2014 -- H 7787

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LC004975

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATIONS ACT

     

     Introduced By: Representative Michael J.Marcello

     Date Introduced: March 04, 2014

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 7-1.2-1301 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1301. Voluntary dissolution by incorporators. -- (a) A corporation which has not

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commenced business and which has not issued any shares, may be voluntarily dissolved by its

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incorporators at any time in the following manner:

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      (1) Articles of dissolution are executed by a majority of the incorporators, and verified

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by them, and state:

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      (i) The name of the corporation.

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      (ii) The date of issuance of its certificate of incorporation.

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      (iii) That none of its shares have been issued.

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      (iv) That the corporation has not commenced business.

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      (v) That the amount, if any, actually paid in on subscriptions for its shares, less any part

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of the amount disbursed for necessary expenses, has been returned to those entitled to it.

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      (vi) That no debts of the corporation remain unpaid.

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      (vii) That a majority of the incorporators elect that the corporation be dissolved.

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      (2) The original articles of dissolution are delivered to the secretary of state. If the

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secretary of state finds that the articles of dissolution conform to law, the secretary of state shall,

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when all fees and franchise taxes have been paid:

 

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      (i) Endorse on the original the word "Filed," and the month, day, and year of the filing.

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      (ii) File the original in his or her office.

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      (iii) Issue a certificate of dissolution.

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      (3) If the corporation is dissolved prior to the effective date stated on the articles of

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incorporation, no franchise taxes shall be due.

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      (b) The certificate of dissolution is delivered to the incorporators or their representative.

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Upon the issuance of the certificate of dissolution by the secretary of state, the existence of the

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corporation continue but only for the purposes and subject to the limitations set forth in §§ 7-1.2-

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1324 and 7-1.2-1325. ceases.

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     SECTION 2. Section 7-1.2-1309 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1309. Filing of articles of dissolution. -- (a) The articles of dissolution are

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delivered to the secretary of state. If the secretary of state finds that the articles of dissolution

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conform to law, the secretary of state shall, when all fees and franchise taxes have been paid:

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      (1) Endorse on the original the word "Filed," and the month, day, and year of the filing.

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      (2) File the original in his or her office.

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      (3) Issue a certificate of dissolution.

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      (b) The certificate of dissolution is delivered to the representative of the dissolved

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corporation. Upon the issuance of the certificate of dissolution the existence of the corporation

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ceases, except for the purpose of suits, other proceedings, and appropriate corporate action by

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shareholders, directors, and officers as provided in this chapter continues but only for the

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purposes and subject to the limitations set forth in §§ 7-1.2-1324 and 7-1.2-1325.

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     SECTION 3. Section 7-1.2-1311 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1311. Issuance of certificates of revocation. -- (a) Upon revoking any certificate

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of incorporation, the secretary of state shall:

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      (1) Issue a certificate of revocation;

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      (2) File the certificate in his or her office; and

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      (3) Send to the corporation by regular mail a copy of the certificate of revocation,

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addressed to the registered office of the corporation in this state on file with the secretary of

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state's office; provided, however, that if a prior mailing addressed to the registered office of the

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corporation in this state currently on file with the secretary of state's office has been returned to

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the secretary of state as undeliverable by the United States Postal Service for any reason, or if the

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revocation certificate is returned as undeliverable to the secretary of state's office by the United

 

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States Postal Service for any reason, the secretary of state shall give notice as follows:

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      (i) To the corporation at its principal office of record as shown in its most recent annual

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report, and no further notice is required; or

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      (ii) In the case of a domestic corporation which has not yet filed an annual report, then to

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any one of the incorporators listed on the articles of incorporation, and no further notice is

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required.

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      (b) Upon the issuance of the certificate of revocation, the existence of the corporation

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continues but only for the purposes and subject to the limitations set forth in §§ 7-1.2-1324 and 7-

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1.2-1325 the authority of the corporation to transact business in this state ceases.

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      (c) Notwithstanding anything to the contrary, the issuance of a certificate of revocation

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of a corporation does not terminate the authority of its registered agent.

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     SECTION 4. Section 7-1.2-1312 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1312. Withdrawal of certificate of revocation. -- (a) Within ten (10) years after

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issuing a certificate of revocation as provided in section 7-1.2-1311, the secretary of state may

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withdraw the certificate of revocation and retroactively reinstate the corporation in good standing

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as if its articles of incorporation had not been revoked, except as subsequently provided:

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      (1) Upon the filing by the corporation of the any documents it had previously failed to

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file as set forth in subdivisions (3) -- (6) of section 7-1.2-1310(a); and

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      (2) Upon the payment by the corporation of a penalty for each year or part of a year that

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has elapsed since the issuance of the certificate of revocation.; and

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      (3) Upon the filing by the corporation of a certificate of good standing from the Rhode

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Island division of taxation.

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      (b) If, as permitted by the provisions of this title, another corporation, whether business

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or nonprofit, limited partnership, limited liability partnership or limited liability company, or

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domestic or foreign, qualified to transact business in this state, bears or has filed a fictitious

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business name statement with respect to or reserved or registered a name which is not

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distinguishable upon the records of the secretary of state from the name of a corporation with

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respect to which the certificate of revocation is proposed to be withdrawn, then the secretary of

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state shall condition the withdrawal of the certificate of revocation upon the reinstated

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corporation's amending its articles of incorporation or otherwise complying with the provisions of

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this chapter with respect to the use of a name available to it under the laws of this state so as to

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designate a name which is distinguishable upon the records of the secretary of state from its

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former name.

 

LC004975 - Page 3 of 7

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      (c) Upon the withdrawal of the certificate of revocation and reinstatement of the

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corporation in good standing as provided in subsection (a) of this section, title to any real estate,

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or any interest in real estate, held by the corporation at the time of the issuance of the certificate

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of revocation and not conveyed subsequent to the revocation of its articles of incorporation is

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deemed to be revested in the corporation without further act or deed.

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     SECTION 5. Section 7-1.2-1320 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1320. Decree of involuntary dissolution. -- In proceedings to liquidate the assets

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and business of a corporation, when the costs and expenses of the proceedings and all debts,

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obligations, and liabilities of the corporation have been paid and discharged and all of its

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remaining property and assets distributed to its shareholders, or in case its property and assets are

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not sufficient to satisfy and discharge the costs, expenses, debts, and obligations, all the property

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and assets have been applied as far as they will go to their payment, the court shall enter a decree

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dissolving the corporation, at which time the existence of the corporation continues but only for

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the purposes and subject to the limitations set forth in §§ 7-1.2-1324 and 7-1.2-1325 ceases.

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     SECTION 6. Section 7-1.2-1324 of the General Laws in Chapter 7-1.2 entitled "Rhode

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1324. Survival of remedy after dissolution. -- The dissolution of a corporation

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either:

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      (a) By the issuance of a certificate of dissolution by the secretary of state pursuant to §§

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7-1.2-1301 or 7-1.2-1309; or

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      (b) By a decree of court when the court has not liquidated the assets and business of the

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corporation as provided in this chapter pursuant to § 7-1.2-1320; or

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      (c) By expiration of its period of duration; does not take away or impair any remedy

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available to or against the corporation, its directors, officers, or shareholders, for any right or

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claim existing, or any liability incurred, prior to the dissolution if action or other proceeding on

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the right, claim, or liability is commenced within two (2) years after the date of the dissolution.

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Any action or proceeding by or against the corporation may be prosecuted or defended by the

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corporation in its corporate name. The shareholders, directors, and officers have power to take

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any corporate or other action that is appropriate to protect the remedy, right, or claim. If the

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corporation was dissolved by the expiration of its period of duration, the corporation may amend

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its articles of incorporation at any time during the period of two (2) years so as to extend its

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period of duration.

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     SECTION 7. Section 7-1.2-1325 of the General Laws in Chapter 7-1.2 entitled "Rhode

 

LC004975 - Page 4 of 7

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Island Business Corporation Act" is hereby amended to read as follows:

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     7-1.2-1325. Continuation of certain corporate powers. – Effect of dissolution and

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revocation of articles of incorporations. – (a) Any corporation dissolved in any manner under

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this chapter or any corporation whose existence is terminated under section 44-12-8 or any

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corporation whose articles of incorporation are revoked by the secretary of state under section 7-

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1.2-1310 nevertheless continues its corporate existence but may not carry on any business except

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what is appropriate to wind up and liquidate its business and affairs, including:

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     (1) Collecting its assets;

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     (2) Disposing of its properties that are not distributed in kind to its shareholders;

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     (3) Discharging or making provision for discharging its liabilities;

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     (4) Distributing its remaining property among its shareholders according to their

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interests; and

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     (5) Doing every other act necessary to wind up and liquidate its business and affairs.

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     (b) Dissolution of a corporation in any manner under this chapter or termination of any

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corporation's existence under § 44-12-8 or revocation of a corporation's articles of incorporation

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does not:

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     (1) Transfer title to the corporation's property;

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     (2) Prevent transfer of its shares or securities, although the authorization to dissolve may

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provide for closing the corporation's share transfer records;

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     (3) Subject its directors or officers to standards of conduct different from those prescribed

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in this chapter;

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     (4) Change quorum or voting requirements for its board of directors or shareholders;

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change provisions for selection, resignation, or removal of its directors or officers or both; or

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change provisions for amending its bylaws;

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     (5) Prevent commencement of a proceeding by or against the corporation in its corporate

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name except as otherwise provided in § 7-1.2-1324;

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     (6) Abate or suspend a proceeding pending by or against the corporation on the effective

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date of dissolution; or

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     (7) Terminate the authority of the registered agent of the corporation.

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     for five (5) years after the date of the dissolution, termination, or revocation for the

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purpose of enabling it to settle and close its affairs, to dispose of and convey its property, to

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discharge its liabilities, and to distribute its assets, but not for the purpose of continuing the

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business for which it was organized. The shareholders, directors, and officers have power to take

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any corporate or other action that is appropriate to carry out the purposes of this section.

 

LC004975 - Page 5 of 7

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     SECTION 8. This act shall apply to all corporations as defined in Chapter 7-1.2,

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including all such corporations for which dissolution or revocation proceedings are pending or for

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which a certificate of dissolution or a certificate of revocation has been issued by the secretary of

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state or a decree of dissolution has been issued by the superior court prior to the effective date

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hereof.

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     SECTION 9. This act shall take effect upon passage.

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LC004975

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LC004975 - Page 6 of 7

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATIONS ACT

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     This act would clarify the distinction between dissolution of a corporation and revocation

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of its charter and the results of such events.

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     This act would take effect upon passage.

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LC004975

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