General Assembly>Division of Legislative Services>Publications>Session Summaries>2006>Corporations


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Corporations

Passed

P HB609

Professional corporations; directors. Clarifies that if a professional corporation's board of directors is eliminated or its make-up or manner of selection is modified by agreement, only individuals or entities licensed or otherwise authorized to render such professional services shall supervise and direct the provision of the professional services rendered by the corporation. However, the supervision and direction of a professional corporation of architects, professional engineers, or land surveyors may be provided by individuals employed by the corporation who are not duly licensed to render such professional service if two-thirds of the persons providing the supervision and direction are duly licensed to render the professional service. A similar exception applies to corporations rendering the services of certified landscape architects.
Patron - O'Bannon

P HB860

Business entities; post-assessment filings. Allows the State Corporation Commission to file or issue a document or certificate with respect to a domestic and foreign stock and nonstock corporation, limited liability company, business trust, or limited partnership, notwithstanding the entity's failure to pay all fees, fines, penalties, and interest due to the Commission, if the entity's obligation is the payment of an annual registration fee and the document or certificate is to be issued or filed with an effective date that is prior to the registration fee's due date. The measure also includes technical amendments.
Patron - Hargrove

P HB887

Mergers and reinstatements of corporations. Provides exceptions to the requirements for (i) the filing of an authenticated copy of an instrument of merger on behalf of a qualified foreign corporation when the merger includes a Virginia entity for which articles of merger are filed and (ii) the approval of a merger by the shareholders of a survivor whose shares do not vary by more than 20 percent. These exceptions were removed in 2005. A corporation shall not be deemed to be in good standing if, among other criteria, an order of reinstatement prohibiting a domestic corporation from engaging in business until it changes its corporate name is issued and in effect. Other provisions clarify that the term "articles of incorporation" includes articles of consolidation, serial designation, reduction, and correction; provide that a certificate of good standing will not be issued to a reinstated Virginia corporation that is required to change its name before transacting business; and make several technical amendments.
Patron - Kilgore

P HB952

Professional corporations; employee stock ownership plans. Authorizes a professional corporation to issue shares of its stock to, and authorizes its shareholders to transfer shares to, the trustees of an eligible employee stock ownership plan. An eligible employee stock ownership plan is a plan with trustees who are licensed to render the professional service for which the corporation is organized and that prohibits an individual not licensed to render the professional service from owning, or being issued, shares in the professional corporation. However, professional corporations rendering the services of certified public accountants, architects, engineers, land surveyors, certified landscape architects or certified interior designers may have employee stock ownership plans that permit individuals who are not duly licensed to render such service or legally authorized to use such title, as appropriate, to render these services to participate in the plan if the minimum percentages of equity interest required for stock ownership generally are satisfied. This bill is identical to SB 108.
Patron - Joannou

P SB78

Virginia Stock Corporation Act; short form mergers to form holding companies. Establishes a procedure by which a constituent corporation may merge an indirect subsidiary into itself, or merge itself into an indirect subsidiary, to form a holding company. The process may be accomplished without approval of shareholders of the constituent corporation or the directors or shareholders of the indirect subsidiary if specified conditions are met.
Patron - Watkins

P SB108

Professional corporations; employee stock ownership plans. Authorizes a professional corporation to issue shares of its stock to, and authorizes its shareholders to transfer shares to, the trustees of an eligible employee stock ownership plan. An eligible employee stock ownership plan is a plan with trustees who are licensed to render the professional service for which the corporation is organized and that prohibits an individual not licensed to render the professional service from owning, or being issued, shares in the professional corporation. However, professional corporations rendering the services of certified public accountants, architects, engineers, land surveyors, certified landscape architects or certified interior designers may have employee stock ownership plans that permit individuals who are not duly licensed to render such service or legally authorized to use such title, as appropriate, to render these services to participate in the plan if the minimum percentages of equity interest required for stock ownership generally are satisfied. This bill is identical to HB 952.
Patron - Stosch

P SB477

Limited liability companies. Provides for the issuance of a certificate of organization upon the filing of articles of organization. The measure also provides for (i) the execution of documents by an organizer when there are no members or managers and (ii) the filing by a domestic limited liability company of articles of cancellation and the Commission's issuance of a certificate of cancellation. The due date for the payment of the annual registration fee is extended from September 1 to October 1, after which the notice of impending cancellation will be issued. Other changes are technical amendments intended to clarify statutory provisions applicable to limited liability companies.
Patron - Colgan

P SB547

Limited liability companies and limited partnerships; domestication. Establishes a procedure by which a foreign limited liability company may become a domestic limited liability company. The provisions establishing the procedure for domestication of a foreign limited liability company become effective on November 1, 2006. The measure also provides procedures for publishing notice of the dissolution of a limited liability company or limited partnership, and for serving a summons upon a limited liability company. The measure revises numerous provisions to update references to business entities and give limited liability companies the same rights as are provided to other forms of business entities.
Patron - Stosch

P SB587

Renewal of reservation of name. Requires that an application to renew a reservation of the name of a nonstock corporation, limited liability company, business trust, or limited partnership be filed within the 45-day period preceding the expiration of reservation.
Patron - Miller

P SB592

Corporations; registered investment companies. Authorizes the board of directors of an open-end management investment company to classify unissued shares into classes or into series within a class or to reclassify unissued shares of a class into one or more classes or series within one or more classes. Registered investment companies are exempted from provisions that limit the authority of a corporation's board of directors to increase or decrease the number of directors. Directors of open-end management investment companies who are not defined as an "interested person" under the Investment Company Act are deemed to be independent and disinterested when taking any action as a director. The directors of an open-end management company registered under the Investment Company Act are authorized, unless the articles of incorporation provide otherwise, to amend the articles to increase or decrease the aggregate number of shares or classes or series of shares without shareholder action.
Patron - Watkins

Failed

F HB600

Securities registered in joint names. Clarifies that corporate securities held as tenants by the entireties with the right of survivorship shall be owned by a husband and wife.
Patron - Albo

F HB1386

Securities Act; agent registration exemption. Exempts individuals offering securities of Virginia cooperatives from the Virginia Securities Act's agent registration requirements. Securities of Virginia cooperatives currently are exempt from the Act's security registration requirements.
Patron - Lohr

Carried Over

C HB1570

Business entities; certification of legal status; penalty. Requires that an individual executing a document to be filed with the State Corporation Commission pertaining to a corporation, limited liability company, business trust, limited partnership, or general partnership execute and submit a sworn and notarized affidavit certifying that the individual and every other individual identified in the document as an officer, director, shareholder, manager, member, partner, trustee, employee, or agent, as appropriate, of the business entity is either (i) a citizen of the United States, (ii) a legal permanent resident of the United States, or (iii) a conditional resident alien of the United States. The individual shall submit valid documentary evidence that the individual and every other individual so identified have such status. A violation is a Class 1 misdemeanor.
Patron - Reid

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