HOUSE BILL REPORT

ESB 5583

BYSenators Pullen, Newhouse, Nelson, Rasmussen and Talmadge

Replacing the Washington business corporation act.

House Committe on Judiciary

Majority Report:  Do pass.  (18)

      Signed by Representatives Appelwick, Chair; Crane, Vice Chair; Padden, Ranking Republican Member; Belcher, Brough, Dellwo, Hargrove, Inslee, P. King, R. Meyers, Moyer, H. Myers, Patrick, Schmidt, Scott, D. Sommers, Tate and Wineberry.

House Staff:Pat Shelledy (786-7149)

AS PASSED HOUSE APRIL 12, 1989

BACKGROUND:

The present Washington Business Act was adopted in 1965.  The act was based largely on the Model Business Corporation Act.  Since 1965, numerous changes have been proposed and adopted. In 1984, the Committee on Corporate Laws of the American Bar Association adopted the 1984 Revised Model Act (RMA) which completely revises and updates the Model Business Corporations Act and serves as a model for state corporation acts.  Washington has adopted many of the recommendations of the RMA in a piecemeal fashion since 1984.

The Corporate Act Revision Committee (CARC) of the Washington State Bar Association reviewed the RMA and concluded that the RMA contains significant improvements in organization, language, and concepts. CARC recommends completely revising Washington law governing corporations using the RMA structure and language.

SUMMARY:

The current Washington law governing corporations is repealed and the entire 1984 Revised Model Act is adopted with some modifications.  The act modernizes and recodifies corporate law into a rational structure.

Fiscal Note:      Not Requested.

Effective Date:The bill takes effect July 1, 1990.

House Committee ‑ Testified For:    Kevin McMahon, Washington State Bar Association; and Ralph Munro, Secretary of State.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Modernizing the corporation laws makes the code more accessible, reflects changes in current practice and substantially conforms to the Revised Model Act.

House Committee - Testimony Against:      None Presented.