Bill Summary for S 114 (2017-2018)

Summary date: 

Feb 21 2017

Bill Information:

View NCGA Bill Details2017-2018 Session
Senate Bill 114 (Public) Filed Tuesday, February 21, 2017
AN ACT REVISING THE LAWS GOVERNING THE SUBMISSION OF ANNUAL REPORTS BY VARIOUS BUSINESS ENTITIES TO THE SECRETARY OF STATE; CONFORMING THE TREATMENT OF LEASEHOLD INTERESTS IN EXEMPT PROPERTY TO THAT OF OTHER TYPES OF INTANGIBLE PERSONAL PROPERTY FOR PURPOSES OF THE PROPERTY TAX; AND CREATING THE CRIMINAL CODE RECODIFICATION COMMISSION.
Intro. by Wells, Tarte.

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Bill summary

Sections 1-5

Amends GS 55-16-22 to provide that the annual reports required to be submitted by each corporation, both domestic and foreign, authorized to do business in this State are to be submitted to the Secretary of State (was, to the Secretary of Revenue, or in the alternative, directly to the Secretary of State). Removes the requirement that each insurance company subject to GS Chapter 58 deliver an annual report to the Secretary of State. Requires the annual report to be in an electronic form prescribed by the Secretary of State. Amends the information that must be included in the annual report to also include (1) the e-mail address of the corporation's registered agent and a valid e-mail address for the corporation if different from that of the registered agent and (2) the physical business addresses of the principal officers and that address and related information on any other person who has actual authority to bind the corporation. Removes the provision allowing for a certification to be made instead of setting forth the required information if the information contained in the most recently filed annual report has not changed. Provides that an annual report is due by the 15th day of the fourth month following the close of the domestic or foreign corporation's fiscal year.

Authorizes the Secretary of State to assess a penalty of $250 if an annual report does not completely and accurately contain the information required under subdivisions (2) and (4) of subsection (a3), relating to the corporation's registered office and principal officers. Further provides that, in addition, any person who willfully fails to completely and accurately provide that information will be punished under GS 55D-18. Deems a report to be timely filed if the report is corrected to contain the required information and submitted with payment of any penalty assessed to the Secretary of State within 30 days after the effective date of notice.

Establishes that if the Secretary of State does not receive an annual report within 60 days (was, 120 days) of the date the report in due, the Secretary may presume the annual report is delinquent. Provides that the presumption may be rebutted by evidence satisfactory to the Secretary of State of submission presented by the filing corporation. 

Allows the Secretary of State to provide by e-mail any notice or form required under this statute if the submitting domestic or foreign corporation to be notified has consented to receiving notices and forms via e-mail and has provided the Secretary of State an e-mail address for receiving the notices or forms. Provides that any e-mail address provided by a submitting corporation in accordance with this statute is confidential and not subject to public records laws.

Makes conforming and technical changes, and adds descriptors to the statute's subsections.

Amends GS 55-14-22 to require all penalties, fees, or other payments due by a corporation under GS Chapter 55 have been paid before the Secretary of State can cancel a certificate of dissolution of a corporation and prepare a certificate of reinstatement of the corporation.

Amends GS 55-1-22 to establish a nonrefundable fee of $125 for the filing of an annual report by a domestic or foreign corporation with the Secretary of State (previously, a $25 fee for paper filing and an $18 fee for electronic filing of an annual report). Directs the State Treasurer to remit $2 of each fee collected for filing of annual reports to the Secretary of State to be used pursuant to GS 66-58.12(c). Prohibits the Secretary of State from charging an additional amount for the use of electronic filing, electronic payment, or electronic filing and payment. Makes conforming changes.

Amends GS 57D-2-24 to provide that the annual reports required to be submitted by each LLC, both domestic and foreign, authorized to do business in this State are to be submitted to the Secretary of State in electronic form as prescribed by the Secretary and as otherwise provided in the statute (was, on a form as prescribed by and in a manner required by the Secretary). Removes the provision allowing for a certification to be made instead of setting forth the required information if the information contained in the most recently filed annual report has not changed. Amends the information that must be included in the annual report to also include (1) the e-mail address of the LLC's registered agent and a valid e-mail address for the LLC if different from that of the registered agent, and  (2) the physical business addresses of the principal managers and that address and related information on any other person who has actual authority to bind the LLC. 

Authorizes the Secretary of State to assess a penalty of $250 if an annual report does not completely and accurately contain the information required under subdivisions (3) and (5) of subsection (a1), relating to the LLCs registered office and principal managers. Further provides that, in addition, any person who willfully fails to completely and accurately provide that information will be punished under GS 55D-18. Deems a report to be timely filed if the report is corrected to contain the required information and submitted with payment of any penalty assessed to the Secretary of State within 30 days after the effective date of notice. 

Allows the Secretary of State to provide by e-mail any notice or form required under this statute if the submitting LLC to be notified has consented to receiving notices and forms via e-mail and has provided the Secretary of State an e-mail address for receiving the notices or forms. Provides that any e-mail address provided by a submitting LLC in accordance with this statute is confidential and not subject to public records laws.  

Makes conforming and technical changes, and adds descriptors to the statute's subsections.

Amends GS 57D-1-22 to establish a fee of $125 (was, $200) for the filing of an annual report by an LLC with the Secretary of State. Prohibits the Secretary of State from charging an additional amount for the use of electronic filing, electronic payment, or electronic filing and payment. Directs the State Treasurer to remit $2 of each fee collected for filing of annual reports to the Secretary of State to be used pursuant to GS 66-58.12(c). 

Effective January 1, 2018, and applies to annual reports due on or after that date.

Sections 6-9

Enacts GS 55A-16-22.1 to require each nonprofit domestic corporation and each foreign corporation authorized to conduct affairs in this State to submit an annual report to the Secretary of State in electronic form as prescribed by the Secretary of State. Sets forth information that must be included in the annual report. Requires the information in the annual report to be current as of the date the report is executed. Sets the due date of the first annual report of the corporation to be May 15 of the year following formation, and May 15 every subsequent year. 

Authorizes the Secretary of State to assess a penalty of $250 if an annual report does not completely and accurately contain the information required under subdivisions (2) and (4) of subsection (a), relating to the corporation's registered office and officers. Further provides that, in addition, any person who willfully fails to completely and accurately provide that information will be punished under GS 55D-18. Deems a report to be timely filed if the report is corrected to contain the required information and submitted to the Secretary of State within 30 days after the effective date of notice. Provides for amendments to any previously filed annual report to be filed at any time for the purpose of correcting, updating, or augmenting the information contained in the annual report. 

Establishes that if the Secretary of State does not receive an annual report within 60 days of the date the report is due, the Secretary may presume the annual report is delinquent. Provides that the presumption may be rebutted by by evidence presented by the filing corporation.

Allows the Secretary of State to provide by e-mail any notice or form required under this statute if the submitting domestic or foreign corporation to be notified has consented to receiving notices and forms via e-mail and has provided the Secretary of State an e-mail address for receiving the notices or forms. Provides that any e-mail address provided by a submitting corporation in accordance with this statute is confidential and not subject to public records laws.

Amends GS 55A-14-20, concerning grounds for administrative dissolution of a nonprofit corporation, to add that the Secretary of State may commence a proceeding under GS 55A-14-21 to dissolve administratively a corporation if the corporation is delinquent in submitting its annual report. Makes technical changes.

Amends GS 55A-14-22 to to require all penalties, fees, or other payments due by a nonprofit corporation under GS Chapter 55A have been paid before the Secretary of State can cancel a certificate of dissolution of a corporation and prepare a certificate of reinstatement of the corporation.

Amends GS 55A-1-22 to establish that there is no filing fee for an annual report filed by a nonprofit corporation with the Secretary of State. Prohibits the Secretary of State from charging an additional amount for the use of electronic filing, electronic payment, or electronic filing and payment.

Effective January 1, 2019.

Sections 10-12

Repeals GS 105-256.1, requiring corporate annual report fees be credited to the General Fund as tax revenue. Makes conforming change to repeal GS 105-228.90(a)(2), which includes annual report filing requirements of GS 55-16-22 under the scope of Article 9 of GS Chapter 105.

Amends GS 59-84.4 to require each registered LLP and each foreign LLP authorized to transact business in this State to submit to the Secretary of State for filing an annual report, in an electronic form prescribed by the Secretary of State (previously, in a form prescribed by the Secretary). Amends the information that must be included in the annual report to include the e-mail address of the LLP's registered agent and a valid e-mail address for the LLP if different from that of the registered agent. Removes the provision allowing for a certification to be made instead of setting forth the required information if the information contained in the most recently filed annual report has not changed.

Authorizes the Secretary of State to assess a penalty of $250 if an annual report does not completely and accurately contain the information required under subdivisions (2) of subsection (a), relating to the LLP's registered office and agent. Further provides that, in addition, any person who willfully fails to completely and accurately provide that information will be punished under GS 55D-18. Deems a report to be timely filed if the report is corrected to contain the required information and submitted with payment of any penalty assessed to the Secretary of State within 30 days after the effective date of notice. Amends the second situation where the Secretary of State may revoke the registration of an LLP to be when the LLP does not submit its annual report to the Secretary of State on or before the sixtieth day after it is due (was, on or before the date it is due). 

Allows the Secretary of State to provide by e-mail any notice or form required under this statute if the submitting LLP to be notified has consented to receiving notices and forms via e-mail and has provided the Secretary of State an e-mail address for receiving the notices or forms. Provides that any e-mail address provided by a submitting LLP in accordance with this statute is confidential and not subject to public records laws. 

Make conforming and technical changes, and adds descriptors to the statute's subsections.

Amends GS 59-35.2 to establish a $125 (was, $200) filing fee for annual reports filed with the Secretary of State by LLPs. Prohibits the Secretary of State from charging an additional amount for the use of electronic filing, electronic payment, or electronic filing and payment. Directs the State Treasurer to remit $2 of each fee collected for filing of annual reports to the Secretary of State to be used pursuant to GS 66-58.12(c). 

Effective January 1, 2018, and applies to annual reports due on or after that date.

Section 13

Amends GS 105-164.14 by adding a new subsection (d3) to prohibit a business entity who has not submitted the required applicable annual report under GS Chapters 55, 57D, or 59 from getting a refund of sales and use taxes paid under GS Article 5 of Chapter 105. Makes new subsection (d3) applicable to a foreign or domestic corporation, an LLC, and an LLP, as those terms are defined by the new subsection. Adds new subsection (d4) to allow an entity subject to subsection (d3) to get a refund of sales and use taxes paid under Article 5 of GS Chapter 105 upon providing evidence satisfactory to the Secretary that the required annual report has been filed. Clarifies that subsection (d4) does not exempt the entity from existing subsection (d) or any other applicable requirements governing the application for a refund under this statute.

Effective January 1, 2018.

Section 14

Amends GS 105-164.14(d3), as enacted by this act, to add nonprofit corporations who have not submitted the required annual report under GS Chapter 55A to those entities not allowed a refund of sales and use taxes paid under Article 5 of GS Chapter 105.

Effective January 1, 2019.

Section 15 

Directs the Secretary of State and Department of Revenue to develop a process for verifying whether an applicant for a refund under GS 105-164.14 has submitted all required annual reports, and requires the sharing of relevant information for that purpose, upon request and to the extent permitted by federal law. Requires this process to be operational prior to January 1, 2018.

Section 16

Amends GS 105-232 to increase the fee for the cost of reinstatement by a suspended corporation or LLC to the Secretary of State from $25 to $50. Directs the Secretary of Revenue to remit $25 from each fee collected under this statute to the Secretary of State to be used to cover its share of the cost of reinstatement. Provides that any funds in excess of the amount needed to cover the Secretary of State's share of the cost of reinstatement is to revert to the General Fund. Applies to fees collected on or after the date this act becomes law.

Section 17

Directs the Joint Legislative Program Evaluation Oversight Committee to amend the 2018-19 Program Evaluation Division work plan to direct the Program Evaluation Division (PED) to study the effect implementation of this act will have on the staffing levels and customer service demands of the Secretary of State and Department of Revenue. Directs the PED to report the results of the study to the Joint Legislative Program Evaluation Oversight Committee and the Joint Legislative Oversight Committee on General Government on or before August 1, 2019.

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