Nonprofit 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)

The 60th Legislative Assembly of North Dakota passed legislation that affects nonprofit corporations created under NDCC, Chapter 10-33. The legislative bills and changes are summarized as follows:

House Bill 1034: (effective August 1, 2007) Uniform Trust Code and Charitable Trusts

• Replaced the current statutes relating to trusts with a new chapter in the North Dakota Century Code (N.D.C.C.) titled the North Dakota Uniform Trust Code, Chapter 59-09
• Amended a citation in N.D.C.C. § 10-33-105 (Nonprofit Corporation Act) relating to the North Dakota Uniform Trust Code.

House Bill 1035: (effective August 1, 2007) Uniform Commercial Code

In N.D.C.C. § 10-33-01 (Nonprofit Corporation Act), a reference to N.D.C.C. § 41-01-11 was removed and the definition of "signed" was changed to mean: "That the signature of a person, which may be a facsimile affixed, engraved, printed, placed, stamped with indelible ink, transmitted by facsimile telecommunication or electronically, or in any other manner reproduced on the record, is placed on a record with the present intention to authenticate that record; … ..."

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

Amended numerous sections of law related to various business entity chapters, including the Nonprofit Corporation Act in Chapter 10-33 of the North Dakota Century Code. These are:

• N.D.C.C. § 10-33-01, subsection 35, changed the definition of subsidiary.
• Added N.D.C.C. § 10-33-01.3 relating to the reservation of legislative right to amend or repeal provisions of the Nonprofit Corporation Act and subjecting any corporation created or governed by the act.
• In N.D.C.C. § 10-33-06:
  • Repealed obsolete text in subsection 2 related to cumulative voting.
  • Added text related to creation of committees and subcommittees in subsection 3
  • In subsection 9, added a new provision allowing the articles of incorporation to be dependent upon facts ascertainable outside of the articles; and to incorporate by reference agreements which copies are maintained in the corporate office.
• In N.D.C.C. § 10-33-10, provided that an amendment to the articles of incorporation, which only changes the corporate name, may be authorized by the board of directors without the approval of the members.
• In N.D.C.C. § 10-33-34, repealed obsolete language related to article XII of the Constitution of North Dakota which was amended by the voters in June, 2006.
• In N.D.C.C. § 10-33-44, clarified that written action by the members requires at least a majority vote of the voting power entitled to vote on the matter in question.

House Bill 1452: (effective August 1, 2007) Civil Liability of a Charitable Organization

• Limited the liability of a charitable organization for money damages for a personal injury or property damage.
• Defined terms related to liability issues.

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

• Removed specific registered agent provisions from Chapter 10-33 (Nonprofit 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.