HOUSE BILL NO. 3396 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE THOMAS.
7035H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 347.035, 347.163, 351.385, 351.386, 351.395, 351.572, 351.1036, 355.131, 355.141, 355.771, 357.010, 358.150, 358.440, 359.251, and 359.551, RSMo, and to enact in lieu thereof twenty-five new sections relating to the powers of artificial persons, with a delayed effective date.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 347.035, 347.163, 351.385, 351.386, 351.395, 351.572, 2 351.1036, 355.131, 355.141, 355.771, 357.010, 358.150, 358.440, 359.251, and 359.551, 3 RSMo, are repealed and twenty-five new sections enacted in lieu thereof, to be known as 4 sections 347.035, 347.163, 351.385, 351.386, 351.395, 351.572, 351.1036, 351.1400, 5 351.1401, 351.1402, 351.1403, 351.1406, 351.1408, 351.1410, 351.1412, 351.1415, 6 351.1418, 355.131, 355.141, 355.771, 357.010, 358.150, 358.440, 359.251, and 359.551, 7 to read as follows: 347.035. A limited liability company may be organized under sections 347.010 to 2 347.187 and may conduct or promote any lawful businesses or purposes within this state or 3 any other jurisdiction. The lawful businesses or purposes authorized under this section 4 do not include political spending power as defined under section 351.1401. 347.163. 1. Every foreign limited liability company now transacting business in or 2 which may hereafter transact business in this state which shall neglect or fail to comply with 3 the provisions of section 347.153 shall be subject to a fine of not less than one thousand 4 dollars. If the secretary is advised that a foreign limited liability company is transacting 5 business within this state in contravention of sections 347.010 to 347.187, the secretary shall 6 report the fact to the prosecuting attorney of any county in which the limited liability
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 3396 2
7 company is transacting business, and the prosecuting attorney shall, as soon thereafter as is 8 practical, institute proceedings to recover the fine prescribed in this section. In addition to 9 such penalty, no foreign limited liability company failing to comply with sections 347.010 to 10 347.187 may maintain any suit or action, either legal or equitable, in any of the courts of this 11 state, upon any demand, whether arising out of contract or tort, while the requirements of 12 sections 347.010 to 347.187 have not been met. 13 2. The failure of a foreign limited liability company to register in this state does not 14 impair the validity of any contract or act of the foreign limited liability company or prevent 15 the foreign limited liability company from defending any action, suit or proceeding in any 16 court of this state. 17 3. A member of a foreign limited liability company is not liable for any debts, 18 obligations or liabilities of the foreign limited liability company solely by reason of having 19 transacted business in this state without registration. 20 4. A foreign limited liability company, by transacting business in this state without 21 registration, shall be subject to the provisions of sections 506.500 to 506.520 with respect to 22 causes of actions arising out of the transaction of business in this state. 23 5. Without excluding other activities which may not constitute transacting business in 24 this state, a foreign limited liability company shall not be considered to be transacting 25 business in this state, for purposes of sections 347.010 to 347.187, by reason of carrying on in 26 this state any one or more of the following activities: 27 (1) Maintaining or defending any action or suit or any administrative or arbitration 28 proceeding, or effecting the settlement thereof or the settlement of claims or disputes; 29 (2) Holding meetings of its members or carrying on other activities concerning its 30 internal affairs; 31 (3) Maintaining bank accounts; 32 (4) Borrowing money or creating evidence of debt, mortgage or lien on or other 33 security interest in real or personal property; 34 (5) Securing or collecting debts or enforcing any rights in properties securing the 35 same; 36 (6) Transacting any business in interstate commerce; or 37 (7) Conducting an isolated transaction completed within a period of thirty days and 38 not in the course of a number of repeated transactions of a like nature. 39 6. A foreign corporation, as defined in section 351.015 or section 355.066, shall not 40 be deemed to be transacting business in this state for the purposes of section 351.572 solely 41 for the reason that it is a member of a limited liability company. 42 7. A foreign limited partnership or foreign registered limited liability limited 43 partnership, as defined in section 359.011, shall not be deemed to be transacting business in HB 3396 3
44 this state for the purposes of section 359.551 solely for the reason that it is a member of a 45 limited liability company. 46 8. A foreign limited liability company as defined in sections 347.010 to 347.187 shall 47 not be deemed to be transacting business in this state for the purposes of this section, solely 48 for the reason that it is a member of a limited liability company. 49 9. A foreign registered limited liability partnership, as defined in section 358.020, 50 shall not be deemed to be transacting business in this state for the purposes of section 351.572 51 solely for the reason that it is a member of a limited liability company. 52 10. The provisions of this section do not apply in determining the context or activities 53 which may subject a foreign limited liability company to service of process, suit, taxation or 54 regulation under any other statute of this state. 55 11. Notwithstanding the provisions of subsection 5 of this section and any other 56 provision of law, an entity organized or existing under the laws of another jurisdiction 57 that directly or indirectly undertakes, finances, or directs acts constituting political 58 spending power as defined under section 351.1401 in this state is conclusively deemed to 59 be transacting business in this state for purposes of jurisdiction and enforcement. 351.385. Each corporation shall have power: 2 (1) To have succession by its corporate name for the period limited in its articles of 3 incorporation or perpetually where there is no such limitations; 4 (2) To sue and be sued, complain and defend in any court of law or equity; 5 (3) To have a corporate seal which may be altered at pleasure and to use the same by 6 causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced; 7 (4) To purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use 8 and otherwise deal in, sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise 9 dispose of all or any part of its real or personal property, or any interest therein, or other 10 assets, wherever situated; and to hold for any period of time, real estate acquired in payment 11 of a debt, by foreclosure or otherwise, or real estate exchanged therefor; 12 (5) To be a general or limited partner; 13 (6) To purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, 14 use, employ, sell, mortgage, loan, pledge, or otherwise dispose of, and otherwise use and deal 15 in and with, shares or other interests in, or obligations of, other domestic or foreign 16 corporations, associations, partnerships, or individuals, or direct or indirect obligations of the 17 United States or of any other government, state, territory, governmental district or 18 municipality or of any instrumentality thereof; 19 (7) To make contracts and guarantees, including but not limited to guarantees of the 20 capital stock, bonds, other securities, evidences of indebtedness and other debts and 21 obligations issued by any other corporation of this or any other state, or issued by any state or HB 3396 4
22 any political subdivision thereof; to incur liabilities; to borrow money at such rates of interest 23 as the corporation may determine without regard to the restrictions of any usury law of this 24 state; to issue its notes, bonds, and other obligations; to issue notes or bonds, secured or 25 unsecured, which by their terms are convertible into shares of stock of any class, upon such 26 terms and conditions and at such rates or prices as may be provided in such notes or bonds 27 and the indenture or mortgage under which they are issued; and to secure any of its 28 obligations by mortgage, pledge, or deed of trust of all or any of its property, franchises, and 29 income; 30 (8) To invest its surplus funds from time to time and to lend money and to take and 31 hold real and personal property as security for the payment of funds so invested or loaned; 32 (9) To conduct its business, carry on its operations, and have offices within and 33 without this state, and to exercise in any other state, territory, district, or possession of the 34 United States, or in any foreign country, the powers granted by this chapter; 35 (10) To elect or appoint directors, officers and agents of the corporation, define their 36 duties and fix their compensation, and to indemnify directors, officers and employees to the 37 extent and in the manner permitted by law; 38 (11) To make and alter bylaws, not inconsistent with its articles of incorporation or 39 with the laws of this state, for the administration and regulation of the affairs of the 40 corporation, and to adopt emergency bylaws and exercise emergency powers as permitted by 41 law; 42 (12) To transact any lawful business in aid of the United States in the prosecution of 43 war, to make donations to associations and organizations aiding in war activities, and to lend 44 money to the state or federal government for war purposes; 45 (13) To cease its corporate activities and surrender its corporate franchise; 46 (14) To have and exercise all powers necessary or convenient to effect any or all of 47 the purposes for which the corporation is formed; 48 (15) To make contributions to any corporation organized for civic, charitable, 49 benevolent, scientific or educational purposes, or to any incorporated or unincorporated 50 association, community chest or community fund, not operated or used for profit to its 51 members but operated for the purposes of raising funds for and of distributing funds to other 52 civic, charitable, benevolent, scientific or educational organizations or agencies; 53 (16) To renounce, in its articles of incorporation or by action of its board of directors, 54 any interest or expectancy of the corporation in, or in being offered an opportunity to 55 participate in, specified business opportunities or specified classes or categories of business 56 opportunities that are presented to the corporation, or one or more of its officers, directors, 57 employees, agents, or stockholders. HB 3396 5
58 (17) Notwithstanding any other provision of this chapter, no power granted 59 under this section includes political spending power as defined under section 351.1401. 60 Political spending power shall not be deemed necessary or convenient under any 61 circumstances including under subdivision (14) of this section. An act constituting 62 political spending power is ultra vires and void as provided in section 351.1408 and 63 results in forfeiture of charter privileges as provided in section 351.1410. 351.386. 1. Every corporation incorporated under this chapter may engage in any 2 lawful business unless a more limited purpose is set forth in the articles of incorporation; 3 however, the corporation shall not be restricted to this limited purpose, unless it has stated it is 4 so restricted in its articles of incorporation. 5 2. A corporation engaging in a business that is subject to regulation under another 6 statute of this state may incorporate under this chapter only if permitted by, and subject to all 7 limitations of, the other statute. 8 3. For purposes of this section, "lawful business" does not include political 9 spending power as defined under section 351.1401. 351.395. 1. No act of a corporation and no conveyance or transfer of real or personal 2 property to or by a corporation shall be invalid by reason of the fact that the corporation was 3 without capacity or power to do such act or to make or receive such conveyance or transfer, 4 but such lack of capacity or power may be asserted: 5 (1) In a proceeding by a shareholder against the corporation to enjoin the doing of any 6 act or acts or the transfer of real or personal property by or to the corporation. If the 7 unauthorized acts or transfer sought to be enjoined are being, or are to be, performed or made 8 pursuant to any contract to which the corporation is a party, the court may, if all of the parties 9 to the contract are parties to the proceeding and if it deems the same to be equitable, set aside 10 and enjoin the performance of such contract, and in so doing may allow to the corporation or 11 to the other parties to the contract, as the case may be, compensation for the loss or damage 12 sustained by either of them which may result from the action of the court in setting aside and 13 enjoining the performance of such contract, but anticipated profits to be derived from the 14 performance of the contract shall not be awarded by the court as a loss or damage sustained; 15 (2) In a proceeding by the corporation, whether acting directly or through a receiver, 16 trustee, or other legal representative, or through shareholders in a representative suit, against 17 the incumbent or former officers or directors of the corporation; 18 (3) In a proceeding by the attorney general, as provided in this chapter, to dissolve the 19 corporation, or in a proceeding by the attorney general to enjoin the corporation from the 20 transaction of unauthorized business. HB 3396 6
21 2. This section does not apply to an act constituting political spending power as 22 defined under section 351.1401. Any such act is ultra vires and void under section 23 351.1408. 351.572. 1. A foreign corporation may not transact business in this state until it 2 obtains a certificate of authority from the secretary of state. 3 2. The following activities, among others, do not constitute transacting business 4 within the meaning of subsection 1 of this section: 5 (1) Maintaining, defending, or settling any proceeding; 6 (2) Holding meetings of the board of directors or shareholders or carrying on other 7 activities concerning internal corporate affairs; 8 (3) Maintaining bank accounts; 9 (4) Maintaining offices or agencies for the transfer, exchange, and registration of the 10 corporation's own securities or maintaining trustees or depositories with respect to those 11 securities; 12 (5) Creating or acquiring indebtedness, mortgages, and security interests in real or 13 personal property; 14 (6) Securing or collecting debts or enforcing mortgages and security interests in 15 property securing the debts; 16 (7) Conducting an isolated transaction that is completed within thirty days and that is 17 not one in the course of repeated transactions of a like nature; 18 (8) Transacting business in interstate commerce. 19 3. The list of activities in subsection 2 of this section is not exhaustive. 20 4. Notwithstanding subsection 2 of this section and any other provision of law, an 21 entity organized or existing under the laws of another jurisdiction that directly or 22 indirectly undertakes, finances, or directs acts constituting political spending power as 23 defined under section 351.1401 in this state is conclusively deemed to be transacting 24 business in this state for purposes of jurisdiction and enforcement. 351.1036. 1. In addition to other powers, a cooperative as an agent or otherwise: 2 (1) May perform every act necessary or proper to conduct of the cooperative's 3 business or accomplish the purposes of the cooperative; 4 (2) Has all other rights, powers, or privileges granted by the laws of this state to any 5 business entity, except those that are inconsistent with the express provisions of sections 6 351.1000 to 351.1228; [and] 7 (3) Has the powers given in this section; and 8 (4) Notwithstanding any other provision of sections 351.1000 to 351.1228, no 9 right, power, or privilege described in this subsection includes political spending power 10 as defined in section 351.1401, except as expressly provided by law for political HB 3396 7
11 committees. Political spending power may not be deemed necessary or proper under 12 any circumstances. 13 2. The cooperative may act as the agent of its members, either collectively or 14 individually, in the negotiation for and procurement of all goods, services, and programs 15 which may be provided to the members by or through the cooperative, provided, however, 16 that unless the cooperative has affirmatively accepted responsibility, the cooperative shall 17 have no liability for its members' failure, whether collective or individual, to perform or pay 18 for such goods, services or programs. 19 3. A cooperative may enter into or become a party to a contract or agreement for the 20 cooperative or for or on behalf of the members or patrons, including but not limited to, 21 contracts related to prices for and types of products, goods, or services to be supplied or sold 22 to the members, goods manufactured and sold by the members through the cooperative, the 23 management of the cooperative by a third party manager, and any other contract deemed by 24 the board to be in the best interests of the cooperative or the members, or between the 25 cooperative and its members. 26 4. (1) A cooperative may purchase and hold, lease, mortgage, encumber, sell, 27 exchange, and convey as a legal entity property of any kind including but not limited to real 28 property, personal property, intellectual property, real estate, buildings, equipment, products, 29 patents, and copyrights as the business of the cooperative may require, including the sale or 30 other disposition of assets required by the business of the cooperative as determined by the 31 board. 32