Farm Corporation Legislative Summary: 2007

(Full texts of all bills adopted by the Sixtieth Legislative Assembly are available on the Secretary of State’s website at www.nd.gov/sos/ under the lobbying and legislative link located in the left side menu)

House Bill 1241: (effective July 1, 2007) All Business Entities

Amended numerous sections of law related to various business entity chapters, including the North Dakota Business Corporation Act in Chapter 10-19.1 of the North Dakota Century Code which also apply to farm corporations. These are:

• N.D.C.C. § 10-19.1-00.1 established the official title of the chapter as the "North Dakota Business Corporation Act"
• N.D.C.C. § 10-19.1-01, changed or added the definitions of "acquiring organization", "articles", "class", "constituent organization", "distribution", "governing body", "originating records", "owners", "ownership interests", "parent", "related organization", "signed", "subsidiary", and "surviving organization"
• Added N.D.C.C. § 10-19.1-02.1 relating to the reservation of legislative right to amend or repeal provisions of the North Dakota Business Corporation Act and subjecting any corporation created or governed by the act
• Removed all provisions related to article XII of the Constitution of North Dakota since that constitutional article was repealed in the June 2006 primary election.
• N.D.C.C., § 10-19.1-10, enabled a committee to create a subcommittee and delegate any or all of its authority to the subcommittee; made technical corrections to the content of the articles of incorporation; provided that articles of incorporation may be dependent upon facts ascertainable outside of the articles incorporated by referenced documents maintained in the corporate office
• N.D.C.C., § 10-19.1-13, created subsection 10 providing that an amendment which only changes the corporation’s name need not be submitted to the shareholders for approval
• N.D.C.C., § 10-19.1-41 changed the procedure for the non-judicial removal of directors and makes clear that a director may be removed with or without cause by the affirmative vote of the majority of the voting power of all shares entitled to vote at an election for directors unless, in the case of a corporation with cumulative voting, there are sufficient votes cast against the removal of the director as required to have elected the director at an election of the entire board under cumulative voting
• A new subsection to N.D.D.C. § 10-19.1-48 enabled a committee to create a subcommittee and delegate any or all of its authority to the subcommittee
• N.D.C.C., § 10-19.1-63, subsection 4 provided that all shares issued are non-assessable unless assessable shares are issued with the unanimous consent of all shareholders.
• N.D.C.C., § 10-19.1-75, subsection 1 enabled a corporation to submit a matter to its shareholders whether or not the board believes the matter to be advisable
• Enabled mergers, exchanges, and transfers between a corporation and any organization
• Changes to N.D.C.C., § 10-19.1-147 standardized the fee to incorporate at $90; eliminated the license fees formerly collected from domestic and foreign corporations

Senate Bill 2153: (effective July 1, 2008) Registered Agents

• Eliminated the provision requiring disclosure of the registered agent, and the address thereof, on the initial report filed with the Secretary of State at the time of filing the Articles of Incorporation
• Removed specific registered agent provisions from Chapter 10-19.1 (North Dakota Business Corporation Act) and consolidated them into a new chapter, 10-01.1, of the Century Code titled the North Dakota Registered Agents Act
• Allowed registered agents to represent their clients in the same manner as they do under current law
• Allowed for the optional registration of a commercial registered agent serving as a registered agent for numerous entities in North Dakota. When doing so, the name and address of the commercial registered agent is consistently on record for all entities represented by them. If the commercial registered agent moves or undergoes a change of name, a single filing of that change will update the registered agent records for all of the clients they represent.
• Established the duties of a registered agent
• Enabled entities without a registration requirement with the Secretary of State to voluntarily name a registered agent and establish a public record with the Secretary of State. Examples of these entities are trusts or unincorporated nonprofit organizations
• Eliminated the filing requirement of the consent of registered agent