SENATE BILL REPORT

SB 6389

BYSenators Nelson, Talmadge and Newhouse

Revising the Washington business corporation act.

Senate Committee on Law & Justice

Senate Hearing Date(s):January 16, 1990

Majority Report:  That Substitute Senate Bill No. 6389 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Nelson, Chairman; McCaslin, Vice Chairman; Hayner, Madsen, Newhouse, Niemi, Patrick, Rasmussen, Rinehart, Talmadge, Thorsness.

Senate Staff:Vicki E. Schur (786-7415)

                  January 22, 1990

AS REPORTED BY COMMITTEE ON LAW & JUSTICE, JANUARY 16, 1990

BACKGROUND:

In 1989, the Legislature adopted the Revised Model Business Corporations Act, which goes into effect on July 1, 1990.  The act, Chapter 23B RCW, replaces the current law, Chapter 23A RCW.  The act tracks national developments in corporate law and keeps Washington in line with other major commercial states in the country.

SUMMARY:

Technical amendments resolve ambiguities and simplify administration of the act.

The fee structure for corporate filings is amended to be consistent with current filing fees.  Corporations may change their registered agent or office on their annual report without incurring an additional fee.  Notice of annual license fees for foreign corporations will be sent to the corporation's registered office in Washington.

The Secretary of State may waive penalty fees when mitigating circumstances are presented; however, the Secretary of State has no discretion to administratively reinstate a dissolved corporation.

Dissolution procedures are consistent with current law.  The 60-day delay in notice to a delinquent corporation is deleted.  Affirmative causes of action do not survive dissolution; however, dissolved corporations retain the right to defend actions.

Notice to a corporation is effective when sent to the address or telephone number appearing on the current records of the corporation, if expressly authorized by the articles of incorporation or bylaws.  Otherwise, notice is effective when received.

Two-thirds of a corporation's shareholders must approve an amendment to its articles of incorporation which would reduce to less than two-thirds the number of votes necessary to approve a merger, dissolution or other disposition of stock other than in the regular course of business.

The corporate authorization of federally chartered banks, savings institutions, and similar corporations is treated as being outside the act, consistent with current law.

EFFECT OF PROPOSED SUBSTITUTE:

Technical corrections are made.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: P. Cameron DeVore, Washington State Bar Association Corporate Act Revision Committee