Senator Daniel McCay proposes the following substitute bill:


1     
CORPORATION AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Anthony E. Loubet

5     
Senate Sponsor: Daniel McCay

6     

7     LONG TITLE
8     General Description:
9          This bill addresses provisions related to corporations.
10     Highlighted Provisions:
11          This bill:
12          ▸     amends application requirements for:
13               •     a nonprofit corporation or a corporation applying for reinstatement after
14     dissolution; and
15               •     a foreign nonprofit corporation or foreign corporation applying for withdrawal;
16          ▸     requires the Division of Corporations and Commercial Code to request that the
17     State Tax Commission certify that:
18               •     a nonprofit corporation or corporation applying for reinstatement after
19     dissolution is in good standing; and
20               •     a foreign nonprofit corporation or foreign corporation applying for withdrawal is
21     in good standing;
22          ▸     requires the State Tax Commission to notify the Division of Corporations and
23     Commercial Code and the corporation if the corporation is not in good standing;
24          ▸     requires the Division of Corporations and Commercial Code to approve a
25     corporation's application for withdrawal under certain circumstances;
26          ▸     modifies provisions related to corporate quorum or voting requirements for
27     religious nonprofit corporations; and
28          ▸     makes technical and conforming changes.
29     Money Appropriated in this Bill:
30          None
31     Other Special Clauses:
32          This bill provides a special effective date.
33     Utah Code Sections Affected:
34     AMENDS:
35          16-6a-716, as enacted by Laws of Utah 2000, Chapter 300
36          16-6a-1412, as last amended by Laws of Utah 2017, Chapter 122
37          16-6a-1513, as enacted by Laws of Utah 2000, Chapter 300
38          16-10a-1422, as last amended by Laws of Utah 2017, Chapter 122
39          16-10a-1520, as enacted by Laws of Utah 1992, Chapter 277
40     

41     Be it enacted by the Legislature of the state of Utah:
42          Section 1. Section 16-6a-716 is amended to read:
43          16-6a-716. Greater quorum or voting requirements.
44          (1) The articles of incorporation or bylaws may provide for a greater:
45          (a) quorum requirement for members or voting groups than is provided for by this
46     chapter; or
47          (b) voting requirement for members or voting groups than is provided by this chapter.
48          (2) [An] Except as provided in Subsection (3), an amendment to the articles of
49     incorporation or the bylaws that adds, changes, or deletes a greater quorum or voting
50     requirement shall meet the same quorum requirement and be adopted by the same vote and
51     voting groups required to take action under the greater of the quorum and voting requirements:
52          (a) then in effect; or
53          (b) proposed to be adopted.
54          (3) Notwithstanding Subsection (2), a nonprofit organization that is affiliated with a
55     religious organization may make an amendment to the nonprofit organization's articles of
56     incorporation or bylaws in accordance with the direction of the religious organization's
57     religious authorities.
58          Section 2. Section 16-6a-1412 is amended to read:
59          16-6a-1412. Reinstatement following administrative dissolution -- Reinstatement
60     after voluntary dissolution.
61          (1) A nonprofit corporation administratively dissolved under Section 16-6a-1411 may
62     apply to the division for reinstatement within two years after the effective date of dissolution by
63     delivering to the division for filing an application for reinstatement that:
64          (a) states:
65          [(a)] (i) the effective date of [its] the nonprofit corporation's administrative dissolution
66     and [its] the nonprofit corporation's corporate name on the effective date of dissolution;
67          [(b)] (ii) that the ground or grounds for dissolution:
68          [(i)] (A) did not exist; or
69          [(ii)] (B) have been eliminated;
70          [(c)] (iii) [(i)] the corporate name under which the nonprofit corporation is being
71     reinstated; [and]
72          [(ii)] (iv) the corporate name that satisfies the requirements of Section 16-6a-401;
73          [(d)] (v) that the nonprofit corporation has paid all fees or penalties imposed under this
74     chapter or other applicable state law;
75          [(e)] (vi) that the nonprofit corporation:
76          [(i)] (A) has paid any taxes, fees, or penalties owed to the State Tax Commission; or
77          [(ii)] (B) is current on a payment plan with the State Tax Commission for any taxes,
78     fees, or penalties owed to the State Tax Commission;
79          [(f)] (vii) the address of the nonprofit corporation's registered office;
80          [(g)] (viii) the name of the nonprofit corporation's registered agent at the office stated
81     in Subsection (1)(f);
82          (ix) the federal employer identification number of the nonprofit corporation; and
83          [(h)] (x) any additional information the division determines is necessary or
84     appropriate[.]; and
85          [(2)] (b) [The nonprofit corporation shall include in or with the application for
86     reinstatement:]
87          [(a)] includes the written consent to appointment by the designated registered agent[;
88     and].
89          [(b) a certificate from the State Tax Commission that states that the nonprofit
90     corporation:]
91          [(i) has paid any taxes, fees, or penalties owed to the State Tax Commission; or]
92          [(ii) is current on a payment plan with the State Tax Commission for any taxes, fees, or
93     penalties owed to the State Tax Commission.]
94          (2) (a) After receiving a nonprofit corporation's application for reinstatement, the
95     division shall:
96          (i) provide the State Tax Commission with the nonprofit corporation's federal employer
97     identification number; and
98          (ii) request that the State Tax Commission certify that the nonprofit corporation is in
99     good standing.
100          (b) The State Tax Commission shall certify that a nonprofit corporation is in good
101     standing if the nonprofit corporation:
102          (i) has paid all taxes, fees, and penalties the nonprofit corporation owed to the State
103     Tax Commission; or
104          (ii) is current on a payment plan with the State Tax Commission for all taxes, fees, and
105     penalties the nonprofit corporation owes to the State Tax Commission.
106          (c) If a nonprofit corporation is not in good standing as described in Subsection (2)(b),
107     the State Tax Commission shall:
108          (i) notify the division, stating that the nonprofit corporation is not in good standing;
109     and
110          (ii) notify the nonprofit corporation, explaining in detail why the nonprofit corporation
111     is not in good standing.
112          (3) (a) The division shall revoke the administrative dissolution if:
113          (i) the division determines that the application for reinstatement contains the
114     information required [by Subsections (1) and (2); and] under Subsection (1);
115          (ii) the division determines that the information in the application is correct; and
116          (iii) the State Tax Commission certifies that the nonprofit corporation is in good
117     standing as described in Subsection (2)(b).
118          (b) The division shall mail written notice of the revocation to the nonprofit corporation
119     in the manner provided in Subsection 16-6a-1411(5) stating the effective date of the
120     dissolution.
121          (4) When the reinstatement is effective:
122          (a) the reinstatement relates back to and takes effect as of the effective date of the
123     administrative dissolution;
124          (b) the nonprofit corporation may carry on [its] the nonprofit corporation's activities,
125     under the name stated pursuant to Subsection (1)(c), as if the administrative dissolution had
126     never occurred; and
127          (c) an act of the nonprofit corporation during the period of dissolution is effective and
128     enforceable as if the administrative dissolution had never occurred.
129          (5) (a) The division may make rules for the reinstatement of a nonprofit corporation
130     voluntarily dissolved.
131          (b) The rules made under Subsection (5)(a) shall be substantially similar to the
132     requirements of this section for reinstatement of a nonprofit corporation that is administratively
133     dissolved.
134          Section 3. Section 16-6a-1513 is amended to read:
135          16-6a-1513. Withdrawal of foreign nonprofit corporation.
136          (1) A foreign nonprofit corporation authorized to conduct affairs in this state may not
137     withdraw from this state until [its] the foreign nonprofit corporation's application for
138     withdrawal has been filed by the division.
139          (2) A foreign nonprofit corporation authorized to conduct affairs in this state may apply
140     for withdrawal by delivering to the division for filing an application for withdrawal [setting
141     forth] that states:
142          (a) [its] the foreign nonprofit corporation's corporate name and [its] assumed name, if
143     any;
144          (b) the name of the state or country under whose law [it] the foreign nonprofit
145     corporation is incorporated;
146          (c) (i) (A) the address of [its] the foreign nonprofit corporation's principal office; or
147          (B) if a principal office is not to be maintained, a statement that the foreign nonprofit
148     corporation will not maintain a principal office; and
149          (ii) if different from the address of the principal office or if no principal office is to be
150     maintained, the address to which service of process may be mailed pursuant to Section
151     16-6a-1514;
152          (d) that the foreign nonprofit corporation is not conducting affairs in this state;
153          (e) that [it] the foreign nonprofit corporation surrenders [its] the foreign nonprofit
154     corporation's authority to conduct affairs in this state;
155          (f) whether [its] the foreign nonprofit corporation's registered agent will continue to be
156     authorized to accept service on [its] the foreign nonprofit corporation's behalf in any
157     proceeding based on a cause of action arising during the time [it] the foreign nonprofit
158     corporation was authorized to conduct affairs in this state; [and]
159          (g) the federal employer identification number of the foreign nonprofit corporation; and
160          [(g)] (h) any additional information that the division determines is necessary or
161     appropriate to:
162          (i) determine whether the foreign nonprofit corporation is entitled to withdraw; and
163          (ii) determine and assess any unpaid taxes, fees, and penalties payable by the foreign
164     nonprofit corporation as prescribed by this chapter.
165          [(3) A foreign nonprofit corporation's application for withdrawal may not be filed by
166     the division until:]
167          [(a) all outstanding fees and state tax obligations have been paid; and]
168          [(b) the division has received a certificate from the State Tax Commission reciting that
169     all taxes owed by the foreign nonprofit corporation have been paid.]
170          (3) (a) After receiving a foreign nonprofit corporation's application for withdrawal, the
171     division shall:
172          (i) provide the State Tax Commission with the foreign nonprofit corporation's federal
173     employer identification number; and
174          (ii) request that the State Tax Commission certify that the foreign nonprofit corporation
175     is in good standing.
176          (b) The State Tax Commission shall certify that a foreign nonprofit corporation is in
177     good standing if the foreign nonprofit corporation has paid all taxes, fees, and penalties the
178     foreign nonprofit corporation owed to the State Tax Commission.
179          (c) If a foreign nonprofit corporation is not in good standing as described in Subsection
180     (3)(b), the State Tax Commission shall:
181          (i) notify the division, stating that the foreign nonprofit corporation is not in good
182     standing; and
183          (ii) notify the foreign nonprofit corporation, explaining in detail why the foreign
184     nonprofit corporation is not in good standing.
185          (4) (a) The division shall approve a foreign nonprofit corporation's application for
186     withdrawal if:
187          (i) the division determines that the application for withdrawal contains the information
188     required under Subsection (2);
189          (ii) the division determines the information in the application is correct; and
190          (iii) the State Tax Commission certifies that the foreign nonprofit corporation is in
191     good standing as described in Subsection (3)(b).
192          (b) The division shall mail written notice of the withdrawal stating the effective date of
193     the withdrawal to the foreign nonprofit corporation.
194          Section 4. Section 16-10a-1422 is amended to read:
195          16-10a-1422. Reinstatement following dissolution.
196          (1) A corporation dissolved under Section 16-10a-1403 or 16-10a-1421 may apply to
197     the division for reinstatement within two years after the effective date of dissolution by
198     delivering to the division for filing an application for reinstatement that:
199          (a) states:
200          [(a)] (i) the effective date of the corporation's dissolution;
201          [(b)] (ii) the corporation's corporate name as of the effective date of dissolution;
202          [(c)] (iii) that the grounds for dissolution either did not exist or have been eliminated;
203          [(d)] (iv) the corporate name under which the corporation is being reinstated;
204          [(e)] (v) that the name stated in Subsection [(1)(d)] (1)(a)(iv) satisfies the requirements
205     of Section 16-10a-401;
206          [(f)] (vi) that the corporation has paid all fees or penalties imposed under this chapter
207     or other applicable state law;
208          [(g)] (vii) that the corporation:
209          [(i)] (A) has paid any taxes, fees, or penalties owed to the State Tax Commission; or
210          [(ii)] (B) is current on a payment plan with the State Tax Commission for any taxes,
211     fees, or penalties owed to the State Tax Commission;
212          [(h)] (viii) the address of the corporation's registered office in this state;
213          [(i)] (ix) the name of the corporation's registered agent at the office stated in
214     Subsection (1)(h);
215          (x) the federal employer identification number of the corporation; and
216          [(j)] (xi) any additional information the division determines to be necessary or
217     appropriate[.]; and
218          [(2)] (b) [The corporation shall include in or with the application for reinstatement:]
219          [(a)] includes the written consent to appointment by the designated registered agent[;
220     and].
221          [(b) a certificate from the State Tax Commission that states that the corporation:]
222          [(i) has paid any taxes, fees, or penalties owed to the State Tax Commission; or]
223          [(ii) is current on a payment plan with the State Tax Commission for any taxes, fees, or
224     penalties owed to the State Tax Commission.]
225          (2) (a) After receiving a corporation's application for reinstatement, the division shall:
226          (i) provide the State Tax Commission with the corporation's federal employer
227     identification number; and
228          (ii) request that the State Tax Commission certify that the corporation is in good
229     standing.
230          (b) The State Tax Commission shall certify that a corporation is in good standing if the
231     corporation:
232          (i) has paid all taxes, fees, and penalties the corporation owed to the State Tax
233     Commission; or
234          (ii) is current on a payment plan with the State Tax Commission for all taxes, fees, and
235     penalties the corporation owes to the State Tax Commission.
236          (c) If a corporation is not in good standing as described in Subsection (2)(b), the State
237     Tax Commission shall:
238          (i) notify the division, stating that the corporation is not in good standing; and
239          (ii) notify the corporation, explaining in detail why the corporation is not in good
240     standing.
241          (3) [If]
242          (a) The division shall revoke the administrative dissolution if:
243          (i) the division determines that the application for reinstatement contains the
244     information required [by Subsections (1) and (2) and] under Subsection (1);
245          (ii) the division determines that the information in the application is correct[, the
246     division shall revoke the administrative dissolution.]; and
247          (iii) the State Tax Commission certifies that the corporation is in good standing as
248     described in Subsection (2)(b).
249          (b) The division shall mail to the corporation in the manner provided in Subsection
250     16-10a-1421(5) written notice of:
251          [(a)] (i) the revocation; and
252          [(b)] (ii) the effective date of the revocation.
253          (4) (a) When the reinstatement is effective, [it] the reinstatement relates back to the
254     effective date of the administrative dissolution.
255          (b) Upon reinstatement:
256          [(a)] (i) an act of the corporation during the period of dissolution is effective and
257     enforceable as if the administrative dissolution had never occurred; and
258          [(b)] (ii) the corporation may carry on [its] the corporation's business, under the name
259     stated pursuant to Subsection [(1)(d),] (1)(a)(iv), as if the administrative dissolution had never
260     occurred.
261          Section 5. Section 16-10a-1520 is amended to read:
262          16-10a-1520. Withdrawal of foreign corporation.
263          (1) A foreign corporation authorized to transact business in this state may not withdraw
264     from this state until [its] the foreign corporation's application for withdrawal has been filed by
265     the division.
266          (2) A foreign corporation authorized to transact business in this state may apply for
267     withdrawal by delivering to the division for filing an application for withdrawal [setting forth]
268     that states:
269          (a) [its] the foreign corporation's corporate name and [its] assumed name, if any;
270          (b) the name of the state or country under whose law [it] the foreign corporation is
271     incorporated;
272          (c) the address of [its] the foreign corporation's principal office, or if none is to be
273     maintained, a statement that the corporation will not maintain a principal office, and if different
274     from the address of the principal office or if no principal office is to be maintained, the address
275     to which service of process may be mailed pursuant to Section 16-10a-1521;
276          (d) that the corporation is not transacting business in this state and that [it] the foreign
277     corporation surrenders [its] the foreign corporation's authority to transact business in this state;
278          (e) whether [its] the foreign corporation's registered agent will continue to be
279     authorized to accept service on [its] the foreign corporation's behalf in any proceeding based on
280     a cause of action arising during the time [it] the foreign corporation was authorized to transact
281     business in this state; [and]
282          (f) the federal employer identification number of the foreign corporation; and
283          [(f)] (g) any additional information that the division determines is necessary or
284     appropriate to determine whether the corporation is entitled to withdraw, and to determine and
285     assess any unpaid taxes, fees, and penalties payable by [it] the foreign corporation as prescribed
286     by this chapter.
287          [(3) A foreign corporation's application for withdrawal may not be filed by the division
288     until all outstanding fees and state tax obligations have been paid and the division has received
289     a tax clearance certificate from the State Tax Commission.]
290          (3) (a) After receiving a foreign corporation's application for withdrawal, the division
291     shall:
292          (i) provide the State Tax Commission with the foreign corporation's federal employer
293     identification number; and
294          (ii) request that the State Tax Commission certify that the foreign corporation is in
295     good standing.
296          (b) The State Tax Commission shall certify that a foreign corporation is in good
297     standing if the foreign corporation has paid all taxes, fees, and penalties the foreign nonprofit
298     corporation owed to the State Tax Commission.
299          (c) If a foreign corporation is not in good standing as described in Subsection (3)(b),
300     the State Tax Commission shall:
301          (i) notify the division, stating that the foreign corporation is not in good standing; and
302          (ii) notify the foreign corporation, explaining in detail why the foreign corporation is
303     not in good standing.
304          (4) (a) The division shall approve a foreign corporation's application for withdrawal if:
305          (i) the division determines that the application for withdrawal contains the information
306     required under Subsection (2);
307          (ii) the division determines the information in the application is correct; and
308          (iii) the State Tax Commission certifies that the foreign corporation is in good standing
309     as described in Subsection (3)(b).
310          (b) The division shall mail written notice of the withdrawal stating the effective date of
311     the withdrawal to the foreign corporation.
312          Section 6. Effective date.
313          (1) Except as provided in Subsection (2), this bill takes effect on May 3, 2023.
314          (2) The actions affecting the following sections take effect on July 1, 2023:
315          (a) Section 16-6a-1412;
316          (b) Section 16-6a-1513;
317          (c) Section 16-10a-1422; and
318          (d) Section 16-10a-1520.