CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Legislative Roundup: Some Notable Corporate and UCC Legislative Changes from 2022

By: Pia Angelikis, Esq. and Joan Helwig, Esq., COGENCY GLOBAL on Thu, Dec 15, 2022

What this is: Around the country, state law makers have had a busy legislative year.  Below is a summary of some of the notable business entity and UCC related bills from various states that were passed into law in 2022, many of which will take effect on January 1, 2023. 

What this means: Over two dozen bills, from California to Rhode Island, were introduced in 2022. They covered everything from shareholder approval and appraisal rights to addressing certain digital assets as “controllable electronic records”. We rounded them up for you.

Year End Legislative Round Up

California

Senate Bill 49, effective January 1, 2023, allows domestic corporations to convert to other foreign entity types and to convert (or “redomesticate”) into foreign corporations, provided that the laws of the respective foreign state allows for such changes.  Need more info? Check out our article California Expands Its Conversion Statute.

Senate Bill 218, effective January 1, 2023, allows for ratification or validation of certain invalid corporate acts that would otherwise have been lawful.  Read more in our article California Allows for Ratification and Validation Procedures for Noncompliant Corporate Actions.

Senate Bill 1202, effective January 1, 2023, permits the Secretary of State to cancel certain entity articles of conversion under specified circumstances.  The bill includes notification requirements about the cancellation and also revises name filing requirements for certain entities. 

Assembly Bill 1802, effective January 1, 2023, amends the Revised Uniform Limited Liability Company Act.  It relates to utilization of omitted assets to discharge known unsatisfied liabilities It contains provisions for distribution of assets omitted from winding up.

Assembly Bill 1766, effective January 1, 2023, amends the definition of “driver’s license” and “identification card” in section 9-503 of Article 9 of the Uniform Commercial Code.  The amended definitions will include, among other things, a restricted identification card for eligible persons who are unable to “submit satisfactory proof of identity and California residency”.  

Assembly Bill 1780, effective January 1, 2023, permits a corporation’s shareholder meetings to be conducted, in whole or in part, by electronic transmission, subject to certain conditions. 

Assembly Bill 2431 includes clarifying changes to the question on the limited liability company Statement of Information as to whether any members or managers have any outstanding final judgments issued against them regarding wage order or Labor Code violations.  As per the state website: “this law change requires the first Statement of Information filed in 2023 to be a complete Statement of Information.”

Colorado

Senate Bill 22-045, took effect on August 9, 2022.  It includes modification to the Public Benefit Corporation Act. The bill changes conversion procedures which relate to shareholder approval and appraisal rights. It also details directors' duties to the public benefit corporation and others. 


Senate Bill 22-034, effective February 1, 2023, authorizes complaints to be made if a filing may be considered fraudulent or unauthorized. Includes procedures for complaining to the Secretary of State and referral to the Attorney General and Administrative Law Judge, where applicable.

Delaware

In keeping with its tradition of amending its business entity laws annually, Delaware’s 2022 business entity law amendments generally took effect on August 1, 2022.  For details on some of these amendments, please see our post Delaware Amends Its Business Entity Laws.

Florida

Senate Bill 336, effective January 1, 2023, amends Article 9 of the Uniform Commercial Code regarding assignments.  

Senate Bill 1062, generally effective January 2, 2023, amends, among other things, certain procedures for service of process upon specific business entities.

Indiana

Senate Bill 351, took effect July 1, 2022.  The bill adopts a new section to the state’s Uniform Commercial Code and corresponding Article 9 amendments addressing certain digital assets called “controllable electronic records”. 

Iowa 

House File 2445, took effect on July 1, 2022.  It adopted a new Article 12 of the Uniform Commercial Code and corresponding Article 9 amendments addressing certain digital assets called “controllable electronic records”.

Kansas

House Bill 2391, has a delayed implementation date of January 1, 2024 (rather than the January 1, 2023 implementation date stated in the bill). It changes business entity annual reporting requirements to biennial business entity reporting requirements.  

Maryland 

Maryland Senate Bill 879 and House Bill 996, took effect on October 1, 2022. These bills include procedures for ratifying and validating certain defective corporate acts. 

Minnesota

House Bill 3400, took effect on August 1, 2022, and relates to fraudulent UCC financing statement filings.

Nebraska

Legislative Bill 649, generally took effect July 1, 2022.  It adopts a new Article 12 of the Uniform Commercial Code and corresponding Article 9 amendments addressing certain digital assets called “controllable electronic records”. 

New Hampshire

House Bill 1503, effective January 1, 2023, adopts a new Article 12 of the Uniform Commercial Code  and corresponding Article 9 amendments addressing certain digital assets called “controllable electronic records”. 

Pennsylvania 

House Bill 2057, effective January 2, 2023, includes among other changes, the removal of the decennial filing requirement and the establishment of an annual report filing requirement.  Section 146, relating to annual reports, includes a different effective date from the rest of the bill.  The annual report section is effective in January 2024.

Rhode Island

Senate Bill 2813 and companion House Bill 7753, effective January 1, 2023, create a new “Uniform Partnership Act”. 

Senate Bill 2812 and companion House Bill 7603, effective January 1, 2023, create a new “Uniform Limited Partnership Act”. 

House Bill 8001 and Senate Bill 2645, effective January 1, 2023, include an electronic filing option for a certificate relating to an assumed name.

These are highlights of some of many legislative changes in 2022. For more details on these bills, please refer to the full texts on each state’s legislative website.
 
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

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