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  • Summary date: Oct 2 2023 - View Summary


  • Summary date: Sep 19 2023 - View Summary

    House amendment to the 5th edition makes the following changes.  

    Inserts new Part VII, as follows.

    Amends GS 58-70-90 (definitions pertaining to prohibited practices by collection agencies engaged in consumer debt collection) to add defined terms credit card debt and itemized accounting. Specifies that for purposes of a debt collection agency’s violation of any prohibited practices set forth in Part 3 of Article 40 of GS Chapter 58, a debtor does not need to prove actual damages to recover the civil penalty; the civil penalty is in addition to the actual damages, if any. Increases the pleading requirements for a complaint filed by a collection agency plaintiff under GS 58-70-145 to require that such plaintiffs allege that notice required by GS 58-70-115(6) was sent, and to incorporate documents sent with that notice. Requires that a court dismiss any complaints that fail to comply with GS 58-70-145. Amends GS 58-70-150 (materials that must accompany a debt buyer plaintiff’s complaint) as follows. Specifies that for complaints based on credit card debt, the debt buyer must allege in the complaint that no contract or signed writing evidencing the original debt to trigger the requirement that documents generated when the credit card was actually used must be attached. Makes clarifying change. Provides that any complaint failing to comply with the section must be dismissed by the court upon motion of the debtor or on the court’s own initiative.  

    Amends GS 58-70-155 (prerequisites to entering a default or summary judgment against debtor) to establish that, for claims based on credit card debt, the only evidence sufficient to establish the amount and nature of the debt are properly authenticated business records that satisfy the requirements of the specified North Carolina Rules of Evidence, and that include at least all of the following: (1) the original account number; (2) the original creditor; (3) an itemized accounting; (4) the date of last payment, if any; (5) the basis for the interest charged; and (6) the date the account was opened. Provides that if a debt buyer fails to satisfy the statute's requirements, the debt buyer's motion for summary judgment or default judgment must be denied and any judgments entered in favor of the non-compliant debt buyer are void and subject to vacatur under the NC Rules of Civil Procedure. Makes conforming and organizational changes.

    Effective January 1, 2024, and applies to debt collection activities undertaken and actions filed on or after that date. 

    Makes organizational change to account for new section and conforming changes to act’s long title.

  • Summary date: Sep 12 2023 - View Summary

    House committee substitute to the 4th edition makes the following changes. 

    Removes proposed Part VII, added by the previous edition, which amended GS 58-70-90 to include a definition of “Itemized accounting,” amended GS 58-70-11, concerning unfair practices, and amended GS 58-70-155(b) concerning items to be included in authenticated business records to establish the amount and nature of a debt. 

    Makes conforming organizational changes. Makes changes to the act's long title. 

  • Summary date: Aug 16 2023 - View Summary

    House committee substitute to the 3rd edition makes the following changes. 

    Adds a new Part VII with the following content. 

    Amends GS 58-70-90 (Definitions) to include a definition of “Itemized accounting,” which includes accountings for debt that has and has not been charged off. Standardizes the format of the definitions throughout the section. 

    Amends GS 58-70-115 (Unfair practices) to insert clarifying language that a collection agency unfair practice includes when the collection agency is a debt buyer on acting on behalf of one, bringing suit or initiating an arbitration proceeding against the debtor, or otherwise attempting to collect on the debt without “access to” (i) valid documentation of the debt buyer’s ownership of the debt instrument and (ii) reasonable verification of the amount of debt owed by the debtor.

    Amends GS 58-70-155(b) to remove existing subsubsections (3)-(8), and replace them with new language requiring that an authenticated business record establishing the amount and nature of a debt to include an itemized accounting as defined by the act in GS 58-70-90.

    Renumbers the previous Part VII as Part VIII. 

    Makes changes to the act's long title. 

  • Summary date: May 2 2023 - View Summary

    Senate committee substitute to the 2nd edition makes the following changes.

    Adds a new Part VI that amends GS 55-16-02 (Inspection of records by shareholders) to create a right for a qualified shareholder of a corporation to inspect the records of subsidiaries as long as the corporation has actual possession and control of the records, or could obtain the records through the exercise of control over the subsidiary and, as of the date of the demand, the qualified shareholder inspection of the books and records of the subsidiary would not constitute a breach of an agreement between the corporation or the subsidiary and a person not affiliated with the corporation. Defines subsidiary in GS 55-16-01.1(5). Effective and applies to written demands for inspection given on or after October 1, 2023.  Makes conforming organization changes and changes the act's long title.

  • Summary date: Apr 25 2023 - View Summary

    Senate committee substitute to the 1st edition makes a clarifying change to GS 55-10-04(e) (voting on amendments by voting groups).   

  • Summary date: Apr 3 2023 - View Summary

    Part I.

    Makes technical and clarifying changes to GS 55-1-40, setting forth the defined terms applicable to GS Chapter, the NC Business Corporation Act. Adds email and email address as defined terms. Eliminates the term means.

    Amends GS 55-1-41, providing that written notice by a corporation to its shareholder is effective when deposited in the US mail with postage prepaid and correctly addressed to the shareholder's address shown in the corporation's current record of shareholders (previously applied to domestic and foreign corporations; corporation is defined to exclude foreign corporations except in two specified statutes). Adds authority for any notice by a corporation to be delivered to shareholders by email to the email address shown in the corporation's current record of shareholders, effective when sent as provided in GS 66-325, unless the shareholder has previously notified the corporation in writing objecting to receiving communications by email. Modifies current authority to send electronic records by other electronic means to qualify that this authority is subject to a shareholder providing notice of objection to the corporation. Now provides for shareholders to provide notice to the corporation of the shareholder's objection to receiving notices and other communications by email or other electronic means at any time on a prospective basis upon written notice to the corporation or upon a later date specified in the notice (previously referred to as a notice of termination). Enacts new subsection (c1), requiring cessation of notices or other communications delivered by email address or other electronic means if (1) the corporation receives notice from the information processing system that two consecutive notices or other communications have not been delivered as directed, and (2) the notice of non-delivery becomes known to the secretary, transfer agent, or another person responsible for notices and communications. Specifies that the inadvertent failure to recognize the notice of non-delivery as a cessation of authority to provide email or electronic notices does not invalidate any meeting or other action. Makes technical and clarifying changes. 

    Amends GS 55-7-20, requiring the shareholders' list to show shareholders' email addresses or addresses for electronic transmission if meeting notices or communications will be sent by email or electronic means. Makes technical changes.

    Amends GS 55-16-06 to specify that the existing two exceptions to the Chapter's notice requirements apply when the corporation is not permitted to deliver notice by email or other electronic means. Adds a third exception, also only applicable when the corporation is not permitted to deliver notice by email or other electronic means, to include instances where no address has been provided to the corporation by or on behalf of a shareholder and the corporation has not otherwise obtained an address it believes is reliable. Makes technical changes.

    Makes the above provisions effective October 1, 2023, and applicably to noticed provided on or after that date.

    Part II.

    Amends GS 55-7-04 to limit existing authority for actions required or permitted to be taken at a shareholders' meeting to be taken without a meeting and without prior notice, so long as the articles of incorporation of a corporation that is not public at the time the action is taken, and if the action is taken by the minimum number of votes that would be necessary if all entitled to vote were present and voted, to corporations incorporated prior to October 1, 2023. Adds a new provision applicable to corporations incorporated on or after October 1, 2023, to allow for the same authority except to now require that taking action without a meeting is not prohibited by the articles of incorporation. No longer requires the action to bear the date of signature. Makes technical and clarifying changes. Effective October 1, 2023, and applies to written consents received on or after that date.

    Part III.

    Amends GS 55-10-02, which allows a corporation's board of directors to adopt certain amendments to the articles of incorporation without shareholder approval, to allow the board to delete a class of shares from the articles if the articles authorized the board to create the class and no shares of the class or rights to acquire shares of the class are outstanding. Effective October 1, 2023.

    Part IV.

    Amends GS 55-10-04, which allows a class to vote as a voting group on an amendment that meets any of ten descriptions listed. Enacts a new subsection (e), limited to amendments that would either (1) create a new class of shares having rights or preferences with respect to distribution or to dissolution that are prior, superior, or substantially equal to the shares of the class, or (2) increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions or to dissolution that are prior, superior, or substantially equal to the shares of the class. Allows a class or series entitled to vote as a separate voting group on the two types of amendments above to be restricted in whole or in part if provided in the original articles of incorporation or by an amendment that is adopted prior to the issuance of any shares of the class or series or that is approved by a majority of the votes of the class or series entitled to be case on the amendment. Makes technical changes. Effective October 1, 2023. 

    Part V.

    Amends GS 66-95 regarding disclosure statements required of business opportunity sales contracts. Allows for franchisors to include material, other than the title and required statement on the cover sheet to the disclosure document, pursuant to 16 CFR Part 436 or guidelines of the NC Securities Administration Association. Now allows, alternatively to the ten specified information points required in the disclosure document, for the disclosure document to contain a franchise disclosure document that complies in all material respects with 16 CFR Part 436. Makes technical and clarifying changes.

    Makes conforming changes to GS 66-97, regarding filing disclosure statements with the Secretary of State. Eliminates authority for the Secretary of State to accept the Uniform Franchise Offering Circular or the Federal Trade Commission Basic Disclosure Document along with required caption, statement, and other information required in GS 66-95. Makes technical and conforming changes. Makes language gender neutral. 

    Part VI.

    Requires the Revisor to print relevant portions of the Official Comments to the Model Business Corporation Act and all explanatory comments of the drafters of the act at the Revisor's discretion as annotations to GS Chapter 55.