House File 844 - Enrolled House File 844 AN ACT PROVIDING FOR BUSINESS ENTITIES, PROVIDING FOR CERTAIN FEES, AND INCLUDING EFFECTIVE DATE PROVISIONS. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: DIVISION I FOR PROFIT CORPORATIONS PART A GENERAL PROVISIONS Section 1. Section 490.101, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.101 Short title. This chapter shall be known and may be cited as the “Iowa Business Corporation Act” . Sec. 2. Section 490.120, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.120 Requirements for documents —— extrinsic facts. 1. A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the secretary of state. 2. This chapter must require or permit filing the document in the office of the secretary of state. 3. The document must contain the information required by this chapter and may contain other information.
House File 844, p. 2 4. The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form. 5. The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation. 6. Except as provided in section 490.1622, subsection 3, the document must be signed by any of the following: a. The chair of the board of directors of a domestic or foreign corporation, its president, or another of its officers. b. If directors have not been selected or the corporation has not been formed, by an incorporator. c. If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary. 7. a. The person executing the document shall sign it and state beneath or opposite the person’s signature the person’s name and the capacity in which the document is signed. The document may but need not contain a corporate seal, attestation, acknowledgment, or verification. b. The secretary of state may accept for filing a document containing a copy of a signature, however made. 8. If the secretary of state has prescribed a mandatory form for the document under section 490.121, subsection 1, the document must be in or on the prescribed form. 9. The document must be delivered to the office of the secretary of state for filing. Delivery may be made by electronic transmission if and to the extent permitted by the secretary of state. If it is filed in typewritten or printed form and not transmitted electronically, the secretary of state may require one exact or conformed copy to be delivered with the document. 10. When the document is delivered to the office of the secretary of state for filing, the correct filing fee, and any franchise tax, license fee, or penalty required by this chapter or other law to be paid at the time of delivery for filing must be paid or provision for payment made in a manner permitted by
House File 844, p. 3 the secretary of state. 11. Whenever a provision of this chapter permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, all of the following provisions apply: a. The manner in which the facts will operate upon the terms of the plan or filed document must be set forth in the plan or filed document. b. The facts may include any of the following: (1) Any of the following that is available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data. (2) A determination or action by any person or body, including the corporation or any other party to a plan or filed document. (3) The terms of, or actions taken under, an agreement to which the corporation is a party, or any other agreement or document. c. As used in this subsection: (1) “Filed document” means a document filed by the secretary of state under any provision of this chapter except subchapter XV or section 490.1622. (2) “Plan” means a plan of domestication, conversion, merger, or share exchange. d. The following provisions of a plan or filed document shall not be made dependent on facts outside the plan or filed document: (1) The name and address of any person required in a filed document. (2) The registered office of any entity required in a filed document. (3) The registered agent of any entity required in a filed document. (4) The number of authorized shares and designation of each class or series of shares. (5) The effective date of a filed document. (6) Any required statement in a filed document of the date
House File 844, p. 4 on which the underlying transaction was approved or the manner in which that approval was given. e. If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is neither ascertainable by reference to a source described in paragraph “b” , subparagraph (1), nor a document that is a matter of public record, and the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the secretary of state articles of amendment to the filed document setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this paragraph “e” are deemed to be authorized by the authorization of the original filed document to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders. Sec. 3. Section 490.121, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.121 Forms. 1. a. The secretary of state may prescribe and furnish on request any of the following forms: (1) An application for a certificate of existence or certificate of registration. (2) A foreign corporation’s registration statement. (3) A foreign corporation’s statement of withdrawal. (4) A foreign corporation’s transfer of registration statement. (5) The biennial report required by section 490.1622. b. If the secretary of state so requires, use of the forms provided in paragraph “a” is mandatory. 2. The secretary of state may prescribe and furnish on request forms for other documents required or permitted to be filed pursuant to this chapter but their use is not mandatory. Sec. 4. Section 490.122, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.122 Filing, service, and copying fees. 1. The secretary of state shall collect the following fees when the documents described in this subsection are delivered to the secretary of state for filing:
House File 844, p. 5 DOCUMENT FEE a. Articles of incorporation . . . . . . . . . . . . . . . . . . . . . . $ 50 b. Application for use of indistinguishable name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 c. Application for reserved name . . . . . . . . . . . . . . . . . . $ 10 d. Notice of transfer of reserved name . . . . . . . . . . . . $ 10 e. Application for registered name . . . . . . . . . . . . . . . . $ 20 f. Application for renewal of registered name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20 g. Corporation’s statement of change of registered agent or registered office or both . . . . . . . . No fee h. Agent’s statement of change of registered office for each affected corporation not to exceed a total of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee i. Agent’s statement of resignation . . . . . . . . . . . . . . . No fee j. Articles of domestication . . . . . . . . . . . . . . . . . . . . . . $ 50 k. Articles of conversion . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 l. Amendment of articles of incorporation . . . . . . . . . $ 50 m. Restatement of articles of incorporation with amendment of articles . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 n. Restatement of articles of incorporation without amendment of articles . . . . . . . . . . . . . . . . . . . . . . . . $ 50 o. Articles of merger or share exchange . . . . . . . . . . . $ 50 p. Articles of dissolution . . . . . . . . . . . . . . . . . . . . . . . . $ 5 q. Articles of revocation of dissolution . . . . . . . . . . $ 5 r. Certificate of administrative dissolution . . . . . . No fee s. Application for reinstatement following administrative dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 t. Certificate of reinstatement . . . . . . . . . . . . . . . . . . . No fee u. Certificate of judicial dissolution . . . . . . . . . . . . No fee v. Foreign registration statement . . . . . . . . . . . . . . . . . $ 100 w. Amendment of foreign registration statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100 x. Statement of withdrawal . . . . . . . . . . . . . . . . . . . . . . . . $ 10 y. Transfer of foreign registration statement . . . . . $ 100 z. Notice of termination of registration . . . . . . . . . . No fee aa. Articles of correction . . . . . . . . . . . . . . . . . . . . . . . . $ 5 ab. Articles of validation . . . . . . . . . . . . . . . . . . . . . . . . $ 5 ac. Application for certificate of existence or
House File 844, p. 6 registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 ad. Biennial report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60 ae. Any other document required or permitted to be filed by this chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 2. The secretary of state shall collect a fee of five dollars each time process is served on the secretary of state under this chapter. The party to a proceeding causing service of process is entitled to recover this fee as costs if such party prevails in the proceeding. 3. The secretary of state shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation: a. One dollar a page for copying. b. Five dollars for the certificate. Sec. 5. Section 490.123, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.123 Effective date of filed document. 1. Except to the extent otherwise provided in section 490.124, subsection 3, and part E, a document accepted for filing is effective as follows: a. On the date and at the time of filing, as provided in section 490.125, subsection 2. b. On the date of filing and at the time specified in the document as its effective time, if later than the time under paragraph “a” . c. At a specified delayed effective date and time which shall not be more than ninety days after filing. d. If a delayed effective date is specified, but no time is specified, at 12:01 a.m. on the date specified, which shall not be more than ninety days after the date of filing. 2. If a filed document does not specify the time zone or place at which a date or time or both is to be determined, the date or time or both at which it becomes effective shall be those prevailing at the place of filing in this state. Sec. 6. Section 490.124, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.124 Correcting filed document. 1. A document filed by the secretary of state pursuant to this chapter may be corrected if any of the following applies:
House File 844, p. 7 a. The document contains an inaccuracy. b. The document was defectively signed, attested, sealed, verified, or acknowledged. c. The electronic transmission was defective. 2. A document is corrected by complying with all of the following: a. By preparing articles of correction that do all of the following: (1) Describe the document, including its filing date, or a copy of the document is attached to the articles of correction. (2) Specify the inaccuracy or defect to be corrected. (3) Correct the inaccuracy or defect. b. By delivering the articles of correction to the secretary of state for filing. 3. Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. Sec. 7. Section 490.125, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.125 Filing duty of secretary of state. 1. If a document delivered to the office of the secretary of state for filing satisfies the requirements of section 490.120, the secretary of state shall file it. 2. The secretary of state files a document by recording it as filed on the date and time of receipt. After filing a document, except the biennial report required by section 490.1622, and except as provided in section 490.503, the secretary of state shall return to the person who delivered the document for filing a copy of the document with an acknowledgment of the date and time of filing. 3. If the secretary of state refuses to file a document, it shall be returned to the person who delivered the document for filing within five days after the document was delivered, together with a brief, written explanation of the reason for the refusal. 4. The secretary of state’s duty to file documents under this section is ministerial. The secretary of state’s filing
House File 844, p. 8 or refusing to file a document does not create a presumption of any of the following: a. The document does or does not conform to the requirements of this chapter. b. The information contained in the document is correct or incorrect. Sec. 8. Section 490.126, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.126 Appeal from secretary of state’s refusal to file document. 1. If the secretary of state refuses to file a document delivered for filing, the person that delivered the document for filing may petition the district court of the county where the corporation’s principal office or, if none in this state, its registered office, is located to compel its filing. The document and the explanation of the secretary of state’s refusal to file must be attached to the petition. The court may decide the matter in a summary proceeding. 2. The court may order the secretary of state to file the document or take other action the court considers appropriate. 3. The court’s final decision may be appealed as in other civil proceedings. Sec. 9. Section 490.127, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.127 Evidentiary effect of certified copy of filed document. A certificate from the secretary of state delivered with a copy of a document filed by the secretary of state is conclusive evidence that the original document is on file with the secretary of state. Sec. 10. Section 490.128, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.128 Certificate of existence or registration. 1. Any person may apply to the secretary of state to furnish a certificate of existence for a domestic corporation or a certificate of registration for a foreign corporation. 2. A certificate of existence must set forth all of the following: a. The domestic corporation’s corporate name.
House File 844, p. 9 b. That the domestic corporation is duly incorporated under the law of this state, the date of its incorporation, and the period of its duration if less than perpetual. c. That all fees, taxes, and penalties owed to this state have been paid, subject to all of the following: (1) Payment is reflected in the records of the secretary of state. (2) Nonpayment affects the existence of the domestic corporation. d. That its most recent biennial report required by section 490.1622 has been filed by the secretary of state. e. That articles of dissolution have not been filed. f. That the corporation is not administratively dissolved and a proceeding is not pending under section 490.1421. g. Other facts of record in the office of the secretary of state that may be requested by the applicant. 3. A certificate of registration must set forth all of the following: a. The foreign corporation’s name used in this state. b. That the foreign corporation is registered to do business in this state. c. That all fees, taxes, and penalties owed to this state have been paid, subject to all of the following: (1) Payment is reflected in the records of the secretary of state. (2) Nonpayment affects the registration of the foreign corporation. d. That its most recent biennial report required by section 490.1622 has been filed by the secretary of state. e. Other facts of record in the office of the secretary of state that may be requested by the applicant. 4. Subject to any qualification stated in the certificate, a certificate of existence or registration issued by the secretary of state may be relied upon as conclusive evidence of the facts stated in the certificate. Sec. 11. Section 490.129, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.129 Penalty for signing false document. 1. A person commits an offense by signing a document that
House File 844, p. 10 the person knows is false in any material respect with intent that the document be delivered to the secretary of state for filing. 2. An offense under this section is a serious misdemeanor punishable by a fine of not to exceed one thousand dollars. Sec. 12. Section 490.135, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.135 Powers. The secretary of state has the power reasonably necessary to perform the duties required of the secretary of state by this chapter. Sec. 13. Section 490.140, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.140 Chapter definitions. As used in this chapter, unless otherwise specified: 1. “Articles of incorporation” means the articles of incorporation described in section 490.202, all amendments to the articles of incorporation, and any other documents permitted or required to be delivered for filing by a domestic business corporation with the secretary of state under any provision of this chapter that modify, amend, supplement, restate, or replace the articles of incorporation. After an amendment of the articles of incorporation or any other document filed under this chapter that restates the articles of incorporation in their entirety, the articles of incorporation shall not include any prior documents. When used with respect to a foreign corporation or a domestic or foreign nonprofit corporation, the “articles of incorporation” of such an entity means the document of such entity that is equivalent to the articles of incorporation of a domestic business corporation. 2. “Authorized shares” means the shares of all classes a domestic or foreign corporation is authorized to issue. 3. “Beneficial shareholder” means a person who owns the beneficial interest in shares, which may be a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee. 4. “Conspicuous” means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it.
House File 844, p. 11 5. “Cooperative association” means an entity that is structured and operated on a cooperative basis pursuant to 26 U.S.C. §1381(a) and that meets the definitional requirements of an association as provided in 12 U.S.C. §1141j(a) or 7 U.S.C. §291. 6. “Corporation” , “domestic corporation” , “business corporation” , or “domestic business corporation” means a corporation for profit, which is not a foreign corporation, incorporated under this chapter. 7. “Deliver” or “delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with section 490.141, by electronic transmission. 8. “Distribution” means a direct or indirect transfer of cash or other property, except a corporation’s own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a payment of a dividend; a purchase, redemption, or other acquisition of shares; a distribution of indebtedness; a distribution in liquidation; or otherwise. 9. “Document” means any of the following: a. A tangible medium on which information is inscribed, and includes handwritten, typed, printed or similar instruments, and copies of such instruments. b. An electronic record. 10. “Domestic” , with respect to an entity, means an entity governed as to its internal affairs by the law of this state. 11. “Effective date” , when referring to a document accepted for filing by the secretary of state, means the time and date determined in accordance with section 490.123. 12. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. 13. “Electronic record” means information that is stored in an electronic or other nontangible medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with section 490.141, subsection 10.
House File 844, p. 12 14. “Electronic transmission” or “electronically transmitted” means any form or process of communication not directly involving the physical transfer of paper or another tangible medium, which is all of the following: a. Suitable for the retention, retrieval, and reproduction of information by the recipient. b. Retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with section 490.141, subsection 10. 15. “Eligible entity” means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation. 16. “Eligible interests” means interests or memberships. 17. “Employee” includes an officer but not a director. A director may accept duties that make the director also an employee. 18. “Entity” includes a domestic and foreign business corporation; domestic and foreign nonprofit corporation; estate; trust; domestic and foreign unincorporated entity; and a state, the United States, and a foreign government. 19. “Expenses” means reasonable expenses of any kind, including reasonable fees and expenses of counsel and experts, that are incurred in connection with a matter. 20. “Filing entity” means an unincorporated entity, other than a limited liability partnership, that is of a type that is created by filing a public organic record or is required to file a public organic record that evidences its creation. 21. “Foreign” , with respect to an entity, means an entity governed as to its internal affairs by the organic law of a jurisdiction other than this state. 22. “Foreign corporation” or “foreign business corporation” means a corporation incorporated under a law other than the law of this state which would be a business corporation if incorporated under the law of this state. 23. “Foreign nonprofit corporation” means a corporation incorporated under a law other than the law of this state which would be a nonprofit corporation if incorporated under the law of this state.
House File 844, p. 13 24. “Foreign registration statement” means the foreign registration statement described in section 490.1503. 25. “Governmental subdivision” includes an authority, city, county, district, and municipality. 26. “Governor” means any person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law governing the entity and its organic rules. 27. “Includes” and “including” denote a partial definition or a nonexclusive list. 28. “Individual” means a natural person. 29. “Interest” means either or both of the following rights under the organic law governing an unincorporated entity: a. The right to receive distributions from the entity either in the ordinary course or upon liquidation. b. The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs. 30. “Interest holder” means a person who holds of record an interest. 31. a. “Interest holder liability” means any of the following: (1) Personal liability for a debt, obligation, or other liability of a domestic or foreign corporation or eligible entity that is imposed on a person by any of the following: (a) Solely by reason of the person’s status as a shareholder, member, or interest holder. (b) By the articles of incorporation of the domestic corporation or the organic rules of the eligible entity or foreign corporation that make one or more specified shareholders, members, or interest holders, or categories of shareholders, members, or interest holders, liable in their capacity as shareholders, members, or interest holders for all or specified liabilities of the corporation or eligible entity. (2) An obligation of a shareholder, member, or interest holder under the articles of incorporation of a domestic corporation or the organic rules of an eligible entity or foreign corporation to contribute to the entity. b. For purposes of paragraph “a” , except as otherwise
House File 844, p. 14 provided in the articles of incorporation of a domestic corporation or the organic law or organic rules of an eligible entity or a foreign corporation, interest holder liability arises under paragraph “a” , subparagraph (1), when the corporation or eligible entity incurs the liability. 32. “Jurisdiction of formation” means the state or country the law of which includes the organic law governing a domestic or foreign corporation or eligible entity. 33. “Means” denotes an exhaustive definition. 34. “Membership” means the rights of a member in a domestic or foreign nonprofit corporation. 35. “Merger” means a transaction pursuant to section 490.1102. 36. “Nonfiling entity” means an unincorporated entity that is of a type that is not created by filing a public organic record. 37. “Nonprofit corporation” or “domestic nonprofit corporation” means a corporation incorporated under the laws of this state and subject to the provisions of chapter 504. 38. “Organic law” means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity. 39. “Organic rules” means the public organic record and private organic rules of a domestic or foreign corporation or eligible entity. 40. “Person” means a person as defined in section 4.1. 41. “Principal office” means the office, in or out of this state, so designated in the biennial report required by section 490.1622 or foreign registration statement where the principal executive offices of a domestic or foreign corporation are located. 42. a. “Private organic rules” means any of the following: (1) The bylaws of a domestic or foreign business or nonprofit corporation. (2) The rules, regardless of whether in writing, that govern the internal affairs of an unincorporated entity, are binding on all of its interest holders, and are not part of its public organic record, if any. b. Where private organic rules have been amended or
House File 844, p. 15 restated, the term means the private organic rules as last amended or restated. 43. “Proceeding” includes a civil suit and criminal, administrative, and investigatory action. 44. a. “Public organic record” means any of the following: (1) The articles of incorporation of a domestic or foreign business or nonprofit corporation. (2) The document, if any, the filing of which is required to create an unincorporated entity, or which creates the unincorporated entity and is required to be filed. b. Where a public organic record has been amended or restated, the term means the public organic record as last amended or restated. 45. “Record date” means the date fixed for determining the identity of the corporation’s shareholders and their shareholdings for purposes of this chapter. Unless another time is specified when the record date is fixed, the determination shall be made as of the close of business at the principal office of the corporation on the date so fixed. 46. “Record shareholder” means any of the following: a. The person in whose name shares are registered in the records of the corporation. b. The person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to section 490.723 on file with the corporation to the extent of the rights granted by such certificate. 47. “Registered foreign corporation” means a foreign corporation registered to do business in the state pursuant to subchapter XV. 48. “Secretary” means the corporate officer to whom the board of directors has delegated responsibility under section 490.840, subsection 3, to maintain the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation. 49. “Share exchange” means a transaction pursuant to section 490.1103. 50. “Shareholder” means a record shareholder. 51. “Shares” means the units into which the proprietary interests in a domestic or foreign corporation are divided.
House File 844, p. 16 52. “Sign” or “signature” means, with present intent to authenticate or adopt a document, doing any of the following: a. Executing or adopting a tangible symbol to a document, including any manual, facsimile, or conformed signature. b. Attaching to or logically associating with an electronic transmission an electronic sound, symbol, or process, and including an electronic signature in an electronic transmission. 53. “State” , when referring to a part of the United States, includes a state and commonwealth, and their agencies and governmental subdivisions, and a territory and insular possession, and their agencies and governmental subdivisions, of the United States. 54. “Subscriber” means a person who subscribes for shares in a corporation, whether before or after incorporation. 55. “Type of entity” means a generic form of entity that is any of the following: a. Recognized at common law. b. Formed under an organic law, regardless of whether some entities formed under that law are subject to provisions of that law that create different categories of the form of entity. 56. a. “Unincorporated entity” means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and that is not any of the following: (1) A domestic or foreign business or nonprofit corporation. (2) A series of a limited liability company or of another type of entity. (3) An estate. (4) A trust. (5) A state, the United States, or foreign government. b. “Unincorporated entity” includes a general partnership, limited liability company, limited partnership, business trust, joint stock association, and unincorporated nonprofit association. 57. “United States” includes district, authority, bureau, commission, department, and any other agency of the United
House File 844, p. 17 States. 58. “Unrestricted voting trust beneficial owner” means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement. 59. “Voting group” means all shares of one or more classes or series that under the articles of incorporation or this chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to vote generally on the matter are for that purpose a single voting group. 60. “Voting power” means the current power to vote in the election of directors. 61. “Voting trust beneficial owner” means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to section 490.730, subsection 1. 62. “Writing” or “written” means any information in the form of a document. Sec. 14. Section 490.141, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.141 Notices and other communications. 1. A notice under this chapter must be in writing unless oral notice is reasonable in the circumstances. Unless otherwise agreed between the sender and the recipient, words in a notice or other communication under this chapter must be in English. 2. A notice or other communication may be given by any method of delivery, except that electronic transmissions must be in accordance with this section. If the methods of delivery are impracticable, a notice or other communication may be given by means of a broad nonexclusionary distribution to the public, which may include a newspaper of general circulation in the area where published; radio, television, or other form of public broadcast communication; or other methods of distribution that the corporation has previously identified to its shareholders. 3. A notice or other communication to a domestic corporation
House File 844, p. 18 or to a foreign corporation registered to do business in this state may be delivered to the corporation’s registered agent at its registered office or to the secretary at the corporation’s principal office shown in its most recent biennial report required by section 490.1622 or, in the case of a foreign corporation that has not yet delivered a biennial report, in its foreign registration statement. 4. A notice or other communication may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection 10. 5. Any consent under subsection 4 may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if all of the following apply: a. The corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with such consent. b. Such inability becomes known to the secretary or an assistant secretary or to the transfer agent, or other person responsible for the giving of notice or other communications; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. 6. Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when all of the following apply: a. The electronic transmission enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent, and from which the recipient is able to retrieve the electronic transmission. b. The electronic transmission is in a form capable of being processed by that system. 7. Receipt of an electronic acknowledgment from an information processing system described in subsection 6, paragraph “a” , establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received. 8. An electronic transmission is received under this
House File 844, p. 19 section even if no person is aware of its receipt. 9. A notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following: a. If in a physical form, the earliest of when it is actually received, or when it is left at any of the following: (1) A shareholder’s address shown on the corporation’s record of shareholders maintained by the corporation under section 490.1601, subsection 4. (2) A director’s residence or usual place of business. (3) The corporation’s principal office. b. If mailed by postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail. c. If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of when it is actually received, or as follows: (1) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee. (2) Five days after it is deposited in the United States mail. d. If an electronic transmission, when it is received as provided in subsection 6. e. If oral, when communicated. 10. A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if all of the following apply: a. The electronic transmission is otherwise retrievable in perceivable form. b. The sender and the recipient have consented in writing to the use of such form of electronic transmission. 11. If this chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this section or other provisions of this chapter, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of
House File 844, p. 20 notices of meetings of directors by electronic transmission. 12. In the event that any provisions of this chapter are deemed to modify, limit, or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§7001 et seq., the provisions of this chapter shall control to the maximum extent permitted by section 102(a)(2) of that federal Act. 13. a. Whenever notice would otherwise be required to be given under any provision of this subchapter to a shareholder, such notice need not be given if any of the following apply: (1) Notices to the shareholders of two consecutive annual meetings, and all notices of meetings during the period between such two consecutive annual meetings, have been sent to such shareholder at such shareholder’s address as shown on the records of the corporation and have been returned undeliverable or could not be delivered. (2) All, but not less than two, payments of dividends on securities during a twelve-month period, or two consecutive payments of dividends on securities during a period of more than twelve months, have been sent to such shareholder at such shareholder’s address as shown on the records of the corporation and have been returned undeliverable or could not be delivered. b. If any such shareholder shall deliver to the corporation a written notice setting forth such shareholder’s then-current address, the requirement that notice be given to such shareholder shall be reinstated. Sec. 15. Section 490.142, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.142 Number of shareholders. 1. For purposes of this chapter, any of the following identified as a shareholder in a corporation’s current record of shareholders constitutes one shareholder: a. Three or fewer co-owners. b. A corporation, partnership, trust, estate, or other entity. c. The trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or account. 2. For purposes of this chapter, shareholdings registered
House File 844, p. 21 in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person. Sec. 16. Section 490.143, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.143 Qualified director. 1. As used in this chapter, a “qualified director” means a director who takes action, if at the time action is to be taken any of the following applies: a. Under section 490.202, subsection 2, paragraph “f” , is not a director under any of the following circumstances: (1) To whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply. (2) Has a material relationship with any other person to whom the limitation or elimination described in subparagraph (1) would apply. b. Under section 490.744, does not have any of the following: (1) A material interest in the outcome of the proceeding. (2) A material relationship with a person who has such an interest. c. Under section 490.853 or 490.855, all of the following apply: (1) The director is not a party to the proceeding. (2) The director is not a director as to whom a transaction is a director’s conflicting interest transaction or who sought a disclaimer of the corporation’s interest in a business opportunity under section 490.870, which transaction or disclaimer is challenged in the proceeding. (3) The director does not have a material relationship with a director described in either subparagraph (1) or (2). d. Under section 490.862, the director is not any of the following: (1) A director as to whom the transaction is a director’s conflicting interest transaction. (2) A director who has a material relationship with another director as to whom the transaction is a director’s conflicting interest transaction.
House File 844, p. 22 e. Under section 490.870, is not a director who does any of the following: (1) Pursues or takes advantage of the business opportunity, directly or indirectly through or on behalf of another person. (2) Has a material relationship with a director or officer who pursues or takes advantage of the business opportunity, directly, or indirectly through or on behalf of another person. 2. As used in this section, all of the following apply: a. “Material interest” means an actual or potential benefit or detriment, other than one which would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken. b. “Material relationship” means a familial, financial, professional, employment, or other relationship that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken. 3. The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director: a. Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter, or by any person that has a material relationship with that director, acting alone or participating with others. b. Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director. c. With respect to action to be taken under section 490.744, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged. Sec. 17. Section 490.144, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.144 Householding. 1. A corporation has delivered written notice or any
House File 844, p. 23 other report or statement under this chapter, the articles of incorporation, or the bylaws to all shareholders who share a common address if all of the following apply: a. The corporation delivers one copy of the notice, report, or statement to the common address. b. The corporation addresses the notice, report, or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented. c. Each of those shareholders consents to delivery of a single copy of such notice, report, or statement to the shareholders’ common address. 2. Any such consent described in subsection 1, paragraph “b” or “c” , shall be revocable by any of such shareholders who deliver written notice of revocation to the corporation. If such written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than thirty days after delivery of the written notice of revocation. 3. Any shareholder who fails to object by written notice to the corporation, within sixty days of written notice by the corporation of its intention to deliver single copies of notices, reports, or statements to shareholders who share a common address as permitted by subsection 1, shall be deemed to have consented to receiving such single copy at the common address; provided that the notice of intention explains that consent may be revoked and the method for revoking. Sec. 18. NEW SECTION . 490.145 Part definitions. As used in this part: 1. “Corporate action” means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders. 2. “Date of the defective corporate action” means the date or, if the defective corporate action occurred or may have occurred on more than one date, the range of dates, or the approximate date or range of dates, if the exact date or range of dates is unknown or not readily ascertainable, the defective
House File 844, p. 24 corporate action was purported to have been taken. 3. “Defective corporate action” means all of the following: a. Any corporate action purportedly taken that is, and at the time such corporate action was purportedly taken would have been, within the power of the corporation, but is void or voidable due to a failure of authorization. b. An overissue. 4. “Failure of authorization” means the failure to authorize, approve, or otherwise effect a corporate action in compliance with the provisions of this chapter, the articles of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable. 5. “Overissue” means the purported issuance of any of the following: a. Shares of a class or series in excess of the number of shares of a class or series the corporation has the power to issue under section 490.601 at the time of such issuance. b. Shares of any class or series that is not then authorized for issuance by the articles of incorporation. 6. “Putative shares” means the shares of any class or series, including shares issued upon exercise of rights, options, warrants or other securities convertible into shares of the corporation, or interests with respect to such shares, that were created or issued as a result of a defective corporate action, and any of the following applies: a. But for any failure of authorization would constitute valid shares. b. Cannot be determined by the board of directors to be valid shares. 7. “Valid shares” means the shares of any class or series that have been duly authorized and validly issued in accordance with this chapter, including as a result of ratification or validation under this part. 8. a. “Validation effective time” with respect to any defective corporate action ratified under this part means the later of the following: (1) The time at which the ratification of the defective
House File 844, p. 25 corporate action is approved by the shareholders, or if approval of shareholders is not required, the time at which the notice required by section 490.149 becomes effective in accordance with section 490.141. (2) The time at which any articles of validation filed in accordance with section 490.151 become effective. b. The validation effective time shall not be affected by the filing or pendency of a judicial proceeding under section 490.152 or otherwise, unless otherwise ordered by the court. Sec. 19. NEW SECTION . 490.146 Defective corporate actions. 1. A defective corporate action shall not be void or voidable if ratified in accordance with section 490.147 or validated in accordance with section 490.152. 2. Ratification under section 490.147 or validation under section 490.152 shall not be deemed to be the exclusive means of ratifying or validating any defective corporate action, and the absence or failure of ratification in accordance with this part shall not, of itself, affect the validity or effectiveness of any corporate action properly ratified under common law or otherwise, nor shall it create a presumption that any such corporate action is or was a defective corporate action or void or voidable. 3. In the case of an overissue, putative shares shall be valid shares effective as of the date originally issued or purportedly issued upon any of the following: a. The effectiveness under this part and under subchapter X of an amendment to the articles of incorporation authorizing, designating, or creating such shares. b. The effectiveness of any other corporate action under this part ratifying the authorization, designation, or creation of such shares. Sec. 20. NEW SECTION . 490.147 Ratification of defective corporate actions. 1. To ratify a defective corporate action under this section, other than the ratification of an election of the initial board of directors under subsection 2, the board of directors shall take action ratifying the action in accordance with section 490.148, stating all of the following: a. The defective corporate action to be ratified and, if the
House File 844, p. 26 defective corporate action involved the issuance of putative shares, the number and type of putative shares purportedly issued. b. The date of the defective corporate action. c. The nature of the failure of authorization with respect to the defective corporate action to be ratified. d. That the board of directors approves the ratification of the defective corporate action. 2. In the event that a defective corporate action to be ratified relates to the election of the initial board of directors of the corporation under section 490.205, subsection 1, paragraph “b” , a majority of the persons who, at the time of the ratification, are exercising the powers of directors may take an action stating all of the following: a. The name of the person or persons who first took action in the name of the corporation as the initial board of directors of the corporation. b. The earlier of the date on which such persons first took such action or were purported to have been elected as the initial board of directors. c. That the ratification of the election of such person or persons as the initial board of directors is approved. 3. If any provision of this chapter, the articles of incorporation or bylaws, any corporate resolution, or any plan or agreement to which the corporation is a party in effect at the time action under subsection 1 is taken requires shareholder approval or would have required shareholder approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection 1 shall be submitted to the shareholders for approval in accordance with section 490.148. 4. Unless otherwise provided in the action taken by the board of directors under subsection 1, after the action by the board of directors has been taken and, if required, approved by the shareholders, the board of directors may abandon the ratification at any time before the validation effective time without further action of the shareholders. Sec. 21. NEW SECTION . 490.148 Action on ratification.
House File 844, p. 27 1. The quorum and voting requirements applicable to a ratifying action by the board of directors under section 490.147, subsection 1, shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time such ratifying action is taken. 2. If the ratification of the defective corporate action requires approval by the shareholders under section 490.147, subsection 3, and if the approval is to be given at a meeting, the corporation shall notify each holder of valid and putative shares, regardless of whether entitled to vote, as of the record date for notice of the meeting and as of the date of the occurrence of defective corporate action, provided that notice shall not be required to be given to holders of valid or putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. The notice must state that the purpose, or one of the purposes, of the meeting is to consider ratification of a defective corporate action and must be accompanied by all of the following: a. Either a copy of the action taken by the board of directors in accordance with section 490.147, subsection 1, or the information required by section 490.147, subsection 1, paragraphs “a” through “d” . b. A statement that any claim that the ratification of such defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty days from the applicable validation effective time. 3. Except as provided in subsection 4, with respect to the voting requirements to ratify the election of a director, the quorum and voting requirements applicable to the approval by the shareholders required by section 490.147, subsection 3, shall be the quorum and voting requirements applicable to the corporate action proposed to be ratified at the time of such shareholder approval. 4. The approval by shareholders to ratify the election of a director requires that the votes cast within the voting group favoring such ratification exceed the votes cast opposing such ratification of the election at a meeting at which a quorum is
House File 844, p. 28 present. 5. Putative shares on the record date for determining the shareholders entitled to vote on any matter submitted to shareholders under section 490.147, subsection 3, and without giving effect to any ratification of putative shares that becomes effective as a result of such vote, shall neither be entitled to vote nor counted for quorum purposes in any vote to approve the ratification of any defective corporate action. 6. If the approval under this section of putative shares would result in an overissue, in addition to the approval required by section 490.147, approval of an amendment to the articles of incorporation under subchapter X to increase the number of shares of an authorized class or series or to authorize the creation of a class or series of shares so there would be no overissue shall also be required. Sec. 22. NEW SECTION . 490.149 Notice requirements. 1. Unless shareholder approval is required under section 490.147, subsection 3, prompt notice of an action taken under section 490.147 shall be given to each holder of valid and putative shares, regardless of whether entitled to vote, as of all of the following: a. The date of such action by the board of directors. b. The date of the defective corporate action ratified, provided that notice shall not be required to be given to holders of valid and putative shares whose identities or addresses for notice cannot be determined from the records of the corporation. 2. The notice must contain all of the following: a. Either a copy of the action taken by the board of directors in accordance with section 490.147, subsection 1 or 2, or the information required by section 490.147, subsection 1, paragraphs “a” through “d” , or section 490.147, subsection 2, paragraphs “a” through “c” , as applicable. b. A statement that any claim that the ratification of the defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty days from the applicable validation effective time.
House File 844, p. 29 3. No notice under this section is required with respect to any action required to be submitted to shareholders for approval under section 490.147, subsection 3, if notice is given in accordance with section 490.148, subsection 2. 4. A notice required by this section may be given in any manner permitted by section 490.141 and, for any corporation subject to the reporting requirements of section 13 or 15(d) of the federal Securities Exchange Act of 1934, may be given by means of a filing or furnishing of such notice with the United States securities and exchange commission. Sec. 23. NEW SECTION . 490.150 Effect of ratification. From and after the validation effective time, and without regard to the one hundred twenty-day period during which a claim may be brought under section 490.152, all of the following shall apply: 1. Each defective corporate action ratified in accordance with section 490.147 shall not be void or voidable as a result of the failure of authorization identified in the action taken under section 490.147, subsection 1 or 2, and shall be deemed a valid corporate action effective as of the date of the defective corporate action. 2. The issuance of each putative share or fraction of a putative share purportedly issued pursuant to a defective corporate action identified in the action taken under section 490.147 shall not be void or voidable, and each such putative share or fraction of a putative share shall be deemed to be an identical share or fraction of a valid share as of the time it was purportedly issued. 3. Any corporate action taken subsequent to the defective corporate action ratified in accordance with this part in reliance on such defective corporate action having been validly effected and any subsequent defective corporate action resulting directly or indirectly from such original defective corporate action shall be valid as of the time taken. Sec. 24. NEW SECTION . 490.151 Filings. 1. If the defective corporate action ratified under this part would have required under any other section of this chapter a filing in accordance with this chapter, then, regardless of whether a filing was previously made in respect
House File 844, p. 30 of such defective corporate action and in lieu of a filing otherwise required by this chapter, the corporation shall file articles of validation in accordance with this section, and such articles of validation shall serve to amend or substitute for any other filing with respect to such defective corporate action required by this chapter. 2. The articles of validation must set forth all of the following: a. The defective corporate action that is the subject of the articles of validation, including in the case of any defective corporate action involving the issuance of putative shares, the number and type of putative shares issued and the date or dates upon which such putative shares were purported to have been issued. b. The date of the defective corporate action. c. The nature of the failure of authorization in respect of the defective corporate action. d. A statement that the defective corporate action was ratified in accordance with section 490.147, including the date on which the board of directors ratified such defective corporate action and the date, if any, on which the shareholders approved the ratification of such defective corporate action. e. The information required by subsection 3. 3. The articles of validation must also contain the following information: a. If a filing was previously made in respect of the defective corporate action and no changes to such filing are required to give effect to the ratification of such defective corporate action in accordance with section 490.147, the articles of validation must set forth all of the following: (1) The name, title, and filing date of the filing previously made and any articles of correction to that filing. (2) A statement that a copy of the filing previously made, together with any articles of correction to that filing, is attached as an exhibit to the articles of validation. b. If a filing was previously made in respect of the defective corporate action and such filing requires any change to give effect to the ratification of such defective corporate
House File 844, p. 31 action in accordance with section 490.147, the articles of validation must set forth all of the following: (1) The name, title, and filing date of the filing previously made and any articles of correction to that filing. (2) A statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to such defective corporate action is attached as an exhibit to the articles of validation. (3) The date and time that such filing is deemed to have become effective. c. If a filing was not previously made in respect of the defective corporate action and the defective corporate action ratified under section 490.147 would have required a filing under any other section of this chapter, the articles of validation must set forth all of the following: (1) A statement that a filing containing all of the information required to be included under the applicable section or sections of this chapter to give effect to such defective corporate action is attached as an exhibit to the articles of validation. (2) The date and time that such filing is deemed to have become effective. Sec. 25. NEW SECTION . 490.152 Judicial proceedings regarding validity of corporate actions. 1. Upon application by the corporation, any successor entity to the corporation, a director of the corporation, any shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner of the corporation, including any such shareholder, beneficial shareholder, or unrestricted voting trust beneficial owner as of the date of the defective corporate action ratified under section 490.147, or any other person claiming to be substantially and adversely affected by a ratification under section 490.147, the district court of the county where a corporation’s principal office or, if none in this state, its registered office, is located may do all of the following: a. Determine the validity and effectiveness of any corporate action or defective corporate action.
House File 844, p. 32 b. Determine the validity and effectiveness of any ratification under section 490.147. c. Determine the validity of any putative shares. d. Modify or waive any of the procedures specified in section 490.147 or 490.148 to ratify a defective corporate action. 2. In connection with an action under this section, the court may make such findings or orders, and take into account any factors or considerations, regarding such matters as it deems proper under the circumstances. 3. Service of process of the application under subsection 1 on the corporation may be made in any manner provided by statute of this state or by rule of the applicable court for service on the corporation, and no other party need be joined in order for the court to adjudicate the matter. In an action filed by the corporation, the court may require notice of the action to be provided to other persons specified by the court and permit such other persons to intervene in the action. 4. Notwithstanding any other provision of this section or otherwise under applicable law, any action asserting that the ratification of any defective corporate action and any putative shares issued as a result of such defective corporate action should not be effective, or should be effective only on certain conditions, shall be brought within one hundred twenty days of the validation effective time. Sec. 26. Section 490.201, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.201 Incorporators. One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the secretary of state for filing. Sec. 27. Section 490.202, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.202 Articles of incorporation. 1. The articles of incorporation must set forth all of the following: a. A corporate name for the corporation that satisfies the requirements of section 490.401. b. The number of shares the corporation is authorized to
House File 844, p. 33 issue. c. The street and mailing addresses of the corporation’s initial registered office and the name of its initial registered agent at that office. d. The name and address of each incorporator. 2. The articles of incorporation may set forth any of the following: a. The names and addresses of the individuals who are to serve as the initial directors. b. Provisions not inconsistent with law regarding any of the following: (1) The purpose or purposes for which the corporation is organized. (2) Managing the business and regulating the affairs of the corporation. (3) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders. (4) A par value for authorized shares or classes of shares. (5) The imposition of interest holder liability on shareholders. c. Any provision that under this chapter is required or permitted to be set forth in the bylaws. d. A provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for any of the following: (1) The amount of a financial benefit received by a director to which the director is not entitled. (2) An intentional infliction of harm on the corporation or the shareholders. (3) A violation of section 490.833. (4) An intentional violation of criminal law. e. A provision permitting or making obligatory indemnification of a director for liability, as defined in section 490.850, to any person for any action taken, or any failure to take any action, as a director, except liability for any of the following: (1) Receipt of a financial benefit to which the director is
House File 844, p. 34 not entitled. (2) An intentional infliction of harm on the corporation or its shareholders. (3) A violation of section 490.833. (4) An intentional violation of criminal law. f. A provision limiting or eliminating any duty of a director or any other person to offer the corporation the right to have or participate in any, or one or more classes or categories of, business opportunities, before the pursuit or taking of the opportunity by the director or other person; provided that any application of such a provision to an officer or a related person of that officer is subject to all of the following: (1) It also requires approval of that application by the board of directors, subsequent to the effective date of the provision, by action of qualified directors taken in compliance with the same procedures as are set forth in section 490.862. (2) It may be limited by the authorizing action of the board. 3. The articles of incorporation need not set forth any of the corporate powers enumerated in this chapter. 4. Provisions of the articles of incorporation may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with section 490.120, subsection 11. 5. As used in this section, “related person” has the meaning specified in section 490.860. Sec. 28. Section 490.203, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.203 Incorporation. 1. Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed. 2. The secretary of state’s filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation. Sec. 29. Section 490.205, Code 2021, is amended by striking
House File 844, p. 35 the section and inserting in lieu thereof the following: 490.205 Organization of corporation. 1. After incorporation, the following shall apply: a. If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting. b. If initial directors are not named in the articles of incorporation, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators to do any of the following: (1) Elect initial directors and complete the organization of the corporation. (2) Elect a board of directors who shall complete the organization of the corporation. 2. Action required or permitted by this chapter to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator. 3. An organizational meeting may be held in or out of this state. Sec. 30. Section 490.206, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.206 Bylaws. 1. The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation. 2. The bylaws of a corporation may contain any provision that is not inconsistent with law or the articles of incorporation. 3. The bylaws may contain any of the following provisions: a. A requirement that if the corporation solicits proxies or consents with respect to an election of directors, the corporation include in its proxy statement and any form of its proxy or consent, to the extent and subject to such procedures or conditions as are provided in the bylaws, one or more individuals nominated by a shareholder in addition to
House File 844, p. 36 individuals nominated by the board of directors. b. A requirement that the corporation reimburse the expenses incurred by a shareholder in soliciting proxies or consents in connection with an election of directors, to the extent and subject to such procedures and conditions as are provided in the bylaws, provided that no bylaw so adopted shall apply to elections for which any record date precedes its adoption. 4. Notwithstanding section 490.1020, subsection 2, paragraph “b” , the shareholders in amending, repealing, or adopting a bylaw described in subsection 3 shall not limit the authority of the board of directors to amend or repeal any condition or procedure set forth in or to add any procedure or condition to such a bylaw to provide for a reasonable, practical, and orderly process. Sec. 31. Section 490.207, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.207 Emergency bylaws. 1. Unless the articles of incorporation provide otherwise, the board of directors may adopt bylaws to be effective only in an emergency as defined in subsection 4. The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including any of the following: a. Procedures for calling a meeting of the board of directors. b. Quorum requirements for the meeting. c. Designation of additional or substitute directors. 2. All provisions of the regular bylaws not inconsistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends. 3. Corporate action taken in good faith in accordance with the emergency bylaws has all of the following effects: a. The action binds the corporation. b. The action shall not be used to impose liability on a director, officer, employee, or agent of the corporation. 4. An emergency exists for purposes of this section if a quorum of the board of directors cannot readily be assembled because of some catastrophic event.
House File 844, p. 37 Sec. 32. NEW SECTION . 490.208 Forum selection provisions. 1. The articles of incorporation or bylaws may require that any or all internal corporate claims shall be brought exclusively in any specified court or courts of this state and, if so specified, in any additional courts in this state or in any other jurisdictions with which the corporation has a reasonable relationship. 2. A provision of the articles of incorporation or bylaws adopted under subsection 1 shall not have the effect of conferring jurisdiction on any court or over any person or claim, and shall not apply if none of the courts specified by such provision has the requisite personal and subject matter jurisdiction. If the court or courts of this state specified in a provision adopted under subsection 1 do not have the requisite personal and subject matter jurisdiction and another court of this state does have such jurisdiction, then the internal corporate claim may be brought in such other court of this state, notwithstanding that such other court of this state is not specified in such provision, and in any other court specified in such provision that has the requisite jurisdiction. 3. No provision of the articles of incorporation or bylaws may prohibit bringing an internal corporate claim in the courts of this state or require such claims to be determined by arbitration. 4. “Internal corporate claim” means, for the purposes of this section, any of the following: a. Any claim that is based upon a violation of a duty under the laws of this state by a current or former director, officer, or shareholder in such capacity. b. Any derivative action or proceeding brought on behalf of the corporation. c. Any action asserting a claim arising pursuant to any provision of this chapter or the articles of incorporation or bylaws. d. Any action asserting a claim governed by the internal affairs doctrine that is not included in paragraphs “a” through “c” . Sec. 33. NEW SECTION . 490.209 Foreign-trade zone
House File 844, p. 38 corporation. A domestic corporation may be incorporated or organized under the laws of this state, and a foreign corporation may be registered or authorized to transact business in this state, for the purpose of establishing, operating, and maintaining a foreign-trade zone as defined in 19 U.S.C. §81(a). The domestic or foreign corporation must maintain its principal place of business in this state. The domestic or foreign corporation described in this section has all powers necessary or convenient for applying for a grant of authority to establish, operate, and maintain a foreign-trade zone under 19 U.S.C. §81(a) et seq., and regulations promulgated under that law, and for establishing, operating, and maintaining a foreign-trade zone pursuant to that grant of authority. Sec. 34. Section 490.302, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.302 General powers. Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including the power to do all of the following: 1. Sue and be sued, complain, and defend in its corporate name. 2. Have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it. 3. Make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation. 4. Purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located. 5. Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property. 6. Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other
House File 844, p. 39 interests in, or obligations of, any other entity. 7. Make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other securities and obligations, which may be convertible into or include the option to purchase other securities of the corporation, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income. 8. Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment. 9. Be a promoter, partner, member, associate, or manager of any partnership, joint venture, trust, or other entity. 10. Conduct its business, locate offices, and exercise the powers granted by this chapter within or without this state. 11. Elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit. 12. Pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of its current or former directors, officers, employees, and agents. 13. Make donations for the public welfare or for charitable, scientific, or educational purposes. 14. Transact any lawful business that will aid governmental policy. 15. Make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation. Sec. 35. Section 490.303, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.303 Emergency powers. 1. In anticipation of or during an emergency as defined in subsection 4, the board of directors of a corporation may do all of the following: a. Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent. b. Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so. 2. During an emergency as defined in subsection 4, unless
House File 844, p. 40 emergency bylaws provide otherwise: a. Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner. b. One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum. 3. Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the corporation shall both: a. Bind the corporation. b. Not be used to impose liability on a corporate director, officer, employee, or agent. 4. An emergency exists for purposes of this section if a quorum of the board of directors cannot readily be assembled because of some catastrophic event. Sec. 36. Section 490.401, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.401 Corporate name. 1. A corporate name is subject to all of the following: a. It must contain the word “corporation”, “incorporated”, “company”, or “limited”, or the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”, or words or abbreviations of like import in another language. b. It must not contain language stating or implying that the corporation is organized for a purpose other than that permitted by section 490.301 and its articles of incorporation. 2. Except as authorized by subsections 3 and 4, a corporate name must be distinguishable upon the records of the secretary of state from all of the following: a. The corporate name of a corporation incorporated in this state which is not administratively dissolved, or if such corporation has been administratively dissolved, within five years after the effective date of dissolution. b. A corporate name reserved or registered under section 490.402 or 490.403 or any similar provision of the law of this state. c. The name of a foreign corporation registered to do
House File 844, p. 41 business in this state or an alternate name adopted by a foreign corporation registered to do business in this state because its corporate name is unavailable. d. The corporate name of a nonprofit corporation incorporated in this state which is not administratively dissolved. e. The name of a foreign nonprofit corporation registered to do business in this state or an alternate name adopted by a foreign nonprofit corporation registered to conduct activities in this state because its real name is unavailable. f. The name of a domestic filing entity which is not administratively dissolved. g. The name of a foreign unincorporated entity registered to do business in this state or an alternate name adopted by such an entity registered to conduct activities in this state because its real name is unavailable. h. A name reserved, registered, or protected as follows: (1) For a limited liability partnership, section 486A.1001 or 486A.1002. (2) For a limited partnership, section 488.108, 488.109, or 488.810. (3) For a business corporation, this section, or section 490.402, 490.403, or 490.1422. (4) For a limited liability company under chapter 489, section 489.108, 489.109, or 489.706. (5) For a nonprofit corporation, section 504.401, 504.402, 504.403, or 504.1423. 3. A corporation may apply to the secretary of state for authorization to use a name that is not distinguishable upon the secretary of state’s records from one or more of the names described in subsection 2. The secretary of state shall authorize use of the name applied for if any of the following conditions apply: a. The other corporation or unincorporated entity consents to the use in writing and submits an undertaking in form satisfactory to the secretary of state to change its name to a name that is distinguishable upon the records of the secretary of state from the name of the applying corporation. b. The applicant delivers to the secretary of state a
House File 844, p. 42 certified copy of the final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state. 4. A corporation may use the name, including the fictitious name, of another domestic or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and the proposed user corporation submits documentation to the satisfaction of the secretary of state establishing any of the following conditions: a. Has merged with the other corporation. b. Has been formed by reorganization of the other corporation. c. Has acquired all or substantially all of the assets, including the corporate name, of the other corporation. 5. This chapter does not control the use of fictitious names; however, if a corporation or a foreign corporation uses a fictitious name in this state, it shall deliver to the secretary of state for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name. Sec. 37. Section 490.402, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.402 Reserved name. 1. A person may reserve the exclusive use of a corporate name, including a fictitious or alternate name for a foreign corporation whose corporate name is not available, by delivering an application to the secretary of state for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the corporate name applied for is available, the secretary of state shall reserve the name for the applicant’s exclusive use for a nonrenewable one hundred twenty-day period. 2. The owner of a reserved corporate name may transfer the reservation to another person by delivering to the secretary of state a signed notice of the transfer that states the name and address of the transferee. Sec. 38. Section 490.403, Code 2021, is amended by striking
House File 844, p. 43 the section and inserting in lieu thereof the following: 490.403 Registered name. 1. A foreign corporation may register its corporate name, or its corporate name with the addition of any word or abbreviation listed in section 490.401, subsection 1, paragraph “a” , if necessary for the corporate name to comply with section 490.401, subsection 1, paragraph “a” , if the name is distinguishable upon the records of the secretary of state from the corporate names that are not available under section 490.401, subsection 2. 2. A foreign corporation registers its corporate name, or its corporate name with any addition permitted by subsection 1, by delivering to the secretary of state for filing an application that complies with all of the following: a. Sets forth that name, the state or country and date of its incorporation, and a brief description of the nature of the business which is to be conducted in this state. b. Is accompanied by a certificate of existence, or a document of similar import, from the state or country of incorporation. 3. The name is registered for the applicant’s exclusive use upon the effective date of the application and for the remainder of the calendar year, unless renewed. 4. A foreign corporation whose name registration is effective may renew it for successive years by delivering to the secretary of state for filing a renewal application, which complies with the requirements of subsection 2, between October 1 and December 31 of the preceding year. The renewal application when filed renews the registration for the following calendar year. 5. a. A foreign corporation whose name registration is effective may thereafter do any of the following: (1) Register to do business as a foreign corporation under the registered name, if it complies with section 490.401, subsection 1, paragraph “b” . (2) Consent in writing to the use of that name by a domestic corporation thereafter incorporated under this chapter or by another foreign corporation. b. The registration terminates when the domestic corporation
House File 844, p. 44 is incorporated or the foreign corporation registers to do business under that name. Sec. 39. Section 490.501, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.501 Registered office and agent of domestic and registered foreign corporations. 1. Each corporation shall continuously maintain in this state all of the following: a. A registered office that may be the same as any of its places of business. b. A registered agent, which may be any of the following: (1) An individual who resides in this state and whose business office is identical with the registered office. (2) A domestic or foreign corporation or eligible entity whose business office is identical with the registered office and, in the case of a foreign corporation or foreign eligible entity, is registered to do business in this state. 2. As used in this subchapter, “corporation” means both a domestic corporation and a registered foreign corporation. Sec. 40. Section 490.502, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.502 Change of registered office or registered agent. 1. A corporation may change its registered office or registered agent by delivering to the secretary of state for filing a statement of change that sets forth all of the following: a. The name of the corporation. b. The street and mailing addresses of its current registered office. c. If the current registered office is to be changed, the street and mailing addresses of the new registered office. d. The name of its current registered agent. e. If the current registered agent is to be changed, the name of the new registered agent and the new agent’s written consent, either on the statement or attached to it, to the appointment. f. That after the change or changes are made, the street and mailing addresses of its registered office and of the business office of its registered agent will be identical.
House File 844, p. 45 2. If the street or mailing address of a registered agent’s business office changes, the agent shall change the street or mailing address of the registered office of any corporation for which the agent is the registered agent by delivering a signed written notice of the change to the corporation and delivering to the secretary of state for filing a signed statement that complies with the requirements of subsection 1 and states that the corporation has been notified of the change. 3. If a registered agent changes the registered agent’s business address to another place, the registered agent may change the business address and the address of the registered agent by filing a statement as required in subsection 2 for each corporation, or a single statement for all corporations named in the notice, except that it need be signed only by the registered agent and need not be responsive to subsection 1, paragraph “e” , and must recite that a copy of the statement has been mailed to each corporation named in the notice. 4. A corporation may also change its registered office or registered agent in its biennial report as provided in section 490.1622. Sec. 41. Section 490.503, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.503 Resignation of registered agent. 1. A registered agent may resign as agent for a corporation by delivering to the secretary of state for filing a statement of resignation signed by the agent which shall state all of the following: a. The name of the corporation. b. The name of the agent. c. The agent resigns from serving as registered agent for the corporation. d. The address of the corporation to which the agent will deliver the notice required by subsection 3. 2. A statement of resignation takes effect on the earlier of the following: a. 12:01 a.m. on the thirty-first day after the day on which it is filed by the secretary of state. b. The designation of a new registered agent for the corporation.
House File 844, p. 46 3. A registered agent promptly shall deliver to the corporation notice of the date on which a statement of resignation was delivered to the secretary of state for filing. 4. When a statement of resignation takes effect, the person that resigned ceases to have responsibility under this chapter for any matter thereafter tendered to it as agent for the corporation. The resignation does not affect any contractual rights the corporation has against the agent or that the agent has against the corporation. 5. A registered agent may resign with respect to a corporation regardless of whether the corporation is in good standing. Sec. 42. Section 490.504, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.504 Service on corporation. 1. A corporation’s registered agent is the corporation’s agent for service of process, notice, or demand required or permitted by law to be served on the corporation. 2. If a corporation has no registered agent, or the agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the secretary at the corporation’s principal office. Service is perfected under this subsection at the earliest of the following: a. The date the corporation receives the mail. b. The date shown on the return receipt, if signed on behalf of the corporation. c. Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed. 3. a. The secretary of state shall be an agent of the corporation upon whom process, notice, or demand may be served, if any of the following applies: (1) The process, notice, or demand cannot be served on a corporation pursuant to subsection 1 or 2. (2) The process, notice, or demand is to be served on a registered foreign corporation that has withdrawn its registration pursuant to section 490.1507 or 490.1509, or the registration of which has been terminated pursuant to section
House File 844, p. 47 490.1511. b. Service of any process, notice, or demand on the secretary of state as agent for a corporation may be made by delivering to the secretary of state duplicate copies of the process, notice, or demand. If process, notice, or demand is served on the secretary of state, the secretary of state shall forward one of the copies by registered or certified mail, return receipt requested, to the corporation at the last address shown in the records of the secretary of state. Service is effected under this subsection at the earliest of the following: (1) The date the corporation receives the process, notice, or demand. (2) The date shown on the return receipt, if signed on behalf of the corporation. (3) Five days after the process, notice, or demand is deposited with the United States mail by the secretary of state. 4. This section does not prescribe the only means, or necessarily the required means, of serving a corporation. Sec. 43. Section 490.601, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.601 Authorized shares. 1. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and, before the issuance of shares of a class or series, describe the terms, including the preferences, rights, and limitations of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series. 2. The articles of incorporation must authorize all of the following: a. One or more classes or series of shares that together
House File 844, p. 48 have full voting rights. b. One or more classes or series of shares, which may be the same class, classes, or series as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution. 3. The articles of incorporation may authorize one or more classes or series of shares that have any of the following characteristics: a. Have special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter. b. Are redeemable or convertible as specified in the articles of incorporation in any of the following ways: (1) At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event. (2) For cash, indebtedness, securities, or other property. (3) At prices and in amounts specified or determined in accordance with a formula. c. Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative. d. Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation. 4. The terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with section 490.120, subsection 11. 5. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation. 6. The description of the preferences, rights, and limitations of classes or series of shares in subsection 3 is not exhaustive. Sec. 44. Section 490.602, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.602 Terms of class or series determined by board of directors. 1. If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to
House File 844, p. 49 do any of the following: a. Classify any unissued shares into one or more classes or into one or more series within a class. b. Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes. c. Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class. 2. If the board of directors acts pursuant to subsection 1, it shall determine the terms, including the preferences, rights, and limitations, to the same extent permitted under section 490.601, of any of the following: a. Any class of shares before the issuance of any shares of that class. b. Any series within a class before the issuance of any shares of that series. 3. Before issuing any shares of a class or series created under this section, the corporation shall deliver to the secretary of state for filing articles of amendment setting forth the terms determined under subsection 1. Sec. 45. Section 490.603, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.603 Issued and outstanding shares. 1. A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or canceled. 2. The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of subsection 3 and to section 490.640. 3. At all times that shares of the corporation are outstanding, one or more shares that together have full voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding. Sec. 46. Section 490.604, Code 2021, is amended by striking the section and inserting in lieu thereof the following: 490.604 Fractional shares.
House File 844, p. 50 1. A corporation may issue fractions of a share or in lieu of doing so may do any of the following: a. Pay in cash the value of fractions of a share. b. Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share. c. Arrange for disposition of fractional shares by the holders of such shares. 2. Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by section 490.625, subsection 2. 3. The holder of a fractional share is entitled to exercise the rights of a shareholder, including the rights to vote, to receive dividends, and to receive distributions upon dissolution. The holder of scrip is not entitled to any of these rights unless the scrip provides for them. 4. The board of directors may authorize the issuance of scrip subject to any condition, including any of the following: a. That the scrip will become void if not exchanged for full shares before a specified date. b.