SB481 By Senators Figures, Smitherman, and Marsh RFD Fiscal Responsibility and Economic Development Rd 1 14-MAY-15

SYNOPSIS: Under existing law, only corporations, limited liability partnerships, and professional associations are required to file any annual reports to stay active.

This bill would require all filing entities and foreign filing entities to file an annual report to assist the state in determining which filing entities and foreign filing entities are active and which may need to be cancelled or revoked through an administrative dissolution process.

This bill would allow the Secretary of State, after proper notice, to administratively dissolve entities which are no longer active and have not complied with filing an annual report.

Existing law also provides a schedule of fees for annual reports for corporations, limited liability partnerships, and professional associations.

This bill would make the fee schedule consistent between those business entities.

A BILL TO BE ENTITLED AN ACT

Relating to business entities; to amend Sections 10A-1-4.31, 10A-2-16.22, and 10A-8-10.01, Code of Alabama 1975, to require all filing entities and foreign filing entities to file an annual report to assist the state in determining which filing entities and foreign filing entities are active and which may need to be cancelled or revoked through an administrative dissolution process; to add Division F to Article 3, Chapter 1, Title 10A, Code of Alabama 1975; to allow the Secretary of State to administratively dissolve entities which are no longer active and have not complied with filing an annual report; to require notice prior to dissolution of the business entity; to provide for a fee schedule that is consistent between the certain business entities; and to make technical changes.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Sections 10A-1-4.31, 10A-2-16.22, and 10A-8-10.01, Code of Alabama 1975, are amended to read as follows:

§10A-1-4.31.

"(a) The judge of probate or the Secretary of State, as the case may be, shall collect the following fees when the filing instruments described in this title are delivered to him or her for filing:

FILING INSTRUMENT FEE FOR STATE OF ALABAMA FEE FOR THE JUDGE OF PROBATE (1) Certificate of formation and restated certificate of formation $100 $50 (2) Amendment to certificate of formation $50 $25 (3) Name reservations A. less than 24 hours $25 No fee B. 24 hours or more $10 No fee (4) Certificate of termination $100 $50 (5) Certificate of merger; articles of consolidation or share exchange $100 $50 (6) Foreign entity registration including registration of foreign limited liability partnership $150 No fee (7) Certificate of existence A. Less than 24 hours $25 No fee B. 24 hours or more $10 No fee (8) Registered limited liability partnership registration $100 $50 (9) Registered limited liability partnership annual report $100 $75 No fee (10) Reinstatement of Administratively dissolved entity $100 No fee (10)(11) Partnership statement (filing or certifying) $25 $25 (11)(12) Any other filing instrument required or permitted to be filed under this title $25 $25

"(b) When appropriate, two checks shall accompany a filing instrument delivered to the judge of probate or the Secretary of State for filing, one payable to the judge of probate for all charges for the judge of probate, and one payable to the State of Alabama covering all charges for the Secretary of State. In the case of any filing instrument delivered for filing to the judge of probate accompanied by a check for the charges for the Secretary of State, the check for the Secretary of State shall be forwarded by the judge of probate to the Secretary of State. In the case of any filing instrument delivered for filing to the Secretary of State accompanied by a check for the judge of probate, the check for the judge of probate shall be forwarded by the Secretary of State to the judge of probate.

"(c) There is hereby established in the State Treasury a fund to be known and designated as the Secretary of State Entity Fund. All funds, fees, charges, costs, and collections accruing to or collected by the Secretary of State under the foregoing provisions of this section or any other fees collected by the Secretary of State relating to entities shall be deposited into the State Treasury to the credit of the Secretary of State Entity Fund except as so provided in subsection (e).

"(d) All funds now or hereafter deposited in the State Treasury to the credit of the Secretary of State Entity Fund shall not be expended for any purpose whatsoever unless the same shall have been allotted and budgeted in accordance with the provisions of Article 4 of Chapter 4 of Title 41, and only in the amounts and for the purposes provided by the Legislature in the general appropriation bill or this section.

"(e) Seventy percent of funds collected by the Secretary of State in relation to entities during the fiscal year shall be deposited to the credit of the State General Fund.

"(f) The fees herein imposed for the office of the judge of probate shall be charged and paid into the appropriate county treasury or to the judge of probate as may be authorized or required by law.

"(g) The Secretary of State shall collect the following fees for copying and certifying the copy of any filing instrument relating to a domestic or foreign entity:

"(1) One dollar fifty cents ($1.50) a page for copying; and

"(2) Five dollars ($5) for the certificate.

"(h) The judge of probate shall collect the following fees for copying and certifying the copy of any filing instrument relating to an entity:

"(1) One dollar fifty cents ($1.50) a page for copying; and

"(2) Five dollars ($5) for the certificate.

"(i) For requests of immediate expedition of documents to be obtained in less than 24 hours, other than name reservations and certificates of existence, by the Secretary of State regarding document filings, certifications, and certificates in addition to required fees, a one hundred dollar ($100) surcharge shall be imposed.

§10A-2-16.22.

"(a) Each domestic corporation, and each foreign corporation authorized to transact business in this state, shall deliver to the Secretary of State for filing an annual report that sets forth all of the following:

"(1) The name of the corporation and the state or other jurisdiction under whose law it is incorporated;.

"(2) The address of its registered office and the name of its registered agent at that office in this state;.

"(3) The address of its principal office including, in the case of a foreign corporation, the address of its principal office in the state or other jurisdiction under whose law it is incorporated;.

"(4) The names and respective addresses of its president and secretary; and.

"(5) A brief statement of the character of business in which it is actually engaged in this state.

"(b) Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.

"(c) The first annual report must be delivered to the Secretary of State between January 1 and March 15 of the year following the calendar year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business. Subsequent annual reports must be delivered to the Secretary of State between January 1 and March 15 of the following calendar years.

"(d) If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.

"(e) The public record information filed with the Department of Revenue, pursuant to Chapter 14A of Title 40 shall constitute and be accepted in lieu of the annual report required pursuant to this section, provided that a ten dollar ($10) fee for the State of Alabama accompany the public record information filed by the corporation annually with the Department of Revenue. The fee for the annual report specified in Section 10A-1-4.31 shall be deposited in the State Treasury to the credit of the Secretary of State Entity Fund as prescribed by Section 10A-1-4.31.

§10A-8-10.01.

"(a) To become a registered limited liability partnership, a partnership shall file with the judge of probate in the county in which the partnership has its principal office, or if the partnership is required to have a registered agent, with the judge of probate in the county in which the registered office is located, and with the Secretary of State a registration stating all of the following:

"(i) the (1) The name of the registered limited liability partnership;.

"(ii) the (2) The street, and mailing, if different, address of its principal office;.

"(iii) if (3) If the partnership's principal office is not located in this state, the street, and mailing, if different, address of a registered office and the name of the registered agent at that office for service of process in this state which the partnership shall be required to maintain;.

"(iv) a (4) A brief statement of the business in which the partnership engages;.

"(v) a (5) A statement that the partnership thereby registers as a registered limited liability partnership; and.

"(vi) any (6) other information the partnership determines to include.

"(b) The registration shall be executed by one or more partners authorized to execute a registration.

"(c) The registration shall be accompanied by a fee for the judge of probate and for the Secretary of State in the respective amounts prescribed by Section 10A-1-4.31.

"(d) The judge of probate shall register as a registered limited liability partnership any partnership that submits a completed registration with the required registration fee.

"(e) A partnership registered under this section shall pay each year following the year in which its registration is filed, on a date specified by the Secretary of State, an annual report fee in the amount prescribed by Section 10A-1-4.31. The fee must be accompanied by a notice, on a form provided by the Secretary of State, which shall set forth any material changes in the information required to be contained in the partnership's registration.

"(f) The registration is effective immediately on the date the registration is filed with the judge of probate or at any later date or time specified in the registration, and remains effective until either of the following occur:

"(i) it (1) It is voluntarily canceled by filing with the judge of probate in the county in which the registration was originally filed, with a copy to the Secretary of State, a written statement of cancellation executed by one or more partners authorized to execute a statement of cancellation; or.

(ii) 180 (2) One hundred eighty days after receipt by the partnership of a notice from the Secretary of State (which notice shall be sent by certified mail, return receipt requested) that the partnership has failed to make timely filing of the annual notice and the payment of the annual report fee specified in subsection (e), unless the notice is filed and the fee is paid within the 180-day period.

"(g) A partnership becomes a registered limited liability partnership on the date a registration is filed with the judge of probate or at any later date or time specified in the registration if, in either case, there has been substantial compliance with the requirements of this chapter. A partnership continues as a registered limited liability partnership if there has been substantial compliance with the requirements of this chapter. The status of the partnership as a registered limited liability partnership and the liability of a partner of the registered limited liability partnership shall not be adversely affected by error or subsequent changes in the information stated in the registration under subsection (a) of this section or notice under subsection (e) of this section.

"(h) The fact that a registration or notice is on file with the Secretary of State is notice that the partnership is a registered limited liability partnership and as notice of all other facts set forth in the registration or notice.

"(i) A partnership that has registered as a registered limited liability partnership is for all purposes, except as provided in Section 10A-8-3.06, the same entity that existed before the registration and continues to be a partnership under the laws of this state subject to the registered limited liability partnership provisions of this chapter. If a registered limited liability partnership dissolves and its business or a portion of its business is continued without liquidation of all of the partnership affairs, a partnership which is a successor to the registered limited liability partnership shall not be required to file a new registration or annual notice but shall thereafter be required to file annual notices and pay the annual report fees pursuant to subsection (e) of this section and shall be deemed to have filed any documents and paid all necessary fees required or permitted under this section which were filed by the predecessor partnership.

"(j) The Secretary of State may provide forms for registration or notice of a registered limited liability partnership.

"(k) A partnership's decision to file a registration shall be approved by a majority of the partners of the partnership, unless otherwise agreed to by the partners in a partnership agreement. The decision to cancel a registration shall require the approval of all of the partners of the partnership, unless otherwise agreed to by the partners in a partnership agreement.

"(l)(a) (1) A dissolved registered limited liability partnership may continue its status as a registered limited liability partnership through termination either by:

"(1) continuing a. Continuing to file an annual notice and pay the annual report fee until termination in accordance with subsection (e) of this section; or.

"(2) filing b. Filing a final annual notice and paying a final annual report fee equal to the annual fee provided in subsection (e) of this section, and the final annual notice shall, in addition to providing the information required by subsection (e):

"(i) state 1. State that the partnership is dissolved and is winding up its affairs;

"(ii) identify 2. Identify the cause or causes of the dissolution;

"(iii) state 3. State that the annual notice is the final annual notice and will remain in effect until termination; and

"(iv) state 4. State that the partnership will terminate within 12 months from the date of the final annual notice.

"(b) (2) When the dissolved registered limited liability partnership has wound up its affairs, it shall file with the judge of probate in the county in which the original registration was filed and with the Secretary of State a termination notice that contains the following information:

"(1) the a. The name of the registered limited liability partnership;

"(2) that b. That the registered limited liability partnership has dissolved and wound up its affairs; and

"(3) that c. That the registered limited liability partnership is terminated.

"(3) The notice must be signed by one former general partner who has not wrongfully dissolved the partnership. There is no fee for the termination filing.

"(m) The termination or winding up of a registered limited liability partnership, or the cancellation of its registration, does not affect the limited liability of partners for debts, obligations or liabilities of the partnership which occur or were incurred prior to the termination or winding up of the registered limited liability partnership or the cancellation of its registration."

Section 2. Division F is added to Article 3, Chapter 1, Title 10A, Code of Alabama 1975, to read as follows:

Division F.

§10A-1-3.51.

(a) Each filing entity and foreign filing entity authorized to transact business in this state shall deliver to the Secretary of State for filing an annual report that sets forth all of the following:

(1) The name of the entity and the Alabama county, state, or other jurisdiction under whose law it is formed.

(2) The address of its registered office and the name of its registered agent at that office in this state.

(3) The address of its principal office including, in the case of a foreign limited liability company, the address of its principal office in the state or other jurisdiction under whose law it is formed.

(4) A brief statement of the character of business in which it is actually engaged in this state.

(5) Any other information required by Title 10A, including, without limitation, any information required by the specific chapter of Title 10A, governing the filing entity or foreign filing entity or by Article 8, Chapter 1, Title 10A, to be included in an annual notice or report.

(b) Information in the annual report must be current as of the date the annual report is executed on behalf of the entity.

(c) The first annual report must be delivered to the Secretary of State between January 1 and March 15 of the year following the calendar year in which a domestic filing entity was formed or a foreign filing entity was authorized to transact business. Subsequent annual reports must be delivered to the Secretary of State between January 1 and March 15 of the following calendar years.

(d) If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting filing entity or foreign filing entity in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.

(e) An entity that does not deliver its annual report to the Secretary of State within 180 days after the final due date may be administratively dissolved by the Secretary of State.

(f)(1) If the Secretary of State determines that an annual report has not been filed by March 15, he or she shall serve the entity with written notice of his or her determination.

(2) If the entity does not file an annual report within 60 days after service of the notice is perfected under Section 10A-1-5.31(b), 10A-1-5.35, or 10A-1-5.36, the Secretary of State shall administratively dissolve the entity by signing a certificate of dissolution that recites the cancellation or revocation and its effective date. The Secretary of State shall file the original of the certificate, deliver a copy to the judge of probate for filing, and serve a copy on the filing entity or foreign filing entity under Section 10A-1-5.31(b), 10A-1-5.35, or 10A-1-5.36.

(g) A filing entity or foreign filing entity administratively dissolved continues its existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under Section 10A-2-14.05, 10A-5A-7.03, 10A-8-8.03, 10A-8-10.05, or 10A-9-8.03, and notify claimants under Sections 10A-1-9.21 and 10A-1-9.22.

(h) The administrative dissolution of an entity does not terminate the authority of its registered agent.

(i) The fee for the annual report shall be deposited in the State Treasury to the credit of the Secretary of State Entity Fund as prescribed by Section 10A-1-4.31.

(j) A filing entity or foreign filing entity administratively dissolved under this section may apply to the Secretary of State for reinstatement within two years after the effective date of dissolution. The application must satisfy all of the following:

(1) Recite the name and address of the entity and the effective date of its dissolution.

(2) Recite the Alabama Entity Identification Number assigned to the entity at its initial formation or authorization.

(3) State that the ground or grounds for dissolution either did not exist or have been eliminated.

(4) Contain a Compliance Certificate from the Alabama Department of Revenue reciting that all taxes owed by the entity have been paid.

(5) Include the filing fee listed in Section 10A-1-4.31.

(k) The name of the entity following reinstatement shall be determined as follows:

(1) If the initial entity name is available a name reservation with the entity name prior to dissolution shall be obtained and attached to the reinstatement application.

(2) If the initial entity name is not available a name reservation with a new entity name meeting the requirements of Title 10A or Section 10A-9-1.08 for specific partnership types, or a name reservation with the initial name of the entity prior to dissolution with the word "reinstated" following the name shall be obtained and attached to the reinstatement application.

(l) If the Secretary of State determines that the application contains the information required by subsections (j) and (k) and that the information is correct, he or she shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites his or her determination and the effective date of reinstatement, file the original of the certificate and deliver a copy to the judge of probate for filing, and serve a copy on the entity under Section 10A-1-5.31, 10A-1-5.35, or 10A-1-5.36.

(m) When reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the entity resumes carrying on its business as if the administrative dissolution never occurred.

Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Business Entities

Corporations

Limited Liability Companies

Professional Associations

Secretary of State

Code Added

Code Amended