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H.B. 222

             1     

REVISED CORPORATION ACT AMENDMENTS

             2     
1999 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Afton B. Bradshaw

             5      AN ACT RELATING TO CORPORATIONS; ADDRESSING APPEALS FROM DENIALS OF
             6      REINSTATEMENTS; CLARIFYING SERVICE; AND MAKING TECHNICAL
             7      CORRECTIONS.
             8      This act affects sections of Utah Code Annotated 1953 as follows:
             9      AMENDS:
             10          16-10a-504, as enacted by Chapter 277, Laws of Utah 1992
             11          16-10a-1421, as enacted by Chapter 277, Laws of Utah 1992
             12          16-10a-1422, as enacted by Chapter 277, Laws of Utah 1992
             13          16-10a-1423, as enacted by Chapter 277, Laws of Utah 1992
             14          16-10a-1511, as enacted by Chapter 277, Laws of Utah 1992
             15          16-10a-1531, as enacted by Chapter 277, Laws of Utah 1992
             16      Be it enacted by the Legislature of the state of Utah:
             17          Section 1. Section 16-10a-504 is amended to read:
             18           16-10a-504. Service on corporation.
             19          (1) Except as provided in Subsection (3), S [ a corporation may be served ] THE DIVISION
             19a      MAY SERVE A CORPORATION s by first-class,
             20      postage prepaid United States mail.
             21          [(1)] (2) A corporation's registered agent is the corporation's agent for service of process,
             22      notice, or demand required or permitted by law to be served on the corporation.
             23          [(2)] (3) (a) If a corporation has no registered agent, or the agent cannot with reasonable
             24      diligence be served, the corporation may be served by mail that is:
             25          (i) registered or certified [mail,];
             26          (ii) return receipt requested[,]; and
             27          (iii) addressed to the corporation at its principal office.


             28          (b) Service is perfected under this Subsection (3) at the earliest of:
             29          [(a)] (i) the date the corporation receives the process, notice, or demand;
             30          [(b)] (ii) the date shown on the return receipt, if signed on behalf of the corporation; or
             31          [(c)] (iii) five days after mailing.
             32          [(3)] (4) This section does not prescribe the only means, or necessarily the required means,
             33      of serving a corporation.
             34          Section 2. Section 16-10a-1421 is amended to read:
             35           16-10a-1421. Procedure for and effect of administrative dissolution.
             36          (1) If the division determines that one or more grounds exist under Section 16-10a-1420
             37      for dissolving a corporation, it shall serve the corporation in the manner provided in Section
             38      16-10a-504 with written notice of [its]:
             39          (a) the division's determination[, stating] that one or more grounds exist for dissolving;
             40      and
             41          (b) the grounds [in the manner provided in Section 16-10a-504 ] for dissolving the
             42      corporation.
             43          (2) (a) If the corporation does not correct each ground for dissolution, or demonstrate to
             44      the reasonable satisfaction of the division that each ground does not exist, within 60 days after
             45      service of the notice contemplated by Subsection (1), the division may administratively dissolve
             46      the corporation.
             47          (b) The division shall serve written notice of the administrative dissolution on the
             48      dissolved corporation[, stating the effective date thereof,] in the manner provided in Section
             49      16-10a-504 , stating the effective date of the dissolution.
             50          (c) The division shall deliver a copy of the notice to the last registered agent of the
             51      dissolved corporation.
             52          (3) A corporation administratively dissolved continues its corporate existence but may not
             53      carry on any business except the business necessary to wind up and liquidate its business and
             54      affairs under Section 16-10a-1405 and to give notice to claimants in the manner provided in
             55      Sections 16-10a-1406 and 16-10a-1407 .
             56          (4) The administrative dissolution of a corporation does not terminate the authority of its
             57      registered agent.
             58          (5) Upon the administrative dissolution of a corporation, the division shall be an agent of


             59      the dissolved corporation for purposes of service of process. Service of process on the division
             60      under this Subsection (5) is service on the dissolved corporation. Upon receipt of process, the
             61      division shall deliver a copy of the process to the dissolved corporation at its principal office.
             62          Section 3. Section 16-10a-1422 is amended to read:
             63           16-10a-1422. Reinstatement following administrative dissolution.
             64          (1) A corporation administratively dissolved under Section 16-10a-1421 may apply to the
             65      division for reinstatement within two years after the effective date of dissolution by delivering to
             66      the division for filing an application for reinstatement that states:
             67          (a) the effective date of its administrative dissolution and its corporate name as of that
             68      date;
             69          (b) that the grounds for dissolution either did not exist or have been eliminated;
             70          (c) the corporate name under which the corporation is being reinstated and that the name
             71      satisfies the requirements of Section 16-10a-401 ;
             72          (d) that all taxes, fees, or penalties imposed pursuant to this chapter, otherwise owed by
             73      the corporation to the State Tax Commission, or otherwise imposed by applicable laws of this state
             74      have been paid;
             75          (e) the address of its registered office in this state and the name of its registered agent at
             76      that office; and
             77          (f) any additional information the division determines to be necessary or appropriate.
             78          (2) The corporation shall include in or with the application for reinstatement the written
             79      consent to appointment by the designated registered agent, and a certificate from the State Tax
             80      Commission reciting that all taxes owed by the corporation have been paid.
             81          (3) If the division determines that the application for reinstatement contains the
             82      information required by Subsections (1) and (2) and that the information is correct, the division
             83      shall revoke the administrative dissolution. The division shall serve the corporation in the manner
             84      provided in Section 16-10a-504 with written notice of:
             85          (a) the revocation[, stating]; and
             86          (b) the effective date[, in the manner provided in Section 16-10a-504 ] of the revocation.
             87          (4) When the reinstatement is effective, it relates back to the effective date of the
             88      administrative dissolution and the corporation may carry on its business, under the name stated
             89      pursuant to Subsection (1)(c), as if the administrative dissolution had never occurred.


             90          Section 4. Section 16-10a-1423 is amended to read:
             91           16-10a-1423. Appeal from denial of reinstatement.
             92          [(1)] If the division denies a corporation's application for reinstatement following
             93      administrative dissolution, the division shall serve the corporation in the manner provided in
             94      Section 16-10a-504 with written notice:
             95          (1) setting forth the reasons for denying the application [in the manner provided in Section
             96      16-10a-504 .]; and
             97          (2) stating that the corporation has the right to appeal the division's determination to the
             98      executive director of the Department of Commerce in accordance with Title 63, Chapter 46b,
             99      Administrative Procedures Act.
             100          [(2) The corporation may appeal the denial of reinstatement to the district court in a county
             101      in this state in which the principal or registered office of the corporation is located, or in Salt Lake
             102      County, within 30 days after service of the notice of denial is perfected under Section 16-10a-504 .
             103      The corporation appeals by petitioning the court to set aside the dissolution and attaching to the
             104      petition copies of the division's notice of dissolution, the corporation's application for
             105      reinstatement, and the division's notice of denial.]
             106          [(3) The court may summarily order the division to reinstate the dissolved corporation or
             107      may take other action the court considers appropriate.]
             108          [(4) The court's final decision may be appealed as in other civil proceedings.]
             109          Section 5. Section 16-10a-1511 is amended to read:
             110           16-10a-1511. Service on foreign corporation.
             111          (1) Except as provided in Subsection (3), S [ a foreign corporation may be served ] THE
            
111a      DIVISION MAY SERVE A FOREIGN CORPORATION s by
             112      first-class, postage prepaid United States mail.
             113          [(1)] (2) The registered agent of a foreign corporation authorized to transact business in
             114      this state is the foreign corporation's agent for service of process, notice, or demand required or
             115      permitted by law to be served on the foreign corporation.
             116          [(2)] (3) (a) If a foreign corporation authorized to transact business in this state has no
             117      registered agent or if the registered agent cannot with reasonable diligence be served, the foreign
             118      corporation may be served by mail that is:
             119          (i) registered or certified [mail,];
             120          (ii) return receipt requested[,]; and


             121          (iii) addressed to the foreign corporation at its principal office.
             122          (b) Service is perfected under this Subsection (3) at the earliest of:
             123          [(a)] (i) the date the foreign corporation receives the process, notice, or demand;
             124          [(b)] (ii) the date shown on the return receipt, if signed on behalf of the foreign
             125      corporation; or
             126          [(c)] (iii) five days after mailing.
             127          [(3)] (4) This section does not prescribe the only means, or necessarily the required means,
             128      of serving a foreign corporation authorized to transact business in this state.
             129          Section 6. Section 16-10a-1531 is amended to read:
             130           16-10a-1531. Procedure for and effect of revocation.
             131          (1) If the division determines that one or more grounds exist under Section 16-10a-1530
             132      for revoking the authority of a foreign corporation to transact business in this state, the division
             133      shall serve the foreign corporation in the manner provided in Section 16-10a-1511 with written
             134      notice of [its]:
             135          (a) the division's determination [stating] that one or more grounds exist for revocation; and
             136          (b) the grounds[, in the manner provided in Section 16-10a-1511 ] for revocation.
             137          (2) (a) If the foreign corporation does not correct each ground for revocation or
             138      demonstrate to the reasonable satisfaction of the division that each ground determined by the
             139      division does not exist, within 60 days after service of the notice under Subsection (1), the division
             140      may revoke the foreign corporation's authority to transact business in this state.
             141          (b) The division shall serve [a written notice of the revocation] on the foreign corporation
             142      [stating] in the manner provided in Section 16-10a-1511 a written notice of:
             143          (i) revocation; and
             144          (ii) the effective date of the revocation[, in the manner provided in Section 16-10a-1511 ].
             145          (c) The division shall deliver a copy of the notice to the last registered agent of the foreign
             146      corporation.
             147          (3) The authority of a foreign corporation to transact business in this state ceases on the
             148      date shown on the division's certificate revoking the corporation's certificate of authority.
             149          (4) Revocation of a foreign corporation's authority to transact business in this state does
             150      not terminate the authority of the registered agent of the corporation.
             151          (5) Upon the revocation of a foreign corporation's authority to transact business in this


             152      state, the division becomes an agent for the foreign corporation for service of process in any
             153      proceeding based on a cause of action which arose during the time the foreign corporation
             154      transacted business in this state or was authorized to transact business in this state. Service of
             155      process on the division under this Subsection (5) is service on the foreign corporation. Upon
             156      receipt of process, the division shall mail a copy of the process to the foreign corporation at its
             157      principal office.




Legislative Review Note
    as of 12-22-98 1:48 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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