FLOOR BOOK MEMO House Committee on the Judiciary
Com. Sub. for H.B. 2553
Prepared by: Brian Skinner
(3/6/2013) Phone: 304-340-3258
email: brian.skinner@wvhouse.gov
SPONSORS: Delegates Morgan, Stephens, Diserio, Jones, Paxton, P. Smith, Staggers,
Hartman, and Lynch.
TITLE: Authorizing the Secretary of State to administratively dissolve certain business
entities.
DATE INTRODUCED: February 20, 2013.
CODE SECTIONS AFFECTED: W.Va. Code §31B-8-809, §31D-17-1420, §31D-15-1530,
§31E-13-1320, and §31E-14-1430. (Amend & reenact).
IDENTICAL/SIMILAR BILLS: S.B. 70. (Same as)
CHAIRMAN'S SUMMARY:
A. EXISTING LAW: W.Va. Code § 31B-8-809, contains the grounds for which a
limited liability company may be dissolved by the Secretary of State. W.Va. Code §§
31D-14-1420 & 31E-13-1320, includes the grounds for which a domestic corporation -
- for profit or non-profit - - may be dissolved by the Secretary. Finally, foreign
corporations - - for profit or non-profit - - may be dissolved by the Secretary
pursuant to W.Va. Code §§ 31D-15-1530 & 31E-14-1430.
B. THIS COMMITTEE SUBSTITUTE: The bill adds as grounds for the
administrative dissolution of a limited liability company or corporation (foreign or
domestic, for-profit or non-profit):
(1) the revocation of a professional license of one or more of the incorporators
by a professional licensing board and the license is required for the continued
operation of the company or corporation; and
(2) the company or corporation being in default with the Bureau of
Employment Programs.
C. COMMITTEE SUBSTITUTE: The Committee adopted a committee substitute
that included only the non-substantive, drafting changes made to the intorduced bill
by the Committee on Government Organization.
FULL ANALYSIS:
I. SUBSTANTIVE ANALYSIS
A. EXISTING LAW: Under current law a limited liability company may be
dissolved by the Secretary of State if the company fails to pay any fees, taxes or
penalties imposed by law within 60 days after they are due or fails to deliver its
annual report to the Secretary of State within 60 days after it is due. W.Va. Code §
31B-8-809.
A domestic corporation - - for profit or non-profit - - may be dissolved by
the Secretary if (1) it does not pay within 60 days after they are due any franchise
taxes or penalties imposed by law; (2) fails to notify the Secretary within 60 days that
its registered agent or registered office has been changed, that its registered agent
has resigned or that its registered office has been discontinued; or (3) the
corporation's period of duration stated in its articles of incorporation expires. W.Va.
Code §§ 31D-14-1420 & 31E-13-1320.
A foreign corporation - - for profit or non-profit - - may be dissolved by the
Secretary if (1) the foreign corporation does not pay within 60 days after they are
due any franchise taxes or penalties imposed by law; (2) it fails to inform the
Secretary that its registered agent or registered office has changed, its registered
agent has resigned or its registered office has been discontinued within 60 days of
the change, resignation or discontinuance; (3) an incorporator, director, officer or
agent of the foreign corporation signed a document he or she knew was false in any
material respect with intent that the document be delivered to the Secretary for
filing; or (4) the Secretary receives a duly authenticated certificate from the Secretary
of State or other official having custody of corporate records in the state or country
under whose law the foreign corporation is incorporated stating that it has been
dissolved or disappeared as the result of a merger. W.Va. Code §§ 31D-15-1530 &
31E-14-1430.
B. THIS BILL: The bill adds as grounds for the administrative dissolution of a
limited liability company, a corporation, foreign or domestic, for profit or non-profit, the revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with
the Bureau of Employment Programs.
C. COMMITTEE ON GOVERNMENT ORGANIZATION'S STRIKE AND
INSERT AMENDMENT: The Committee on Government Organization adopted a
strike and insert amendment to the bill that makes only a non-substantive drafting
change to the bill's contents. The amendment replaces the term "incorporators" with
the phrase "license holders" in the amended language throughout the bill that
applies to the revocation of professional licenses.
D. STAFF SUGGESTED COMMITTEE SUBSTITUTE: The staff suggested
committee substitute adopts the Committee on Government Organization's
amendment in whole without any other changes.
II. SECTION DIRECTORY:
CHAPTER 31B. UNIFORM LIMITED LIABILITY COMPANY ACT.
ARTICLE 8. WINDING UP COMPANY'S BUSINESS.
§31B-8-809. Grounds for administrative dissolution.
The section contains the grounds for the administrative dissolution of a
limited liability company. It is amended to include as grounds for dissolution, the
revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with
the Bureau of Employment Programs.
CHAPTER 31D. WEST VIRGINIA BUSINESS CORPORATION ACT.
ARTICLE 14. DISSOLUTION.
§31D-14-1420. Grounds for administrative dissolution.
The section contains the grounds for the administrative dissolution of a
domestic corporation. It is amended to include as grounds for dissolution, the
revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with the Bureau of Employment Programs.
ARTICLE 15. FOREIGN CORPORATIONS.
§31D-15-1530. Grounds for revocation.
The section contains the grounds for the administrative dissolution of a
foreign corporation. It is amended to include as grounds for dissolution, the
revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with
the Bureau of Employment Programs.
CHAPTER 31E. WEST VIRGINIA NONPROFIT CORPORATION ACT.
ARTICLE 13. DISSOLUTION.
§31E-13-1320. Grounds for administrative dissolution.
The section contains the grounds for the administrative dissolution of a non-
profit corporation. It is amended to include as grounds for dissolution, the
revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with
the Bureau of Employment Programs.
ARTICLE 14. FOREIGN CORPORATIONS.
§31E-14-1430. Grounds for revocation.
The section contains the grounds for the administrative dissolution of a
foreign non-profit corporation. It is amended to include as grounds for dissolution,
the revocation of a professional license of one or more of the incorporators by a
professional licensing board and the license is required for the continued operation
of the company or corporation; or the company or corporation being in default with
the Bureau of Employment Programs.
III. FISCAL ANALYSIS: A fiscal note is unavailable for this bill. However, it does not
appear that the bill will have more than a de minimis fiscal impact on the State.
IV. COMMENTS
A. CONSTITUTIONAL ISSUES: None identified.
B. GOVERNMENT AGENCIES AFFECTED: Secretary of State.
C. RULE MAKING AUTHORITY: None.
D. COMMITTEE REFERENCE: Governmental Organization then Judiciary.
E. TITLE ANALYSIS: The bill's title has been amended to more accurately
reflect the contents of the bill. The new title is included in the committee
substitute.
F. DRAFTING ISSUES OR OTHER COMMENTS: None.
G. EFFECTIVE DATE: 90 days from passage.