House Study Bill 691 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON HOLT) A BILL FOR An Act providing for business corporations, providing for 1 certain fees, and including effective date provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5044HC (1) 88 da/jh
H.F. _____ DIVISION I 1 GENERAL PROVISIONS 2 Section 1. Section 490.101, Code 2020, is amended by 3 striking the section and inserting in lieu thereof the 4 following: 5 490.101 Short title. 6 This chapter shall be known and may be cited as the “Iowa 7 Business Corporation Act” . 8 Sec. 2. Section 490.120, Code 2020, is amended by striking 9 the section and inserting in lieu thereof the following: 10 490.120 Requirements for documents —— extrinsic facts. 11 1. A document must satisfy the requirements of this 12 section, and of any other section that adds to or varies these 13 requirements, to be entitled to filing by the secretary of 14 state. 15 2. This chapter must require or permit filing the document 16 in the office of the secretary of state. 17 3. The document must contain the information required by 18 this chapter and may contain other information. 19 4. The document must be typewritten or printed or, if 20 electronically transmitted, it must be in a format that can be 21 retrieved or reproduced in typewritten or printed form. 22 5. The document must be in the English language. A 23 corporate name need not be in English if written in English 24 letters or Arabic or Roman numerals, and the certificate of 25 existence required of foreign corporations need not be in 26 English if accompanied by a reasonably authenticated English 27 translation. 28 6. Except as provided in section 490.1622, subsection 3, the 29 document must be signed by any of the following: 30 a. The chairperson of the board of directors of a domestic 31 or foreign corporation, its president, or another of its 32 officers. 33 b. If directors have not been selected or the corporation 34 has not been formed, by an incorporator. 35 -1- LSB 5044HC (1) 88 da/jh 1/ 261
H.F. _____ c. If the corporation is in the hands of a receiver, 1 trustee, or other court-appointed fiduciary, by that fiduciary. 2 7. a. The person executing the document shall sign it 3 and state beneath or opposite the person’s signature the 4 person’s name and the capacity in which the document is signed. 5 The document may but need not contain a corporate seal, 6 attestation, acknowledgment, or verification. 7 b. The secretary of state may accept for filing a document 8 containing a copy of a signature, however made. 9 8. If the secretary of state has prescribed a mandatory 10 form for the document under section 490.121, subsection 1, the 11 document must be in or on the prescribed form. 12 9. The document must be delivered to the office of the 13 secretary of state for filing. Delivery may be made by 14 electronic transmission if and to the extent permitted by the 15 secretary of state. If it is filed in typewritten or printed 16 form and not transmitted electronically, the secretary of state 17 may require one exact or conformed copy to be delivered with 18 the document. 19 10. When the document is delivered to the office of the 20 secretary of state for filing, the correct filing fee, and any 21 franchise tax, license fee, or penalty required by this chapter 22 or other law to be paid at the time of delivery for filing must 23 be paid or provision for payment made in a manner permitted by 24 the secretary of state. 25 11. Whenever a provision of this chapter permits any of the 26 terms of a plan or a filed document to be dependent on facts 27 objectively ascertainable outside the plan or filed document, 28 all of the following provisions apply: 29 a. The manner in which the facts will operate upon the terms 30 of the plan or filed document must be set forth in the plan or 31 filed document. 32 b. The facts may include any of the following: 33 (1) Any of the following that is available in a nationally 34 recognized news or information medium either in print or 35 -2- LSB 5044HC (1) 88 da/jh 2/ 261
H.F. _____ electronically: statistical or market indices, market prices 1 of any security or group of securities, interest rates, 2 currency exchange rates, or similar economic or financial data. 3 (2) A determination or action by any person or body, 4 including the corporation or any other party to a plan or filed 5 document. 6 (3) The terms of, or actions taken under, an agreement to 7 which the corporation is a party, or any other agreement or 8 document. 9 c. As used in this subsection: 10 (1) “Filed document” means a document filed with the 11 secretary of state under any provision of this chapter except 12 subchapter XV or section 490.1622. 13 (2) “Plan” means a plan of domestication, conversion, 14 merger, or share exchange. 15 d. The following provisions of a plan or filed document 16 shall not be made dependent on facts outside the plan or filed 17 document: 18 (1) The name and address of any person required in a filed 19 document. 20 (2) The registered office of any entity required in a filed 21 document. 22 (3) The registered agent of any entity required in a filed 23 document. 24 (4) The number of authorized shares and designation of each 25 class or series of shares. 26 (5) The effective date of a filed document. 27 (6) Any required statement in a filed document of the date 28 on which the underlying transaction was approved or the manner 29 in which that approval was given. 30 e. If a provision of a filed document is made dependent on a 31 fact ascertainable outside of the filed document, and that fact 32 is neither ascertainable by reference to a source described 33 in paragraph “b” , subparagraph (1), nor a document that is a 34 matter of public record, and the affected shareholders have 35 -3- LSB 5044HC (1) 88 da/jh 3/ 261
H.F. _____ not received notice of the fact from the corporation, then the 1 corporation shall file with the secretary of state articles of 2 amendment to the filed document setting forth the fact promptly 3 after the time when the fact referred to is first ascertainable 4 or thereafter changes. Articles of amendment under this 5 paragraph “e” are deemed to be authorized by the authorization 6 of the original filed document to which they relate and may be 7 filed by the corporation without further action by the board of 8 directors or the shareholders. 9 Sec. 3. Section 490.121, Code 2020, is amended by striking 10 the section and inserting in lieu thereof the following: 11 490.121 Forms. 12 1. a. The secretary of state may prescribe and furnish on 13 request any of the following forms: 14 (1) An application for a certificate of existence or 15 certificate of registration. 16 (2) A foreign corporation’s registration statement. 17 (3) A foreign corporation’s statement of withdrawal. 18 (4) A foreign corporation’s transfer of registration 19 statement. 20 (5) The biennial report required by section 490.1622. 21 b. If the secretary of state so requires, use of the forms 22 provided in paragraph “a” is mandatory. 23 2. The secretary of state may prescribe and furnish on 24 request forms for other documents required or permitted to be 25 filed by this chapter but their use is not mandatory. 26 Sec. 4. Section 490.122, Code 2020, is amended by striking 27 the section and inserting in lieu thereof the following: 28 490.122 Filing, service, and copying fees. 29 1. The secretary of state shall collect the following fees 30 when the documents described in this subsection are delivered 31 to the secretary of state for filing: 32 DOCUMENT FEE 33 a. Articles of incorporation . . . . . . . . . . . . . . . . . . . . . . $ __ 34 b. Application for use of indistinguishable 35 -4- LSB 5044HC (1) 88 da/jh 4/ 261
H.F. _____ name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 1 c. Application for reserved name . . . . . . . . . . . . . . . . . . $ __ 2 d. Notice of transfer of reserved name . . . . . . . . . . . . $ __ 3 e. Application for registered name . . . . . . . . . . . . . . . . $ __ 4 f. Application for renewal of registered 5 name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 6 g. Corporation’s statement of change of 7 registered agent or registered office or both . . . . . . . . $ __ 8 h. Agent’s statement of change of registered 9 office for each affected corporation not to exceed 10 a total of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 11 i. Agent’s statement of resignation . . . . . . . . . . . . . No fee 12 j. Articles of domestication . . . . . . . . . . . . . . . . . . . . . . $ __ 13 k. Articles of conversion . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 14 l. Amendment of articles of 15 incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 16 m. Restatement of articles of incorporation 17 with amendment of articles . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 18 n. Restatement of articles of incorporation 19 without amendment of articles . . . . . . . . . . . . . . . . . . . . . . . . $ __ 20 o. Articles of merger or share exchange . . . . . . . . . . . $ __ 21 p. Articles of dissolution . . . . . . . . . . . . . . . . . . . . . . . . $ __ 22 q. Articles of revocation of dissolution . . . . . . . . . . $ __ 23 r. Certificate of administrative 24 dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee 25 s. Application for reinstatement following 26 administrative dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 27 t. Certificate of reinstatement . . . . . . . . . . . . . . . . . No fee 28 u. Certificate of judicial dissolution . . . . . . . . . . No fee 29 v. Foreign registration statement . . . . . . . . . . . . . . . . . $ __ 30 w. Amendment of foreign registration 31 statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 32 x. Statement of withdrawal . . . . . . . . . . . . . . . . . . . . . . . . $ __ 33 y. Transfer of foreign registration statement . . . . . $ __ 34 z. Notice of termination of registration . . . . . . . . No fee 35 -5- LSB 5044HC (1) 88 da/jh 5/ 261
H.F. _____ aa. Biennial report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 1 ab. Articles of correction . . . . . . . . . . . . . . . . . . . . . . . . $ __ 2 ac. Articles of validation . . . . . . . . . . . . . . . . . . . . . . . . $ __ 3 ad. Application for certificate of existence or 4 registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 5 ae. Any other document required or permitted 6 to be filed by this chapter . . . . . . . . . . . . . . . . . . . . . . . . . . $ __ 7 2. The secretary of state shall collect a fee of $____ each 8 time process is served on the secretary of state under this 9 chapter. The party to a proceeding causing service of process 10 is entitled to recover this fee as costs if such party prevails 11 in the proceeding. 12 3. The secretary of state shall collect the following fees 13 for copying and certifying the copy of any filed document 14 relating to a domestic or foreign corporation: 15 a. $____ a page for copying. 16 b. $____ for the certificate. 17 Sec. 5. Section 490.123, Code 2020, is amended by striking 18 the section and inserting in lieu thereof the following: 19 490.123 Effective date of filed document. 20 1. Except to the extent otherwise provided in section 21 490.124, subsection 3, and part E, a document accepted for 22 filing is effective as follows: 23 a. On the date and at the time of filing, as provided in 24 section 490.125, subsection 2. 25 b. On the date of filing and at the time specified in the 26 document as its effective time, if later than the time under 27 paragraph “a” . 28 c. At a specified delayed effective date and time which 29 shall not be more than ninety days after filing. 30 d. If a delayed effective date is specified, but no time is 31 specified, at 12:01 a.m. on the date specified, which shall not 32 be more than ninety days after the date of filing. 33 2. If a filed document does not specify the time zone or 34 place at which a date or time or both is to be determined, the 35 -6- LSB 5044HC (1) 88 da/jh 6/ 261
H.F. _____ date or time or both at which it becomes effective shall be 1 those prevailing at the place of filing in this state. 2 Sec. 6. Section 490.124, Code 2020, is amended by striking 3 the section and inserting in lieu thereof the following: 4 490.124 Correcting filed document. 5 1. A document filed by the secretary of state pursuant to 6 this chapter may be corrected if any of the following applies: 7 a. The document contains an inaccuracy. 8 b. The document was defectively signed, attested, sealed, 9 verified, or acknowledged. 10 c. The electronic transmission was defective. 11 2. A document is corrected by complying with all of the 12 following: 13 a. By preparing articles of correction that do all of the 14 following: 15 (1) Describe the document, including its filing date, or a 16 copy of the document is attached to the articles of correction. 17 (2) Specify the inaccuracy or defect to be corrected. 18 (3) Correct the inaccuracy or defect. 19 b. By delivering the articles of correction to the secretary 20 of state for filing. 21 3. Articles of correction are effective on the effective 22 date of the document they correct except as to persons relying 23 on the uncorrected document and adversely affected by the 24 correction. As to those persons, articles of correction are 25 effective when filed. 26 Sec. 7. Section 490.125, Code 2020, is amended by striking 27 the section and inserting in lieu thereof the following: 28 490.125 Filing duty of secretary of state. 29 1. If a document delivered to the office of the secretary of 30 state for filing satisfies the requirements of section 490.120, 31 the secretary of state shall file it. 32 2. The secretary of state files a document by recording 33 it as filed on the date and time of receipt. After filing 34 a document, except the biennial report required by section 35 -7- LSB 5044HC (1) 88 da/jh 7/ 261
H.F. _____ 490.1622, and except as provided in section 490.503, the 1 secretary of state shall return to the person who delivered 2 the document for filing a copy of the document with an 3 acknowledgment of the date and time of filing. 4 3. If the secretary of state refuses to file a document, 5 it shall be returned to the person who delivered the document 6 for filing within five days after the document was delivered, 7 together with a brief, written explanation of the reason for 8 the refusal. 9 4. The secretary of state’s duty to file documents under 10 this section is ministerial. The secretary of state’s filing 11 or refusing to file a document does not create a presumption 12 of any of the following: 13 a. The document does or does not conform to the requirements 14 of this chapter. 15 b. The information contained in the document is correct or 16 incorrect. 17 Sec. 8. Section 490.126, Code 2020, is amended by striking 18 the section and inserting in lieu thereof the following: 19 490.126 Appeal from secretary of state’s refusal to file 20 document. 21 1. If the secretary of state refuses to file a document 22 delivered for filing, the person that delivered the document 23 for filing may petition the district court to compel its 24 filing. The document and the explanation of the secretary of 25 state’s refusal to file must be attached to the petition. The 26 court may decide the matter in a summary proceeding. 27 2. The court may order the secretary of state to file the 28 document or take other action the court considers appropriate. 29 3. The court’s final decision may be appealed as in other 30 civil proceedings. 31 Sec. 9. Section 490.127, Code 2020, is amended by striking 32 the section and inserting in lieu thereof the following: 33 490.127 Evidentiary effect of certified copy of filed 34 document. 35 -8- LSB 5044HC (1) 88 da/jh 8/ 261
H.F. _____ A certificate from the secretary of state delivered with 1 a copy of a document filed by the secretary of state is 2 conclusive evidence that the original document is on file with 3 the secretary of state. 4 Sec. 10. Section 490.128, Code 2020, is amended by striking 5 the section and inserting in lieu thereof the following: 6 490.128 Certificate of existence or registration. 7 1. Any person may apply to the secretary of state to furnish 8 a certificate of existence for a domestic corporation or a 9 certificate of registration for a foreign corporation. 10 2. A certificate of existence must set forth all of the 11 following: 12 a. The domestic corporation’s corporate name. 13 b. That the domestic corporation is duly incorporated under 14 the law of this state, the date of its incorporation, and the 15 period of its duration if less than perpetual. 16 c. That all fees, taxes, and penalties owed to this state 17 have been paid, subject to all of the following: 18 (1) Payment is reflected in the records of the secretary of 19 state. 20 (2) Nonpayment affects the existence of the domestic 21 corporation. 22 d. That its most recent biennial report required by section 23 490.1622 has been filed with the secretary of state. 24 e. That articles of dissolution have not been filed. 25 f. That the corporation is not administratively dissolved 26 and a proceeding is not pending under section 490.1421. 27 g. Other facts of record in the office of the secretary of 28 state that may be requested by the applicant. 29 3. A certificate of registration must set forth all of the 30 following: 31 a. The foreign corporation’s name used in this state. 32 b. That the foreign corporation is registered to do business 33 in this state. 34 c. That all fees, taxes, and penalties owed to this state 35 -9- LSB 5044HC (1) 88 da/jh 9/ 261
H.F. _____ have been paid, subject to all of the following: 1 (1) Payment is reflected in the records of the secretary of 2 state. 3 (2) Nonpayment affects the registration of the foreign 4 corporation. 5 d. That its most recent biennial report required by section 6 490.1622 has been filed with the secretary of state. 7 e. Other facts of record in the office of the secretary of 8 state that may be requested by the applicant. 9 4. Subject to any qualification stated in the certificate, 10 a certificate of existence or registration issued by the 11 secretary of state may be relied upon as conclusive evidence of 12 the facts stated in the certificate. 13 Sec. 11. Section 490.129, Code 2020, is amended by striking 14 the section and inserting in lieu thereof the following: 15 490.129 Penalty for signing false document. 16 1. A person commits an offense by signing a document that 17 the person knows is false in any material respect with intent 18 that the document be delivered to the secretary of state for 19 filing. 20 2. An offense under this section is a serious misdemeanor 21 punishable by a fine of not to exceed one thousand dollars. 22 Sec. 12. Section 490.135, Code 2020, is amended by striking 23 the section and inserting in lieu thereof the following: 24 490.135 Powers. 25 The secretary of state has the power reasonably necessary to 26 perform the duties required of the secretary of state by this 27 chapter. 28 Sec. 13. Section 490.140, Code 2020, is amended by striking 29 the section and inserting in lieu thereof the following: 30 490.140 Chapter definitions. 31 As used in this chapter, unless otherwise specified: 32 1. “Articles of incorporation” means the articles of 33 incorporation described in section 490.202, all amendments 34 to the articles of incorporation, and any other documents 35 -10- LSB 5044HC (1) 88 da/jh 10/ 261
H.F. _____ permitted or required to be delivered for filing by a domestic 1 business corporation with the secretary of state under any 2 provision of this chapter that modify, amend, supplement, 3 restate, or replace the articles of incorporation. After 4 an amendment of the articles of incorporation or any other 5 document filed under this chapter that restates the articles of 6 incorporation in their entirety, the articles of incorporation 7 shall not include any prior documents. When used with respect 8 to a foreign corporation or a domestic or foreign nonprofit 9 corporation, the “articles of incorporation” of such an entity 10 means the document of such entity that is equivalent to the 11 articles of incorporation of a domestic business corporation. 12 2. “Authorized shares” means the shares of all classes a 13 domestic or foreign corporation is authorized to issue. 14 3. “Beneficial shareholder” means a person who owns 15 the beneficial interest in shares, which may be a record 16 shareholder or a person on whose behalf shares are registered 17 in the name of an intermediary or nominee. 18 4. “Conspicuous” means so written, displayed, or presented 19 that a reasonable person against whom the writing is to operate 20 should have noticed it. 21 5. “Corporation” , “domestic corporation” , “business 22 corporation” , or “domestic business corporation” means a 23 corporation for profit, which is not a foreign corporation, 24 incorporated under this chapter. 25 6. “Deliver” or “delivery” means any method of delivery 26 used in conventional commercial practice, including delivery 27 by hand, mail, commercial delivery, and, if authorized in 28 accordance with section 490.141, by electronic transmission. 29 7. “Distribution” means a direct or indirect transfer of 30 cash or other property, except a corporation’s own shares, 31 or incurrence of indebtedness by a corporation to or for the 32 benefit of its shareholders in respect of any of its shares. 33 A distribution may be in the form of a payment of a dividend; 34 a purchase, redemption, or other acquisition of shares; a 35 -11- LSB 5044HC (1) 88 da/jh 11/ 261
H.F. _____ distribution of indebtedness; a distribution in liquidation; 1 or otherwise. 2 8. “Document” means any of the following: 3 a. A tangible medium on which information is inscribed, and 4 includes handwritten, typed, printed or similar instruments, 5 and copies of such instruments. 6 b. An electronic record. 7 9. “Domestic” , with respect to an entity, means an entity 8 governed as to its internal affairs by the law of this state. 9 10. “Effective date” , when referring to a document accepted 10 for filing by the secretary of state, means the time and date 11 determined in accordance with section 490.123. 12 11. “Electronic” means relating to technology having 13 electrical, digital, magnetic, wireless, optical, 14 electromagnetic, or similar capabilities. 15 12. “Electronic record” means information that is stored in 16 an electronic or other nontangible medium and is retrievable in 17 paper form through an automated process used in conventional 18 commercial practice, unless otherwise authorized in accordance 19 with section 490.141, subsection 10. 20 13. “Electronic transmission” or “electronically transmitted” 21 means any form or process of communication not directly 22 involving the physical transfer of paper or another tangible 23 medium, which is all of the following: 24 a. Suitable for the retention, retrieval, and reproduction 25 of information by the recipient. 26 b. Retrievable in paper form by the recipient through an 27 automated process used in conventional commercial practice, 28 unless otherwise authorized in accordance with section 490.141, 29 subsection 10. 30 14. “Eligible entity” means a domestic or foreign 31 unincorporated entity or a domestic or foreign nonprofit 32 corporation. 33 15. “Eligible interests” means interests or memberships. 34 16. “Employee” includes an officer but not a director. 35 -12- LSB 5044HC (1) 88 da/jh 12/ 261
H.F. _____ A director may accept duties that make the director also an 1 employee. 2 17. “Entity” includes a domestic and foreign business 3 corporation; domestic and foreign nonprofit corporation; 4 estate; trust; domestic and foreign unincorporated entity; and 5 a state, the United States, and a foreign government. 6 18. “Expenses” means reasonable expenses of any kind, 7 including reasonable fees and expenses of counsel and experts 8 employed by the shareholder, that are incurred in connection 9 with a matter. 10 19. “Filing entity” means an unincorporated entity, other 11 than a limited liability partnership, that is of a type that 12 is created by filing a public organic record or is required to 13 file a public organic record that evidences its creation. 14 20. “Foreign” , with respect to an entity, means an entity 15 governed as to its internal affairs by the organic law of a 16 jurisdiction other than this state. 17 21. “Foreign corporation” or “foreign business corporation” 18 means a corporation incorporated under a law other than the 19 law of this state which would be a business corporation if 20 incorporated under the law of this state. 21 22. “Foreign nonprofit corporation” means a corporation 22 incorporated under a law other than the law of this state which 23 would be a nonprofit corporation if incorporated under the law 24 of this state. 25 23. “Foreign registration statement” means the foreign 26 registration statement described in section 490.1503. 27 24. “Governmental subdivision” includes an authority, city, 28 county, district, and municipality. 29 25. “Governor” means any person under whose authority the 30 powers of an entity are exercised and under whose direction the 31 activities and affairs of the entity are managed pursuant to 32 the organic law governing the entity and its organic rules. 33 26. “Includes” and “including” denote a partial definition 34 or a nonexclusive list. 35 -13- LSB 5044HC (1) 88 da/jh 13/ 261
H.F. _____ 27. “Individual” means a natural person. 1 28. “Interest” means either or both of the following rights 2 under the organic law governing an unincorporated entity: 3 a. The right to receive distributions from the entity either 4 in the ordinary course or upon liquidation. 5 b. The right to receive notice or vote on issues involving 6 its internal affairs, other than as an agent, assignee, proxy, 7 or person responsible for managing its business and affairs. 8 29. “Interest holder” means a person who holds of record an 9 interest. 10 30. a. “Interest holder liability” means any of the 11 following: 12 (1) Personal liability for a debt, obligation, or other 13 liability of a domestic or foreign corporation or eligible 14 entity that is imposed on a person by any of the following: 15 (a) Solely by reason of the person’s status as a 16 shareholder, member, or interest holder. 17 (b) By the articles of incorporation of the domestic 18 corporation or the organic rules of the eligible entity 19 or foreign corporation that make one or more specified 20 shareholders, members, or interest holders, or categories of 21 shareholders, members, or interest holders, liable in their 22 capacity as shareholders, members, or interest holders for all 23 or specified liabilities of the corporation or eligible entity. 24 (2) An obligation of a shareholder, member, or interest 25 holder under the articles of incorporation of a domestic 26 corporation or the organic rules of an eligible entity or 27 foreign corporation to contribute to the entity. 28 b. For purposes of paragraph “a” , except as otherwise 29 provided in the articles of incorporation of a domestic 30 corporation or the organic law or organic rules of an eligible 31 entity or a foreign corporation, interest holder liability 32 arises under paragraph “a” , subparagraph (1), when the 33 corporation or eligible entity incurs the liability. 34 31. “Jurisdiction of formation” means the state or country 35 -14- LSB 5044HC (1) 88 da/jh 14/ 261
H.F. _____ the law of which includes the organic law governing a domestic 1 or foreign corporation or eligible entity. 2 32. “Means” denotes an exhaustive definition. 3 33. “Membership” means the rights of a member in a domestic 4 or foreign nonprofit corporation. 5 34. “Merger” means a transaction pursuant to section 6 490.1102. 7 35. “Nonfiling entity” means an unincorporated entity that 8 is of a type that is not created by filing a public organic 9 record. 10 36. “Nonprofit corporation” or “domestic nonprofit 11 corporation” means a corporation incorporated under the laws of 12 this state and subject to the provisions of chapter 504. 13 37. “Organic law” means the statute governing the internal 14 affairs of a domestic or foreign business or nonprofit 15 corporation or unincorporated entity. 16 38. “Organic rules” means the public organic record and 17 private organic rules of a domestic or foreign corporation or 18 eligible entity. 19 39. “Person” means a person as defined in section 4.1. 20 40. “Principal office” means the office, in or out of 21 this state, so designated in the biennial report or foreign 22 registration statement where the principal executive offices of 23 a domestic or foreign corporation are located. 24 41. a. “Private organic rules” means any of the following: 25 (1) The bylaws of a domestic or foreign business or 26 nonprofit corporation. 27 (2) The rules, regardless of whether in writing, that govern 28 the internal affairs of an unincorporated entity, are binding 29 on all of its interest holders, and are not part of its public 30 organic record, if any. 31 b. Where private organic rules have been amended or 32 restated, the term means the private organic rules as last 33 amended or restated. 34 42. “Proceeding” includes a civil suit and criminal, 35 -15- LSB 5044HC (1) 88 da/jh 15/ 261
H.F. _____ administrative, and investigatory action. 1 43. a. “Public organic record” means any of the following: 2 (1) The articles of incorporation of a domestic or foreign 3 business or nonprofit corporation. 4 (2) The document, if any, the filing of which is required 5 to create an unincorporated entity, or which creates the 6 unincorporated entity and is required to be filed. 7 b. Where a public organic record has been amended or 8 restated, the term means the public organic record as last 9 amended or restated. 10 44. “Record date” means the date fixed for determining 11 the identity of the corporation’s shareholders and their 12 shareholdings for purposes of this chapter. Unless another 13 time is specified when the record date is fixed, the 14 determination shall be made as of the close of business at the 15 principal office of the corporation on the date so fixed. 16 45. “Record shareholder” means any of the following: 17 a. The person in whose name shares are registered in the 18 records of the corporation. 19 b. The person identified as the beneficial owner of shares 20 in a beneficial ownership certificate pursuant to section 21 490.723 on file with the corporation to the extent of the 22 rights granted by such certificate. 23 46. “Registered foreign corporation” means a foreign 24 corporation registered to do business in the state pursuant to 25 subchapter XV. 26 47. “Secretary” means the corporate officer to whom the 27 board of directors has delegated responsibility under section 28 490.840, subsection 3, to maintain the minutes of the meetings 29 of the board of directors and of the shareholders and for 30 authenticating records of the corporation. 31 48. “Share exchange” means a transaction pursuant to section 32 490.1103. 33 49. “Shareholder” means a record shareholder. 34 50. “Shares” means the units into which the proprietary 35 -16- LSB 5044HC (1) 88 da/jh 16/ 261
H.F. _____ interests in a domestic or foreign corporation are divided. 1 51. “Sign” or “signature” means, with present intent to 2 authenticate or adopt a document, doing any of the following: 3 a. Executing or adopting a tangible symbol to a document, 4 including any manual, facsimile, or conformed signature. 5 b. Attaching to or logically associating with an electronic 6 transmission an electronic sound, symbol, or process, 7 and including an electronic signature in an electronic 8 transmission. 9 52. “State” , when referring to a part of the United 10 States, includes a state and commonwealth, and their agencies 11 and governmental subdivisions, and a territory and insular 12 possession, and their agencies and governmental subdivisions, 13 of the United States. 14 53. “Subscriber” means a person who subscribes for shares in 15 a corporation, whether before or after incorporation. 16 54. “Type of entity” means a generic form of entity that is 17 any of the following: 18 a. Recognized at common law. 19 b. Formed under an organic law, regardless of whether 20 some entities formed under that law are subject to provisions 21 of that law that create different categories of the form of 22 entity. 23 55. a. “Unincorporated entity” means an organization 24 or artificial legal person that either has a separate legal 25 existence or has the power to acquire an estate in real 26 property in its own name and that is not any of the following: 27 (1) A domestic or foreign business or nonprofit 28 corporation. 29 (2) A series of a limited liability company or of another 30 type of entity. 31 (3) An estate. 32 (4) A trust. 33 (5) A state, the United States, or foreign government. 34 b. “Unincorporated entity” includes a general partnership, 35 -17- LSB 5044HC (1) 88 da/jh 17/ 261
H.F. _____ limited liability company, limited partnership, business 1 trust, joint stock association, and unincorporated nonprofit 2 association. 3 56. “United States” includes district, authority, bureau, 4 commission, department, and any other agency of the United 5 States. 6 57. “Unrestricted voting trust beneficial owner” means, with 7 respect to any shareholder rights, a voting trust beneficial 8 owner whose entitlement to exercise the shareholder right in 9 question is not inconsistent with the voting trust agreement. 10 58. “Voting group” means all shares of one or more 11 classes or series that under the articles of incorporation 12 or this chapter are entitled to vote and be counted together 13 collectively on a matter at a meeting of shareholders. All 14 shares entitled by the articles of incorporation or this 15 chapter to vote generally on the matter are for that purpose 16 a single voting group. 17 59. “Voting power” means the current power to vote in the 18 election of directors. 19 60. “Voting trust beneficial owner” means an owner of 20 a beneficial interest in shares of the corporation held 21 in a voting trust established pursuant to section 490.730, 22 subsection 1. 23 61. “Writing” or “written” means any information in the form 24 of a document. 25 Sec. 14. Section 490.141, Code 2020, is amended by striking 26 the section and inserting in lieu thereof the following: 27 490.141 Notices and other communications. 28 1. A notice under this chapter must be in writing unless 29 oral notice is reasonable in the circumstances. Unless 30 otherwise agreed between the sender and the recipient, words 31 in a notice or other communication under this chapter must be 32 in English. 33 2. A notice or other communication may be given by any 34 method of delivery, except that electronic transmissions must 35 -18- LSB 5044HC (1) 88 da/jh 18/ 261
H.F. _____ be in accordance with this section. If the methods of delivery 1 are impracticable, a notice or other communication may be 2 given by means of a broad nonexclusionary distribution to the 3 public, which may include a newspaper of general circulation 4 in the area where published; radio, television, or other 5 form of public broadcast communication; or other methods of 6 distribution that the corporation has previously identified to 7 its shareholders. 8 3. A notice or other communication to a domestic corporation 9 or to a foreign corporation registered to do business in this 10 state may be delivered to the corporation’s registered agent at 11 its registered office or to the secretary at the corporation’s 12 principal office shown in its most recent biennial report or, 13 in the case of a foreign corporation that has not yet delivered 14 a biennial report, in its foreign registration statement. 15 4. A notice or other communication may be delivered by 16 electronic transmission if consented to by the recipient or if 17 authorized by subsection 10. 18 5. Any consent under subsection 4 may be revoked by the 19 person who consented by written or electronic notice to the 20 person to whom the consent was delivered. Any such consent is 21 deemed revoked if all of the following apply: 22 a. The corporation is unable to deliver two consecutive 23 electronic transmissions given by the corporation in accordance 24 with such consent. 25 b. Such inability becomes known to the secretary or an 26 assistant secretary or to the transfer agent, or other person 27 responsible for the giving of notice or other communications; 28 provided, however, the inadvertent failure to treat such 29 inability as a revocation shall not invalidate any meeting or 30 other action. 31 6. Unless otherwise agreed between the sender and the 32 recipient, an electronic transmission is received when all of 33 the following apply: 34 a. The electronic transmission enters an information 35 -19- LSB 5044HC (1) 88 da/jh 19/ 261
H.F. _____ processing system that the recipient has designated or uses 1 for the purposes of receiving electronic transmissions or 2 information of the type sent, and from which the recipient is 3 able to retrieve the electronic transmission. 4 b. The electronic transmission is in a form capable of being 5 processed by that system. 6 7. Receipt of an electronic acknowledgment from an 7 information processing system described in subsection 6, 8 paragraph “a” , establishes that an electronic transmission was 9 received but, by itself, does not establish that the content 10 sent corresponds to the content received. 11 8. An electronic transmission is received under this 12 section even if no person is aware of its receipt. 13 9. A notice or other communication, if in a comprehensible 14 form or manner, is effective at the earliest of the following: 15 a. If in a physical form, the earliest of when it is 16 actually received, or when it is left at any of the following: 17 (1) A shareholder’s address shown on the corporation’s 18 record of shareholders maintained by the corporation under 19 section 490.1601, subsection 4. 20 (2) A director’s residence or usual place of business. 21 (3) The corporation’s principal office. 22 b. If mailed by postage prepaid and correctly addressed to a 23 shareholder, upon deposit in the United States mail. 24 c. If mailed by United States mail postage prepaid and 25 correctly addressed to a recipient other than a shareholder, 26 the earliest of when it is actually received, or as follows: 27 (1) If sent by registered or certified mail, return receipt 28 requested, the date shown on the return receipt signed by or on 29 behalf of the addressee. 30 (2) Five days after it is deposited in the United States 31 mail. 32 d. If an electronic transmission, when it is received as 33 provided in subsection 6. 34 e. If oral, when communicated. 35 -20- LSB 5044HC (1) 88 da/jh 20/ 261
H.F. _____ 10. A notice or other communication may be in the form of 1 an electronic transmission that cannot be directly reproduced 2 in paper form by the recipient through an automated process 3 used in conventional commercial practice only if all of the 4 following apply: 5 a. The electronic transmission is otherwise retrievable in 6 perceivable form. 7 b. The sender and the recipient have consented in writing to 8 the use of such form of electronic transmission. 9 11. If this chapter prescribes requirements for notices 10 or other communications in particular circumstances, those 11 requirements govern. If articles of incorporation or bylaws 12 prescribe requirements for notices or other communications, 13 not inconsistent with this section or other provisions of 14 this chapter, those requirements govern. The articles of 15 incorporation or bylaws may authorize or require delivery of 16 notices of meetings of directors by electronic transmission. 17 12. In the event that any provisions of this chapter are 18 deemed to modify, limit, or supersede the federal Electronic 19 Signatures in Global and National Commerce Act, 15 U.S.C. 20 §§7001 et seq., the provisions of this chapter shall control 21 to the maximum extent permitted by section 102(a)(2) of that 22 federal Act. 23 13. a. Whenever notice would otherwise be required to be 24 given under any provision of this subchapter to a shareholder, 25 such notice need not be given if any of the following apply: 26 (1) Notices to the shareholders of two consecutive annual 27 meetings, and all notices of meetings during the period between 28 such two consecutive annual meetings, have been sent to such 29 shareholder at such shareholder’s address as shown on the 30 records of the corporation and have been returned undeliverable 31 or could not be delivered. 32 (2) All, but not less than two, payments of dividends on 33 securities during a twelve-month period, or two consecutive 34 payments of dividends on securities during a period of more 35 -21- LSB 5044HC (1) 88 da/jh 21/ 261
H.F. _____ than twelve months, have been sent to such shareholder at 1 such shareholder’s address as shown on the records of the 2 corporation and have been returned undeliverable or could not 3 be delivered. 4 b. If any such shareholder shall deliver to the corporation 5 a written notice setting forth such shareholder’s then-current 6 address, the requirement that notice be given to such 7 shareholder shall be reinstated. 8 Sec. 15. Section 490.142, Code 2020, is amended by striking 9 the section and inserting in lieu thereof the following: 10 490.142 Number of shareholders. 11 1. For purposes of this chapter, any of the following 12 identified as a shareholder in a corporation’s current record 13 of shareholders constitutes one shareholder: 14 a. Three or fewer co-owners. 15 b. A corporation, partnership, trust, estate, or other 16 entity. 17 c. The trustees, guardians, custodians, or other fiduciaries 18 of a single trust, estate, or account. 19 2. For purposes of this chapter, shareholdings registered 20 in substantially similar names constitute one shareholder if 21 it is reasonable to believe that the names represent the same 22 person. 23 Sec. 16. Section 490.143, Code 2020, is amended by striking 24 the section and inserting in lieu thereof the following: 25 490.143 Qualified director. 26 1. As used in this chapter, a “qualified director” means a 27 director who takes action, if at the time action is to be taken 28 any of the following applies: 29 a. Under section 490.202, subsection 2, paragraph “f” , is 30 not a director under any of the following circumstances: 31 (1) To whom the limitation or elimination of the duty of 32 an officer to offer potential business opportunities to the 33 corporation would apply. 34 (2) Has a material relationship with any other person to 35 -22- LSB 5044HC (1) 88 da/jh 22/ 261
H.F. _____ whom the limitation or elimination described in subparagraph 1 (1) would apply. 2 b. Under section 490.744, does not have any of the 3 following: 4 (1) A material interest in the outcome of the proceeding. 5 (2) A material relationship with a person who has such an 6 interest. 7 c. Under section 490.853 or 490.855, all of the following 8 apply: 9 (1) The director is not a party to the proceeding. 10 (2) The director is not a director as to whom a transaction 11 is a director’s conflicting interest transaction or who sought 12 a disclaimer of the corporation’s interest in a business 13 opportunity under section 490.870, which transaction or 14 disclaimer is challenged in the proceeding. 15 (3) The director does not have a material relationship with 16 a director described in either subparagraph (1) or (2). 17 d. Under section 490.862, the director is not any of the 18 following: 19 (1) A director as to whom the transaction is a director’s 20 conflicting interest transaction. 21 (2) A director who has a material relationship with another 22 director as to whom the transaction is a director’s conflicting 23 interest transaction. 24 e. Under section 490.870, is not a director who does any of 25 the following: 26 (1) Pursues or takes advantage of the business opportunity, 27 directly or indirectly through or on behalf of another person. 28 (2) Has a material relationship with a director or officer 29 who pursues or takes advantage of the business opportunity, 30 directly, or indirectly through or on behalf of another person. 31 2. As used in this section, all of the following apply: 32 a. “Material interest” means an actual or potential 33 benefit or detriment, other than one which would devolve on 34 the corporation or the shareholders generally, that would 35 -23- LSB 5044HC (1) 88 da/jh 23/ 261
H.F. _____ reasonably be expected to impair the objectivity of the 1 director’s judgment when participating in the action to be 2 taken. 3 b. “Material relationship” means a familial, financial, 4 professional, employment, or other relationship that would 5 reasonably be expected to impair the objectivity of the 6 director’s judgment when participating in the action to be 7 taken. 8 3. The presence of one or more of the following 9 circumstances shall not automatically prevent a director from 10 being a qualified director: 11 a. Nomination or election of the director to the current 12 board by any director who is not a qualified director with 13 respect to the matter, or by any person that has a material 14 relationship with that director, acting alone or participating 15 with others. 16 b. Service as a director of another corporation of which a 17 director who is not a qualified director with respect to the 18 matter, or any individual who has a material relationship with 19 that director, is or was also a director. 20 c. With respect to action to be taken under section 490.744, 21 status as a named defendant, as a director against whom action 22 is demanded, or as a director who approved the conduct being 23 challenged. 24 Sec. 17. Section 490.144, Code 2020, is amended by striking 25 the section and inserting in lieu thereof the following: 26 490.144 Householding. 27 1. A corporation has delivered written notice or any 28 other report or statement under this chapter, the articles of 29 incorporation, or the bylaws to all shareholders who share a 30 common address if all of the following apply: 31 a. The corporation delivers one copy of the notice, report, 32 or statement to the common address. 33 b. The corporation addresses the notice, report, or 34 statement to those shareholders either as a group or to each 35 -24- LSB 5044HC (1) 88 da/jh 24/ 261
H.F. _____ of those shareholders individually or to the shareholders in a 1 form to which each of those shareholders has consented. 2 c. Each of those shareholders consents to delivery of 3 a single copy of such notice, report, or statement to the 4 shareholders’ common address. 5 2. Any such consent described in subsection 1, paragraph 6 “b” or “c” , shall be revocable by any of such shareholders who 7 deliver written notice of revocation to the corporation. If 8 such written notice of revocation is delivered, the corporation 9 shall begin providing individual notices, reports, or other 10 statements to the revoking shareholder no later than thirty 11 days after delivery of the written notice of revocation. 12 3. Any shareholder who fails to object by written notice 13 to the corporation, within sixty days of written notice by 14 the corporation of its intention to deliver single copies of 15 notices, reports, or statements to shareholders who share a 16 common address as permitted by subsection 1, shall be deemed 17 to have consented to receiving such single copy at the common 18 address; provided that the notice of intention explains that 19 consent may be revoked and the method for revoking. 20 Sec. 18. NEW SECTION . 490.145 Part definitions. 21 As used in this part: 22 1. “Corporate action” means any action taken by or on 23 behalf of the corporation, including any action taken by the 24 incorporator, the board of directors, a committee of the board 25 of directors, an officer or agent of the corporation, or the 26 shareholders. 27 2. “Date of the defective corporate action” means the date 28 or, if the defective corporate action occurred or may have 29 occurred on more than one date, the range of dates, or the 30 approximate date or range of dates, if the exact date or range 31 of dates is unknown or not readily ascertainable, the defective 32 corporate action was purported to have been taken. 33 3. “Defective corporate action” means all of the following: 34 a. Any corporate action purportedly taken that is, and at 35 -25- LSB 5044HC (1) 88 da/jh 25/ 261
H.F. _____ the time such corporate action was purportedly taken would 1 have been, within the power of the corporation, but is void or 2 voidable due to a failure of authorization. 3 b. An overissue. 4 4. “Failure of authorization” means the failure to 5 authorize, approve, or otherwise effect a corporate action in 6 compliance with the provisions of this chapter, the articles of 7 incorporation or bylaws, a corporate resolution, or any plan 8 or agreement to which the corporation is a party, if and to the 9 extent such failure would render such corporate action void or 10 voidable. 11 5. “Overissue” means the purported issuance of any of the 12 following: 13 a. Shares of a class or series in excess of the number of 14 shares of a class or series the corporation has the power to 15 issue under section 490.601 at the time of such issuance. 16 b. Shares of any class or series that is not then authorized 17 for issuance by the articles of incorporation. 18 6. “Putative shares” means the shares of any class or 19 series, including shares issued upon exercise of rights, 20 options, warrants or other securities convertible into 21 shares of the corporation, or interests with respect to such 22 shares, that were created or issued as a result of a defective 23 corporate action, and any of the following applies: 24 a. But for any failure of authorization would constitute 25 valid shares. 26 b. Cannot be determined by the board of directors to be 27 valid shares. 28 7. “Valid shares” means the shares of any class or series 29 that have been duly authorized and validly issued in accordance 30 with this chapter, including as a result of ratification or 31 validation under this part. 32 8. a. “Validation effective time” with respect to any 33 defective corporate action ratified under this part means the 34 later of the following: 35 -26- LSB 5044HC (1) 88 da/jh 26/ 261
H.F. _____ (1) The time at which the ratification of the defective 1 corporate action is approved by the shareholders, or if 2 approval of shareholders is not required, the time at which 3 the notice required by section 490.149 becomes effective in 4 accordance with section 490.141. 5 (2) The time at which any articles of validation filed in 6 accordance with section 490.151 become effective. 7 b. The validation effective time shall not be affected by 8 the filing or pendency of a judicial proceeding under section 9 490.152 or otherwise, unless otherwise ordered by the court. 10 Sec. 19. NEW SECTION . 490.146 Defective corporate actions. 11 1. A defective corporate action shall not be void or 12 voidable if ratified in accordance with section 490.147 or 13 validated in accordance with section 490.152. 14 2. Ratification under section 490.147 or validation under 15 section 490.152 shall not be deemed to be the exclusive means 16 of ratifying or validating any defective corporate action, and 17 the absence or failure of ratification in accordance with this 18 part shall not, of itself, affect the validity or effectiveness 19 of any corporate action properly ratified under common law or 20 otherwise, nor shall it create a presumption that any such 21 corporate action is or was a defective corporate action or void 22 or voidable. 23 3. In the case of an overissue, putative shares shall be 24 valid shares effective as of the date originally issued or 25 purportedly issued upon any of the following: 26 a. The effectiveness under this part and under subchapter X 27 of an amendment to the articles of incorporation authorizing, 28 designating, or creating such shares. 29 b. The effectiveness of any other corporate action under 30 this part ratifying the authorization, designation, or creation 31 of such shares. 32 Sec. 20. NEW SECTION . 490.147 Ratification of defective 33 corporate actions. 34 1. To ratify a defective corporate action under this 35 -27- LSB 5044HC (1) 88 da/jh 27/ 261
H.F. _____ section, other than the ratification of an election of the 1 initial board of directors under subsection 2, the board of 2 directors shall take action ratifying the action in accordance 3 with section 490.148, stating all of the following: 4 a. The defective corporate action to be ratified and, if the 5 defective corporate action involved the issuance of putative 6 shares, the number and type of putative shares purportedly 7 issued. 8 b. The date of the defective corporate action. 9 c. The nature of the failure of authorization with respect 10 to the defective corporate action to be ratified. 11 d. That the board of directors approves the ratification of 12 the defective corporate action. 13 2. In the event that a defective corporate action to be 14 ratified relates to the election of the initial board of 15 directors of the corporation under section 490.205, subsection 16 1, paragraph “b” , a majority of the persons who, at the time of 17 the ratification, are exercising the powers of directors may 18 take an action stating all of the following: 19 a. The name of the person or persons who first took 20 action in the name of the corporation as the initial board of 21 directors of the corporation. 22 b. The earlier of the date on which such persons first 23 took such action or were purported to have been elected as the 24 initial board of directors. 25 c. That the ratification of the election of such person or 26 persons as the initial board of directors is approved. 27 3. If any provision of this chapter, the articles of 28 incorporation or bylaws, any corporate resolution, or any 29 plan or agreement to which the corporation is a party in 30 effect at the time action under subsection 1 is taken requires 31 shareholder approval or would have required shareholder 32 approval at the date of the occurrence of the defective 33 corporate action, the ratification of the defective corporate 34 action approved in the action taken by the directors under 35 -28- LSB 5044HC (1) 88 da/jh 28/ 261
H.F. _____ subsection 1 shall be submitted to the shareholders for 1 approval in accordance with section 490.148. 2 4. Unless otherwise provided in the action taken by the 3 board of directors under subsection 1, after the action by the 4 board of directors has been taken and, if required, approved 5 by the shareholders, the board of directors may abandon the 6 ratification at any time before the validation effective time 7 without further action of the shareholders. 8 Sec. 21. NEW SECTION . 490.148 Action on ratification. 9 1. The quorum and voting requirements applicable to a 10 ratifying action by the board of directors under section 11 490.147, subsection 1, shall be the quorum and voting 12 requirements applicable to the corporate action proposed to be 13 ratified at the time such ratifying action is taken. 14 2. If the ratification of the defective corporate action 15 requires approval by the shareholders under section 490.147, 16 subsection 3, and if the approval is to be given at a meeting, 17 the corporation shall notify each holder of valid and putative 18 shares, regardless of whether entitled to vote, as of the 19 record date for notice of the meeting and as of the date of 20 the occurrence of defective corporate action, provided that 21 notice shall not be required to be given to holders of valid or 22 putative shares whose identities or addresses for notice cannot 23 be determined from the records of the corporation. The notice 24 must state that the purpose, or one of the purposes, of the 25 meeting is to consider ratification of a defective corporate 26 action and must be accompanied by all of the following: 27 a. Either a copy of the action taken by the board of 28 directors in accordance with section 490.147, subsection 1, 29 or the information required by section 490.147, subsection 1, 30 paragraphs “a” through “d” . 31 b. A statement that any claim that the ratification of 32 such defective corporate action and any putative shares issued 33 as a result of such defective corporate action should not be 34 effective, or should be effective only on certain conditions, 35 -29- LSB 5044HC (1) 88 da/jh 29/ 261
H.F. _____ shall be brought within one hundred twenty days from the 1 applicable validation effective time. 2 3. Except as provided in subsection 4, with respect to the 3 voting requirements to ratify the election of a director, the 4 quorum and voting requirements applicable to the approval by 5 the shareholders required by section 490.147, subsection 3, 6 shall be the quorum and voting requirements applicable to the 7 corporate action proposed to be ratified at the time of such 8 shareholder approval. 9 4. The approval by shareholders to ratify the election of a 10 director requires that the votes cast within the voting group 11 favoring such ratification exceed the votes cast opposing such 12 ratification of the election at a meeting at which a quorum is 13 present. 14 5. Putative shares on the record date for determining 15 the shareholders entitled to vote on any matter submitted to 16 shareholders under section 490.147, subsection 3, and without 17 giving effect to any ratification of putative shares that 18 becomes effective as a result of such vote, shall neither be 19 entitled to vote nor counted for quorum purposes in any vote to 20 approve the ratification of any defective corporate action. 21 6. If the approval under this section of putative shares 22 would result in an overissue, in addition to the approval 23 required by section 490.147, approval of an amendment to the 24 articles of incorporation under subchapter X to increase 25 the number of shares of an authorized class or series or to 26 authorize the creation of a class or series of shares so there 27 would be no overissue shall also be required. 28 Sec. 22. NEW SECTION . 490.149 Notice requirements. 29 1. Unless shareholder approval is required under section 30 490.147, subsection 3, prompt notice of an action taken under 31 section 490.147 shall be given to each holder of valid and 32 putative shares, regardless of whether entitled to vote, as of 33 all of the following: 34 a. The date of such action by the board of directors. 35 -30- LSB 5044HC (1) 88 da/jh 30/ 261
H.F. _____ b. The date of the defective corporate action ratified, 1 provided that notice shall not be required to be given to 2 holders of valid and putative shares whose identities or 3 addresses for notice cannot be determined from the records of 4 the corporation. 5 2. The notice must contain all of the following: 6 a. Either a copy of the action taken by the board of 7 directors in accordance with section 490.147, subsection 1 or 8 2, or the information required by section 490.147, subsection 9 1, paragraphs “a” through “d” , or section 490.147, subsection 2, 10 paragraphs “a” through “c” , as applicable. 11 b. A statement that any claim that the ratification of 12 the defective corporate action and any putative shares issued 13 as a result of such defective corporate action should not be 14 effective, or should be effective only on certain conditions, 15 shall be brought within one hundred twenty days from the 16 applicable validation effective time. 17 3. No notice under this section is required with respect 18 to any action required to be submitted to shareholders for 19 approval under section 490.147, subsection 3, if notice is 20 given in accordance with section 490.148, subsection 2. 21 4. A notice required by this section may be given in any 22 manner permitted by section 490.141 and, for any corporation 23 subject to the reporting requirements of section 13 or 15(d) of 24 the federal Securities Exchange Act of 1934, may be given by 25 means of a filing or furnishing of such notice with the United 26 States securities and exchange commission. 27 Sec. 23. NEW SECTION . 490.150 Effect of ratification. 28 From and after the validation effective time, and without 29 regard to the one hundred twenty-day period during which 30 a claim may be brought under section 490.152, all of the 31 following shall apply: 32 1. Each defective corporate action ratified in accordance 33 with section 490.147 shall not be void or voidable as a result 34 of the failure of authorization identified in the action taken 35 -31- LSB 5044HC (1) 88 da/jh 31/ 261
H.F. _____ under section 490.147, subsection 1 or 2, and shall be deemed 1 a valid corporate action effective as of the date of the 2 defective corporate action. 3 2. The issuance of each putative share or fraction of a 4 putative share purportedly issued pursuant to a defective 5 corporate action identified in the action taken under section 6 490.147 shall not be void or voidable, and each such putative 7 share or fraction of a putative share shall be deemed to be an 8 identical share or fraction of a valid share as of the time it 9 was purportedly issued. 10 3. Any corporate action taken subsequent to the defective 11 corporate action ratified in accordance with this part in 12 reliance on such defective corporate action having been 13 validly effected and any subsequent defective corporate action 14 resulting directly or indirectly from such original defective 15 corporate action shall be valid as of the time taken. 16 Sec. 24. NEW SECTION . 490.151 Filings. 17 1. If the defective corporate action ratified under this 18 part would have required under any other section of this 19 chapter a filing in accordance with this chapter, then, 20 regardless of whether a filing was previously made in respect 21 of such defective corporate action and in lieu of a filing 22 otherwise required by this chapter, the corporation shall file 23 articles of validation in accordance with this section, and 24 such articles of validation shall serve to amend or substitute 25 for any other filing with respect to such defective corporate 26 action required by this chapter. 27 2. The articles of validation must set forth all of the 28 following: 29 a. The defective corporate action that is the subject of the 30 articles of validation, including in the case of any defective 31 corporate action involving the issuance of putative shares, the 32 number and type of putative shares issued and the date or dates 33 upon which such putative shares were purported to have been 34 issued. 35 -32- LSB 5044HC (1) 88 da/jh 32/ 261
H.F. _____ b. The date of the defective corporate action. 1 c. The nature of the failure of authorization in respect of 2 the defective corporate action. 3 d. A statement that the defective corporate action was 4 ratified in accordance with section 490.147, including 5 the date on which the board of directors ratified such 6 defective corporate action and the date, if any, on which 7 the shareholders approved the ratification of such defective 8 corporate action. 9 e. The information required by subsection 3. 10 3. The articles of validation must also contain the 11 following information: 12 a. If a filing was previously made in respect of the 13 defective corporate action and no changes to such filing are 14 required to give effect to the ratification of such defective 15 corporate action in accordance with section 490.147, the 16 articles of validation must set forth all of the following: 17 (1) The name, title, and filing date of the filing 18 previously made and any articles of correction to that filing. 19 (2) A statement that a copy of the filing previously made, 20 together with any articles of correction to that filing, is 21 attached as an exhibit to the articles of validation. 22 b. If a filing was previously made in respect of the 23 defective corporate action and such filing requires any change 24 to give effect to the ratification of such defective corporate 25 action in accordance with section 490.147, the articles of 26 validation must set forth all of the following: 27 (1) The name, title, and filing date of the filing 28 previously made and any articles of correction to that filing. 29 (2) A statement that a filing containing all of the 30 information required to be included under the applicable 31 section or sections of this chapter to give effect to such 32 defective corporate action is attached as an exhibit to the 33 articles of validation. 34 (3) The date and time that such filing is deemed to have 35 -33- LSB 5044HC (1) 88 da/jh 33/ 261
H.F. _____ become effective. 1 c. If a filing was not previously made in respect of the 2 defective corporate action and the defective corporate action 3 ratified under section 490.147 would have required a filing 4 under any other section of this chapter, the articles of 5 validation must set forth all of the following: 6 (1) A statement that a filing containing all of the 7 information required to be included under the applicable 8 section or sections of this chapter to give effect to such 9 defective corporate action is attached as an exhibit to the 10 articles of validation. 11 (2) The date and time that such filing is deemed to have 12 become effective. 13 Sec. 25. NEW SECTION . 490.152 Judicial proceedings 14 regarding validity of corporate actions. 15 1. Upon application by the corporation, any successor 16 entity to the corporation, a director of the corporation, any 17 shareholder, beneficial shareholder, or unrestricted voting 18 trust beneficial owner of the corporation, including any 19 such shareholder, beneficial shareholder, or unrestricted 20 voting trust beneficial owner as of the date of the defective 21 corporate action ratified under section 490.147, or any other 22 person claiming to be substantially and adversely affected by a 23 ratification under section 490.147, the district court of the 24 county where a corporation’s principal office or, if none in 25 this state, its registered office, is located may do all of the 26 following: 27 a. Determine the validity and effectiveness of any corporate 28 action or defective corporate action. 29 b. Determine the validity and effectiveness of any 30 ratification under section 490.147. 31 c. Determine the validity of any putative shares. 32 d. Modify or waive any of the procedures specified in 33 section 490.147 or 490.148 to ratify a defective corporate 34 action. 35 -34- LSB 5044HC (1) 88 da/jh 34/ 261
H.F. _____ 2. In connection with an action under this section, the 1 court may make such findings or orders, and take into account 2 any factors or considerations, regarding such matters as it 3 deems proper under the circumstances. 4 3. Service of process of the application under subsection 5 1 on the corporation may be made in any manner provided by 6 statute of this state or by rule of the applicable court for 7 service on the corporation, and no other party need be joined 8 in order for the court to adjudicate the matter. In an action 9 filed by the corporation, the court may require notice of the 10 action to be provided to other persons specified by the court 11 and permit such other persons to intervene in the action. 12 4. Notwithstanding any other provision of this section or 13 otherwise under applicable law, any action asserting that the 14 ratification of any defective corporate action and any putative 15 shares issued as a result of such defective corporate action 16 should not be effective, or should be effective only on certain 17 conditions, shall be brought within one hundred twenty days of 18 the validation effective time. 19 Sec. 26. Section 490.201, Code 2020, is amended by striking 20 the section and inserting in lieu thereof the following: 21 490.201 Incorporators. 22 One or more persons may act as the incorporator or 23 incorporators of a corporation by delivering articles of 24 incorporation to the secretary of state for filing. 25 Sec. 27. Section 490.202, Code 2020, is amended by striking 26 the section and inserting in lieu thereof the following: 27 490.202 Articles of incorporation. 28 1. The articles of incorporation must set forth all of the 29 following: 30 a. A corporate name for the corporation that satisfies the 31 requirements of section 490.401. 32 b. The number of shares the corporation is authorized to 33 issue. 34 c. The street and mailing addresses of the corporation’s 35 -35- LSB 5044HC (1) 88 da/jh 35/ 261
H.F. _____ initial registered office and the name of its initial 1 registered agent at that office. 2 d. The name and address of each incorporator. 3 2. The articles of incorporation may set forth any of the 4 following: 5 a. The names and addresses of the individuals who are to 6 serve as the initial directors. 7 b. Provisions not inconsistent with law regarding any of the 8 following: 9 (1) The purpose or purposes for which the corporation is 10 organized. 11 (2) Managing the business and regulating the affairs of the 12 corporation. 13 (3) Defining, limiting, and regulating the powers of the 14 corporation, its board of directors, and shareholders. 15 (4) A par value for authorized shares or classes of shares. 16 (5) The imposition of interest holder liability on 17 shareholders. 18 c. Any provision that under this chapter is required or 19 permitted to be set forth in the bylaws. 20 d. A provision eliminating or limiting the liability 21 of a director to the corporation or its shareholders for 22 money damages for any action taken, or any failure to take 23 any action, as a director, except liability for any of the 24 following: 25 (1) The amount of a financial benefit received by a director 26 to which the director is not entitled. 27 (2) An intentional infliction of harm on the corporation or 28 the shareholders. 29 (3) A violation of section 490.833. 30 (4) An intentional violation of criminal law. 31 e. A provision permitting or making obligatory 32 indemnification of a director for liability, as defined in 33 section 490.850, to any person for any action taken, or any 34 failure to take any action, as a director, except liability for 35 -36- LSB 5044HC (1) 88 da/jh 36/ 261
H.F. _____ any of the following: 1 (1) Receipt of a financial benefit to which the director is 2 not entitled. 3 (2) An intentional infliction of harm on the corporation or 4 its shareholders. 5 (3) A violation of section 490.833. 6 (4) An intentional violation of criminal law. 7 f. A provision limiting or eliminating any duty of a 8 director or any other person to offer the corporation the 9 right to have or participate in any, or one or more classes 10 or categories of, business opportunities, before the pursuit 11 or taking of the opportunity by the director or other person; 12 provided that any application of such a provision to an officer 13 or a related person of that officer is subject to all of the 14 following: 15 (1) It also requires approval of that application by the 16 board of directors, subsequent to the effective date of the 17 provision, by action of qualified directors taken in compliance 18 with the same procedures as are set forth in section 490.862. 19 (2) It may be limited by the authorizing action of the 20 board. 21 3. The articles of incorporation need not set forth any of 22 the corporate powers enumerated in this chapter. 23 4. Provisions of the articles of incorporation may be made 24 dependent upon facts objectively ascertainable outside the 25 articles of incorporation in accordance with section 490.120, 26 subsection 11. 27 5. As used in this section, “related person” has the meaning 28 specified in section 490.860. 29 Sec. 28. Section 490.203, Code 2020, is amended by striking 30 the section and inserting in lieu thereof the following: 31 490.203 Incorporation. 32 1. Unless a delayed effective date is specified, the 33 corporate existence begins when the articles of incorporation 34 are filed. 35 -37- LSB 5044HC (1) 88 da/jh 37/ 261
H.F. _____ 2. The secretary of state’s filing of the articles of 1 incorporation is conclusive proof that the incorporators 2 satisfied all conditions precedent to incorporation except in a 3 proceeding by the state to cancel or revoke the incorporation 4 or involuntarily dissolve the corporation. 5 Sec. 29. Section 490.205, Code 2020, is amended by striking 6 the section and inserting in lieu thereof the following: 7 490.205 Organization of corporation. 8 1. After incorporation, the following shall apply: 9 a. If initial directors are named in the articles 10 of incorporation, the initial directors shall hold an 11 organizational meeting, at the call of a majority of the 12 directors, to complete the organization of the corporation by 13 appointing officers, adopting bylaws, and carrying on any other 14 business brought before the meeting. 15 b. If initial directors are not named in the articles of 16 incorporation, the incorporator or incorporators shall hold 17 an organizational meeting at the call of a majority of the 18 incorporators to do any of the following: 19 (1) Elect initial directors and complete the organization 20 of the corporation. 21 (2) Elect a board of directors who shall complete the 22 organization of the corporation. 23 2. Action required or permitted by this chapter to be taken 24 by incorporators at an organizational meeting may be taken 25 without a meeting if the action taken is evidenced by one or 26 more written consents describing the action taken and signed by 27 each incorporator. 28 3. An organizational meeting may be held in or out of this 29 state. 30 Sec. 30. Section 490.206, Code 2020, is amended by striking 31 the section and inserting in lieu thereof the following: 32 490.206 Bylaws. 33 1. The incorporators or board of directors of a corporation 34 shall adopt initial bylaws for the corporation. 35 -38- LSB 5044HC (1) 88 da/jh 38/ 261
H.F. _____ 2. The bylaws of a corporation may contain any provision 1 that is not inconsistent with law or the articles of 2 incorporation. 3 3. The bylaws may contain any of the following provisions: 4 a. A requirement that if the corporation solicits proxies 5 or consents with respect to an election of directors, the 6 corporation include in its proxy statement and any form 7 of its proxy or consent, to the extent and subject to such 8 procedures or conditions as are provided in the bylaws, one 9 or more individuals nominated by a shareholder in addition to 10 individuals nominated by the board of directors. 11 b. A requirement that the corporation reimburse the expenses 12 incurred by a shareholder in soliciting proxies or consents in 13 connection with an election of directors, to the extent and 14 subject to such procedures and conditions as are provided in 15 the bylaws, provided that no bylaw so adopted shall apply to 16 elections for which any record date precedes its adoption. 17 4. Notwithstanding section 490.1020, subsection 2, 18 paragraph “b” , the shareholders in amending, repealing, or 19 adopting a bylaw described in subsection 3 shall not limit the 20 authority of the board of directors to amend or repeal any 21 condition or procedure set forth in or to add any procedure 22 or condition to such a bylaw to provide for a reasonable, 23 practical, and orderly process. 24 Sec. 31. Section 490.207, Code 2020, is amended by striking 25 the section and inserting in lieu thereof the following: 26 490.207 Emergency bylaws. 27 1. Unless the articles of incorporation provide otherwise, 28 the board of directors may adopt bylaws to be effective only in 29 an emergency as defined in subsection 4. The emergency bylaws, 30 which are subject to amendment or repeal by the shareholders, 31 may make all provisions necessary for managing the corporation 32 during the emergency, including any of the following: 33 a. Procedures for calling a meeting of the board of 34 directors. 35 -39- LSB 5044HC (1) 88 da/jh 39/ 261
H.F. _____ b. Quorum requirements for the meeting. 1 c. Designation of additional or substitute directors. 2 2. All provisions of the regular bylaws not inconsistent 3 with the emergency bylaws remain effective during the 4 emergency. The emergency bylaws are not effective after the 5 emergency ends. 6 3. Corporate action taken in good faith in accordance with 7 the emergency bylaws has all of the following effects: 8 a. The action binds the corporation. 9 b. The action shall not be used to impose liability on a 10 director, officer, employee, or agent of the corporation. 11 4. An emergency exists for purposes of this section if a 12 quorum of the board of directors cannot readily be assembled 13 because of some catastrophic event. 14 Sec. 32. NEW SECTION . 490.208 Forum selection provisions. 15 1. The articles of incorporation or bylaws may require 16 that any or all internal corporate claims shall be brought 17 exclusively in any specified court or courts of this state 18 and, if so specified, in any additional courts in this state 19 or in any other jurisdictions with which the corporation has a 20 reasonable relationship. 21 2. A provision of the articles of incorporation or bylaws 22 adopted under subsection 1 shall not have the effect of 23 conferring jurisdiction on any court or over any person or 24 claim, and shall not apply if none of the courts specified 25 by such provision has the requisite personal and subject 26 matter jurisdiction. If the court or courts of this state 27 specified in a provision adopted under subsection 1 do not 28 have the requisite personal and subject matter jurisdiction 29 and another court of this state does have such jurisdiction, 30 then the internal corporate claim may be brought in such other 31 court of this state, notwithstanding that such other court 32 of this state is not specified in such provision, and in any 33 other court specified in such provision that has the requisite 34 jurisdiction. 35 -40- LSB 5044HC (1) 88 da/jh 40/ 261
H.F. _____ 3. No provision of the articles of incorporation or bylaws 1 may prohibit bringing an internal corporate claim in the 2 courts of this state or require such claims to be determined 3 by arbitration. 4 4. “Internal corporate claim” means, for the purposes of 5 this section, any of the following: 6 a. Any claim that is based upon a violation of a duty 7 under the laws of this state by a current or former director, 8 officer, or shareholder in such capacity. 9 b. Any derivative action or proceeding brought on behalf of 10 the corporation. 11 c. Any action asserting a claim arising pursuant to any 12 provision of this chapter or the articles of incorporation or 13 bylaws. 14 d. Any action asserting a claim governed by the internal 15 affairs doctrine that is not included in paragraphs “a” through 16 “c” . 17 Sec. 33. Section 490.302, Code 2020, is amended by striking 18 the section and inserting in lieu thereof the following: 19 490.302 General powers. 20 Unless its articles of incorporation provide otherwise, 21 every corporation has perpetual duration and succession in its 22 corporate name and has the same powers as an individual to do 23 all things necessary or convenient to carry out its business 24 and affairs, including the power to do all of the following: 25 1. Sue and be sued, complain, and defend in its corporate 26 name. 27 2. Have a corporate seal, which may be altered at will, and 28 to use it, or a facsimile of it, by impressing or affixing it or 29 in any other manner reproducing it. 30 3. Make and amend bylaws, not inconsistent with its articles 31 of incorporation or with the laws of this state, for managing 32 the business and regulating the affairs of the corporation. 33 4. Purchase, receive, lease, or otherwise acquire, and own, 34 hold, improve, use, and otherwise deal with, real or personal 35 -41- LSB 5044HC (1) 88 da/jh 41/ 261
H.F. _____ property, or any legal or equitable interest in property, 1 wherever located. 2 5. Sell, convey, mortgage, pledge, lease, exchange, and 3 otherwise dispose of all or any part of its property. 4 6. Purchase, receive, subscribe for, or otherwise acquire, 5 own, hold, vote, use, sell, mortgage, lend, pledge, or 6 otherwise dispose of, and deal in and with shares or other 7 interests in, or obligations of, any other entity. 8 7. Make contracts and guarantees, incur liabilities, 9 borrow money, issue its notes, bonds, and other securities 10 and obligations, which may be convertible into or include the 11 option to purchase other securities of the corporation, and 12 secure any of its obligations by mortgage or pledge of any of 13 its property, franchises, or income. 14 8. Lend money, invest and reinvest its funds, and receive 15 and hold real and personal property as security for repayment. 16 9. Be a promoter, partner, member, associate, or manager of 17 any partnership, joint venture, trust, or other entity. 18 10. Conduct its business, locate offices, and exercise the 19 powers granted by this chapter within or without this state. 20 11. Elect directors and appoint officers, employees, and 21 agents of the corporation, define their duties, fix their 22 compensation, and lend them money and credit. 23 12. Pay pensions and establish pension plans, pension 24 trusts, profit sharing plans, share bonus plans, share option 25 plans, and benefit or incentive plans for any or all of its 26 current or former directors, officers, employees, and agents. 27 13. Make donations for the public welfare or for charitable, 28 scientific, or educational purposes. 29 14. Transact any lawful business that will aid governmental 30 policy. 31 15. Make payments or donations, or do any other act, not 32 inconsistent with law, that furthers the business and affairs 33 of the corporation. 34 Sec. 34. Section 490.303, Code 2020, is amended by striking 35 -42- LSB 5044HC (1) 88 da/jh 42/ 261
H.F. _____ the section and inserting in lieu thereof the following: 1 490.303 Emergency powers. 2 1. In anticipation of or during an emergency as defined in 3 subsection 4, the board of directors of a corporation may do 4 all of the following: 5 a. Modify lines of succession to accommodate the incapacity 6 of any director, officer, employee, or agent. 7 b. Relocate the principal office, designate alternative 8 principal offices or regional offices, or authorize the 9 officers to do so. 10 2. During an emergency as defined in subsection 4, unless 11 emergency bylaws provide otherwise: 12 a. Notice of a meeting of the board of directors need be 13 given only to those directors whom it is practicable to reach 14 and may be given in any practicable manner. 15 b. One or more officers of the corporation present at a 16 meeting of the board of directors may be deemed to be directors 17 for the meeting, in order of rank and within the same rank in 18 order of seniority, as necessary to achieve a quorum. 19 3. Corporate action taken in good faith during an emergency 20 under this section to further the ordinary business affairs of 21 the corporation shall both: 22 a. Bind the corporation. 23 b. Not be used to impose liability on a corporate director, 24 officer, employee, or agent. 25 4. An emergency exists for purposes of this section if a 26 quorum of the board of directors cannot readily be assembled 27 because of some catastrophic event. 28 Sec. 35. Section 490.401, Code 2020, is amended by striking 29 the section and inserting in lieu thereof the following: 30 490.401 Corporate name. 31 1. A corporate name is subject to all of the following: 32 a. It must contain the word “corporation”, “incorporated”, 33 “company”, or “limited”, or the abbreviation “corp.”, “inc.”, 34 “co.”, or “ltd.”, or words or abbreviations of like import in 35 -43- LSB 5044HC (1) 88 da/jh 43/ 261
H.F. _____ another language. 1 b. It must not contain language stating or implying that 2 the corporation is organized for a purpose other than that 3 permitted by section 490.301 and its articles of incorporation. 4 2. Except as authorized by subsections 3 and 4, a corporate 5 name must be distinguishable upon the records of the secretary 6 of state from all of the following: 7 a. The corporate name of a corporation incorporated in 8 this state which is not administratively dissolved, or if such 9 corporation has been administratively dissolved, within five 10 years after the effective date of dissolution. 11 b. A corporate name reserved or registered under section 12 490.402 or 490.403 or any similar provision of the law of this 13 state. 14 c. The name of a foreign corporation registered to do 15 business in this state or an alternate name adopted by a 16 foreign corporation registered to do business in this state 17 because its corporate name is unavailable. 18 d. The corporate name of a nonprofit corporation 19 incorporated in this state which is not administratively 20 dissolved. 21 e. The name of a foreign nonprofit corporation registered 22 to do business in this state or an alternate name adopted by a 23 foreign nonprofit corporation registered to conduct activities 24 in this state because its real name is unavailable. 25 f. The name of a domestic filing entity which is not 26 administratively dissolved. 27 g. The name of a foreign unincorporated entity registered 28 to do business in this state or an alternate name adopted by 29 such an entity registered to conduct activities in this state 30 because its real name is unavailable. 31 h. A name reserved, registered, or protected as follows: 32 (1) For a limited liability partnership, section 486A.1001 33 or 486A.1002. 34 (2) For a limited partnership, section 488.108, 488.109, or 35 -44- LSB 5044HC (1) 88 da/jh 44/ 261
H.F. _____ 488.810. 1 (3) For a business corporation, this section, or section 2 490.402, 490.403, or 490.1422. 3 (4) For a limited liability company under chapter 489, 4 section 489.108, 489.109, or 489.706. 5 (5) For a nonprofit corporation, section 504.401, 504.402, 6 504.403, or 504.1423. 7 3. A corporation may apply to the secretary of state for 8 authorization to use a name that is not distinguishable upon 9 the secretary of state’s records from one or more of the names 10 described in subsection 2. The secretary of state shall 11 authorize use of the name applied for if any of the following 12 conditions apply: 13 a. The other corporation or unincorporated entity consents 14 to the use in writing and submits an undertaking in form 15 satisfactory to the secretary of state to change its name to a 16 name that is distinguishable upon the records of the secretary 17 of state from the name of the applying corporation. 18 b. The applicant delivers to the secretary of state a 19 certified copy of the final judgment of a court of competent 20 jurisdiction establishing the applicant’s right to use the name 21 applied for in this state. 22 4. A corporation may use the name, including the fictitious 23 name, of another domestic or foreign corporation that is used 24 in this state if the other corporation is incorporated or 25 authorized to transact business in this state and the proposed 26 user corporation submits documentation to the satisfaction 27 of the secretary of state establishing any of the following 28 conditions: 29 a. Has merged with the other corporation. 30 b. Has been formed by reorganization of the other 31 corporation. 32 c. Has acquired all or substantially all of the assets, 33 including the corporate name, of the other corporation. 34 5. This chapter does not control the use of fictitious 35 -45- LSB 5044HC (1) 88 da/jh 45/ 261
H.F. _____ names; however, if a corporation or a foreign corporation 1 uses a fictitious name in this state, it shall deliver to the 2 secretary of state for filing a copy of the resolution of its 3 board of directors, certified by its secretary, adopting the 4 fictitious name. 5 Sec. 36. Section 490.402, Code 2020, is amended by striking 6 the section and inserting in lieu thereof the following: 7 490.402 Reserved name. 8 1. A person may reserve the exclusive use of a corporate 9 name, including a fictitious or alternate name for a foreign 10 corporation whose corporate name is not available, by 11 delivering an application to the secretary of state for 12 filing. The application must set forth the name and address 13 of the applicant and the name proposed to be reserved. If the 14 secretary of state finds that the corporate name applied for is 15 available, the secretary of state shall reserve the name for 16 the applicant’s exclusive use for a nonrenewable one hundred 17 twenty-day period. 18 2. The owner of a reserved corporate name may transfer the 19 reservation to another person by delivering to the secretary of 20 state a signed notice of the transfer that states the name and 21 address of the transferee. 22 Sec. 37. Section 490.403, Code 2020, is amended by striking 23 the section and inserting in lieu thereof the following: 24 490.403 Registered name. 25 1. A foreign corporation may register its corporate 26 name, or its corporate name with the addition of any word 27 or abbreviation listed in section 490.401, subsection 1, 28 paragraph “a” , if necessary for the corporate name to comply 29 with section 490.401, subsection 1, paragraph “a” , if the name 30 is distinguishable upon the records of the secretary of state 31 from the corporate names that are not available under section 32 490.401, subsection 2. 33 2. A foreign corporation registers its corporate name, or 34 its corporate name with any addition permitted by subsection 35 -46- LSB 5044HC (1) 88 da/jh 46/ 261
H.F. _____ 1, by delivering to the secretary of state for filing an 1 application that complies with all of the following: 2 a. Sets forth that name, the state or country and date of 3 its incorporation, and a brief description of the nature of the 4 business which is to be conducted in this state. 5 b. Is accompanied by a certificate of existence, or a 6 document of similar import, from the state or country of 7 incorporation. 8 3. The name is registered for the applicant’s exclusive 9 use upon the effective date of the application and for the 10 remainder of the calendar year, unless renewed. 11 4. A foreign corporation whose name registration is 12 effective may renew it for successive years by delivering 13 to the secretary of state for filing a renewal application, 14 which complies with the requirements of subsection 2, between 15 October 1 and December 31 of the preceding year. The renewal 16 application when filed renews the registration for the 17 following calendar year. 18 5. a. A foreign corporation whose name registration is 19 effective may thereafter do any of the following: 20 (1) Register to do business as a foreign corporation under 21 the registered name, if it complies with section 490.401, 22 subsection 1, paragraph “b” . 23 (2) Consent in writing to the use of that name by a domestic 24 corporation thereafter incorporated under this chapter or by 25 another foreign corporation. 26 b. The registration terminates when the domestic corporation 27 is incorporated or the foreign corporation registers to do 28 business under that name. 29 Sec. 38. Section 490.501, Code 2020, is amended by striking 30 the section and inserting in lieu thereof the following: 31 490.501 Registered office and agent of domestic and 32 registered foreign corporations. 33 1. Each corporation shall continuously maintain in this 34 state all of the following: 35 -47- LSB 5044HC (1) 88 da/jh 47/ 261
H.F. _____ a. A registered office that may be the same as any of its 1 places of business. 2 b. A registered agent, which may be any of the following: 3 (1) An individual who resides in this state and whose 4 business office is identical with the registered office. 5 (2) A domestic or foreign corporation or eligible entity 6 whose business office is identical with the registered office 7 and, in the case of a foreign corporation or foreign eligible 8 entity, is registered to do business in this state. 9 2. As used in this subchapter, “corporation” means both a 10 domestic corporation and a registered foreign corporation. 11 Sec. 39. Section 490.502, Code 2020, is amended by striking 12 the section and inserting in lieu thereof the following: 13 490.502 Change of registered office or registered agent. 14 1. A corporation may change its registered office or 15 registered agent by delivering to the secretary of state 16 for filing a statement of change that sets forth all of the 17 following: 18 a. The name of the corporation. 19 b. The street and mailing addresses of its current 20 registered office. 21 c. If the current registered office is to be changed, the 22 street and mailing addresses of the new registered office. 23 d. The name of its current registered agent. 24 e. If the current registered agent is to be changed, the 25 name of the new registered agent and the new agent’s written 26 consent, either on the statement or attached to it, to the 27 appointment. 28 f. That after the change or changes are made, the street and 29 mailing addresses of its registered office and of the business 30 office of its registered agent will be identical. 31 2. If the street or mailing address of a registered agent’s 32 business office changes, the agent shall change the street or 33 mailing address of the registered office of any corporation for 34 which the agent is the registered agent by delivering a signed 35 -48- LSB 5044HC (1) 88 da/jh 48/ 261
H.F. _____ written notice of the change to the corporation and delivering 1 to the secretary of state for filing a signed statement that 2 complies with the requirements of subsection 1 and states that 3 the corporation has been notified of the change. 4 3. If a registered agent changes the registered agent’s 5 business address to another place, the registered agent may 6 change the business address and the address of the registered 7 agent by filing a statement as required in subsection 2 for 8 each corporation, or a single statement for all corporations 9 named in the notice, except that it need be signed only by the 10 registered agent and need not be responsive to subsection 1, 11 paragraph “e” , and must recite that a copy of the statement has 12 been mailed to each corporation named in the notice. 13 4. A corporation may also change its registered office or 14 registered agent in its biennial report as provided in section 15 490.1622. 16 Sec. 40. Section 490.503, Code 2020, is amended by striking 17 the section and inserting in lieu thereof the following: 18 490.503 Resignation of registered agent. 19 1. A registered agent may resign as agent for a corporation 20 by delivering to the secretary of state for filing a statement 21 of resignation signed by the agent which shall state all of the 22 following: 23 a. The name of the corporation. 24 b. The name of the agent. 25 c. The agent resigns from serving as registered agent for 26 the corporation. 27 d. The address of the corporation to which the agent will 28 deliver the notice required by subsection 3. 29 2. A statement of resignation takes effect on the earlier 30 of the following: 31 a. 12:01 a.m. on the thirty-first day after the day on which 32 it is filed by the secretary of state. 33 b. The designation of a new registered agent for the 34 corporation. 35 -49- LSB 5044HC (1) 88 da/jh 49/ 261
H.F. _____ 3. A registered agent promptly shall deliver to the 1 corporation notice of the date on which a statement of 2 resignation was delivered to the secretary of state for filing. 3 4. When a statement of resignation takes effect, the person 4 that resigned ceases to have responsibility under this chapter 5 for any matter thereafter tendered to it as agent for the 6 corporation. The resignation does not affect any contractual 7 rights the corporation has against the agent or that the agent 8 has against the corporation. 9 5. A registered agent may resign with respect to a 10 corporation regardless of whether the corporation is in good 11 standing. 12 Sec. 41. Section 490.504, Code 2020, is amended by striking 13 the section and inserting in lieu thereof the following: 14 490.504 Service on corporation. 15 1. A corporation’s registered agent is the corporation’s 16 agent for service of process, notice, or demand required or 17 permitted by law to be served on the corporation. 18 2. If a corporation has no registered agent, or the agent 19 cannot with reasonable diligence be served, the corporation 20 may be served by registered or certified mail, return receipt 21 requested, addressed to the secretary at the corporation’s 22 principal office. Service is perfected under this subsection 23 at the earliest of the following: 24 a. The date the corporation receives the mail. 25 b. The date shown on the return receipt, if signed on behalf 26 of the corporation. 27 c. Five days after its deposit in the United States mail, 28 as evidenced by the postmark, if mailed postpaid and correctly 29 addressed. 30 3. a. The secretary of state shall be an agent of the 31 corporation upon whom process, notice, or demand may be served, 32 if any of the following applies: 33 (1) The process, notice, or demand cannot be served on a 34 corporation pursuant to subsection 1 or 2. 35 -50- LSB 5044HC (1) 88 da/jh 50/ 261
H.F. _____ (2) The process, notice, or demand is to be served on 1 a registered foreign corporation that has withdrawn its 2 registration pursuant to section 490.1507 or 490.1509, or the 3 registration of which has been terminated pursuant to section 4 490.1511. 5 b. Service of any process, notice, or demand on the 6 secretary of state as agent for a corporation may be made by 7 delivering to the secretary of state duplicate copies of the 8 process, notice, or demand. If process, notice, or demand 9 is served on the secretary of state, the secretary of state 10 shall forward one of the copies by registered or certified 11 mail, return receipt requested, to the corporation at the 12 last address shown in the records of the secretary of state. 13 Service is effected under this subsection at the earliest of 14 the following: 15 (1) The date the corporation receives the process, notice, 16 or demand. 17 (2) The date shown on the return receipt, if signed on 18 behalf of the corporation. 19 (3) Five days after the process, notice, or demand is 20 deposited with the United States mail by the secretary of 21 state. 22 4. This section does not prescribe the only means, or 23 necessarily the required means, of serving a corporation. 24 Sec. 42. Section 490.601, Code 2020, is amended by striking 25 the section and inserting in lieu thereof the following: 26 490.601 Authorized shares. 27 1. The articles of incorporation must set forth any classes 28 of shares and series of shares within a class, and the number 29 of shares of each class and series, that the corporation is 30 authorized to issue. If more than one class or series of 31 shares is authorized, the articles of incorporation must 32 prescribe a distinguishing designation for each class or series 33 and, before the issuance of shares of a class or series, 34 describe the terms, including the preferences, rights, and 35 -51- LSB 5044HC (1) 88 da/jh 51/ 261
H.F. _____ limitations of that class or series. Except to the extent 1 varied as permitted by this section, all shares of a class or 2 series must have terms, including preferences, rights, and 3 limitations that are identical with those of other shares of 4 the same class or series. 5 2. The articles of incorporation must authorize all of the 6 following: 7 a. One or more classes or series of shares that together 8 have full voting rights. 9 b. One or more classes or series of shares, which may be 10 the same class, classes, or series as those with voting rights, 11 that together are entitled to receive the net assets of the 12 corporation upon dissolution. 13 3. The articles of incorporation may authorize one or more 14 classes or series of shares that have any of the following 15 characteristics: 16 a. Have special, conditional, or limited voting rights, or 17 no right to vote, except to the extent otherwise provided by 18 this chapter. 19 b. Are redeemable or convertible as specified in the 20 articles of incorporation in any of the following ways: 21 (1) At the option of the corporation, the shareholder, or 22 another person or upon the occurrence of a specified event. 23 (2) For cash, indebtedness, securities, or other property. 24 (3) At prices and in amounts specified or determined in 25 accordance with a formula. 26 c. Entitle the holders to distributions calculated in 27 any manner, including dividends that may be cumulative, 28 noncumulative, or partially cumulative. 29 d. Have preference over any other class or series of shares 30 with respect to distributions, including distributions upon the 31 dissolution of the corporation. 32 4. The terms of shares may be made dependent upon facts 33 objectively ascertainable outside the articles of incorporation 34 in accordance with section 490.120, subsection 11. 35 -52- LSB 5044HC (1) 88 da/jh 52/ 261
H.F. _____ 5. Any of the terms of shares may vary among holders of the 1 same class or series so long as such variations are expressly 2 set forth in the articles of incorporation. 3 6. The description of the preferences, rights, and 4 limitations of classes or series of shares in subsection 3 is 5 not exhaustive. 6 Sec. 43. Section 490.602, Code 2020, is amended by striking 7 the section and inserting in lieu thereof the following: 8 490.602 Terms of class or series determined by board of 9 directors. 10 1. If the articles of incorporation so provide, the board 11 of directors is authorized, without shareholder approval, to 12 do any of the following: 13 a. Classify any unissued shares into one or more classes or 14 into one or more series within a class. 15 b. Reclassify any unissued shares of any class into one 16 or more classes or into one or more series within one or more 17 classes. 18 c. Reclassify any unissued shares of any series of any class 19 into one or more classes or into one or more series within a 20 class. 21 2. If