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SB570 SUB1 Senate Bill 570 History

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COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 570

(By Senators Edgell, Fitzsimmons, Cookman, Wells, Miller and Walters)

____________

[Originating in the Committee on the Judiciary;

reported February 20, 2014.]

____________

 

 

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; to amend and reenact §31E-14-1401 of said code; to amend said code by adding thereto a new section, designated §47-9-64; and to amend said code by adding thereto a new section, designated §47B-10-6, all relating to making exemptions from obtaining certificates of authority from the Secretary of State for certain foreign corporations, companies and partnerships the same as for corporations in this state; and making language consistent with state corporation language as to when the named foreign businesses are or are not considered to be doing business in this 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; that §31E-14-1401 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §47-9-64; and that said code be amended by adding thereto a new section, designated §47B-10-6, all to read as follows:

CHAPTER 31B. UNIFORM LIMITED LIABILITY COMPANY ACT.

ARTICLE 10. FOREIGN LIMITED LIABILITY COMPANIES.

§31B-10-1003. Activities not constituting transacting business.

    (a) A foreign limited liability company may not conduct affairs in this state until it obtains a certificate of authority from the Secretary of State.

    (a) (b) The following activities, among others, of a foreign limited liability company that do not constitute transacting business in this state conducting affairs within the meaning of subsection a of this article include section:

    (1) Maintaining, defending or settling an action or proceeding;

    (2) Holding meetings of its members or managers the board of directors or shareholders or carrying on any other activity concerning its internal corporate 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) (4) Selling through independent contractors;

    (6) (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;

    (7) (6) Creating or acquiring indebtedness, mortgages or security interests in real or personal property;

    (8) (7) Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts: and holding, protecting and maintaining property so acquired; 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 is not one in the course of similar transactions of a like manner nature;

    (10) Transacting business 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;

    (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;

    (11) (17) 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) (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 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 The list of activities in subsection (b) of this section is not exhaustive.

    (d) A foreign limited liability company 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 limited liability company commits a tort, in whole or in part, in this state; or

    (3) The limited liability company 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 limited liability company had no agents, servants or employees, or contacts within this state at the time of the injury.

    (e) A foreign limited liability company'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 limited liability company that any notice or process served upon, or accepted by, the Secretary of State in a proceeding against that foreign limited liability company 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.

    (f) A person may apply for an exemption by delivering an application to the Secretary of State for filing along with a filing fee of $25. The application must set forth:

    (1) Name of the organization applying for exemption;

    (2) The state the organization was organized in and date of its formation in that state;

    (3) The address of the principal office of the organization;

    (4) The type of business to be conducted in West Virginia; and

    (5) Any other information the Secretary of State deems appropriate to determine if an exemption is to be granted.

CHAPTER 31D. WEST VIRGINIA BUSINESS CORPORATION ACT.

ARTICLE 15. FOREIGN CORPORATIONS.

§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;

    (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.

    (f) A person may apply for an exemption by delivering an application to the Secretary of State for filing along with a filing fee of $25. The application must set forth:

    (1) Name of the organization applying for exemption;

    (2) The state the organization was organized in and date of its formation in that state;

    (3) The address of the principal office of the organization;

    (4) The type of business to be conducted in West Virginia; and

    (5) Any other information the Secretary of State deems appropriate to determine if an exemption is to be granted.

CHAPTER 31E. WEST VIRGINIA NONPROFIT CORPORATION ACT.

ARTICLE 14. FOREIGN CORPORATIONS.

§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;

    (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.

    (f) A person may apply for an exemption by delivering an application to the Secretary of State for filing along with a filing fee of $25. The application must set forth:

    (1) Name of the organization applying for exemption;

    (2) The state the organization was organized in and date of its formation in that state;

    (3) The address of the principal office of the organization;

    (4) The type of business to be conducted in West Virginia; and

    (5) Any other information the Secretary of State deems appropriate to determine if an exemption is to be granted.

CHAPTER 47. REGULATION OF TRADE.

ARTICLE 9. UNIFORM LIMITED PARTNERSHIP ACT.

§47-9-64. Activities not constituting transacting business.

    (a) A foreign limited partnership 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;

    (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 limited partnership in another state; and

    (18) Holding all, or a portion thereof, of the outstanding stock of another limited partnership authorized to transact business in the State of West Virginia: Provided, That the foreign limited partnership 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 limited partnership is deemed to be transacting business in this state if:

    (1) The limited partnership makes a contract to be performed, in whole or in part, by any party thereto in this state;

    (2) The limited partnership commits a tort, in whole or in part, in this state; or

    (3) The limited partnership 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 limited partnership had no agents, servants or employees or contacts within this state at the time of the injury.

    (e) A foreign limited partnership'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 limited partnership that any notice or process served upon, or accepted by, the Secretary of State in a proceeding against that foreign limited partnership 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 limited partnership in this state.

    (f) A person may apply for an exemption by delivering an application to the Secretary of State for filing along with a filing fee of $25. The application must set forth:

    (1) Name of the organization applying for exemption;

    (2) The state the organization was organized in and date of its formation in that state;

    (3) The address of the principal office of the organization;    (4) The type of business to be conducted in West Virginia; and    (5) Any other information the Secretary of State deems appropriate to determine if an exemption is to be granted.

CHAPTER 47B. UNIFORM PARTNERSHIP ACT.

ARTICLE 10. LIMITED LIABILITY PARTNERSHIPS.

§47B-10-6. Activities not constituting transacting business.

    (a) A foreign limited liability partnership 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;

    (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 limited liability partnership authorized to transact business in the State of West Virginia: Provided, That the foreign limited liability partnership 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 limited liability partnership is deemed to be transacting business in this state if:

    (1) The limited liability partnership makes a contract to be performed, in whole or in part, by any party thereto in this state;

    (2) The limited liability partnership 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 limited liability partnership'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 limited liability partnership that any notice or process served upon, or accepted by, the Secretary of State in a proceeding against that foreign limited liability partnership 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.

    (f) A person may apply for an exemption by delivering an application to the Secretary of State for filing along with a filing fee of $25. The application must set forth:

    (1) Name of the organization applying for exemption;

    (2) The state the organization was organized in and date of its formation in that state;

    (3) The address of the principal office of the organization;

    (4) The type of business to be conducted in West Virginia; and

    (5) Any other information the Secretary of State deems appropriate to determine if an exemption is to be granted.






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    (NOTE: The bill makes exemptions from obtaining certificates of authority from the Secretary of State for certain foreign corporations, companies and partnerships the same as for corporations in this state. Language is made consistent as to when foreign businesses are or are not doing business in this state.



    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.


    §47-9-64 and §47B-10-6 are new; therefore strike-throughs and underscoring have been omitted.)

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