Relating to documents filed with the secretary of state by business entities, including by authorizing the secretary of state to refuse to file documents or remove information from documents

GENERAL. This bill amends current and enacts new provisions relating to a number of different types of business organizations (entities) existing on a for-profit, cooperative, or nonprofit basis. An entity may be formed in this state as a domestic entity or formed in another jurisdiction and doing business in this state as a foreign entity. Generally, an entity is recognized as a person operating in this state with each type of entity governed under its own Code chapter. The relevant chapters, other than for cooperative associations, are based on model legislation prepared by the American bar association. BACKGROUND —— ORGANIZATION. The bill is comprised of a number of divisions, including a division amending a chapter establishing the office of secretary of state (SOS) and vesting the SOS with powers and duties (Code chapter 9). The other divisions address specific types of entities. A profit entity includes either a partnership, including a limited liability partnership, or a foreign limited liability partnership (Code chapter 486A); either a limited partnership, including a limited liability limited partnership, or a foreign limited partnership, including a foreign limited liability limited partnership (Code chapter 488); either a limited liability company, including a professional limited liability company, or a registered foreign limited liability company (Code chapter 489); either a corporation or foreign corporation (Code chapter 490), including a professional corporation or foreign professional corporation (Code chapter (496C). An entity formed on a cooperative basis includes either an association, foreign association (Code chapter 499), or a cooperative association (Code chapter 501); and either a cooperative or foreign cooperative (Code chapter 501A). An entity organized on a nonprofit basis includes either a corporation or a foreign corporation (Code chapter 504). BACKGROUND —— OPERATIONS. Each type of entity recognizes one or more executives making managerial decisions and equity holders, many of whom are voters making fundamental decisions affecting the entity. Depending upon an entity’s type, an executive may be referred to as a partner (Code chapter 486A), general partner (Code chapter 486A or 488), manager (Code chapter 489), or director (Code chapter 490, 499, 501, 501A, or 504). An equity holder may be referred to as a partner (Code chapter 486A), limited partner (Code chapter 486A or 488), shareholder (Code chapter 490), or member (Code chapter 489, 499, 501, 501A, or 504). Generally, an entity’s executives and equity holders are shielded from personal liability for actions attributable to the entity. The entity and its equity holders may also be subject to special tax treatment. BACKGROUND —— DOCUMENTS. Each entity is placed under the general authority of the SOS and in order to be recognized or authorized to carry out certain functions in this state, an entity must file a number of designated documents (referred to as records in Code chapters 488 and 489).116). Two Code chapters do not so prescribe the SOS’s authority when filing a document (Code chapters 499 and 501).116). Two Code chapters do not provide the SOS with that authority (Code chapters 499 and 501).117). One chapter provides for the right by the SOS to refuse a filing but not a right of appeal (Code chapter 488). Two Code chapters provide for neither a right by the SOS to refuse a filing nor consequently the right of appeal by the entity (Code chapters 499 and 501). BACKGROUND —— REGISTERED FILINGS.501) in addition to a registered agent and registered office, the registered filing must include the entity’s principal (or executive) office.1421).115). BILL’S PROVISIONS —— SECRETARY OF STATE’S AUTHORITY TO FILE DOCUMENTS. The bill makes changes to each of the Code chapters beginning with Code chapter 9 by amending provisions by correcting citations or enhancing readability. BILL’S PROVISIONS —— REFUSAL TO FILE A DOCUMENT. The bill provides that when filing a document by an association or foreign association under Code chapter 499 or a cooperative under Code chapter 501, the entity and SOS are subject to the same filing requirements as other entities.105).105).105B).116). BILL’S PROVISIONS —— NOTARIZED AFFIDAVIT TO REMOVE UNAUTHORIZED USE INFORMATION FROM A REGISTERED FILING.117B). A person whose information has been misidentified in a registered filing may submit to the SOS a notarized affidavit to remove such information from a registered filing (affidavit). The SOS must conduct an administrative review of the affidavit to determine the whether an asserted allegation is true. The SOS may reject an affidavit after determining that it is illegible, incomplete, misleading, or includes factual errors; or its purpose is to defraud or harass a person, including the filer. BILL’S PROVISIONS —— STATEMENT TO REMOVE UNAUTHORIZED USE INFORMATION FROM A REGISTERED FILING.117C). The SOS must also deliver a notice of the statement to the entity explaining what information was removed and why it was removed. The SOS may allow the entity to correct the registered filing. The SOS is prohibited from charging a fee for accepting or reviewing an affidavit, filing a statement, or removing unauthorized use information from any registered filing. The SOS cannot return a fee paid for a registered filing. The SOS may act as an agent of the entity and the office of the SOS may act as the registered office of the entity. BILL’S PROVISIONS —— STATEMENT TO REMOVE UNAUTHORIZED USE INFORMATION FROM A REGISTERED FILING —— REGISTERED AGENT AND OFFICE.504A). BILL’S PROVISIONS —— APPEAL OF STATEMENT TO REMOVE UNAUTHORIZED USE INFORMATION FROM A REGISTERED FILING.117D).