House committee substitute to the 2nd edition makes the following changes.
Makes technical and clarifying changes to GS 55-7-02.
Deletes the standard effective date provision applicable to the Part.
Replaces the proposed changes to GS 55A-1-70 with the following. Authorizes corporate officers, directors and members to conduct business of the corporation electronically unless prohibited or limited by the articles of incorporation or bylaws, or by action of the corporation's board of directors. Provides for the Chapter's provisions to supersede any conflicting provisions of Article 40 of GS Chapter 66. Requires members who wish to communicate and conduct business electronically with a corporation to designate the email address to be used for communication and business, and provide any other information required to facilitate communication and business between the member and the corporation, pursuant to the corporation's guidance.
Modifies the proposed changes to GS 55A-7-08 regarding member action by written ballot or electronic voting. Authorizes rather than mandates the provision of written ballots and electronic ballots or notice and instructions for electronic ballots and voting. Removes the proposed requirements of electronic voting systems. Mandates that all members entitled to vote on a matter by given the opportunity to vote by written ballot or electronic voting or both. Makes technical, clarifying and conforming changes to proposed language.
Amends proposed GS 55A-7-09, which authorizes remote membership meetings of a corporation. Conditions the statute's provisions upon remote member meetings not being prohibited by the articles of incorporation of the bylaws. Requires members to be given the opportunity to participate to the same extent as they could participate in person (including voting) and requires that the corporation has implemented reasonable measures to verify that each person participating remotely is a member or a member's proxy (previously required all action and business requiring a vote of the membership to be taken and conducted pursuant to GS 55A-7-08 and did not require the corporation to verify the presence of a quorum at the meeting). Eliminates the previous notice requirements to now only require notice that the meeting will be held by remote communication and sufficient instruction and information on how member can join, in addition to the information required by GS 55A-7-05 (previously included information on voting agenda and members list access). Amends the authority of the board of directors to prescribe additional rules and procedures for remote meetings to require compliance with GS Chapter 55A, including rules concerning votes to be taken during the remote communication meeting or that membership votes on some or all matter must be cast as permitted in GS 55A-7-08 (previously required compliance with Article 40 of GS Chapter 65). Eliminates the provision specifying that all references to meetings in this Chapter include meetings held by means of remote communication in accordance with the provisions of the Chapter.
Eliminates the provisions of previous Part III, which amended GS 47C-3-108 and GS 47F-3-108 regarding condominium association unit owner and planned community association lot owner meetings and owner notifications. Makes conforming organizational changes.
Summary date: Mar 24 2021 - View summary
Summary date: Mar 23 2021 - View summary
House committee substitute to the 1st edition makes the following changes.
Deletes the proposed changes to GS 55-7-09(a), which clarified that a corporation was required to hold a special shareholders' meeting if either of the specified conditions applied. Amends GS 55-7-05 by modifying the conditions under which a public corporation that has provided the specified notice of its annual or special shareholders' meeting does not have to provide further notification to also include instances when it is anticipated that an existing governmental order restricting travel or group gatherings will be extended; also amends those requirements to require that the corporation post the required press release about the remote meeting on its corporate website approximately contemporaneously with the press release. Makes additional clarifying changes. Makes clarifying changes to GS 55-7-09.
Adds a provision amending GS 55A-2-07, which allows the board of directors of a corporation to adopt, amend, or repeal bylaws to be effective only in an emergency. Amends when an emergency is considered to exist to be when a natural or man-made disaster impedes the ability of the corporation's board of directors or members to comply with one or more provisions of the corporation's bylaws (was, an emergency exists if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event).
Adds a severability clause. Makes conforming organizational changes.
Amends the act's effective date provision to deem remote shareholder meetings noticed before the effective date of this act as a result of the State of Emergency declared by Executive Order No. 116 on March 10, 2020, and complying with any subsequent executive orders authorizing remote shareholder meetings issued by Governor Roy A. Cooper, as in compliance with this act.
Summary date: Mar 16 2021 - View summary
Enacts GS 55-7-09(c) to authorize a corporation's board of directors, in its sole discretion, to determine that any shareholder meeting will be held solely by means of remote communication, unless prohibited by the articles of incorporation or bylaws, so long as existing measures for remote participation are implemented. Makes technical changes.
Amends GS 55-7-05 to allow for an annual or special shareholders' meeting that is adjourned to a different date to be continued solely by remote communication if it is announced at the meeting before adjournment and the new date and time are noticed the same, unless the bylaws require otherwise. Adds a new provision to deem further notice in accordance with the time restraints of subsection (a) is not required when a governmental order restricts travel or group gatherings applicable to the place of the meeting or principal office in effect and in good faith are anticipated to be in effect at the date and time set forth in the initial notification. Requires the board of directors to determine to hold the meeting solely by remote communication at the same date and time set or a different date and time, and the corporation to promptly issue a national press release announcing the same and file the press release with the SEC contemporaneously. Makes technical and clarifying changes.
Amends GS 55-7-20 to allow the shareholders' list to be available on a reasonably accessible electronic network, with access information provided with the meeting notice, in lieu of making the list available for inspection at the principal office or place identified in the meeting notice. Requires access to the electronic list to continue through the meeting if the meeting is to be held solely by means of remote communication. Makes clarifying and technical changes. Makes language gender neutral.
Amends GS 55-10-22 to provide for amendment or repeal of a bylaw that prohibits a meeting of shareholders solely by means of remote communication in the same way as bylaws are amended or repealed that fix a greater quorum or voting requirement for the board of directors. Makes technical changes.
Makes further conforming changes to GS 55-7-01 (annual meetings) and GS 55-7-02 (special meetings).
Directs the Revisor of Statutes to print relevant Official Comments to the Revised Model Business Corporation Act and explanatory comments of the drafters.
Replaces the provisions of GS 55A-1-70 with the following. Authorizes a nonprofit corporation, its officer, directors, and members to conduct business electronically in accordance with the Chapter and Article 40 of GS Chapter 66 without further consent or agreement unless prohibited by the articles of incorporation or bylaws. Provides that the Chapter's provisions supersede conflicting provisions of Article 40 of GS Chapter 66. Requires prior agreement of a member before conducting communication or business electronically with the member, including the member providing written agreement, designating a preferred email address, and providing any other facilitating information. Requires the nonprofit to inform the member on how to revoke the agreement.
Makes conforming changes to GS 55A-1-41 regarding electronic notice to members. Eliminates provisions allowing a member to terminate an agreement to electronic notice at any time on a prospective basis upon written notice. Makes technical and clarifying changes. Makes conforming changes to GS 55A-7-04 regarding action by written consent, and to GS 55A-8-21 regarding board action without meeting.
Enacts GS 55A-7-09 to authorize a nonprofit corporation's board of directors to determine that any membership meeting will be held remotely if participants can hear other participants and be heard by other participants if recognized. Provides for electronic voting and verification of a quorum. Details additional notice requirements for electronic meetings, including sufficient instruction on how members can join the meeting, notice of electronic voting, and information on how to inspect or gain access to the members' list. Allows boards to prescribe additional rules and procedures for remote meetings consistent with the Chapter and Article 40 of GS Chapter 65. Specifies that all references to meetings in the Chapter include electronic meetings.
Amends GS 55A-7-01 and GS 55A-7-02 to explicitly authorize remote annual, regular, and special meetings as provided in new GS 55A-7-09. Makes conforming changes.
Amends GS 55A-7-03 to authorize court-ordered meetings to be held remotely as provided in new GS 55A-7-09. Makes technical and clarifying changes.
Makes the following changes to GS 55A-7-05 regarding meeting notices. Requires notices for remote meetings to include the information required in new GS 55A-7-09. Requires continued meetings held remotely to announce a description of the means of remote communication. Makes technical and clarifying changes.
Amends GS 55A-7-06 to limit the exception to the general rule that attendance waives the right to object to consideration of a particular matter that was not within the purposes described in the meeting notice. Provides that waiver does not apply when the member objects to the matter's consideration before it is voted on in an in-person meeting.
Amends GS 55A-7-08 to provide for action by written ballot and electronic voting. Adds to the existing parameters for written ballots to require ballots to contain or request information sufficient to identify the member of the member's proxy unless secret balloting is required. Allows submission of written ballots by any reasonable means specified by the corporation, including email (previously authorized electronic submission). Establishes parameters for electronic ballots or electronic notice that sets forth each proposed action and provides an opportunity and instruction on how to vote for or against each proposed action using the electronic ballot or an electronic voting system, limited to members who have agreed to electronic communication and business under GS 55A-1-70 as amended. Lists four requirements of electronic voting, including control mechanisms and recordkeeping. Limits the use of solely electronic voting to when all members entitled to vote on a proposed action have agreed pursuant to GS 55A-1-70, as amended. Requires that all deadlines for returns of written ballots and electronic ballots and for casting of electronic votes on any proposed action be identical. Prohibits revocation of any electronic ballot or electronic vote submitted unless otherwise provided in the articles of incorporation or bylaws. Makes conforming changes.
Amends GS 55A-7-24 to allow for appointment of a proxy electronically with the member's signature or sent from the member's designated email address pursuant to GS 55A-1-70 as amended. Makes clarifying and technical changes.
Amends GS 55A-7-20 to alternatively allow a members' list to be available on a reasonably accessible electronic network so long as access information is provided with the meeting notice. Allows for the nonprofit to take reasonable steps to ensure restrict access to members only. Makes conforming and technical changes.
Amends GS 55A-8-20 to specify that electronic nonprofit board meetings require that all participating directors hear and can be heard by each other during the meeting.
Amends GS 47C-3-108 to require a unit owner to agree to email notification in order for a condominium association meeting notice to be delivered to them via email. Makes technical changes by removing outdated language. Adds that meetings of the association and executive board that are held remotely do not have to be conducted in accordance with the most recent edition of Robert's Rules of Order Newly Revised.
Amends GS 47F-3-108 to require a lot owner to agree to email notification in order for a planned community association meeting notice to be delivered to them via email. Makes technical changes by removing outdated language. Adds that meetings of the association and executive board that are held remotely do not have to be conducted in accordance with the most recent edition of Robert's Rules of Order Newly Revised.
Amends GS 58-8-10 by adding to the information that must be included in a meeting notice given to members of a mutual insurance company, to require including the method of remote communication. Specifies that language that is to be included in the notice when the meeting has a remote connection or is held solely remotely. Makes participation via remote communication subject to guidelines and procedures adopted by the board of directors. Specifies that members participating in meetings remotely are to be deemed (1) present and (2) voting in person at the meeting if the mutual insurance company has implemented reasonable measures to: (1) verify membership status of people participating remotely; (2) give each member participating remotely a reasonable opportunity to participate in the meeting and to vote on matters submitted to the members substantially concurrently with the proceedings. Allows the board of directors to determine that any meeting of members must be held solely by means of remote communication, but only if the mutual company implements the measures specified above.
Allows remote shareholder meetings noticed before this act’s effective date that comply with Executive Order No. 185, to proceed remotely as originally noticed notwithstanding any notice and meeting requirements of GS Chapter 55 (North Carolina Business Corporation Act).