Your Federal Quarterly Tax Payments are due April 15th Get Help Now >>

Franchise Tax Board Change of Corporation Name by fro49407

VIEWS: 58 PAGES: 46

Franchise Tax Board Change of Corporation Name document sample

More Info
									80TH LEGISLATIVE SESSION UPDATE
                                 Presented by:
                                Robert Sumners
                         Office of the Secretary of State

                                Presented to:
                    The Dallas Area Paralegal Association
                             Corporate Section
                              October 19, 2007
                                        Dallas, Texas

 Business and Public Filings Division
 This presentation focuses on changes relevant to provisions
   governing filings made with the Corporations Section,
               Office of the Secretary of State.

All bills referenced can be viewed at www.capitol.state.tx.us




  Business and Public Filings Division
HB 1737—relating to business entities and associations
       Effective Date: September 1, 2007
   Amends:
       Business Organizations Code (BOC)
       Texas Business Corporation Act (TBCA)
       Texas Limited Liability Company Act (TLLCA)
       Texas Revised Limited Partnership Act (TRLPA)

   Includes technical corrections, further clarifications and
  fills procedural gaps. Some substantive changes.


    Business and Public Filings Division
                           Certificates of Formation
 Section 301.003(3) BOC was amended to specifically prohibit a
professional corporation from being formed for the practice of
medicine.

 Deleted provision in section 2.003 BOC restricting formation of
a domestic entity to pursue an activity or purpose that requires the
obtaining a license. Added the specific restriction to sections 2.007
and 2.010 applicable only to for-profit and nonprofit
corporations.


     Business and Public Filings Division
                         Certificates of Formation

 Section 3.005(a)(4) BOC amended to clarify that a
certificate of formation for a domestic entity that is not
formed to exist perpetually must provide a specific period of
duration (term of years or date certain).

               Does not apply to limited partnerships.




   Business and Public Filings Division
                            Certificates of Formation
 Section 3.007 BOC amended to clarify that the certificate of
formation for a professional corporation must also include the
same supplemental provisions as a for-profit corporation, namely:

     names and addresses of initial board of directors; and
     number of shares and statement regarding the par value of those shares.

 Section 3.008 BOC amended to clarify that a professional
corporation may be formed as a close corporation.

SOS filing requirements for professional corporations did not change as a result
of these amendments.
       Business and Public Filings Division
                          Certificates of Formation

 Section 3.015(a)(2) amended to correct omission of information
that was required for formation of professional association under
prior law. Now the certificate of formation must also include:
    The name and address of each member;
    Whether the association is to be governed by a board of directors or
   executive committee; and
    The name and address of each member of the board of directors or
   executive committee.

   This information is in addition to the information required to be
   included in the certificate of formation under sections 3.005 and 3.014 of
   the BOC.
     Business and Public Filings Division
    Certificates of Formation—Professional Association
 Section 3.015 amended to:
   Add a new subsection (c) clarifying that if a certificate of
  formation of a professional association contains provisions
  relating to shares, the certificate must comply with section 3.007
  regarding information relative to those shares.
   Does not require a professional association to base its equity ownership on
   shares.
    Deletes obsolete requirement that certificate include a statement
   that a member of the association may not dissolve the association
   independently of other members of the association.
   Inclusion of the statement is not grounds for rejection.

       Business and Public Filings Division
            BOC Definitions & Synonymous Terms

 Section 1.002 (43) amended to clarify definition of
“jurisdiction of formation” as applied to foreign entities and
domestic non-filing entities.

 Section 1.002(69-a) added to define “period of duration” as
a specified term or period of time or until a date certain. Does
not include a period that expires or whose expiration is made
contingent on the occurrence of a future event or fact, other than
the passage of time or the occurrence of a specified time or date.

    Business and Public Filings Division
             BOC Definitions & Synonymous Terms

 Section 1.002 (69-b) was added to define “person.” “Person” is
defined by cross-reference to the definition of “person” included in
section 311.005 of the Texas Government Code.

 Section 1.006 BOC added new synonymous terms:
    certificate of cancellation = certificate of termination
    incorporator = organizer
    certificate of authority to transact business = registration to transact
   business
    regulations = company agreement
    business corporation = for-profit corporation
     Business and Public Filings Division
                  Restated Certificate of Formation

 Section 3.0611 added to provide that the restated certificate of
formation for a limited liability company may:

    Update the names and addresses of the persons serving as
   managers if the LLC is managed by managers; or

    Update the names and addresses of the persons serving as
   members if the LLC will not have managers.



     Business and Public Filings Division
                                     Entity Names
 Amends chapter 5 of the BOC to clarify that the entity name
requirements established for a domestic entity also apply to a
foreign entity.
 Section 5.055(b) simplified the naming requirements for a
limited partnership that is also registering as a limited liability
partnership.
    Name complies with 5.055(a) and (b) if it includes “limited liability
   limited partnership” or an abbreviation of that phrase.
    ABC, LLLP or ABC, Ltd., LLP are both acceptable.
   Reflects current practice of Secretary of State.
     Business and Public Filings Division
                                 Registered Agents

 Section 5.201(b) BOC amended to make clear that any
“organization” registered or authorized to do business in Texas
may serve as a registered agent.

 Previous language used was more limiting. Section previously
stated that a registered agent, who was not an individual, must be
a domestic entity or foreign entity registered or authorized to do
business in the state.



     Business and Public Filings Division
                             Foreign Filing Entities

 Section 9.054 BOC amended to clearly provide that the late
filing fee for a foreign entity is equal to the product of the amount
of the registration fee for the entity multiplied by the total number
of calendar years, including any partial year, that the entity
transacted business in Texas without having registered.

 Section 9.201 BOC amended to address the powers of a foreign
business trust by providing that a foreign business trust can
engage in any business or activity permitted for a limited liability
company.

     Business and Public Filings Division
                 Certificates of Merger or Exchange

 Section 10.151(b) amended to specifically require that an
alternative statement (in lieu of a plan of merger or exchange)
identify the organizational form of each domestic entity or non-
code organization that is a party to the merger or exchange.

 Also requires, in the case of a merger, that the organizational
form of each domestic entity or non-code organization created by
the plan of merger be identified in the alternative statement.



     Business and Public Filings Division
                       Certificates of Conversion

 Section 10.154(b) BOC amended to specifically require that
the alternative statements provided in lieu of a plan of
conversion include the following information regarding the
converted entity:

                     Name;
                     Organizational form; and
                     Jurisdiction of formation.



   Business and Public Filings Division
                        Winding Up and Termination

 Repeals section 153.452 regarding the information required in the
certificate of termination of a limited partnership as duplicative of
the certificate of termination requirements in section 11.101.
 Repeals section 153.451 regarding the requirement that a
certificate of termination be filed when a limited partnership has no
limited partners.
 However, this circumstance was retained as an event requiring the
winding up of the limited partnership. (See new section 11.058(c) of
the BOC, which also specifies how this event may be cancelled.)

      Business and Public Filings Division
                     Winding Up and Termination


 Section 11.058 BOC also amended to provide that a
voluntary decision of a limited partnership to wind up requires
the written consent of all of the partners unless otherwise
provided in the partnership agreement.




   Business and Public Filings Division
                          Execution Requirements

Limited Liability Companies

 New section 101.0515 added to fill a procedural gap in the BOC
by providing a default provision regarding who may sign a filing
instrument on behalf of an LLC.

A filing instrument for an LLC must be signed by an authorized
officer, manager or member.



    Business and Public Filings Division
                           Execution Requirements

Limited Partnerships

 Section 155.553 BOC as originally enacted included specific
execution requirements for certain types of filing instruments.
However, not all filing instruments were included.

 Section 155.553 amended to provide a general rule for
execution of filing instruments with some specific exceptions. The
general rule is that a filing instrument must be signed by at least
one general partner.

     Business and Public Filings Division
                           Execution Requirements
 Certificate of Termination—Professional Corporation

 Section 303.006 amended to add subsection (a), which specifies
that an authorized officer of a professional corporation must
sign the certificate of termination except as provided by subsection
(b). New subsection (b) provides that:
    When the professional corporation has no living officers, the certificate
   must be signed by a living director.
    If the professional corporation has no living officers or directors, the
   certificate must be signed by the legal representative of the last living
   director.
     Business and Public Filings Division
                              Transition Provisions

Applicability of BOC to Converted Entity

Under the original provisions of the BOC it was not clear whether
the law applicable to the converting entity or the BOC was
applicable to the converted entity. Since section 3.006 BOC stated
that the formation and existence of a domestic filing entity in a
conversion takes effect and commences on the effectiveness of the
conversion, the SOS took the position that the converted entity was
a BOC entity.


     Business and Public Filings Division
                           Transition Provisions

Applicability of BOC to Converted Entity

 Section 402.001(a)(2) was added to resolve the question
of applicability by specifying that a domestic entity that is a
converted entity as a result of a conversion that takes
effect after the effective date of the BOC is a BOC entity.




  Business and Public Filings Division
      Transition Provisions—Early Election to Adopt

 Section 402.003 BOC was amended to clarify the procedures
for early election to adopt.
     A domestic filing entity may elect early adoption by
    following the procedures established by its governing
    documents and the source law governing the entity for approval
    of an amendment to:
        •   its articles of incorporation, if a corporation or cooperative;
        •   its regulations, if an LLC;
        •   its articles of association, if a professional association;
        •   its partnership agreement, if a partnership; or
        •   its declaration of trust, if a REIT.
     Business and Public Filings Division
                            Early Election to Adopt
 Section 402.003 BOC was amended to clarify that if the entity’s
governing documents do not comply with the BOC, the entity must
also comply with the procedures for amending the nonconforming
document, including the filing of a certificate of amendment if
necessary.
 The domestic filing entity must file an early adoption statement
with the filing officer. REITs file with the county clerk. All other
domestic entities with the SOS.
SOS does not require the filing of an amendment as a
precondition to filing the statement of early election.
     Business and Public Filings Division
                     Franchise Tax (or Margin Tax)
In 2006, the 79th Legislature, in its 3rd Called Session, enacted HB
3, which expanded the tax base to include domestic and foreign
business entities not previously subject to franchise tax:
    Professional associations;
    Partnerships (other than general partnerships comprised
   solely of natural persons); and
    Foreign business trusts.

   The revamped tax is commonly referred to as the Margin Tax.


     Business and Public Filings Division
                    Technical Corrections—HB 3928

 The Margin Tax was amended by the 80th Legislature with the
enactment of HB 3928—relating to technical corrections to the
revised franchise tax (HB 3).
 HB 3928 clarified that LLPs were included as taxable entities.
 HB 3928 specifically authorizes the SOS to forfeit the charter,
certificate or registration of a domestic or foreign taxable entity in
the same manner in which the secretary of state forfeits the charter,
certificate or registration of a domestic or foreign corporation.

      Business and Public Filings Division
              Technical Corrections—HB 3928

 HB 3928 also gives the SOS authority to reinstate
the certificate or registration of a taxable entity when the
tax delinquency causing the forfeiture has been cured.


 Additionally, HB 3928 gives the SOS rule-making
authority with respect to the reinstatement of taxable
entities.



Business and Public Filings Division
                    Forfeiture of LLP registrations?

HB 3928 appears to allow the forfeiture and
reinstatement of a registration of a foreign
or domestic limited liability partnership.
This is somewhat problematic due to the
limited duration of the registration (one
year).
How do you forfeit and reinstate after the
registration has expired?

     Business and Public Filings Division
                     Forfeiture of LLP registrations?

The SOS has been advised that the Comptroller will not certify
the LLP registration for forfeiture.
Instead, the Comptroller will certify the registrant (the underlying
partnership) for forfeiture when the registrant has filed a certificate
of formation or application for registration as a foreign entity with
the SOS.
This will mean that forfeiture will only be applicable to limited
partnerships since general partnerships do not file organizational
documents with the SOS.
      Business and Public Filings Division
                   Public Information Reports (PIR)

 Under HB 3928 corporations and LLCs will continue to file
PIRs with the Comptroller as part of the annual franchise tax
report.
 Comptroller will send the public information report to the SOS
and SOS will use the PIR to update management information on
SOS database.
Note that this is an annual filing—no requirement to supplement
nor a procedure for supplementing when officers, directors,
managers or managing-members change.

     Business and Public Filings Division
                    Ownership Information Reports
No requirement that LPs, PAs and LLPs file PIRs. However,
Comptroller is requiring these taxable entities to file an ownership
information report in accordance with section 171.201 of the Tax
Code.
 Report will include the name and address of:
        each officer, director, and manager of the taxable entity;
        for a limited partnership, each general partner;
        for a general partnership or limited liability partnership, each
       managing partner or, if there is not a managing partner, each partner; or
        for a trust, each trustee; and
        the name and address of the agent of the taxable entity designated
       under Section 171.354 of the Tax Code.
     Business and Public Filings Division
                     Ownership Information Reports
 Ownership information reports will not be provided to the SOS
and will not be public record.
 Failure to file the ownership report will be grounds for the
Comptroller to forfeit the business privileges of the taxable entity
under the Tax Code.
 Comptroller has proposed new administrative rules relating to
the margin tax, including the filing of reports and the consequences
of noncompliance. These proposed rules were published in the
Texas Register on September 14, 2007, and can be viewed at
www.sos.state.tx.us/texreg/archive/September142007/index.html.
      Business and Public Filings Division
    Reporting Requirements under the BOC Continue

 Neither HB 3 nor HB 3928 made changes to the reporting
requirements under the BOC or the source law.

    A limited partnership will continue to be subject to the
   periodic reporting requirements of the Texas Revised Limited
   Partnership Act and the BOC and will be required to file a
   report with the SOS not more often than once every four years.

    A professional association will continue to be required to
   file an annual statement with the SOS during June of each year.

     Business and Public Filings Division
                            Nonsubstantive Revisions

As part of the Texas Legislative Council’s continuing statutory
revision project, the Business & Commerce Code and the Local
Government Code were reorganized with the passage of HB 2278
to be effective April 1, 2009.
 The Assumed Business or Professional Name Act currently found
in Title 4, chapter 36 will be moved to Title 5, chapter 71.
 Recodified act conforms to BOC terminology.
 No change made to the entity types that file assumed names with SOS.
Foreign business trusts, foreign REITS, and other foreign entities not considered
corporations, LLCs, or LPs file an assumed name certificate only with the county.
       Business and Public Filings Division
                          Nonsubstantive Revisions

 HB 2278 also repealed and recodified The Development
Corporation Act of 1979 in chapter 501 of Title 12 of the Local
Government Code. Recodified version uses BOC terminology.

 Utility Security Instrument filing provisions currently
included in chapter 35, Title 4 of the Business & Commerce Code,
will be found in new Title 8, chapter 261.

 These revisions make no substantive changes, only changes to
citation.

     Business and Public Filings Division
    Nonprofit Corporations Created Under Special Law
 HB 2090 amended chapter 431 of the Transportation Code,
commonly referred to as the Texas Transportation Corporation
Act, to redefine local government to include hospital districts and
hospital authorities. This provides these entities with the authority
to create a local government transportation corporation.
 HB 2168 amended chapters 262 and 285 of the Health & Safety
Code to authorize municipal and county hospitals created under
general law to form and sponsor a nonprofit corporation under the
provisions of the BOC for the purpose of owning and operating all
or part of one or more ancillary health care facilities.
      Business and Public Filings Division
                                             Railroads

 HB 1447, effective May 4, 2007, amended chapter 1, Title 112 of
the Texas Civil Statutes relating to the creation of railroads. The
amendments streamlined the filing process by deleting the
requirement that the Attorney General approve railroad filings
prior to submission to the SOS.

 In addition, HB 3711, which became effective September 1, 2007,
repealed chapter 1, Title 112, with the intent that railroads be
created under general law, i.e., the BOC.


      Business and Public Filings Division
                                             Railroads

 However, the provisions of the BOC were not amended.

 Section 2.003(2)(E) specifically prohibits a domestic entity from
operating a railroad except as otherwise provided by the Code. (See
section 2.006, BOC.)

More to come. SOS will suggest an amendment to BOC and may request an
opinion from the OAG to reconcile the BOC and the repeal.




      Business and Public Filings Division
                      Come Visit Us on the Web
SOS web site: http://www.sos.state.tx.us

BOC forms: http://www.sos.state.tx.us/corp/forms_boc.shtml

Pre-BOC forms: http://www.sos.state.tx.us/corp/forms.shtml




     Business and Public Filings Division
                       Online Access and Filing


 Available 24 by 7

 Images of filed documents available to view and print

 Place orders for certified copies or certificates online
and receive email responses

 File most filing instruments online

  Business and Public Filings Division
                       SOSDirect Information

                Corporations
                   Limited Partnerships
                   Limited Liability Companies
                   Professional Associations
                   Limited Liability Partnerships
                   Assumed names for those entities
                   State Trademarks
                   Uniform Commercial Code filings


Business and Public Filings Division
                          SOSDirect Searches


   By entity name or variation of name
   By assumed name
   By name of an officer, director, manager, general
  partner or registered agent listed in SOS records




Business and Public Filings Division
                        SOSDirect Assistance

                        SOSDirect Support Team
                        sosdirect@sos.state.tx.us
                             (512) 475-2755




Business and Public Filings Division
                             Need Help? Call


                           Nahdiah Hoang       (512) 475-0218
                           Mike Powell         (512) 463-9856
                           Carmen Flores       (512) 463-5588
                           Lorna Wassdorf      (512) 463-5591




Business and Public Filings Division
                                 Need Help? Email

Corphelp@sos.state.tx.us--Questions regarding document filings,
procedures and applicable law.

Corpinfo@sos.state.tx.us--Information on specific entities filed
with the Corporations Section, including information legal names,
registered agent and office, officer and director, date of formation,
and name availability preliminary advice.

Corpcert@sos.state.tx.us--Requests for plain and certified copies,
certificates of fact (including existence and status).

      Business and Public Filings Division

								
To top