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House File 2469 - IntroducedA Bill ForAn Act 1relating to corporations by providing for the use of
2electronic mail and other electronic transmissions, and
3shareholders’ lists.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SHAREHOLDER NOTICES, LISTS, AND RECORDS
3 Section 1. Section 490.140, Code 2022, is amended by adding
4the following new subsections:
5 NEW SUBSECTION. 12A. “Electronic mail” means an electronic
6transmission directed to a unique electronic mail address.
7 NEW SUBSECTION. 12B. “Electronic mail address” means a
8destination, commonly expressed as a string of characters,
9consisting of a unique user name or mailbox, commonly referred
10to as the “local part” of the address, and a reference to an
11internet domain, commonly referred to as the “domain part” of
12the address, whether or not displayed, to which electronic mail
13may be sent or delivered.
14 Sec. 2. Section 490.141, Code 2022, is amended to read as
15follows:
16490.141 Notices and other communications.
171. A notice under this chapter must be in writing unless
18oral notice is reasonable in the circumstances. Unless
19otherwise agreed between the sender and the recipient, words
20in a notice or other communication under this chapter must be
21in English.
222. A notice or other communication may be given by
23any method of delivery, except that a notice or other
24communication by electronic transmissions transmission must be
25in accordance with this section. If the methods of delivery
26are impracticable, a notice or other communication from a
27corporation may be given by means of a broad nonexclusionary
28distribution to the public, which may include a newspaper
29of general circulation in the area where published; radio,
30television, or other form of public broadcast communication;
31or other methods of distribution that the corporation has
32previously identified to its shareholders.
333. A notice or other communication to a domestic corporation
34or to a registered foreign corporation registered to do
35business in this state may be delivered to the corporation’s
-1-1registered agent at its registered office or to the secretary
2at the corporation’s principal office shown in its most recent
3biennial report required by section 490.1621 or, in the case
4of a foreign corporation that has not yet delivered a biennial
5report, in its foreign registration statement.
64. A notice or other communication from a corporation
7to a shareholder may be delivered by electronic mail to the
8electronic mail address for a shareholder required to be
9included in the record of shareholders maintained pursuant
10to section 490.1601, subsection 4, unless the shareholder
11has previously notified the corporation in writing that
12the shareholder objects to receiving notices and other
13communication by electronic mail. Any notice or other
14communication may be delivered to a shareholder by another form
15of electronic transmission if consented to by the shareholder
16or if authorized by subsection 10. Any notice or other
17communication from the corporation to any other person may be
18delivered by electronic transmission if consented to by the
19recipient or if authorized by subsection 10.
205. Any consent given under this subsection 4 or subsection
2110 may be revoked with respect to future notices or
22communications by the person who consented by giving written
23or electronic notice to the person to whom the consent was
24delivered. Any such consent is deemed revoked
255. A notice or other communication shall no longer be
26delivered to an electronic mail address or other electronic
27transmission address pursuant to subsection 4,if all of the
28following apply:
29a. The corporation is unable to deliver two consecutive
30electronic transmissions given by the corporation in
31accordance with such consent receives notice from the
32information processing system into which such notice or other
33communication was entered that two consecutive notices or
34other communications given by electronic transmission have
35not been delivered to the electronic mail address or other
-2-1electronic transmission address to which such notice or other
2communication was directed.
3b. Such inability notice of nondelivery becomes known to the
4secretary, or an assistant secretary or to the transfer agent,
5or other another person responsible for the giving of notice
6 notices or other communications for the corporation; provided,
7however, that the inadvertent failure to treat such inability
8as a revocation recognize such notice of nondelivery as a
9cessation of authority to provide a shareholder with notice
10by electronic mail or other electronic transmission shall not
11invalidate any meeting or other action.
126. Unless otherwise agreed between the sender and the
13recipient, an a notice or other communication by electronic
14transmission is received when all of the following apply:
15a. The electronic transmission enters an information
16processing system that the recipient has designated or uses
17for the purposes of receiving electronic transmissions or
18information of the type sent, and from which the recipient is
19able to retrieve the directed to any of the following:
20(1) In the case of a shareholder, the electronic mail
21address for the shareholder required to be included in the
22record of shareholders maintained pursuant to section 490.1601,
23subsection 4, or otherelectronic transmission address at
24which the shareholder has consented to receive notice or other
25communications by electronic transmission.
26(2) In the case of any other recipient, the electronic
27transmission address at which the recipient has consented
28to receive notice or other communications by electronic
29transmission.
30b. The electronic transmission is in a form capable of being
31processed by that system.
327. Receipt of an electronic acknowledgment from an
33information processing system described in subsection 6,
34paragraph “a”, establishes that an electronic transmission was
35received but, by itself, does not establish that the content
-3-1sent corresponds to the content received.
28. An electronic transmission is received under this
3section even if no person is aware of its receipt.
49. A notice or other communication, if in a comprehensible
5form or manner, is effective at the earliest of the following:
6a. If in a physical form, the earliest of when it is
7actually received, or when it is left at any of the following:
8(1) A shareholder’s address shown on included in the
9corporation’s record of shareholders maintained by the
10corporation under pursuant to section 490.1601, subsection 4.
11(2) A director’s residence or usual place of business.
12(3) The domestic or registered foreign corporation’s
13principal office.
14b. If mailed by United States mail postage prepaid and
15correctly addressed to a shareholder at the shareholder’s
16address included in the record of shareholders pursuant to
17section 490.1601, subsection 4, upon deposit in the United
18States mail.
19c. If mailed by United States mail postage prepaid and
20correctly addressed to a recipient other than a shareholder, at
21the address included in the corporation’s records the earliest
22of when it is actually received, or as follows:
23(1) If sent by registered or certified mail, return receipt
24requested, the date shown on the return receipt signed by or on
25behalf of the addressee.
26(2) Five days after it is deposited in the United States
27mail.
28d. If an electronic transmission, when it is received as
29provided in subsection 6.
30e. If oral, when communicated.
3110. A notice or other communication may be in the form of
32an electronic transmission that cannot be directly reproduced
33in paper form by the recipient through an automated process
34used in conventional commercial practice only if all of the
35following apply:
-4- 1a. The electronic transmission is otherwise retrievable in
2perceivable form.
3b. The sender and the recipient have consented in writing to
4the use of such form of electronic transmission.
511. If this chapter prescribes requirements for notices
6or other communications in particular circumstances, those
7requirements govern. If articles of incorporation or bylaws
8prescribe requirements for notices or other communications,
9not inconsistent with this section or other provisions of
10this chapter, those requirements govern. The articles of
11incorporation or bylaws may authorize or require delivery of
12notices of meetings of directors by electronic transmission.
1312. In the event that any provisions of this chapter are
14deemed to modify, limit, or supersede the federal Electronic
15Signatures in Global and National Commerce Act, 15 U.S.C.
16§§7001 §7001 et seq., the provisions of this chapter shall
17control to the maximum extent permitted by section 102(a)(2) of
18that federal Act.
1913. a. Whenever notice would otherwise be required to
20be given under any provision of this subchapter chapter
21 to a shareholder, such the notice need not be given if the
22corporation is not permitted to deliver notice by electronic
23transmission pursuant to subsections 4 and 5 and any of the
24following apply:
25(1) Notices to the shareholders of two consecutive annual
26meetings, and all notices of meetings during the period
27between such two consecutive annual meetings, have been sent
28to such shareholder at such shareholder’s address as shown
29on the records of the corporation included in the record
30of shareholders maintained pursuant to section 490.1601,
31subsection 4, and have been returned undeliverable or could not
32be delivered.
33(2) All, but not less than two, payments of dividends on
34securities during a twelve-month period, or two consecutive
35payments of dividends on securities during a period of more
-5-1than twelve months, have been sent to such shareholder at
2such shareholder’s address as shown on the records of the
3corporation included in the record of shareholders maintained
4pursuant to section 490.1601, subsection 4, and have been
5returned undeliverable or could not be delivered.
6(3) No address has been provided to the corporation by or on
7behalf of a shareholder and the corporation has not otherwise
8obtained an address for the shareholder that the corporation
9believes is reliable.
10b. If In addition, if any such shareholder shall deliver
11 to which this subsection applies delivers to the corporation a
12written notice setting forth such shareholder’s then-current
13address, the requirement that notice be given to such
14shareholder shall be reinstated.
15 Sec. 3. Section 490.720, Code 2022, is amended to read as
16follows:
17490.720 Shareholders’ list List of shareholders for meeting.
181. After fixing a record date for a meeting, a corporation
19shall prepare an alphabetical list of the names of all its the
20 shareholders who are entitled to notice of a the shareholders’
21meeting. If the board of directors fixes a different record
22date under section 490.707, subsection 5, to determine the
23shareholders entitled to vote at the meeting, a corporation
24also shall prepare an alphabetical list of the names of
25all its the shareholders who are entitled to vote at the
26meeting. A The list must be arranged by voting group, and
27within each voting group by class or series of shares, and
28show contain the address of, and number and class or series
29 of shares held by, each shareholder. Nothing contained in
30this subsection shall require and, if the notice or other
31communications regarding the meeting has been or will be sent
32by the corporation to include on such list the a shareholder by
33 electronic mail address or other electronic contact information
34of a transmission, the electronic mail or other electronic
35transmission address of that shareholder.
-6- 12. a. The shareholders’ list for of shareholders entitled
2to notice shall be available for inspection by any shareholder,
3beginning two business days after notice of the meeting is
4given for which the list was prepared and continuing through
5the meeting. The shareholders’ list list of shareholders for
6notice shall be made available at via any of the following:
7(1) The At the corporation’s principal office or at a place
8identified in the meeting notice in the city where the meeting
9will be held.
10(2) A On a reasonably accessible electronic network,
11provided that the information required to gain access to such
12list is provided with the notice of the meeting. The list of
13shareholders entitled to vote shall be similarly available
14for inspection promptly after the record date for voting. In
15the event that the corporation determines to make the list
16available on an electronic network, the corporation may take
17reasonable steps to ensure that such information is available
18only to shareholders of the corporation.
19b. A shareholders’ list for voting shall be similarly
20available for inspection promptly after the record date for
21voting. A shareholder, or the shareholder’s agent or attorney,
22is entitled on written demand to inspect and, subject to the
23requirements of section 490.1602, subsection 3, to copy a
24list of shareholders, during regular business hours and at
25the shareholder’s expense, during the period it is available
26for inspection. A corporation may satisfy the shareholder’s
27right to copy a list of shareholders by furnishing a copy
28in the manner described in section 490.1603, subsection 2.
29A shareholder and the shareholder’s agent or attorney who
30inspects or is furnished a copy of a list of shareholders under
31this subsection or under subsection 3 or who copies the list
32under this subsection may use the information on that list only
33for purposes related to the meeting and its subject matter and
34must keep the information on that list confidential.
353. If the meeting is to be held at a place, the corporation
-7-1shall make the list of shareholders entitled to vote available
2at the meeting and any adjournment, and any shareholder, or the
3shareholder’s agent or attorney, is entitled to inspect the
4list at any time during the meeting or and any adjournment.
5If the meeting is to be held solely by means of remote
6communication, then such list shall also be open to available
7for such inspection during the meeting and any adjournment on a
8reasonably accessible electronic network, and the information
9required to access such list shall be provided with the notice
10of the meeting. The corporation may satisfy its obligation
11to make such list available for inspection during a meeting
12by furnishing a copy of the list in the manner described in
13section 490.1603, subsection 2, to the shareholders prior to
14the meeting.
154. If the corporation refuses to allow a shareholder, or
16the shareholder’s agent or attorney, to inspect a shareholders’
17 list of shareholders before or at the meeting or any
18adjournment, or copy a list as permitted by subsection 2, the
19district court of the county where a corporation’s principal
20office or, if none in this state, its registered office, is
21located, on application of the shareholder, may summarily order
22the inspection or copying at the corporation’s expense and may
23postpone the meeting for which the list was prepared until the
24inspection or copying is complete.
255. Refusal or failure to prepare or make available the
26shareholders’ list of shareholders does not affect the validity
27of action taken at the meeting.
28 Sec. 4. Section 490.1601, subsection 4, Code 2022, is
29amended to read as follows:
304. A corporation shall maintain a record of its current
31shareholders in alphabetical order by class or series of shares
32showing the address of, and the number and class or series of
33shares held by, each shareholder to which notices and other
34communications from the corporation are to be sent, and which
35shall include the number and class or series of shares held by
-8-1each such shareholder. Nothing contained in this subsection
2 shall require the corporation to include in such record the
3electronic mail address or other electronic contact information
4of In addition, if a shareholder has provided an electronic
5mail address to the corporation or has consented to receive
6notices or other communications by electronic mail or other
7electronic transmission, the record of shareholders shall
8include the electronic mail or other electronic transmission
9address of the shareholder if notices or other communications
10are being delivered by the corporation to the shareholder at
11such electronic mail or other electronic transmission address
12pursuant to section 490.141, subsection 4. An electronic
13mail address of a shareholder shall be deemed to be provided
14by a shareholder if the electronic mail address is contained
15in a communication to the corporation by or on behalf of
16the shareholder unless the communication expressly indicates
17that the electronic mail address shall not be used to deliver
18notices or other communications.
19DIVISION II
20Grammatical Changes
21 Sec. 5. Section 490.140, subsection 57, Code 2022, is
22amended to read as follows:
2357. “United States” includes a district, authority, bureau,
24commission, department, and any other agency of the United
25States.
26 Sec. 6. Section 490.143, subsection 1, paragraph e,
27subparagraph (2), Code 2022, is amended to read as follows:
28(2) Has a material relationship with a director or officer
29who pursues or takes advantage of the business opportunity,
30directly, or indirectly through or on behalf of another person.
31 Sec. 7. Section 490.1704, subsection 4, Code 2022, is
32amended to read as follows:
334. Unless otherwise provided in the articles of
34incorporation, the violation by a director of the duties
35imposed by subsections 1 and 2 shall not constitute an
-9-1intentional infliction of harm on the corporation or the
2shareholders for the purposes of sections section 490.202,
3subsection 2, paragraphs “d” and “e”.
4DIVISION III
5Terminology Changes
6 Sec. 8. Section 490.120, subsection 5, Code 2022, is amended
7to read as follows:
85. The document must be in the English language. A
9corporate name need not be in English if written in English
10letters or Arabic or Roman numerals, and the certificate of
11existence registration required of foreign corporations need
12not be in English if accompanied by a reasonably authenticated
13English translation.
14 Sec. 9. Section 490.401, subsection 2, paragraphs c and e,
15Code 2022, are amended to read as follows:
16c. The name of a registered foreign corporation registered
17to do business in this state or an alternate name adopted by
18a registered foreign corporation registered to do business in
19this state because its corporate name is unavailable.
20e. The name of a foreign nonprofit corporation registered
21 authorized to do business in this state or an alternate
22name adopted by a foreign nonprofit corporation registered
23 authorized to conduct activities in this state because its real
24name is unavailable.
25 Sec. 10. Section 490.401, subsection 4, unnumbered
26paragraph 1, Code 2022, is amended to read as follows:
27A corporation may use the name, including the fictitious
28name, of another domestic or foreign corporation that is used
29in this state if the other corporation is incorporated or
30authorized registered to transact do business in this state
31and the proposed user corporation submits documentation to the
32satisfaction of the secretary of state establishing any of the
33following conditions:
34 Sec. 11. Section 490.748, subsection 3, Code 2022, is
35amended to read as follows:
-10- 13. The district court may appoint an individual or domestic
2or registered foreign corporation, registered to do business
3in this state, as a custodian or receiver and may require the
4custodian or receiver to post bond, with or without sureties,
5in an amount the district court directs.
6 Sec. 12. Section 490.922, subsection 5, Code 2022, is
7amended to read as follows:
85. If the domesticating corporation is a registered
9 foreign corporation that is registered to do business in this
10state under subchapter XV, its registration statement shall
11be canceled automatically when the domestication becomes
12effective.
13 Sec. 13. Section 490.1511, subsection 4, Code 2022, is
14amended to read as follows:
154. The registration of a registered foreign corporation
16to do business in this state ceases on the effective date
17of the termination as set forth in the certificate of
18termination, unless before that date the foreign corporation
19cures each ground for termination stated in the certificate of
20termination. If the foreign corporation cures each ground, the
21secretary of state shall file a statement that the certificate
22of termination is withdrawn.
23 Sec. 14. Section 490.1621, subsection 4, Code 2022, is
24amended to read as follows:
254. The first biennial report shall be delivered to the
26secretary of state between January 1 and April 1 of the first
27even-numbered year following the calendar year in which a
28domestic corporation was incorporated or a foreign corporation
29was authorized to transact registered to do business in this
30state. Subsequent biennial reports must be delivered to
31the secretary of state between January 1 and April 1 of the
32following even-numbered calendar years. For purposes of this
33section, each biennial report shall contain information related
34to the two-year period immediately preceding the calendar year
35in which the report is filed.
-11-1EXPLANATION
2The inclusion of this explanation does not constitute agreement with
3the explanation’s substance by the members of the general assembly.
4BACKGROUND. This bill amends provisions in the Iowa
5business corporation Act (IBCA) (Code chapter 490) as
6revised in HF 844 (2021 Iowa Acts, chapter 165) based on
7recommendations by the American bar association and published
8as the 2016 revised version of the “Model Business Corporation
9Act” (MBCA). The bill includes later additions to the MBCA
10relating to the use of electronic transmission to deliver and
11receive communications between a corporation and shareholders.
12The bill also makes changes to the use of grammar in provisions
13enacted in HF 844 and the terminology used in the MBCA and
14enacted in HF 844 to enhance the IBCA’s readability.
15DIVISION I — NOTICES AND OTHER COMMUNICATION. The bill
16defines electronic mail (email) as any electronic transmission
17directed to a unique electronic mail address (amended Code
18section 490.140(12A), (12B)). The use of other forms of
19electronic transmission is also allowed. The exception for a
20corporation’s use of electronic transmission, including email,
21to communicate with a shareholder is the shareholder’s written
22objection (amended Code section 490.140(4)). The corporation
23must also cease using this form of communication if it receives
24a message that the electronic transmission could not be
25delivered (amended Code section 490.140(5)).
26DIVISION I — LIST OF SHAREHOLDERS. The phrase
27“shareholders’ list” refers to a register of all active owners
28of the corporation’s shares which the corporation must keep
29current. The bill changes the name to “list of shareholders”.
30The bill provides that if a communication regarding a meeting
31has been sent by the corporation to the shareholder by email
32or other electronic transmission, the address of the email or
33other electronic transmission must be included as part of the
34list (amended Code section 490.720(1)). The bill also provides
35that a corporation may comply with its obligation to make the
-12-1list available for inspection by providing a copy of the list
2prior to meeting; the list is often used for the restricted
3use of protecting shareholder rights (amended Code section
4490.720(2)).
5DIVISION I — RECORD OF SHAREHOLDERS. The corporation is
6required to maintain a record of shareholders which is the
7basis for providing communications to shareholders. If a
8shareholder provides an email address to the corporation or has
9consented to receive communication by electronic transmission,
10the record must include the email or other electronic
11transmission address of the shareholder (amended Code section
12490.1601(4)). In these cases, the electronic mail address
13or other electronic transmission address of a shareholder is
14deemed to be provided by a shareholder to the corporation
15if it is contained in a communication to the corporation by
16or on behalf of the shareholder, unless the shareholder’s
17communication expressly indicates otherwise.
18DIVISION II — GRAMMATICAL CHANGES. The bill amends several
19provisions to correspond to modern rules of grammar, including
20the proper use of an indefinite article, a comma, and the
21singular (amended Code sections 490.140(57), 490.143(1), and
22490.1704(4)).
23DIVISION III — TERMINOLOGY CHANGES. Prior to the enactment
24of the revised MBCA, the IBCA, like other model business
25organization statutes (e.g., limited liability companies
26under Code chapter 489 or nonprofit corporations under Code
27chapter 504), provided that a foreign business was “authorized
28to transact business in this state” or the equivalent phrase
29“authorized to do business in this state” by obtaining a
30certificate of authorization (e.g., Code section 489.208 or
31504.112). By comparison, a domestic corporation (incorporated
32with the secretary of state) may obtain a certificate of
33existence (Code section 490.128) which is also the phrase used
34by other business organizations, including limited liability
35companies (Code section 489.208). A domestic or foreign
-13-1nonprofit corporation may obtain a certificate of existence
2or certificate of authority (Code section 504.112). The
3MBCA provides that in order “to do business in this state” a
4foreign corporation must be registered with the secretary of
5state and obtain a certificate of registration (Code section
6490.128). Such a corporation is defined as a “registered
7foreign corporation” (Code section 490.140(47)).
8The bill makes changes to this terminology when referring
9to foreign corporations to conform with the MBCA’s use of
10terms and to enhance readability. The phrase “certificate of
11existence” is changed to “certificate of registration” (amended
12Code section 490.120(5)). The phrase “authorized to transact
13business in this state” is changed to “registered to do
14business in this state” (amended Code sections 490.401(4) and
15490.1621(4)). The phrase “foreign corporation registered to
16do business in this state” is shortened to “registered foreign
17corporation” (amended Code sections 490.401(2), 490.748(3),
18490.922(5), and 490.1511(4)). When referring to a foreign
19nonprofit corporation, the phrase “registered to do business in
20this state” is changed to “authorized to do business in this
21state (amended Code section 490.401(2)).
-14-da/jh
2electronic mail and other electronic transmissions, and
3shareholders’ lists.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2SHAREHOLDER NOTICES, LISTS, AND RECORDS
3 Section 1. Section 490.140, Code 2022, is amended by adding
4the following new subsections:
5 NEW SUBSECTION. 12A. “Electronic mail” means an electronic
6transmission directed to a unique electronic mail address.
7 NEW SUBSECTION. 12B. “Electronic mail address” means a
8destination, commonly expressed as a string of characters,
9consisting of a unique user name or mailbox, commonly referred
10to as the “local part” of the address, and a reference to an
11internet domain, commonly referred to as the “domain part” of
12the address, whether or not displayed, to which electronic mail
13may be sent or delivered.
14 Sec. 2. Section 490.141, Code 2022, is amended to read as
15follows:
16490.141 Notices and other communications.
171. A notice under this chapter must be in writing unless
18oral notice is reasonable in the circumstances. Unless
19otherwise agreed between the sender and the recipient, words
20in a notice or other communication under this chapter must be
21in English.
222. A notice or other communication may be given by
23any method of delivery, except that a notice or other
24communication by electronic transmissions transmission must be
25in accordance with this section. If the methods of delivery
26are impracticable, a notice or other communication from a
27corporation may be given by means of a broad nonexclusionary
28distribution to the public, which may include a newspaper
29of general circulation in the area where published; radio,
30television, or other form of public broadcast communication;
31or other methods of distribution that the corporation has
32previously identified to its shareholders.
333. A notice or other communication to a domestic corporation
34or to a registered foreign corporation registered to do
35business in this state may be delivered to the corporation’s
-1-1registered agent at its registered office or to the secretary
2at the corporation’s principal office shown in its most recent
3biennial report required by section 490.1621 or, in the case
4of a foreign corporation that has not yet delivered a biennial
5report, in its foreign registration statement.
64. A notice or other communication from a corporation
7to a shareholder may be delivered by electronic mail to the
8electronic mail address for a shareholder required to be
9included in the record of shareholders maintained pursuant
10to section 490.1601, subsection 4, unless the shareholder
11has previously notified the corporation in writing that
12the shareholder objects to receiving notices and other
13communication by electronic mail. Any notice or other
14communication may be delivered to a shareholder by another form
15of electronic transmission if consented to by the shareholder
16or if authorized by subsection 10. Any notice or other
17communication from the corporation to any other person may be
18delivered by electronic transmission if consented to by the
19recipient or if authorized by subsection 10.
205. Any consent given under this subsection 4 or subsection
2110 may be revoked with respect to future notices or
22communications by the person who consented by giving written
23or electronic notice to the person to whom the consent was
24delivered. Any such consent is deemed revoked
255. A notice or other communication shall no longer be
26delivered to an electronic mail address or other electronic
27transmission address pursuant to subsection 4,if all of the
28following apply:
29a. The corporation is unable to deliver two consecutive
30electronic transmissions given by the corporation in
31accordance with such consent receives notice from the
32information processing system into which such notice or other
33communication was entered that two consecutive notices or
34other communications given by electronic transmission have
35not been delivered to the electronic mail address or other
-2-1electronic transmission address to which such notice or other
2communication was directed.
3b. Such inability notice of nondelivery becomes known to the
4secretary, or an assistant secretary or to the transfer agent,
5or other another person responsible for the giving of notice
6 notices or other communications for the corporation; provided,
7however, that the inadvertent failure to treat such inability
8as a revocation recognize such notice of nondelivery as a
9cessation of authority to provide a shareholder with notice
10by electronic mail or other electronic transmission shall not
11invalidate any meeting or other action.
126. Unless otherwise agreed between the sender and the
13recipient, an a notice or other communication by electronic
14transmission is received when all of the following apply:
15a. The electronic transmission enters an information
16processing system that the recipient has designated or uses
17for the purposes of receiving electronic transmissions or
18information of the type sent, and from which the recipient is
19able to retrieve the directed to any of the following:
20(1) In the case of a shareholder, the electronic mail
21address for the shareholder required to be included in the
22record of shareholders maintained pursuant to section 490.1601,
23subsection 4, or otherelectronic transmission address at
24which the shareholder has consented to receive notice or other
25communications by electronic transmission.
26(2) In the case of any other recipient, the electronic
27transmission address at which the recipient has consented
28to receive notice or other communications by electronic
29transmission.
30b. The electronic transmission is in a form capable of being
31processed by that system.
327. Receipt of an electronic acknowledgment from an
33information processing system described in subsection 6,
34paragraph “a”, establishes that an electronic transmission was
35received but, by itself, does not establish that the content
-3-1sent corresponds to the content received.
28. An electronic transmission is received under this
3section even if no person is aware of its receipt.
49. A notice or other communication, if in a comprehensible
5form or manner, is effective at the earliest of the following:
6a. If in a physical form, the earliest of when it is
7actually received, or when it is left at any of the following:
8(1) A shareholder’s address shown on included in the
9corporation’s record of shareholders maintained by the
10corporation under pursuant to section 490.1601, subsection 4.
11(2) A director’s residence or usual place of business.
12(3) The domestic or registered foreign corporation’s
13principal office.
14b. If mailed by United States mail postage prepaid and
15correctly addressed to a shareholder at the shareholder’s
16address included in the record of shareholders pursuant to
17section 490.1601, subsection 4, upon deposit in the United
18States mail.
19c. If mailed by United States mail postage prepaid and
20correctly addressed to a recipient other than a shareholder, at
21the address included in the corporation’s records the earliest
22of when it is actually received, or as follows:
23(1) If sent by registered or certified mail, return receipt
24requested, the date shown on the return receipt signed by or on
25behalf of the addressee.
26(2) Five days after it is deposited in the United States
27mail.
28d. If an electronic transmission, when it is received as
29provided in subsection 6.
30e. If oral, when communicated.
3110. A notice or other communication may be in the form of
32an electronic transmission that cannot be directly reproduced
33in paper form by the recipient through an automated process
34used in conventional commercial practice only if all of the
35following apply:
-4- 1a. The electronic transmission is otherwise retrievable in
2perceivable form.
3b. The sender and the recipient have consented in writing to
4the use of such form of electronic transmission.
511. If this chapter prescribes requirements for notices
6or other communications in particular circumstances, those
7requirements govern. If articles of incorporation or bylaws
8prescribe requirements for notices or other communications,
9not inconsistent with this section or other provisions of
10this chapter, those requirements govern. The articles of
11incorporation or bylaws may authorize or require delivery of
12notices of meetings of directors by electronic transmission.
1312. In the event that any provisions of this chapter are
14deemed to modify, limit, or supersede the federal Electronic
15Signatures in Global and National Commerce Act, 15 U.S.C.
16§§7001 §7001 et seq., the provisions of this chapter shall
17control to the maximum extent permitted by section 102(a)(2) of
18that federal Act.
1913. a. Whenever notice would otherwise be required to
20be given under any provision of this subchapter chapter
21 to a shareholder, such the notice need not be given if the
22corporation is not permitted to deliver notice by electronic
23transmission pursuant to subsections 4 and 5 and any of the
24following apply:
25(1) Notices to the shareholders of two consecutive annual
26meetings, and all notices of meetings during the period
27between such two consecutive annual meetings, have been sent
28to such shareholder at such shareholder’s address as shown
29on the records of the corporation included in the record
30of shareholders maintained pursuant to section 490.1601,
31subsection 4, and have been returned undeliverable or could not
32be delivered.
33(2) All, but not less than two, payments of dividends on
34securities during a twelve-month period, or two consecutive
35payments of dividends on securities during a period of more
-5-1than twelve months, have been sent to such shareholder at
2such shareholder’s address as shown on the records of the
3corporation included in the record of shareholders maintained
4pursuant to section 490.1601, subsection 4, and have been
5returned undeliverable or could not be delivered.
6(3) No address has been provided to the corporation by or on
7behalf of a shareholder and the corporation has not otherwise
8obtained an address for the shareholder that the corporation
9believes is reliable.
10b. If In addition, if any such shareholder shall deliver
11 to which this subsection applies delivers to the corporation a
12written notice setting forth such shareholder’s then-current
13address, the requirement that notice be given to such
14shareholder shall be reinstated.
15 Sec. 3. Section 490.720, Code 2022, is amended to read as
16follows:
17490.720 Shareholders’ list List of shareholders for meeting.
181. After fixing a record date for a meeting, a corporation
19shall prepare an alphabetical list of the names of all its the
20 shareholders who are entitled to notice of a the shareholders’
21meeting. If the board of directors fixes a different record
22date under section 490.707, subsection 5, to determine the
23shareholders entitled to vote at the meeting, a corporation
24also shall prepare an alphabetical list of the names of
25all its the shareholders who are entitled to vote at the
26meeting. A The list must be arranged by voting group, and
27within each voting group by class or series of shares, and
28show contain the address of, and number and class or series
29 of shares held by, each shareholder. Nothing contained in
30this subsection shall require and, if the notice or other
31communications regarding the meeting has been or will be sent
32by the corporation to include on such list the a shareholder by
33 electronic mail address or other electronic contact information
34of a transmission, the electronic mail or other electronic
35transmission address of that shareholder.
-6- 12. a. The shareholders’ list for of shareholders entitled
2to notice shall be available for inspection by any shareholder,
3beginning two business days after notice of the meeting is
4given for which the list was prepared and continuing through
5the meeting. The shareholders’ list list of shareholders for
6notice shall be made available at via any of the following:
7(1) The At the corporation’s principal office or at a place
8identified in the meeting notice in the city where the meeting
9will be held.
10(2) A On a reasonably accessible electronic network,
11provided that the information required to gain access to such
12list is provided with the notice of the meeting. The list of
13shareholders entitled to vote shall be similarly available
14for inspection promptly after the record date for voting. In
15the event that the corporation determines to make the list
16available on an electronic network, the corporation may take
17reasonable steps to ensure that such information is available
18only to shareholders of the corporation.
19b. A shareholders’ list for voting shall be similarly
20available for inspection promptly after the record date for
21voting. A shareholder, or the shareholder’s agent or attorney,
22is entitled on written demand to inspect and, subject to the
23requirements of section 490.1602, subsection 3, to copy a
24list of shareholders, during regular business hours and at
25the shareholder’s expense, during the period it is available
26for inspection. A corporation may satisfy the shareholder’s
27right to copy a list of shareholders by furnishing a copy
28in the manner described in section 490.1603, subsection 2.
29A shareholder and the shareholder’s agent or attorney who
30inspects or is furnished a copy of a list of shareholders under
31this subsection or under subsection 3 or who copies the list
32under this subsection may use the information on that list only
33for purposes related to the meeting and its subject matter and
34must keep the information on that list confidential.
353. If the meeting is to be held at a place, the corporation
-7-1shall make the list of shareholders entitled to vote available
2at the meeting and any adjournment, and any shareholder, or the
3shareholder’s agent or attorney, is entitled to inspect the
4list at any time during the meeting or and any adjournment.
5If the meeting is to be held solely by means of remote
6communication, then such list shall also be open to available
7for such inspection during the meeting and any adjournment on a
8reasonably accessible electronic network, and the information
9required to access such list shall be provided with the notice
10of the meeting. The corporation may satisfy its obligation
11to make such list available for inspection during a meeting
12by furnishing a copy of the list in the manner described in
13section 490.1603, subsection 2, to the shareholders prior to
14the meeting.
154. If the corporation refuses to allow a shareholder, or
16the shareholder’s agent or attorney, to inspect a shareholders’
17 list of shareholders before or at the meeting or any
18adjournment, or copy a list as permitted by subsection 2, the
19district court of the county where a corporation’s principal
20office or, if none in this state, its registered office, is
21located, on application of the shareholder, may summarily order
22the inspection or copying at the corporation’s expense and may
23postpone the meeting for which the list was prepared until the
24inspection or copying is complete.
255. Refusal or failure to prepare or make available the
26shareholders’ list of shareholders does not affect the validity
27of action taken at the meeting.
28 Sec. 4. Section 490.1601, subsection 4, Code 2022, is
29amended to read as follows:
304. A corporation shall maintain a record of its current
31shareholders in alphabetical order by class or series of shares
32showing the address of, and the number and class or series of
33shares held by, each shareholder to which notices and other
34communications from the corporation are to be sent, and which
35shall include the number and class or series of shares held by
-8-1each such shareholder. Nothing contained in this subsection
2 shall require the corporation to include in such record the
3electronic mail address or other electronic contact information
4of In addition, if a shareholder has provided an electronic
5mail address to the corporation or has consented to receive
6notices or other communications by electronic mail or other
7electronic transmission, the record of shareholders shall
8include the electronic mail or other electronic transmission
9address of the shareholder if notices or other communications
10are being delivered by the corporation to the shareholder at
11such electronic mail or other electronic transmission address
12pursuant to section 490.141, subsection 4. An electronic
13mail address of a shareholder shall be deemed to be provided
14by a shareholder if the electronic mail address is contained
15in a communication to the corporation by or on behalf of
16the shareholder unless the communication expressly indicates
17that the electronic mail address shall not be used to deliver
18notices or other communications.
19DIVISION II
20Grammatical Changes
21 Sec. 5. Section 490.140, subsection 57, Code 2022, is
22amended to read as follows:
2357. “United States” includes a district, authority, bureau,
24commission, department, and any other agency of the United
25States.
26 Sec. 6. Section 490.143, subsection 1, paragraph e,
27subparagraph (2), Code 2022, is amended to read as follows:
28(2) Has a material relationship with a director or officer
29who pursues or takes advantage of the business opportunity,
30directly, or indirectly through or on behalf of another person.
31 Sec. 7. Section 490.1704, subsection 4, Code 2022, is
32amended to read as follows:
334. Unless otherwise provided in the articles of
34incorporation, the violation by a director of the duties
35imposed by subsections 1 and 2 shall not constitute an
-9-1intentional infliction of harm on the corporation or the
2shareholders for the purposes of sections section 490.202,
3subsection 2, paragraphs “d” and “e”.
4DIVISION III
5Terminology Changes
6 Sec. 8. Section 490.120, subsection 5, Code 2022, is amended
7to read as follows:
85. The document must be in the English language. A
9corporate name need not be in English if written in English
10letters or Arabic or Roman numerals, and the certificate of
11existence registration required of foreign corporations need
12not be in English if accompanied by a reasonably authenticated
13English translation.
14 Sec. 9. Section 490.401, subsection 2, paragraphs c and e,
15Code 2022, are amended to read as follows:
16c. The name of a registered foreign corporation registered
17to do business in this state or an alternate name adopted by
18a registered foreign corporation registered to do business in
19this state because its corporate name is unavailable.
20e. The name of a foreign nonprofit corporation registered
21 authorized to do business in this state or an alternate
22name adopted by a foreign nonprofit corporation registered
23 authorized to conduct activities in this state because its real
24name is unavailable.
25 Sec. 10. Section 490.401, subsection 4, unnumbered
26paragraph 1, Code 2022, is amended to read as follows:
27A corporation may use the name, including the fictitious
28name, of another domestic or foreign corporation that is used
29in this state if the other corporation is incorporated or
30authorized registered to transact do business in this state
31and the proposed user corporation submits documentation to the
32satisfaction of the secretary of state establishing any of the
33following conditions:
34 Sec. 11. Section 490.748, subsection 3, Code 2022, is
35amended to read as follows:
-10- 13. The district court may appoint an individual or domestic
2or registered foreign corporation, registered to do business
3in this state, as a custodian or receiver and may require the
4custodian or receiver to post bond, with or without sureties,
5in an amount the district court directs.
6 Sec. 12. Section 490.922, subsection 5, Code 2022, is
7amended to read as follows:
85. If the domesticating corporation is a registered
9 foreign corporation that is registered to do business in this
10state under subchapter XV, its registration statement shall
11be canceled automatically when the domestication becomes
12effective.
13 Sec. 13. Section 490.1511, subsection 4, Code 2022, is
14amended to read as follows:
154. The registration of a registered foreign corporation
16to do business in this state ceases on the effective date
17of the termination as set forth in the certificate of
18termination, unless before that date the foreign corporation
19cures each ground for termination stated in the certificate of
20termination. If the foreign corporation cures each ground, the
21secretary of state shall file a statement that the certificate
22of termination is withdrawn.
23 Sec. 14. Section 490.1621, subsection 4, Code 2022, is
24amended to read as follows:
254. The first biennial report shall be delivered to the
26secretary of state between January 1 and April 1 of the first
27even-numbered year following the calendar year in which a
28domestic corporation was incorporated or a foreign corporation
29was authorized to transact registered to do business in this
30state. Subsequent biennial reports must be delivered to
31the secretary of state between January 1 and April 1 of the
32following even-numbered calendar years. For purposes of this
33section, each biennial report shall contain information related
34to the two-year period immediately preceding the calendar year
35in which the report is filed.
-11-1EXPLANATION
2The inclusion of this explanation does not constitute agreement with
3the explanation’s substance by the members of the general assembly.
4BACKGROUND. This bill amends provisions in the Iowa
5business corporation Act (IBCA) (Code chapter 490) as
6revised in HF 844 (2021 Iowa Acts, chapter 165) based on
7recommendations by the American bar association and published
8as the 2016 revised version of the “Model Business Corporation
9Act” (MBCA). The bill includes later additions to the MBCA
10relating to the use of electronic transmission to deliver and
11receive communications between a corporation and shareholders.
12The bill also makes changes to the use of grammar in provisions
13enacted in HF 844 and the terminology used in the MBCA and
14enacted in HF 844 to enhance the IBCA’s readability.
15DIVISION I — NOTICES AND OTHER COMMUNICATION. The bill
16defines electronic mail (email) as any electronic transmission
17directed to a unique electronic mail address (amended Code
18section 490.140(12A), (12B)). The use of other forms of
19electronic transmission is also allowed. The exception for a
20corporation’s use of electronic transmission, including email,
21to communicate with a shareholder is the shareholder’s written
22objection (amended Code section 490.140(4)). The corporation
23must also cease using this form of communication if it receives
24a message that the electronic transmission could not be
25delivered (amended Code section 490.140(5)).
26DIVISION I — LIST OF SHAREHOLDERS. The phrase
27“shareholders’ list” refers to a register of all active owners
28of the corporation’s shares which the corporation must keep
29current. The bill changes the name to “list of shareholders”.
30The bill provides that if a communication regarding a meeting
31has been sent by the corporation to the shareholder by email
32or other electronic transmission, the address of the email or
33other electronic transmission must be included as part of the
34list (amended Code section 490.720(1)). The bill also provides
35that a corporation may comply with its obligation to make the
-12-1list available for inspection by providing a copy of the list
2prior to meeting; the list is often used for the restricted
3use of protecting shareholder rights (amended Code section
4490.720(2)).
5DIVISION I — RECORD OF SHAREHOLDERS. The corporation is
6required to maintain a record of shareholders which is the
7basis for providing communications to shareholders. If a
8shareholder provides an email address to the corporation or has
9consented to receive communication by electronic transmission,
10the record must include the email or other electronic
11transmission address of the shareholder (amended Code section
12490.1601(4)). In these cases, the electronic mail address
13or other electronic transmission address of a shareholder is
14deemed to be provided by a shareholder to the corporation
15if it is contained in a communication to the corporation by
16or on behalf of the shareholder, unless the shareholder’s
17communication expressly indicates otherwise.
18DIVISION II — GRAMMATICAL CHANGES. The bill amends several
19provisions to correspond to modern rules of grammar, including
20the proper use of an indefinite article, a comma, and the
21singular (amended Code sections 490.140(57), 490.143(1), and
22490.1704(4)).
23DIVISION III — TERMINOLOGY CHANGES. Prior to the enactment
24of the revised MBCA, the IBCA, like other model business
25organization statutes (e.g., limited liability companies
26under Code chapter 489 or nonprofit corporations under Code
27chapter 504), provided that a foreign business was “authorized
28to transact business in this state” or the equivalent phrase
29“authorized to do business in this state” by obtaining a
30certificate of authorization (e.g., Code section 489.208 or
31504.112). By comparison, a domestic corporation (incorporated
32with the secretary of state) may obtain a certificate of
33existence (Code section 490.128) which is also the phrase used
34by other business organizations, including limited liability
35companies (Code section 489.208). A domestic or foreign
-13-1nonprofit corporation may obtain a certificate of existence
2or certificate of authority (Code section 504.112). The
3MBCA provides that in order “to do business in this state” a
4foreign corporation must be registered with the secretary of
5state and obtain a certificate of registration (Code section
6490.128). Such a corporation is defined as a “registered
7foreign corporation” (Code section 490.140(47)).
8The bill makes changes to this terminology when referring
9to foreign corporations to conform with the MBCA’s use of
10terms and to enhance readability. The phrase “certificate of
11existence” is changed to “certificate of registration” (amended
12Code section 490.120(5)). The phrase “authorized to transact
13business in this state” is changed to “registered to do
14business in this state” (amended Code sections 490.401(4) and
15490.1621(4)). The phrase “foreign corporation registered to
16do business in this state” is shortened to “registered foreign
17corporation” (amended Code sections 490.401(2), 490.748(3),
18490.922(5), and 490.1511(4)). When referring to a foreign
19nonprofit corporation, the phrase “registered to do business in
20this state” is changed to “authorized to do business in this
21state (amended Code section 490.401(2)).
-14-da/jh