H. B. 4464
(By Delegates Webster, Proudfoot, Stemple, Hrutkay, Guthrie,
Sobonya, Longstreth, Varner, Burdiss, Azinger and Schadler)
[Introduced February 8, 2008; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact §31B-10-1003 of the Code of West
Virginia, 1931, as amended; to amend and reenact §31D-15-1501
of said code; and to amend and reenact §31E-14-1401 of said
code, all relating to conducting certain activities that do
not constitute conducting affairs or transacting business
within the state.
Be it enacted by the Legislature of West Virginia:
That §31B-10-1003 of the Code of West Virginia, 1931, as
amended, be amended and reenacted; that §31D-15-1501 of said code
be amended and reenacted; and that §31E-14-1401 of said code be
amended and reenacted, all to read as follows:
CHAPTER 31B. UNIFORM LIMITED LIABILITY COMPANY ACT.
ARTICLE 10. FOREIGN LIMITED LIABILITY.
§31B-10-1003. Activities not constituting transacting business.
(a) Activities of a foreign limited liability company that do
not constitute transacting business in this state within the
meaning of this article include:
(1) Maintaining, defending or settling an action or proceeding;
(2) Holding meetings of its members or managers or carrying on
any other activity concerning its internal affairs;
(3) Maintaining bank accounts;
(4) Maintaining offices or agencies for the transfer, exchange
and registration of the foreign company's own securities or
maintaining trustees or depositories with respect to those
securities;
(5) Selling through independent contractors;
(6) Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts;
(7) Creating or acquiring indebtedness, mortgages or security
interests in real or personal property;
(8) Securing or collecting debts or enforcing mortgages or
other security interests in property securing the debts, and
holding, protecting and maintaining property so acquired;
(9) Conducting an isolated transaction that is completed
within thirty days and is not one in the course of similar
transactions of a like manner; and
(10) Transacting business in interstate commerce
.;
(11) Applying for withholding tax on an employee residing in
the State of West Virginia who works for the foreign limited
liability company in another state; and
(12) Holding all, or a portion thereof, of the outstanding
stock of another corporation authorized to transact business in the State of West Virginia. Provided, That the foreign limited
liability company does not produce goods, services or otherwise
conduct business in the State of West Virginia.
(b) For purposes of this article, the ownership in this state
of income-producing real property or tangible personal property,
other than property excluded under subsection (a) of this section,
constitutes transacting business in this state.
(c) This section does not apply in determining the contacts or
activities that may subject a foreign limited liability company to
service of process, taxation or regulation under any other law of
this state.
CHAPTER 31D. WEST VIRGINIA BUSINESS CORPORATION ACT
ARTICLE 15. FOREIGN CORPORATIONS
PART 1. CERTIFICATE OF AUTHORITY
§31D-15-1501. Authority to transact business and jurisdiction over
foreign corporations
.
(a) A foreign corporation may not conduct affairs in this
state until it obtains a certificate of authority from the
secretary of state.
(b) The following activities, among others, do not constitute
conducting affairs within the meaning of subsection (a) of this
section:
(1) Maintaining, defending or settling any proceeding;
(2) Holding meetings of the board of directors or shareholders
or carrying on other activities concerning internal corporate
affairs;
(3) Maintaining bank accounts;
(4) Selling through independent contractors;
(5) Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts;
(6) Creating or acquiring indebtedness, mortgages and security
interests in real or personal property;
(7) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts:
Provided, That
this exemption does not include debts collected by collection
agencies as defined in subdivision (b), section two, article
sixteen, chapter forty-seven of this code;
(8) Owning, without more, real or personal property;
(9) Conducting an isolated transaction that is completed
within thirty days and that is not one in the course of repeated
transactions of a like nature;
(10) Conducting affairs in interstate commerce;
(11) Granting funds or other gifts;
(12) Distributing information to its shareholders or members;
(13) Effecting sales through independent contractors;
(14) The acquisition by purchase of lands secured by mortgage
or deeds;
(15) Physical inspection and appraisal of property in West
Virginia as security for deeds of trust, or mortgages and
negotiations for the purchase of loans secured by property in West
Virginia;
and
(16) The management, rental, maintenance and sale or the
operating, maintaining, renting or otherwise dealing with selling
or disposing of property acquired under foreclosure sale or by
agreement in lieu of foreclosure sale
.;
(17) Applying for withholding tax on an employee residing in
the State of West Virginia who works for the foreign corporation in
another state; and
(18) Holding all, or a portion thereof, of the outstanding
stock of another corporation authorized to transact business in the
State of West Virginia. Provided, That the foreign corporation
does not produce goods, services or otherwise conduct business in
the State of West Virginia.
(c) The list of activities in subsection (b) of this section
is not exhaustive.
(d) A foreign corporation is deemed to be transacting business
in this state if:
(1) The corporation makes a contract to be performed, in whole
or in part, by any party thereto in this state;
(2) The corporation commits a tort, in whole or in part, in
this state; or
(3) The corporation manufactures, sells, offers for sale or
supplies any product in a defective condition and that product
causes injury to any person or property within this state
notwithstanding the fact that the corporation had no agents,
servants or employees or contacts within this state at the time of
the injury.
(e) A foreign corporation's making of a contract, the
committing of a manufacture or sale, offer of sale or supply of
defective product as described in subsection (d) of this section is
deemed to be the agreement of that foreign corporation that any
notice or process served upon, or accepted by, the secretary of
state in a proceeding against that foreign corporation arising
from, or growing out of, contract, tort or manufacture or sale,
offer of sale or supply of the defective product has the same legal
force and validity as process duly served on that corporation in
this state.
CHAPTER 31E. WEST VIRGINIA NONPROFIT CORPORATION ACT
ARTICLE 14. FOREIGN CORPORATIONS
PART 1. CERTIFICATE OF AUTHORITY
§31E-14-1401. Authority to conduct affairs required.
(a) A foreign corporation may not conduct affairs in this
state until it obtains a certificate of authority from the
secretary of state.
(b) The following activities, among others, do not constitute
conducting affairs within the meaning of subsection (a) of this
section:
(1) Maintaining, defending, or settling any proceeding;
(2) Holding meetings of the board of directors or members or
carrying on other activities concerning internal corporate affairs;
(3) Maintaining bank accounts;
(4) Selling through independent contractors;
(5) Soliciting or obtaining orders, whether by mail or through
employees or agents or otherwise, if the orders require acceptance
outside this state before they become contracts;
(6) Creating or acquiring indebtedness, mortgages, and
security interests in real or personal property:
Provided, That
this exemption does not include debts collected by collection
agencies as defined in subdivision (b), section two, article
sixteen, chapter forty-seven of this code;
(7) Securing or collecting debts or enforcing mortgages and
security interests in property securing the debts;
(8) Owning, without more, real or personal property;
(9) Conducting an isolated transaction that is completed
within thirty days and that is not one in the course of repeated
transactions of a like nature;
(10) Conducting affairs in interstate commerce;
(11) Granting funds or other gifts;
(12) Distributing information to its shareholders or members;
(13) Effecting sales through independent contractors;
(14) The acquisition by purchase of lands secured by mortgage
or deeds;
(15) Physical inspection and appraisal of property in West
Virginia as security for deeds of trust, or mortgages and
negotiations for the purchase of loans secured by property in West
Virginia; and
(16) The management, rental, maintenance and sale; or the
operating, maintaining, renting or otherwise, dealing with selling
or disposing of property acquired under foreclosure sale or by
agreement in lieu of foreclosure sale
.; and
(17) Applying for withholding tax on an employee residing in
the State of West Virginia who works for the foreign corporation in
another state.
(c) The list of activities in subsection (b) of this section
is not exhaustive.
(d) A foreign corporation is to be deemed to be conducting
affairs in this state if:
(1) The corporation makes a contract to be performed, in whole
or in part, by any party thereto, in this state;
(2) The corporation commits a tort, in whole or in part, in
this state; or
(3) The corporation manufactures, sells, offers for sale or
supplies any product in a defective condition and that product
causes injury to any person or property within this state
notwithstanding the fact that the corporation had no agents, servants or employees or contacts within this state at the time of
the injury.
(e) A foreign corporation's making of a contract, the
committing of a manufacture or sale, offer of sale or supply of
defective product as described in subsection (d) of this section is
deemed to be the agreement of that foreign corporation that any
notice or process served upon, or accepted by, the secretary of
state in a proceeding against that foreign corporation arising
from, or growing out of, contract, tort, or manufacture or sale,
offer of sale or supply of the defective product has the same legal
force and validity as process duly served on that corporation in
this state.
Note: The bill adds additional exemptions to the requirement
that foreign corporation obtain a certificate of authority from the
Secretary of State's Office before conducting affairs in the State.
The additional exemptions are necessary so that foreign
corporations may file particular forms with the State Tax
Department.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.