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S.B. 137

             1     

BUSINESS ORGANIZATION AND DIVISION

             2     
OF CORPORATIONS AND COMMERCIAL CODE

             3     
AMENDMENTS

             4     
2006 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Chief Sponsor: Gregory S. Bell

             7     
House Sponsor: Ross I. Romero

             8     
             9      LONG TITLE
             10      General Description:
             11          This bill makes changes to certain provisions affecting business organizations and the
             12      Division of Corporations and Commercial Code.
             13      Highlighted Provisions:
             14          This bill:
             15          .    allows a document required to be filed by a nonprofit corporation or a corporation to
             16      be signed by an attorney in fact;
             17          .    provides that a claim against a dissolved corporation may not be made more than
             18      seven years after the dissolution;
             19          .    changes the fee that may be collected by the Division of Corporations and
             20      Commercial Code for service of process upon the division under Sections
             21      41-12a-505 and 48-2c-310; and
             22          .    makes technical changes.
             23      Monies Appropriated in this Bill:
             24          None
             25      Other Special Clauses:
             26          None
             27      Utah Code Sections Affected:


             28      AMENDS:
             29          16-6a-105, as enacted by Chapter 300, Laws of Utah 2000
             30          16-10a-120, as enacted by Chapter 277, Laws of Utah 1992
             31          16-10a-1407, as enacted by Chapter 277, Laws of Utah 1992
             32          41-12a-505, as last amended by Chapter 40, Laws of Utah 1989
             33          48-2c-310, as enacted by Chapter 260, Laws of Utah 2001
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 16-6a-105 is amended to read:
             37           16-6a-105. Filing requirements.
             38          (1) To be entitled to filing by the division, a document shall satisfy the requirements of:
             39          (a) this section; and
             40          (b) any other section of this chapter that adds to or varies the requirements of this
             41      section.
             42          (2) This chapter shall require or permit filing the document with the division.
             43          (3) (a) A document shall contain the information required by this chapter.
             44          (b) In addition to the document information required by this chapter, [it] a document
             45      may contain other information.
             46          (4) A document shall be:
             47          (a) typewritten; or
             48          (b) machine printed.
             49          (5) (a) A document shall be in the English language.
             50          (b) A corporate name need not be in English if written in:
             51          (i) English letters; or
             52          (ii) Arabic or Roman numerals.
             53          (c) Notwithstanding Subsection (5)(a), a certificate of existence required of a foreign
             54      nonprofit corporation need not be in English if accompanied by a reasonably authenticated
             55      English translation.
             56          (6) (a) A document shall be:
             57          (i) executed by a person in Subsection (6)(b); or
             58          (ii) a true copy made by photographic, xerographic, electronic, or other process that


             59      provides similar copy accuracy of a document that has been executed by a person listed in
             60      Subsection (6)(b).
             61          (b) A document shall be executed by:
             62          (i) the chair of the board of directors of a domestic or foreign nonprofit corporation;
             63          (ii) all of the directors of a domestic or foreign nonprofit corporation;
             64          (iii) an officer of the domestic or foreign nonprofit corporation;
             65          (iv) if directors have not been selected or the domestic or foreign nonprofit corporation
             66      has not been formed, an incorporator;
             67          (v) if the domestic or foreign nonprofit corporation is in the hands of a receiver,
             68      trustee, or other court-appointed fiduciary, that receiver, trustee, or court-appointed fiduciary;
             69      [or]
             70          (vi) if the document is that of a registered agent:
             71          (A) the registered agent, if the person is an individual; or
             72          (B) a person authorized by the registered agent to execute the document, if the
             73      registered agent is an entity[.]; or
             74          (vii) an attorney in fact if a nonprofit corporation retains the power of attorney with the
             75      nonprofit corporation's records.
             76          (7) A document shall state beneath or opposite the signature of the person executing
             77      the document:
             78          (a) the signer's name; and
             79          (b) the capacity in which the document is signed.
             80          (8) A document may contain:
             81          (a) the corporate seal;
             82          (b) an attestation by the secretary or an assistant secretary; or
             83          (c) an acknowledgment, verification, or proof.
             84          (9) The signature of each person signing a document, whether or not the document
             85      contains an acknowledgment, verification, or proof permitted by Subsection (8), [shall
             86      constitute] constitutes the affirmation or acknowledgment of the person, under penalties of
             87      perjury, that:
             88          (a) the document is:
             89          (i) the person's act and deed; or


             90          (ii) the act and deed of the entity on behalf of which the document is executed; and
             91          (b) the facts stated in the document are true.
             92          (10) If the division has prescribed a mandatory form or cover sheet for the document
             93      under Section 16-6a-106 , a document shall be:
             94          (a) in or on the prescribed form; or
             95          (b) have the required cover sheet.
             96          (11) A document shall be:
             97          (a) delivered to the division for filing; and
             98          (b) accompanied by:
             99          (i) one exact or conformed copy, except as provided in Sections 16-6a-503 and
             100      16-6a-1510 ;
             101          (ii) the correct filing fee; and
             102          (iii) any franchise tax, license fee, or penalty required by this chapter or other law.
             103          (12) Except with respect to filings pursuant to Section 16-6a-503 or 16-6a-1510 , a
             104      document shall state, or be accompanied by a writing stating, the address to which the division
             105      may send a copy upon completion of the filing.
             106          Section 2. Section 16-10a-120 is amended to read:
             107           16-10a-120. Filing requirements.
             108          (1) A document must satisfy the requirements of this section, and of any other section
             109      of this chapter that adds to or varies these requirements, to be entitled to filing by the division.
             110          (2) This chapter must require or permit filing the document with the division.
             111          (3) (a) The document must contain the information required by this chapter. [It]
             112          (b) A document may contain [other] information [as well] in addition to that required
             113      in Subsection (3)(a).
             114          (4) The document must be typewritten or machine printed.
             115          (5) (a) The document must be in the English language.
             116          (b) A corporate name need not be in English if written in English letters, Arabic or
             117      Roman numerals[, and the].
             118          (c) The certificate of existence required of foreign corporations need not be in English
             119      if accompanied by a reasonably authenticated English translation.
             120          (6) The document must be executed, or must be a true copy made by photographic,


             121      xerographic, electronic, or other process that provides similar copy accuracy of a document that
             122      has been executed:
             123          (a) by the chairman of the board of directors of a domestic or foreign corporation, by
             124      all of its directors, or by one of its officers;
             125          (b) if directors have not been selected or the corporation has not been formed, by an
             126      incorporator;
             127          (c) if the corporation is in the hands of a receiver, trustee, or other court-appointed
             128      fiduciary, by that fiduciary; [or]
             129          (d) if the document is that of a registered agent, by the registered agent, if the person is
             130      an individual, or by a person authorized by the registered agent to execute the document, if the
             131      registered agent is an entity[.]; or
             132          (e) by an attorney-in-fact if the corporation retains the power of attorney with the
             133      corporation's records.
             134          (7) The document shall state beneath or opposite the signature of the person executing
             135      the document the signer's name and the capacity in which the document is signed.
             136          (8) The document may, but need not, contain:
             137          (a) the corporate seal;
             138          (b) an attestation by the secretary or an assistant secretary; or
             139          (c) an acknowledgment, verification, or proof.
             140          (9) The signature of each person signing the document, whether or not the document
             141      contains an acknowledgment, verification, or proof permitted by Subsection (8), [shall
             142      constitute] constitutes the affirmation or acknowledgment of the person, under penalties of
             143      perjury, that the document is the person's act and deed or the act and deed of the entity on
             144      behalf of which the document is executed, and that the facts stated in the document are true.
             145          (10) If the division has prescribed a mandatory form or cover sheet for the document
             146      under Section 16-10a-121 , the document must be in or on the prescribed form or must have the
             147      required cover sheet.
             148          (11) The document must be delivered to the division for filing and must be
             149      accompanied by one exact or conformed copy, except as provided in Sections 16-10a-503 and
             150      16-10a-1510 , the correct filing fee, and any franchise tax, license fee, or penalty required by
             151      this chapter or other law.


             152          (12) Except with respect to filings pursuant to Section 16-10a-503 or 16-10a-1510 , the
             153      document must state, or be accompanied by a writing stating, the address to which the division
             154      may send a copy upon completion of the filing.
             155          Section 3. Section 16-10a-1407 is amended to read:
             156           16-10a-1407. Disposition of claims by publication -- Disposition in absence of
             157      publication.
             158          (1) A dissolved corporation may publish notice of its dissolution and request that
             159      persons with claims against the corporation present them in accordance with the notice.
             160          (2) The notice contemplated in Subsection (1) must:
             161          (a) be published one time in a newspaper of general circulation in the county where the
             162      dissolved corporation's principal office or, if it has no principal office in this state, its registered
             163      office is or was last located;
             164          (b) describe the information that must be included in a claim and provide an address at
             165      which any claim must be given to the corporation; and
             166          (c) state that unless sooner barred by any other statute limiting actions, the claim will
             167      be barred if an action to enforce the claim is not commenced within five years after the
             168      publication of the notice.
             169          (3) If the dissolved corporation publishes a newspaper notice in accordance with
             170      Subsection (2), then unless sooner barred under Section 16-10a-1406 or under any other statute
             171      limiting actions, the claim of any claimant against the dissolved corporation is barred unless the
             172      claimant commences an action to enforce the claim against the dissolved corporation within
             173      five years after the publication date of the notice.
             174          (4) (a) For purposes of this section, "claim" means any claim, including claims of this
             175      state, whether known, due or to become due, absolute or contingent, liquidated or unliquidated,
             176      founded on contract, tort, or other legal basis, or otherwise.
             177          (b) For purposes of this section, an action to enforce a claim includes any civil action,
             178      and any arbitration under any agreement for binding arbitration between the dissolved
             179      corporation and the claimant.
             180          (5) If a dissolved corporation does not publish a newspaper notice in accordance with
             181      Subsection (2), then unless sooner barred under Section 16-10a-1406 or under any other statute
             182      limiting actions, the claim of any claimant against the dissolved corporation is barred unless the


             183      claimant commences an action to enforce the claim against the dissolved corporation within
             184      seven years after the date the corporation was dissolved.
             185          Section 4. Section 41-12a-505 is amended to read:
             186           41-12a-505. Effect upon nonresident of use of state highways.
             187          (1) (a) The use and operation by a nonresident or his agent, or of a resident who has
             188      departed Utah, of a motor vehicle on Utah highways is an appointment of the Division of
             189      Corporations and Commercial Code as the true and lawful attorney for service of legal process
             190      in any action or proceeding against [him] the person arising from the use or operation of a
             191      motor vehicle over Utah highways which use or operation results in damages or loss to person
             192      or property. [That]
             193          (b) The use or operation referenced in Subsection (1) is an agreement that process
             194      shall, in any action against [him] the person in which there is such service, be of the same legal
             195      force and validity as if served upon him personally in Utah.
             196          (2) (a) Service of process under Subsection (1) is made by serving a copy upon the
             197      Division of Corporations and Commercial Code or by filing a copy in that office with payment
             198      of a [$5] reasonable fee.
             199          (b) The plaintiff shall, within ten days after service of process, send notice of the
             200      process together with plaintiff's affidavit of compliance with this section to the defendant by
             201      registered mail at [his] the defendant's last-known address.
             202          (3) (a) The court in which the action is pending may order any continuance necessary
             203      to afford the defendant reasonable opportunity to defend the action, but not exceeding 90 days
             204      from the date of filing the action in court.
             205          (b) The [$5] reasonable fee paid by the plaintiff to the Division of Corporations and
             206      Commercial Code [shall be] is taxed as costs if the plaintiff prevails.
             207          (c) The division shall keep a record of all process served showing the day and hour of
             208      service.
             209          Section 5. Section 48-2c-310 is amended to read:
             210           48-2c-310. Service on foreign companies not authorized to do business.
             211          (1) (a) Any foreign company [which] that does business in this state without authority
             212      [shall be] is considered to have thereby appointed and constituted the director of the division its
             213      agent for service of process in any proceeding against it in any state or federal court in this state


             214      arising or growing out of any business transacted by it within this state.
             215          (b) Transacting business in this state by [such] a foreign company [shall be] is a
             216      signification of the agreement of that foreign company that any such process when [so] served
             217      [shall be] upon the division is of the same legal force and validity as if served upon an
             218      authorized person or agent personally within this state.
             219          (2) Whenever the words "transacting business", "the doing of business", or "business
             220      done in this state", by any [such] foreign company are used in this section, they [shall] mean
             221      the course or practice of carrying on any business activities in this state, including[, without
             222      limiting the generality of the foregoing,] the solicitation of business or orders in this state.
             223          (3) (a) In the event of service upon the director of the division in accordance with
             224      Subsection (1), the director of the division shall forthwith notify the foreign company thereof
             225      by letter, certified mail, return receipt requested, directed to the foreign company at the address
             226      furnished to the director of the division by the plaintiff in [such] the action, suit, or proceeding.
             227          (b) The letter must enclose a copy of the process and any other papers served upon the
             228      director of the division.
             229          (c) It [shall be] is the plaintiff's duty [of the plaintiff] in the event of [such] service to
             230      serve process and any other papers in duplicate, to notify the director of the division that
             231      service is being made pursuant to this Subsection (3), and to pay to the director of the division
             232      [the sum of $100 for the use of this state] a reasonable fee, which sum [shall be] is taxed as part
             233      of the costs in the proceeding, if the plaintiff [shall prevail therein] prevails.
             234          (d) The director of the division shall maintain an alphabetical record of any [such]
             235      process served under this section setting forth the name of the plaintiff and defendant, the title,
             236      docket number, and nature of the proceeding in which process has been served upon the
             237      director, the return date thereof, and the day and hour when the service was made.
             238          (e) The director of the division [shall not be] is not required to retain [such] the
             239      information required by Subsection (3)(d) for a period longer than five years from receipt of the
             240      service of process by the director of the division.





Legislative Review Note
    as of 1-12-06 1:26 PM


Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel


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