SSB 3082

BACKGROUND (TREATMENT OF BUSINESS ENTITIES). A business entity may be organized on a profit, nonprofit, or cooperative basis. This bill provides for each type of business entity, including a limited liability company and business corporation organized on a profit basis for the benefit of its investors (members or shareholders), a closed cooperative (closed coop) organized for the benefit of its investor-patrons (members), and a nonprofit corporation organized under principles other than investor benefit (members). , articles of incorporation or operating agreement) that sets forth its powers and duties., a board of directors or officers), and the use or distribution of its assets including earnings with related tax consequences. The business entity exercises its powers and duties under the general oversight of the secretary of state (secretary). The bill addresses statutory requirements for the reinstatement of a dissolved business entity. DISSOLUTION OF A BUSINESS ENTITY., its assets liquidated). _____ XIV, for business corporations; Code chapter 501, subchapter VIII, for closed cooperatives; and Code chapter 504, subchapter XIV, for nonprofit corporations. Generally, a dissolution may be initiated by the business entity on a voluntary basis (with the consent of its interest holders) or on an involuntarily basis pursuant to a legal action for administrative dissolution commenced by the secretary., a failure to maintain a place of business or be represented by a registered agent for purpose of receiving service of process). Once the secretary issues a certificate of dissolution, the subject business entity can no longer do business in the state other than winding up its affairs., the inadvertent failure of an officer of the business entity to file a biennial report with the secretary). Several escape procedures allow a business entity to avoid dissolution. First, the secretary of state is required to notify the business entity of its pending administrative dissolution to allow the business entity to cure the violation. Second, a business entity that has been issued a certificate of dissolution may apply to the secretary of state to cancel the certificate and be reinstated. If the secretary approves the application, the secretary issues a certificate of reinstatement., restrictions on the right of the business entity to regain its name if the application was not timely filed). BILL’S PROVISIONS (TAX STATUS NO LONGER REQUIRED AS A CONDITION FOR REINSTATEMENT). The bill eliminates provisions that require any of these covered business entities to include their federal tax identification number (tax ID number) in its application for administrative reinstatement. _____ the bill eliminates a requirement that the secretary refer the applicant’s tax ID number to the department of workforce development (department) and that the department report to the secretary the applicant’s tax status. The department (see Code chapter 84A) is primarily responsible for administering laws relating to unemployment compensation insurance supported by taxes collected from employers. The provisions to be eliminated currently prohibit the secretary from canceling a certificate of dissolution until the business entity satisfies its tax payment obligation.