Keeping track of the changes to business entity statutes is important for a company’s managers, owners, officers, investors, and advisers. But it can be hard to do considering how often the laws are amended and how many judicial decisions interpreting those laws are issued each year. To help all interested parties keep up, CT has compiled some of the significant legislative and case law developments we have tracked and reported for you in Legislative and Regulatory Update on wolterskluwer.com during 2024.
Alabama
Senate Bill 112, effective August 1, 2024, amended the Business and Nonprofit Entities Code to, among other things, (1) amend the corporation and nonprofit corporation provisions regarding the ratification of defective acts, the limitation of officer liability, the delegation of authority by the board of directors, and the sale of assets without shareholder or member approval; (2) to amend the provisions regarding the restatement of the formation document of various business entities; and (3) to add sections to the LLC, partnership, and limited partnership laws authorizing the ratification of defective acts.
House Bill 230, effective October 1, 2024, repealed the requirement that corporations file an annual report with the Secretary of State.
Connecticut
Senate Bill 435, effective October 1, 2024, amended the Entity Transactions Act regarding definitions, Attorney General jurisdiction, relationship of the Act to other laws, mergers, conversions, and domestications.
Senate Bill 428, effective on various dates as indicated in the bill (1) amended the entity laws regarding contents of formation and qualification documents and annual reports, fees, administrative dissolution and revocation and doing business without registration; (2) amended the LP law regarding execution of filings; (3) amended the LLC law regarding foreign registration and foreign amendment; (4) amended the corporation and LLP laws regarding amended annual reports; (5) amended the State Elective Officers title regarding the name of entity filing office; (6) enacted uncodified assumed name provisions; and (7) enacted uncodified provisions regarding fraudulent filings and registered agents.
Colorado
House Bill 24-1137, effective August 7, 2024, amended the Corporations and Associations code regarding fraudulent filings and reinstatements.
Delaware
Senate Bill 313, effective August 1, 2024, amended the General Corporation Law regarding specific powers; director authorization of agreements and other instruments; delivery of notice; remedies and appointment of stockholder representatives in relation to mergers; and certificate of incorporation amendments and disclosure schedules in relation to mergers.
House Bill 336, effective August 1, 2024, amended the LLC law regarding merger and dissolution of LLCs, termination of protected series, and dissolution and merger of registered series.
House Bill 337, effective August 1, 2024, amended the LP law regarding execution of documents, merger and dissolution of LPs, termination of protected series, and dissolution and merger of registered series.
House Bill 338, effective August 1, 2024, amended the statutory trust law regarding definitions, management, execution of documents, merger and consolidation, conversion, domestication and statutory title and construction.
House Bill 339, effective August 1, 2024, amended the partnership law regarding merger.
In re Fox Corporation/Snap Inc. Section 242 Litigation, Nos. 120 & 121 (Consolidated), decided January 17, 2024. The Delaware Supreme Court held that Sec. 242(b)(2) of the GCL did not provide the members of classes of stock without voting rights with the right to vote on an amendment to the corporations’ charters to exculpate the corporations’ officers.
Gunderson v. The Trade Desk, C.A. No. 2024-1029, decided November 8, 2024. The Delaware Chancery Court held that a majority vote was required to approve a conversion under Sec. 266 that would reincorporate a corporation from Delaware to Nevada and not a supermajority vote that was required by a provision of the corporation’s certificate of incorporation for amendments that would be inconsistent with certain provisions of the certificate of incorporation. The court applied the doctrine of independent legal significance and also noted that previous cases detailed how to draft charter provisions altering statutory default voting that the corporation failed to follow.
Florida
Senate Bill 1198, effective July 1, 2024, added provisions regarding the ratification of defective corporate acts and amended the law regarding resignation of registered agents.
Indiana
Senate Bill 18, effective July 1, 2024, amended the LLC law regarding the consequences of the death of the member of a single member LLC.
Iowa
Senate File 2054, effective July 1, 2024, amended the business entity laws regarding the reinstatement of dissolved business entities.
House File 2647, effective May 1, 2024, amended the LLC law to delete the requirement that a derivative suit pleading may state why demand should be excused as futile.
Kansas
House Bill 2660, effective July 1, 2024, amended the business entity laws to, among other things, authorize a change of registered office address that is a residence by a current occupant, provide that an application for registration of a foreign filing entity must contain a statement made under penalty of perjury that it is in good standing, and change the due dates for filing biennial reports of various business entities.
Maryland
House Bill 749/Senate Bill 400, effective October 1, 2024, amended the Corporations and Associations Code regarding definitions, emergency bylaws, and stock redemptions or repurchases.
Senate Bill 544, effective October 1, 2024, amended the Corporations and Associations Code regarding the ratification of defective corporate acts.
Mississippi
House Bill 1344, Laws of 2024, effective July 1, 2024, required each domestic and foreign nonprofit corporations to file an annual report with the Secretary of State before May 15 of each year.
House Bill 1105, effective July 1, 2024, amended the LLC law regarding the required and prohibited words in an LLC’s name.
Nebraska
Legislative Bill 628, effective July 19, 2024, amended provisions relating to the registration of professional service LLCs and professional corporations.
New York
Senate Bill 8059, effective March 1, 2024, repealed and reenacted with significant changes the New York LLC Transparency Act requiring LLCs to report their beneficial owners to the Department of State. One significant change is that the bill delays the effective date for reporting until January 1, 2026 (formerly, December 21, 2024).
Eccles v. Shamrock Capital Advisors, LLC, 2024 NY Slip Op 02841, decided May 23, 2024. The New York Court of Appeals held that the substantive law of a company's place of incorporation presumptively applies to causes of action arising from its internal affairs. To overcome this presumption and establish the applicability of New York law, a party must demonstrate both that the interest of the place of incorporation is minimal, and that New York has a dominant interest in applying its own substantive law.
Ohio
House Bill 301, effective October 24, 2024, amended the nonprofit corporation law regarding director qualifications and duties, director and officer liability, certificates of good standing, and amendments; and amended the corporation law regarding dissolution.
Senate Bill 98, effective October 24, 2024, amended the law regarding fraudulent filings, statutory agents, and reinstatement.
Oklahoma
Senate Bill 620, effective November 1, 2024, amended (1) the Professional Entity Act regarding definitions, formation, name, office, interest holders, managers, shareholders and professional services; and (2) the General Corporation Act regarding application of the Act to nonstock corporations, limitation of officers’ liability, organization meetings, emergency bylaws, documents, registered agents, consents to action, indemnification and insurance, stock, stock certificates and uncertificated shares, shareholder proxies, record dates, shareholder lists, notices to shareholders, merger and conversion, appraisal rights, dissolution, and revival.
Senate Bill 649, effective November 1, 2024, amended (1) the General Corporation Act regarding names, and (2) the LLC law regarding definitions, articles of organization, execution of documents, names, series LLCs, corrections, cancellation, operating agreements, conversion, appraisal rights, merger and consolidation, divisions, fees, administrative cancellation and reinstatement, and document form, signature and delivery.
Pennsylvania
House Bill 1716, effective September 13, 2024, amended the Corporations & Unincorporated Associations title (1) in the preliminary provisions regarding name registration, nature of transactions, LLC approval of entity transactions and foreign registration; (2) in the business corporation law regarding definitions, authorized debt terms, derivative actions and application of the law; (3) in the nonprofit corporation law regarding definitions, authorized debt terms and derivative actions; (4) in the partnership and LP laws regarding partnership agreements and derivative actions; and (5) in the LLC law regarding operating agreements and derivative actions.
South Dakota
House Bill 1231, effective July 1, 2024, required additional information to be set forth in the annual report of an entity that owns any agricultural land and is a foreign entity or has any foreign beneficial owners.
Texas
Energy Transfer LP v. Culbertson Midstream, LLC, Cause No. 24-BC01B-0005, decided October 30, 2024. The Texas Business Court, 1st Division, held that it does not have jurisdiction to hear cases filed before September 1, 2024, the date that House Bill 19 – the legislation establishing the Texas Business Courts – provides that the changes made to the law go into effect. The court therefore granted the defendant’s motion to remand the case back to the Dallas District Court because it was originally filed on April 8, 2022 and removed to the Texas Business Court on September 30, 2024.
Utah
House Bill 318, effective May 1, 2024, amended the Decentralized Autonomous Organizations Act to clarify that the Division of Corporations and Commercial Code does not issue a certificate of organization and to make modifications to the permitted names of a DAO.
Senate Bill 14, effective May 1, 2024, amended the provisions governing the reinstatement of administratively dissolved corporations, nonprofit corporations, limited cooperative associations, LLPs, LPs, and LLCs.
Virginia
House Bill 124, effective July 1, 2024, amended the stock and nonstock corporation laws regarding who can sign an annual report.
Chung v. Law Firm of Urban & Falk, PLLC, No. 1665-23-4, decided October 29, 2024. The Virginia Court of Appeals held that a professional LLC whose existence was cancelled by the State Corporation Commission for failure to pay its registration fee had standing to apply to the circuit court for confirmation and modification of an arbitration award because its subsequent reinstatement validated its post-cancellation actions including its participation in arbitration, application for modification and confirmation of the award, and incurring of further costs and fees.
Washington
Senate Bill 5786, effective June 6, 2024, amended the business corporation law regarding merger, share or interest exchange, conversion, shareholder and director voting and quorum, removal of directors, domestic amendment, sale of assets, shareholder dissenter rights and social purpose corporations. 5786-S.PL.pdf (wa.gov)
West Virginia
Senate Bill 142, effective June 5, 2024, amended the Fees, Allowances and Costs; Newspapers; Legal Advertisements chapter regarding Annual Report due dates and Annual Report business solicitations.
Senate Bill 262, effective June 5, 2024, amended the Business Corporation Act regarding administrative dissolution.
Wyoming
Senate Bill 50, effective July 1, 2024, enacted the Wyoming Decentralized Unincorporated Nonprofit Association Act, providing for the creation of decentralized unincorporated nonprofit associations.
