

(c) The liability of An an interest holder or governor of a foreign filing entity or of a partner of a foreign limited liability partnership is governed by the laws of its jurisdiction of organization, and is not liable for the liabilities of the entity, and a limitation on liability of entity or of a partner of a foreign limited liability partnership is any limitations on that liability are not waived, solely because the foreign filing entity or foreign limited liability partnership does business in this state without registering. 42

(d) If a foreign filing entity or foreign limited liability partnership does business in this state without registering or cancels its registration, it authorizes service of process for rights of action arising out of doing business in this state to be made under law other than this [act]. 43

Comment

This section is a generalized version of Uniform Limited Liability Company Act Section 808 and parallel provisions of other entity statutes.

SECTION 1-503. FOREIGN REGISTRATION STATEMENT. To qualify register to do business in this state, a foreign filing entity or foreign limited liability partnership must register with the [Secretary of State] by delivering a foreign registration statement to the [Secretary of State] for filing. The statement must set forth:

(1) the name of the foreign filing entity or foreign limited liability partnership and, if the name does not comply with Section 1-301, an alternate name adopted pursuant to Section 1-506(a);

(2) the type of entity;

(2) (3) the name of the jurisdiction under whose law the foreign filing entity or foreign limited liability partnership is formed together with the foreign filing entity’s or the foreign limited liability partnership’s certification of its existence;

(3) (4) the street and mailing address of the principal office of the foreign filing entity or foreign limited liability partnership and, if the laws of the jurisdiction under which it is organized require it to maintain an office in that jurisdiction, the street and mailing address of the required office; and

(4) (5) the name and street and mailing address of its registered agent in this state. 44

Comment

This section is a generalized version of Uniform Limited Liability Company Act, Section 802. Similar provisions are found in Uniform Limited Partnership Act (2001), Section 902, and in Section 702 of the Statutory Trust Entity Act Draft and Section 1302 of the Limited Cooperative Association Draft. Similar requirements are imposed on corporations under Revised Model Business Corporation Act Section 15.03 and Model Nonprofit Corporation Act Section 15.03. In all instances other than the Uniform Limited Liability Company Act provision and the Statutory Trust Entity Act Draft, the governors of the entity also be listed, e.g., the general partners of a limited partnership, and the current directors or officers of a corporation, business or nonprofit. This Draft has followed the lead of the Uniform Limited Liability Company Act and the Statutory Trust Entity Draft in omitting this requirement.

SECTION 1-504. AMENDMENT OF FOREIGN REGISTRATION STATEMENT.

(a) A foreign entity registered to transact do 45 business in this state must deliver to the [Secretary of State] for filing an amendment to its foreign registration statement if it changes:

(1) its entity name;

(2) the period of its duration; its type of entity; or

(3) its jurisdiction of organization.

(b) The requirements of Section 1-503 for an original foreign registration statement apply to an amendment of foreign registration statement under this section. 46

Comment

This section is a generalized version of Model Business Corporation Act section 15.04, but with provision for registration rather than obtaining a certificate of authority.

SECTION 1-505. ACTIVITIES NOT CONSTITUTING DOING BUSINESS.

(a) Activities of a foreign filing entity or foreign limited liability partnership which do not constitute doing business in this state within the meaning of this [article] include:

(1) maintaining, defending, mediating, arbitrating, or settling an action or proceeding;

(2) carrying on any activity concerning its internal affairs, including holding meetings of its interest holders or governors;

(3) maintaining accounts in financial institutions;

(4) maintaining offices or agencies for the transfer, exchange, and registration of the entity’s own interests in the entity or maintaining trustees or depositories with respect to those interests;

(5) selling through independent contractors;

(6) soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts;

(7) creating or acquiring indebtedness, mortgages, or security interests in real or personal property;

(8) securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, or maintaining property;

(9) conducting an isolated transaction that is completed within [30 days] and is not in the course of similar transactions; and

(10) doing business in interstate commerce.

(c) (b) This section does not apply in determining the contacts or activities that may subject a foreign filing entity or foreign limited liability partnership to service of process, taxation, or regulation under law of this state other than this [act]. 47

Comment

This section is a generalized version of Uniform Limited Liability Company Act, Section 803. Similar provisions appear in Uniform Limited Partnership Act (2001), Section 903; and in Section 704 of the Statutory Trust Act Draft and in Section 1303 of the Limited Cooperative Association Act Draft, as well as in Section 15.01(b) of the Revised Model Business Corporation Act; and Sections 15.01(b) of the Model Non-Profit Corporation Act.

SECTION 1-506. NONCOMPLYING NAME OF FOREIGN ENTITY.

(a) A foreign filing entity or foreign limited liability partnership whose name does not comply with Section 1-301 for an entity of its type may not register to do business in this state until it adopts, for the purpose of doing business in this state, an alternate name that complies with Section 1-301. A foreign filing entity or foreign limited liability partnership that registers under an alternate name under this subsection need not comply with [fictitious or assumed name statute]. After registering to do business in this state with an alternate name, a foreign filing entity or foreign limited liability partnership may do business in this state under:

(1) the alternate name;

(2) its entity name, with the addition of its jurisdiction of organization clearly identified; or

(3) under an assumed or fictitious name the entity is authorized to use under [fictitious or assumed name statute].

(b) If a foreign filing entity registered to do business in this state changes its name to one that does not comply with Section 1-301, it may not do business in this state until it complies with subsection (a) by amending its registration to adopt an alternate name that complies with Section 1-301.

Comment

This section is a generalized version of Uniform Limited Liability Company Act Section 805, and of the parallel provisions of other entity statutes.

SECTION 1-507. WITHDRAWAL OF REGISTERED FOREIGN ENTITY. 48

(a) A foreign entity registered to do business in this state may withdraw its registration by delivering a statement of withdrawal to the [Secretary of State] for filing. The application statement of withdrawal must set forth:

(1) the name of the foreign entity and the name of the state or country under whose law

it is formed;

(2) the type of entity;

(3) that it is not doing business in this state and that it withdraws its registration to do business in this state;

(4) that it revokes the authority of its registered agent to accept service on its behalf and appoints the [Secretary of State] as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to do business in this state;

(5) a mailing address to which the [Secretary of State] may mail a copy of any process served on him under subdivision (4); and

(6) a commitment to notify the [Secretary of State] in the future of any change in its mailing address.

(b) After the withdrawal of the entity is effective, service of process on the [Secretary of State] under this section is service on the foreign entity. Upon receipt of process, the [Secretary of State] shall mail a copy of the process to the foreign corporation at the mailing address set forth under subsection (c).

Comment

This section is based on Revised Model Business Corporation Act section 15.20

SECTION 1-508. AUTOMATIC WITHDRAWAL UPON CONVERSION TO DOMESTIC FILING ENTITY OR DOMESTIC LIMITED LIABILITY PARTNERSHIP. A foreign business entity registered to do business in this state that converts to any type of domestic filing entity or to a domestic registered limited liability partnership shall be deemed to have withdrawn its registration on the effective date of the conversion.

Comment

This section is based on Revised Model Business Corporation Act section 15.21.

SECTION 1-509. WITHDRAWAL UPON DISSOLUTION OR CONVERSION TO NONFILING ENTITY OTHER THAN A LIMITED LIABILITY PARTNERSHIP.

(a) A foreign entity registered to do business in this state that dissolves or converts to a domestic or foreign nonfiling entity other than a limited liability partnership shall deliver a statement of withdrawal to the [Secretary of State] for filing. The statement must set forth:

(1) the name of the foreign entity and the name of the state or country under

whose law it was formed before the dissolution or conversion;

(2) its type prior to the dissolution or conversion;

(3) that it surrenders its authority to do business in this state as a registered entity;

(4) if it has converted to foreign nonfiling entity other than a foreign limited liability partnership, the type of nonfiling entity to which it has been converted and the jurisdiction whose laws govern its internal affairs;

(5) if it has been converted to a foreign nonfiling entity:

(i) that it revokes the authority of its registered agent to accept service on its behalf and appoints the secretary of state as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to do business in this state;

(ii) a mailing address to which the secretary of state may mail a copy of any process served on him under paragraph (i); and

(iii) a commitment to notify the secretary of state in the future of any change in its mailing address.

(b) After the withdrawal under this section of an entity that has converted to a foreign

nonfiling entity is effective, service of process on the secretary of state is service on the foreign nonfiling entity. Upon receipt of process, the secretary of state shall mail a copy of the process to

the foreign unincorporated entity at the mailing address set forth under subsection (a)(5).

(c) After the withdrawal under this section of a corporation that has converted to a domestic nonfiling entity is effective, service of process shall be made on the nonfiling entity in

accordance with the regular procedures for service of process on the form of nonfiling entity to

which the entity was converted.

Comment

This section is based on Revised Model Business Corporation Act section 15.22.

SECTION 1-510. TRANSFER OF REGISTRATION.

(a) A foreign filing entity or foreign limited liability partnership registered to do business in this state that merges with or converts to any foreign entity required to register with the [Secretary of State] to do business in this state shall file with the [Secretary of State] an application for transfer of registration. The application shall set forth:

(1) the name of the applicant entity;

(2) the type of entity it was prior to the merger or conversion;

(3) the name of the entity into which it has merged or to which it has been converted, and, if the name does not comply with Section 1-301, an alternate name adopted pursuant to Section 1-506(a);

(4) the type of entity into which it has merged or to which it has been converted and the jurisdiction whose laws govern its internal affairs; and

(5) the following information with regard to the entity into which it has merged or to which it has been converted, if different than the information for the applicant entity:

(i) the street and mailing address of the principal office of the entity and, if the laws of that entity’s jurisdiction or organization require it to maintain an office in that jurisdiction, the street and mailing address of the required office; and

(ii) the name and street and mailing address of its registered agent in this state.

(b) The application for transfer of registration shall be delivered to the secretary of state for filing and shall take effect at the effective time provided in section 1-204.

(c) Upon the effectiveness of the application for transfer of registration, the registration of the applicant entity to do business in this state shall be transferred without interruption to the entity into which it has merged or to which it has been converted.

Comment

This section is patterned after RMBCA section 15.23.

SECTION 1-507 1-511. TERMINATION OF REGISTRATION. 49

(a) The registration of a foreign filing entity or foreign limited liability partnerships to do business in this state may be terminated by the [Secretary of State] in the manner provided in subsections (b) and (c) if the entity does not:

(1) pay, not later than [60 days] after the due date, any fee, tax, or penalty due to or collected by the [Secretary of State] under this [act];

(2) deliver, not later than [60 days] after the due date, the [annual] [biennial] report, if any, required of foreign entities of its type; or

(3) have an agent for service of process as required by Section 1-402.

(b) To terminate the registration of a foreign filing entity or foreign limited liability partnership, the [Secretary of State] must file a notice of termination or note the termination in its records and deliver a copy to the entity’s agent for service of process in this state, or if the entity does not have an proper agent in this state, to the entity’s principal office as designated in Section 1-503(a). The notice must state:

(1) the effective date of the termination, which must be at least [60 days] after the date the [Secretary of State] delivers the copy; and

(2) the grounds for termination under subsection (a).

(c) The authority of a foreign filing entity or foreign limited liability partnership to do business in this state ceases on the effective date of the notice of termination unless before that date the entity cures each ground for termination stated in the notice filed under subsection (b). If the entity cures each ground, the [Secretary of State] shall file a record so stating.

Comment

This section is a generalized version of Uniform Limited Liability Company Act Section 806 and parallel provisions of other entity statutes.

SECTION 1-508 1-512 . CANCELLATION OF REGISTRATION STATEMENT. To cancel its registration statement, a foreign filing entity or foreign limited liability partnership must deliver to the [Secretary of State] for filing a notice of cancellation stating the name of the entity and that the entity desires to cancel its registration statement. The entity’s registration statement is canceled when the notice becomes effective.

Comment

This section is a generalized version of Uniform Limited Liability Company Act Section 807, and parallel provisions of other entity statutes.

[SECTION 1-509 1-513. ACTION BY [ATTORNEY GENERAL]. The [Attorney General] may maintain an action to enjoin a foreign filing entity or foreign limited liability partnership from doing business in this state in violation of this [act].]

Comment

This section is a generalized version of Uniform Limited Liability Company Act Section 809, and parallel provisions of other entity statutes.

[PART] 6

ADMINISTRATIVE DISSOLUTION

SECTION 1-601. GROUNDS. The [Secretary of State] may commence a proceeding under Section 1-602 to dissolve any domestic filing entity administratively if:

(1) the entity does not pay any fee, franchise tax, or penalty collected 50 by the [Secretary of State] imposed by this [act] or law other than this [act] not later than [six months] after it is due;

(2) the entity does not deliver to the [Secretary of State] not later than [six months] after it is due any[annual] [biennial] report required by this [article] or law other than this [article]; or

(3) the entity is without a registered agent in this state for [60 days].

Comment

This section is modeled on Model Business Corporation Act section 14.20.

SECTION 1-602. PROCEDURE AND EFFECT.

(a) If the [Secretary of State] determines that one or more grounds exist under Section 1-601 for dissolving a domestic filing entity, the [Secretary of State] shall serve the entity with notice in a record of the [Secretary of State’s] determination under Section 1-412.

(b) If the entity does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the [Secretary of State] that each ground determined by the [Secretary of State] does not exist not later than [60 days] after service of the notice is perfected under Section 1-412, the [Secretary of State] shall dissolve the entity administratively by signing a statement of dissolution that recites the ground or grounds for dissolution and its effective date. The [Secretary of State] shall file the original of the statement and serve a copy on the entity under Section 1-412.

(c) A filing entity that is administratively dissolved continues its existence as an entity but may not carry on any business except as necessary to wind up and liquidate its business and affairs in the manner provided in its organic law or to apply for reinstatement under Section 1-603.

(d) The administrative dissolution of a filing entity does not terminate the authority of its registered agent.

Comment

This section is modeled on Model Business Corporation Act section 14.21.

SECTION 1-603. REINSTATEMENT.

(a) A domestic filing entity that is administratively dissolved under Section 1-602 may apply to the [Secretary of State] for reinstatement. The application must state:

(1) the name and address of the entity and the effective date of its administrative dissolution;

(2) that the grounds for dissolution either did not exist or have been eliminated; and

(3) that the entity's name satisfies the requirements of Section 1-301.

(b) If the [Secretary of State] determines that the application contains the information required by subsection (a) and that the information is correct, the [Secretary of State] shall cancel the statement of dissolution and prepare a statement of reinstatement that states the [Secretary of State’s] determination and the effective date of reinstatement, file the original of the statement, and serve a copy on the entity under Section 1-412.

(c) When reinstatement under this section is effective, it relates back to and takes effect as of the effective date of the administrative dissolution, and the entity resumes carrying on its business as if the administrative dissolution had never occurred.

Comment

This section is modeled on Model Business Corporation Act section 14.22.

SECTION 1-604. JUDICIAL REVIEW OF DENIAL OF REINSTATEMENT.

(a) If the [Secretary of State] denies an entity’s application for reinstatement following administrative dissolution, the [Secretary of State] shall serve the entity under Section 1-412 with a written notice that explains the reason or reasons for denial.

(b) An entity may seek judicial review of denial of reinstatement in the [name or describe] court not later than [30 days] after service of the notice of denial.

Comment

This section is modeled on Model Business Corporation Act section 14.23.

PART 7. MISCELLANEOUS PROVISIONS 51

SECTION 1-701. RESERVATION OF POWER TO AMEND OR REPEAL. The [Legislature of this State] has power to amend or repeal all or part of this [act] at any time and all domestic and foreign entities subject to this [act] are governed by the amendment or repeal.

SECTION 1-702. SUPPLEMENTAL PRINCIPLES OF LAW. Unless displaced by particular provisions of this [act] the principles of law and equity supplement this [act].

SECTION 1-703. UNIFORMITY OR CONSISTENCY OF APPLICATION AND CONSTRUCTION. In applying and construing the [articles] of this [act] based on uniform or model acts, consideration must be given to the need to promote uniformity or consistency of the law with respect to its subject matter among states that enact it.

SECTION 1-704. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. section 7001 et seq., but this [act] does not modify, limit, or supersede section 101(c) of that Act or authorize electronic delivery of any of the notices described in section 103(b) of that Act.

SECTION 1-705. SAVINGS CLAUSE. The repeal of a statute by this [act] does not affect:

(1) the operation of the statute or any action taken under it before its repeal;

(2) any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute before its repeal;

(3) any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal;

(4) any proceeding, reorganization, or dissolution commenced under the statute before its repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed.

[ARTICLE] 2

ENTITY TRANSACTIONS

[ARTICLE] 3

BUSINESS CORPORATIONS

[ARTICLE] 4

NONPROFIT CORPORATIONS

[ARTICLE] 5

GENERAL PARTNERSHIPS

[ARTICLE] 6

LIMITED PARTNERSHIPS

[ARTICLE] 7

LIMITED LIABILITY COMPANIES

[ARTICLE] 8

LIMITED COOPERATIVE ASSOCIATIONS

[ARTICLE] 9

UNINCORPORATED NONPROFIT ASSOCIATIONS

[ARTICLE] 10

STATUTORY TRUST ENTITIES