What this is: Around the country, state lawmakers have had a busy legislative year. Below is a summary of some of the notable business entity and UCC-related bills from various states that were passed into law or became effective in 2024.
What this means: Many notable business entity bills, from Alabama to Washington, covering a variety of topics, were passed into law in 2024, with several earlier introductions becoming effective in 2024. We have rounded them up for you below.
HB230 removes the requirement for domestic and foreign corporations in Alabama to file an annual report with the Secretary of State. Effective October 1, 2024.
AB231 permits corporations which conduct a meeting on or before December 31, 2025 to offer an option of audio-only means of participation, giving shareholders or proxyholders the ability to select whether to take part by audio only or by audio-visual means of participation. The corporation is prohibited from setting any barriers to other participation methods. Effective January 1, 2024.
AB2908 removes a requirement that included an expiration date of December 31, 2025 for shareholder and member remote participation in meetings. Instead, the ability for a shareholder or member to participate remotely has been extended indefinitely. Effective January 1, 2025.
SB1168 gives the Secretary of State the ability to cancel a business entity in the event there is a court order determining that the entity was unlawfully using a person’s personal identification information and the entity did not file the required statement of information which redacted the personal identification information within a set time period. Also establishes a disclaimer of proper authority procedure for a person to file with the Secretary of State claiming that their personal identification information was used in a business entity filing. Effective January 1, 2025.
AB2283 extends court implementation of electronic service provisions under certain circumstances from July 1, 2024 to July 1, 2025. Effective July 2024.
SB428 requires certain business entities to include a valid email address and the North American Industry Classification System Code on their incorporation/formation and qualification/registration documents. Allows the Secretary of State to notify business entities of filing delinquencies and other issues by email sent to the entity’s email address as opposed to first-class mail at physical addresses. Generally effective January 1, 2025.
SB291 changes the location of the registration of trade names for sole proprietorships, partnerships and associations from the Superior Court prothonotaries to the Division of Revenue. The Act also provides for electronic recordation of the filing of certificates. The fee for the filing is $25, consistent with the current fee charged by the Superior Court. Effective February 1, 2025.
Business entity amendments: In keeping with its annual tradition of amending its business entity law annually, Delaware’s business entity amendments generally took effect on August 1, 2024. For details, see our 2-part article series, Delaware’s 2024 Business Entity Law Amendments Part 1 and Delaware’s 2024 Business Entity Law Amendments Part 2.
SB1198 adds statutory requirements for ratification of defective corporate acts. Sets procedures and filing requirements. Also includes provisions for resignation of registered agent. Effective July 2024.
SB2765 among other things, amends the LLC Act, subject to certain limitations, to provide that the failure of a limited liability company to observe the usual company formalities or requirements related to the exercise of company powers or business management is not grounds for imposing liability on the members or managers. The amendment includes a veil-piercing remedy. Effective January 1, 2025.
SB2054 provides that certain business entities which have been administratively dissolved are no longer required to pay outstanding tax liabilities in order to be reinstated and eliminates the requirement for their federal tax identification. Effective July 1, 2024.
HB3, 2024 3rd extraordinary session repeals the corporate franchise tax and related applicability of incentives pertaining to the tax. Effective January 1, 2026, applicable to corporate franchise tax periods starting January 1, 2026.
SB544/HB888 among other things, changes ratification provisions for defective corporate acts. Effective October 2024.
SB400/HB749 provides for a corporation's adoption of bylaws for an emergency (as defined in the bill). An action taken in good faith during an emergency binds the corporation and may not be used to impose liability on a director, officer, employee or agent of the corporation. Effective October 2024.
SB8059 amends the LLC Transparency Act, including, but not limited to requiring all beneficial ownership disclosures, attestations of exemption and filing fees to be submitted electronically as prescribed by the Department of State. The beneficial ownership disclosure or attestation of exemption must be signed electronically, consistent with provisions of the state technology law. Establishes a confidentiality requirement subject to limited exceptions. Generally effective January 2026.
SB98 has several provisions, including that no person shall include the name of another person on certain documents filed with the Secretary of State without that person's consent, if the named person is included in the filing as: (a) A statutory agent; (b) the individual causing the document to be delivered for filing; (c) the person incorporating, forming, registering or organizing an entity or name registration; (d) any other person required to be identified in the document. Other provisions in the bill include setting a procedure for submission of a complaint with the Secretary of State’s office by someone who believes that he/she has been named in, or affected by, a possible fraudulent filing; setting a time limit for reinstatement of certain dissolved or cancelled entities to within 2 years of the dissolution or cancellation and requiring the written appointment of a statutory agent to include the address of the agent’s primary residence in Ohio (if a natural person) or usual place of business in Ohio (if a business entity). A post office box is not a usual place of business (even if a street address is included). Effective October 24, 2024.
HB2057, effective January 2, 2023, included among other changes, the removal of the decennial filing requirement and the establishment of an annual report filing requirement. Section 146, relating to annual reports, includes a different effective date from the rest of the bill (January 2024) and the annual report requirement begins on January 1, 2025. This is a significant change for business entities that, until now, were filing once a decade. The new annual reporting requirement applies to virtually all business entity types, both domestic and foreign, except for: General partnerships that are not limited liability partnerships, land banks, financial institutions and credit unions. The filing due dates vary depending on the type of business entity. For further details, please visit the DOS website.
H7424/S2739 changes assumed name provisions to filing of business trade name requirements. Trade name filings, including Registration, Renewal, Cancellation or Restoration, are to be made with the Secretary of State instead of the applicable local town or city clerk. The Secretary of State must require the annual renewal of trade names, establish a renewal process, set cancellation and other procedures. The Secretary of State will be keeping an online register. Effective January 2025, with implementation later in the year.
H8055/S3056 authorizes the Division of Taxation to share tax information with the Secretary of State’s office in response to a request from that office regarding an entity’s tax status as compliant or noncompliant. If the Secretary of State’s office receives notice from the Division of Taxation that the entity has failed to pay any fees or taxes due to Rhode Island, the Secretary of State will issue notice and begin revocation proceedings in accordance with the law. The Secretary of State is required to protect federal and state tax information in its custody and refrain from disclosing any specific tax information. Effective January 2025.
HB19 created a business court which is a specialty trial court in Texas authorized to hear specific cases. It is statutorily created under Section 1, Article V of the Texas Constitution. The judicial district is composed of all counties within Texas and includes many divisions. The bill sets jurisdiction for the court, its powers and limitations. Includes procedures and fee authorization. Effective September 2023 and applicable to civil actions on or after September 1, 2024.
SB1045 added a Fifteenth Court of Appeals with jurisdiction over matters relating to certain civil cases. HB19 provides for the Fifteenth Court of Appeals to have exclusive jurisdiction over an appeal from an order or judgment of the business court or an original proceeding or action relating to the business court under certain circumstances. The changes in law made by Senate Bill 1045 apply to appeals perfected on or after September 1, 2024.
Substitute SB5786 makes changes to the business corporation law. It adds definitions relating to merger and share exchange which include such terms as “acquired entity,” “acquiring entity,” “new owner liability,” “party to a merger” and “surviving entity.” The bill revises requirements and procedures for merger and share exchange and sets requirements for voting group approval of certain actions. In addition, by complying with the law, any corporation that is not a social purpose corporation may become a social purpose corporation in accordance with a plan of election. The plan of election must include an amendment to the articles of incorporation with required information and has director and shareholder approval requirements. Effective June 2024.
The new Article 12 on controllable electronic records (with corresponding update to Article 9 to allow perfection of security interests in digital assets) was adopted in 2024 in the following jurisdictions:
For details on the new Article 12 (and the corresponding Article 9 amendment), please see: uniformlaws.org/committees/community-home?communitykey=1457c422-ddb7-40b0-8c76-39a1991651ac#LegBillTrackingAnchor
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.