FLOOR BOOK MEMO House Committee on the Judiciary
Com. Sub. for H.B. 2554
Prepared by: Brian Skinner
(3/6/2013) Phone: 304-340-3258
email: brian.skinner@wvhouse.gov
SPONSORS: Delegates Morgan, Stephens, Staggers, Hartman, Jones, Diserio, and
Lynch.
TITLE: Providing a procedure for the Secretary of State to reinstate certificates of
authority for foreign corporations.
DATE INTRODUCED: February 20, 2013
CODE SECTIONS AFFECTED: W.Va. Code § 31D-15-1532 (amend and reenact), § 31D-15-
1533 (new), § 31E-14-1432 (amend & reenact), § 31E-14-1533 (new) and § 59-1-2
(amend & reenact).
IDENTICAL/SIMILAR BILLS: None.
CHAIRMAN'S SUMMARY:
A. EXISTING LAW: Under current law, a foreign corporation may appeal the
Secretary of State's revocation of its certificate of authority to the circuit court within
30 days after service of the certificate of revocation. The foreign corporation appeals
by petitioning the circuit court to set aside the revocation. The circuit court may
summarily order the Secretary of State to reinstate the certificate of authority or may
take any other action the circuit court considers appropriate. The Court's final
decision may be appealed as in other civil proceedings.
B. THIS BILL: The bill changes the current law by creating an administrative
process for a foreign corporation to seek reinstatement of an administratively
revoked certificate of authority, prior to applying to the circuit court. Under this new
process, provide that a corporation that has had its certificate of authority
administratively revoked may apply to the Secretary of State for reinstatement
within 2 years of the revocation. The Secretary may grant the application and cancel
the certificate of revocation. The reinstatement relates back to and takes effect as of
the effective date of the administrative revocation and the corporation resumes its
business as if the administrative revocation had never occurred.
If the Secretary denies a corporation's application for reinstatement, the
corporation may appeal the denial of reinstatement to the circuit court of Kanawha
County within 30 days after service of the notice. The circuit court's final decision
may be appealed to the West Virginia Supreme Court of Appeals.
C. COMMITTEE SUBSTITUTE: The Committee adopted a committee substitute
that corrects an inconsistency in fees that may be charged by the Secretary of State.
FULL ANALYSIS:
I. SUBSTANTIVE ANALYSIS
A. EXISTING LAW: Under current law, a foreign corporation may appeal the
Secretary of State's revocation of its certificate of authority to the circuit court within
30 days after service of the certificate of revocation. The foreign corporation appeals
by petitioning the circuit court to set aside the revocation. The circuit court may
summarily order the Secretary of State to reinstate the certificate of authority or may
take any other action the circuit court considers appropriate. The Court's final
decision may be appealed as in other civil proceedings.
B. THIS BILL: The bill significantly changes the current law by creating an
administrative process for a foreign corporation to seek reinstatement of an
administratively revoked certificate of authority, rather than first applying to the
circuit court. Under this new process, provide that a corporation that has had its
certificate of authority administratively revoked may apply to the Secretary of State
for reinstatement within 2 years of the revocation. W.Va. Code §§ 31D-15-1532 & 31E-
14-1532. The bill provides the contents of an application for reinstatement. If the
Secretary determines that the application contains the required information and that
the information is accurate, the Secretary shall cancel the certificate of revocation and
prepare a certificate of reinstatement that recites the Secretary of State's
determination and the effective date of reinstatement. Id. The Secretary is required to
send notice of the reinstatement to the corporation within 30 days of the
determination.
When a reinstatement is granted, the reinstatement relates back to and takes
effect as of the effective date of the administrative revocation and the corporation
resumes its business as if the administrative revocation had never occurred. Id.
If the Secretary denies a corporation's application for reinstatement, the
Secretary must notify the corporation within 30 days of application by written notice
that explains the reason or reasons for denial. W.Va. Code §§ 31D-15-1533 & 31E-14-
1433. The corporation may appeal the denial of reinstatement to the circuit court of
Kanawha County within 30 days after service of the notice. The circuit court's final
decision may be appealed to the West Virginia Supreme Court of Appeals. Id.
The bill also amends W.Va. Code § 59-1-2 (Fees to be charged by the Secretary of
State) to reflect that fees for the reinstatement of foreign profit and nonprofit
corporations is the same as for limited liability companies.
C. COMMITTEE ON GOVERNMENT ORGANIZATION'S AMENDMENT: At
the request of the Secretary of State, the Committee on Government Organization
adopted an amendment to the bill that amends W.Va. Code § 59-1-2(a)(1)(L), to
reduce the current $15 fee for articles of merger of more than two in-state businesses
or corporations to $5 - - the current fee for the article of merger for more than two
out of state businesses W.Va. Code § 59-1-2(a)(2)(N).
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 31D. WEST VIRGINIA BUSINESS CORPORATION ACT.
ARTICLE 15. FOREIGN CORPORATIONS.
§31D-15-1532. Reinstatement following administrative revocation.
This section contains the process for the reinstatement of a foreign
corporation that has had its certificate of authority to do business in the state
revoked by the Secretary of State. The section has been significantly amended.
§31D-15-1533. Appeal from denial of reinstatement.
This new section contains the authority to appeal a denial of an
application to reinstate a certificate of authority administratively revoked by the Secretary of State.
CHAPTER 31E. WEST VIRGINIA NONPROFIT CORPORATION ACT.
ARTICLE 14. FOREIGN CORPORATIONS.
§31E-14-1432. Reinstatement following administrative revocation.
This section contains the process for the reinstatement of a foreign
corporation that has had its certificate of authority to do business in the state
revoked by the Secretary of State. The section has been significantly amended.
§31E-14-1533. Appeal from denial of reinstatement.
This new section contains the authority to appeal a denial of an
application to reinstate a certificate of authority administratively revoked by the
Secretary of State.
CHAPTER 59. FEES, ALLOWANCES AND COSTS;
NEWSPAPERS; LEGAL ADVERTISEMENTS.
ARTICLE 1. FEES AND ALLOWANCES.
§59-1-2. Fees to be charged by Secretary of State.
This section is amended to include references to the reinstatement of
domestic or foreign corporations in light of the amendments to W.Va. Code § 31D-
15-1532, § 31D-15-1533, § 31E-14-1432 and § 31E-14-1533.
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: Government 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.