The "Rhode Island Business Climate Reform Act" proposes significant amendments to the Rhode Island Business Corporation Act and introduces new provisions aimed at improving corporate governance and shareholder rights. Key changes include the establishment of minimum ownership requirements for initiating derivative actions, allowing publicly traded and for-profit private entities with 500 or more equity owners to set a threshold of up to 5% of outstanding equity. The act also disqualifies mere disclosure-only settlements as "substantial benefits" for awarding attorneys' fees in derivative actions.

Additionally, it introduces a business judgment rule presuming that directors and managers act in good faith, permits judicial determinations of director independence, and allows for waiving class-by-class voting under certain conditions.

The bill further enhances the business environment by introducing "Anonymous Limited Liability Companies" (ALLCs) that do not require public disclosure of member names, effective July 1, 2026, and establishes a "Complex Commercial Litigation Calendar" to expedite high-value claims.

It amends the homestead estate exemption to an unlimited value for residential properties, effective July 1, 2026, and introduces the "Rhode Island Rapid Arbitration Act," which streamlines arbitration processes.

The legislation also modernizes trust law by allowing for dynasty trusts lasting up to 1,000 years, facilitating private settlements, and prohibiting claims based on forced heirship.

Overall, these amendments aim to promote business growth and improve judicial efficiency in Rhode Island.

Statutes affected:
2761: 7-16-11, 9-26-4.1, 44-11-2