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                  SB 38
              BUSINESS ENTITY REGISTRATION
              AMENDMENTS
              1996 GENERAL SESSION
              STATE OF UTAH
              Sponsor: Craig L. Taylor
          AN ACT RELATING TO BUSINESS ENTITIES; MODIFYING DEFINITIONS IN THE UTAH
          REVISED BUSINESS CORPORATION ACT; CLARIFYING THAT OFFICERS AND
          DIRECTORS OF A CORPORATION MUST BE NATURAL PERSONS; MODIFYING THE
          ANNUAL REPORTING REQUIREMENTS OF LIMITED PARTNERSHIPS; PROVIDING
          FOR SERVICE OF PROCESS FOR LIMITED PARTNERSHIPS; CLARIFYING CHOICE
          OF LAW; AMENDING REGISTRATION REQUIREMENTS; AND MAKING TECHNICAL
          CORRECTIONS.
          This act affects sections of Utah Code Annotated 1953 as follows:
          AMENDS:
          16-10a-102 , as enacted by Chapter 277, Laws of Utah 1992
          16-10a-802 , as enacted by Chapter 277, Laws of Utah 1992
          16-10a-830 , as enacted by Chapter 277, Laws of Utah 1992
          48-1-42 , as last amended by Chapter 28, Laws of Utah 1995
          48-1-44 , as enacted by Chapter 61, Laws of Utah 1994
          48-2a-210 , as last amended by Chapter 189, Laws of Utah 1991
          ENACTS:
          48-2a-104.5 , Utah Code Annotated 1953
          Be it enacted by the Legislature of the state of Utah:
              Section 1. Section 16-10a-102 is amended to read:
              16-10a-102. Definitions.
              As used in this chapter:
              (1) "Address" means [any] a location where mail can be delivered by the United States
          Postal Service. [It] "Address" includes post office box numbers, rural free delivery route numbers,
          and street names and numbers.
              (2) "Affiliate" means [any] a person that directly or indirectly through one or more
          intermediaries controls, or is controlled by, or is under common control with, the person specified.
              (3) "Assumed corporate name" means the name assumed for use in this state by a foreign
          corporation pursuant to Section 16-10a-1506 because its corporate name is not available for use in
          this state.
              (4) "Articles of incorporation" include amended and restated articles of incorporation,
          articles of merger, and documents of a similar import.
              (5) "Authorized shares" means the shares of all classes a domestic or foreign corporation is
          authorized to issue.
              (6) "Bylaws" includes amended bylaws and restated bylaws.
              (7) "Cash" and "money" are used interchangeably in this chapter and mean legal tender and
          negotiable instruments and other cash equivalents readily convertible into legal tender.
              (8) "Conspicuous" means so written that a reasonable person against whom the writing is
          to operate should have noticed it. For example, printing or typing in italics, boldface, contrasting
          color, capitals, or underlining is conspicuous.
              (9) "Control" or a "controlling interest" means the direct or indirect possession of the power
          to direct or cause the direction of the management and policies of an entity, whether through the
          ownership of voting shares, by contract, or otherwise.
              (10) "Corporate name" means:
              (a) the name of a domestic corporation or a domestic nonprofit corporation as stated in its
          articles of incorporation; or
              (b) the name of a foreign corporation or a foreign nonprofit corporation as stated in its
          articles of incorporation or document of similar import.
              (11) "Corporation" or "domestic corporation" means a corporation for profit, which is not
          a foreign corporation, incorporated under or subject to the provisions of this chapter.
              (12) "Deliver" includes delivery by mail and any other means of transmission authorized by
          Section 16-10a-103 , except that delivery to the division means actual receipt by the division.
              (13) "Distribution" means a direct or indirect transfer of money or other property, except a

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          corporation's own shares, or incurrence of indebtedness by a corporation to or for the benefit of its
          shareholders in respect of any of its shares. A distribution may be in the form of a declaration or
          payment of a dividend, a purchase, redemption, or other acquisition of shares, distribution of
          indebtedness, or otherwise.
              (14) "Division" means the Division of Corporations and Commercial Code.
              (15) "Effective date," when referring to a document filed by the division, means the time and
          date determined in accordance with Section 16-10a-123 .
              (16) "Effective date of notice" [is defined] means the date notice is effective as provided in
          Section 16-10a-103 .
              (17) "Employee" includes an officer but not a director. A director may accept duties that
          make that director also an employee.
              (18) "Entity" includes a domestic and foreign corporation, a nonprofit corporation, a limited
          liability company, a profit or nonprofit unincorporated association, a business trust, an estate, a
          partnership, a trust, two or more persons having a joint or common economic interest, state, the
          United States, and a foreign government.
              (19) "Foreign corporation" means a corporation for profit incorporated under a law other
          than the law of this state.
              (20) "Governmental subdivision" means county, municipality, and any other types of
          governmental subdivision authorized by the laws of this state.
              (21) "Individual" [includes] means a natural person, the estate of an incompetent individual,
          or the estate of a deceased individual.
              (22) "Mail," [or] "mailed," or "mailing" means deposit, deposited, or depositing in the
          United States mail, properly addressed, first class postage prepaid, and includes registered or
          certified mail for which the proper fee has been paid.
              (23) "Notice" is [defined] as provided in Section 16-10a-103 .
              (24) "Principal office" means the office, in or out of this state, designated by a domestic or
          foreign corporation as its principal office in the most recent document on file with the division
          providing such information, including an annual report, an application for a certificate of authority,

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          or a notice of change of principal office.
              (25) "Proceeding" includes a civil suit, arbitration or mediation, and a criminal,
          administrative, or investigatory action.
              (26) "Qualified shares" means, with respect to a director's conflicting interest transaction
          pursuant to Section 16-10a-853 , any shares entitled to vote on the transaction, except shares that, to
          the knowledge, before the vote, of the secretary, other officer, or agent of the corporation authorized
          to tabulate votes, are beneficially owned, or the voting of which is controlled, by a director who has
          a conflicting interest respecting the transaction, or by a related person of that director, or both.
              (27) "Receive," when used in reference to receipt of a writing or other document by a
          domestic or foreign corporation, means the writing or other document is actually received:
              (a) by the corporation at its registered office in this state or at its principal office;
              (b) by the secretary of the corporation, wherever the secretary is found; or
              (c) by any other person authorized by the bylaws or the board of directors to receive [such
          writings] the writing or other document, wherever that person is found.
              (28) "Record date" means the date established under Part 6 or 7 of this chapter on which a
          corporation determines the identity of its shareholders. The determination shall be made as of the
          close of business on the record date unless another time for doing so is specified when the record
          date is fixed.
              (29) "Registered office" means the office within this state designated by a domestic or
          foreign corporation as its registered office in the most recent document on file with the division
          providing that information, including articles of incorporation, an application for a certificate of
          authority, or a notice of change of registered office.
              (30) "Related person" of a director means:
              (a) the spouse of the director, or a child, grandchild, sibling, or parent of the director;
              (b) the spouse of a child, grandchild, sibling, or parent of the director;
              (c) an individual having the same home as the director;
              (d) a trust or estate of which the director or any other individual specified in [this]
          Subsection (30) is a substantial beneficiary; or

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              (e) a trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary.
              (31) "Secretary" means the corporate officer to whom the bylaws or the board of directors
          has delegated responsibility under Subsection 16-10a-830 (3) for the preparation and maintenance
          of minutes of the meetings of the board of directors and of the shareholders and of the other records
          and information required to be kept by the corporation by [that] Section 16-10a-830 , and for
          authenticating records of the corporation.
              (32) "Shares" means the units into which the proprietary interests in a corporation are
          divided.
              (33) "Shareholder" means the person in whose name shares are registered in the records of
          a corporation or the beneficial owner of shares to the extent recognized pursuant to Section
          16-10a-723 . For purposes of this chapter:
              (a) the following, which are identified as a shareholder in a corporation's current record of
          shareholders, constitute one shareholder:
              (i) (A) three or fewer coowners;
              (B) in the case of more than three coowners each coowner in excess of the first three will
          be counted as a separate shareholder;
              (ii) a corporation, limited liability company, partnership, trust, estate, or other entity; and
              (iii) the trustees, guardians, custodians, or other fiduciaries of a single trust, estate, or
          account;
              (b) shareholdings registered in substantially similar names constitute one shareholder if it
          is reasonable to believe that the names represent the same person; and
              (c) in any case where the record of shareholders has not been maintained in accordance with
          accepted practice, any additional person who would be identified as an owner on that record if it had
          been maintained in accordance with accepted practice shall be included as a holder of record.
              (34) "Subscriber" means a person who subscribes for shares in a corporation, whether before
          or after incorporation.
              (35) "Voting group" means all shares of one or more classes or series that under the articles
          of incorporation or this chapter are entitled to vote and be counted together collectively on a matter

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          at a meeting of shareholders. All shares entitled by the articles of incorporation or this chapter to
          vote generally on the matter are for that purpose a single voting group.
              Section 2. Section 16-10a-802 is amended to read:
              16-10a-802. Qualifications of directors.
              The articles of incorporation or bylaws may prescribe qualifications for directors, except a
          director shall be a natural person. A director need not be a resident of this state or a shareholder of
          the corporation unless the articles of incorporation or bylaws so prescribe.
              Section 3. Section 16-10a-830 is amended to read:
              16-10a-830. Required officers.
              (1) A corporation shall have the officers designated in its bylaws or by the board of directors
          in a manner not inconsistent with the bylaws. Any officer shall be a natural person.
              (2) Officers may be appointed by the board of directors or in any other manner as the board
          of directors or bylaws may provide. A duly appointed officer may appoint one or more officers or
          assistant officers if authorized by the bylaws or the board of directors.
              (3) The bylaws or the board of directors shall delegate to one of the officers responsibility
          for the preparation and maintenance of minutes of the directors' and shareholders' meetings and other
          records and information required to be kept by the corporation under Section 16-10a-1601 and for
          authenticating records of the corporation.
              (4) The same individual may simultaneously hold more than one office in a corporation.
              Section 4. Section 48-1-42 is amended to read:
              48-1-42. Registration of limited liability partnerships.
              (1) (a) [To become and to continue as a limited liability partnership, a] A partnership shall
          register with the Division of Corporations and Commercial Code by filing an application or a
          renewal statement [which]:
              (i) to become and to continue as a limited liability partnership; or
              (ii) to do business in this state as a foreign limited liability partnership.
              (b) The application or renewal statement shall include:
              [(a)] (i) the name of the limited liability partnership;

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              [(b)] (ii) the address of its principal office;
              [(c)] (iii) if the principal office of the limited liability partnership is not located in this state,
          the address of a registered office and the name and address of a registered agent for service of
          process in this state;
              [(d)] (iv) the number of partners;
              [(e)] (v) a brief statement of the business in which the limited liability partnership engages;
          [and]
              [(f)] (vi) a brief statement that the partnership is applying for, or seeking to renew its status
          as a limited liability partnership[.]; and
              (vii) if a foreign limited liability partnership, an original certificate of fact or good standing
          from the office of the secretary of state or other responsible authority of the state in which the limited
          liability partnership is formed.
              (2) The application or renewal statement required by Subsection (1) shall be executed by a
          majority in voting interest of the partners or by one or more partners authorized by the partnership
          to execute an application or renewal statement.
              (3) The application or renewal statement shall be accompanied by a filing fee established
          under Section 63-38-3.2 .
              (4) The division shall register as a limited liability partnership any partnership that submits
          a completed application with the required fee.
              (5) (a) The registration expires one year after the date an application is filed unless the
          registration is voluntarily withdrawn by filing with the division a written withdrawal notice executed
          by a majority in voting interest of the partners or by one or more partners authorized to execute a
          withdrawal notice.
              (b) Registration of a partnership as a limited liability partnership shall be renewed if no
          earlier than 60 days before the date the registration expires and no later than the date of expiration,
          the limited liability partnership files with the division a renewal statement.
              (c) The division shall renew the registration as a limited liability partnership of any limited
          liability partnership that timely submits a completed renewal statement with the required fee.

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              (d) If a renewal statement is timely filed, the registration is effective for one year after the
          date the registration would have expired but for the filing or the renewal statement.
              (6) The status of a partnership as a limited liability partnership is not affected by changes
          in the information stated in the application or renewal statement which take place after the filing of
          an application or a renewal statement.
              (7) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
          division may issue rules providing for the form content and submittal of applications for registration
          or of renewal statements.
              Section 5. Section 48-1-44 is amended to read:
              48-1-44. Foreign limited liability partnerships.
              (1) Subject to any statute regulating a specific type of business, a limited liability
          [partnerships] partnership registered and existing under the laws of another state, may do business
          in this state [and are not required to register] if it registers with the division [under this chapter] in
          accordance with Section 48-1-42 .
              (2) The internal affairs of a limited liability partnership registered and existing under the
          laws of another jurisdiction, including the provisions providing for the liability of partners for debts,
          obligations of and liabilities chargeable to partnerships, shall be subject to and governed by the laws
          of the state where the partnership is [registered] formed.
              Section 6. Section 48-2a-104.5 is enacted to read:
              48-2a-104.5. Service of process.
              (1) (a) If the limited partnership does not meet the requirement of Section 48-2a-104 of
          maintaining a registered agent, or if the registered agent cannot with reasonable diligence be served,
          the limited partnership may be served by registered or certified mail, return receipt requested,
          addressed to the limited partnership at its principal place of business as designated by the latest
          certificate of limited partnership or certificate of amendment on file with the division.
              (b) Service is perfected under this section at the earliest of:
              (i) the date the limited partnership receives the process, notice, or demand;
              (ii) the date shown on the return receipt, if signed on behalf of the limited partnership; or

    - 8 -
              (iii) five days after mailing.
              (2) This section does not prescribe the only means, or necessarily the required means, of
          serving a limited partnership.
              Section 7. Section 48-2a-210 is amended to read:
              48-2a-210. Annual report.
              (1) Each domestic limited partnership, and each foreign limited partnership authorized to
          transact business in this state, shall file with the division, during the month of its anniversary date
          of formation, in the case of domestic limited partnerships, or during the month of the anniversary
          date of being granted authority to transact business in this state, in the case of foreign limited
          partnerships authorized to transact business in this state, an annual report setting forth:
              (a) the name of the limited partnership and the state or country under the laws of which it
          is formed; [and]
              (b) the name and street address of the agent for service of process required to be maintained
          by Section 48-2a-104 ; and
              (c) any change of address of a general partner.
              (2) The annual report shall be made on forms prescribed and furnished by the division, and
          the information contained on the annual report shall be given as of the date of execution of the
          report. The annual report forms shall include a statement of notice to the limited partnership that
          failure to file the annual report will result in the suspension and eventual cancellation of its
          certificate of limited partnership, in the case of a domestic limited partnership, or of its registration,
          in the case of a foreign limited partnership authorized to transact business in this state. The annual
          report shall be signed under penalty of perjury by any general partner. If the registered agent has
          changed since the last annual report or other appointment of a registered agent, the annual report
          shall also be signed by the new registered agent.
              (3) If the division finds that the report conforms to the requirements of this chapter, it shall
          file the report. If the division finds that the report does not conform, it shall mail the report
          first-class postage prepaid to the limited partnership at the addresses set forth in the certificate for
          any necessary corrections. If a report is returned, the penalties for failure to file the report within

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          the time prescribed in Section 48-2a-203.5 do not apply, as long as the report is corrected and
          returned to the division within 30 days from the date the nonconforming report was mailed to the
          limited partnership.
         

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