Bill Summary for S 362 (2019-2020)

Summary date: 

Mar 27 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
Senate Bill 362 (Public) Filed Tuesday, March 26, 2019
AN ACT REVISING THE LAWS GOVERNING THE SUBMISSION OF ANNUAL REPORTS BY VARIOUS ENTITIES TO THE SECRETARY OF STATE.
Intro. by Wells, Perry.

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Bill summary

Part I. Business Corporations

Amends GS 55-16-22, modifying the annual reporting requirements for corporations transacting business in the State. Now requires electronic submission of the annual report to the Secretary of State (Secretary) rather than giving the option of paper or electronic means. Removes the requirement for insurance companies subject to GS Chapter 58 to submit an annual report. Makes clarifying changes to the information required of the report to specify that the report must include the street or mailing address of the registered office in this State, and the names, titles, and business street addresses of its principal officers. Adds to the required information to now require inclusion of the registered agent's email address; the name, mailing address, email address, and telephone number of an individual authorized to provide information regarding persons with authority to bind the corporation; and an email address for the corporation if different from the email address of the registered agent provided. Removes the provision permitting certification that the information contained in the most recently filed annual report has not changed instead of setting forth all required information other than the corporation's name and the state/country of incorporation. Now requires only the Secretary (rather than both the Secretary and the Secretary of Revenue) to provide space and instructions on the form for corporations to voluntarily indicate the corporation is a veteran-owned small business or service-disabled veteran-owned small business. Clarifies that the annual report is due by the 15th day of the fourth month following the close of the corporation's fiscal year for both domestic and foreign corporations. Authorizes the Secretary to provide notice or forms under the statute by email with consent, and deems any email address provided by a submitting corporation to be confidential and not public record. Makes further conforming changes. 

Provides that the requirement to file electronically applies to annual reports due on or after January 1, 2020, for entities having gross revenues of at least $175,000 in their fiscal year ending in 2018; and applies to annual reports due on or after January 1, 2021, for entities having gross revenues less than $175,000 in their fiscal year ending in 2018.

Makes conforming changes to GS 55-1-22, and increases the fee for submitting the electronic annual report to $125 (was $25 for a paper submission and $18 for an electronic submission). Makes further conforming changes. 

Makes clarifying changes to GS 55-14-22 regarding the reinstatement of a corporation following administrative dissolution under GS 55-14-21. Amends the statute to now require the Secretary to determine that the corporation has paid any penalties, fees, or other payments due under the Chapter before filing a certificate of reinstatement. Makes technical changes and makes the language gender neutral.

Repeals GS 105-228.90(a)(2) (which defines the scope of Article 9, General Tax Administration, to include the annual report filing requirements under GS 55-14-22) and GS 105-256.1 (concerning corporate annual reporting).

Applies to annual reports due on or after January 1, 2020.

Part II. Limited Liability Corporations

Amends GS 57D-2-24, modifying the annual reporting requirements for limited liability corporations (LLCs) transacting business in the State. Now requires electronic submission of the annual report to the Secretary of State (Secretary) rather than paper delivery. Makes clarifying changes to the information required of the report to specify that the report must include the street or mailing address of the registered office in this State, and the names, titles, and business street addresses of its managers and principal officials (was, only principal officials). Adds to the required information to now require inclusion of the registered agent's email address; the name, mailing address, email address, and telephone number of an individual authorized to provide information regarding persons with authority to bind the LLC; and an email address for the LLC if different from the email address of the registered agent provided. Removes the provision permitting certification that the information contained in the most recently filed annual report has not changed instead of restating all required information. Authorizes the Secretary to provide notice or forms under the statute by email with consent, and deems any email address provided by a submitting LLC to be confidential and not public record. Makes further clarifying, conforming, and technical changes.

Makes conforming changes to GS 57D-1-22, and decreases the fee for submitting the electronic annual report to $125 (was $200 for a paper submission). 

Makes clarifying changes to GS 57D-6-06, regarding the reinstatement of an LLC following administrative dissolution under GS 55-14-22, GS 55-14-23, and GS 55-14-24. Amends the statute to now require the Secretary to determine that the LLC has paid any penalties, fees, or other payments due under the Chapter before filing a certificate of reinstatement.

Part III. Nonprofit Corporations

Enacts GS 55A-16-22.1 to now require domestic and foreign corporations authorized to conduct affairs in this State to electronically submit an annual report to the Secretary of State. Details the required information of the report, which are identical to that required of business corporations under GS 55-14-22, as amended. Requires the annual report to be current as of the date the annual report is submitted. Provides for report submission by November 15 of each year, as specified, until voluntary or judicial dissolution of a domestic corporation, or until the effective date of the certificate of withdrawal or revocation of a certificate of authority if a foreign corporation. Provides identical provisions regarding incomplete information and amendments to annual reports as those provided for business corporations under GS 55-14-22, as amended. Authorizes the Secretary to presume an annual report is delinquent if it is not received within 60 days after the report is due, rebuttable by evidence of submission. As with business corporations, authorizes the Secretary to provide notice or forms under the statute by email with consent, and deems any email address provided by a submitting corporation to be confidential and not public record. Deems domestic or foreign corporations licensed as a charitable organization or sponsor under Article 2, GS Chapter 131F to have filed an annual report for purposes of GS Chapter 55A. Amends GS 55A-1-22 to establish no cost for submitting the annual report.

Amends GS 55A-14-20 to authorize the Secretary to commence a proceeding to administratively dissolve a corporation under GS 55A-14-21 if the corporation is delinquent in submitting its annual report.

Makes clarifying changes to GS 55A-14-22, regarding the reinstatement of a corporation following administrative dissolution under GS 55A-14-21. Amends the statute to now require the Secretary to determine that the corporation has paid any penalties, fees, or other payments due under the Chapter before filing a certificate of reinstatement. Makes technical changes and makes the language gender neutral.

Authorizes the Secretary to waive the $100 fee for an application of reinstatement set forth under GS 55A-14-22(17) until January 1, 2022, for a corporation seeking reinstatement following administrative dissolution for delinquent filing pursuant to GS 55A-14-20(2a), as enacted.

Applies to annual reports due on or after January 1, 2021.

Part IV. Limited Liability Partnerships

Amends GS 59-84.4, modifying the annual reporting requirements for registered limited liability partnerships (LLP) and foreign limited liability partnerships (LLP) transacting business in the State. Now requires electronic submission of the annual report to the Secretary of State (Secretary) rather by paper delivery. Makes clarifying changes to the information required of the report to specify that the report must include the street or mailing address of the registered office in this State. Adds to the required information to now require inclusion of the registered agent's email address; the names, titles, and business street addresses of its partners and the name, mailing address, email address, and telephone number of an individual authorized to provide information regarding persons with authority to bind the corporation; and an email address for the LLP if different from the email address of the registered agent provided. Removes the provision permitting certification that the information contained in the most recently filed annual report has not changed instead of setting forth all required information other than the LLP's name and the state/country of formation. Adds a new requirement for any penalties, fees, or other payments due under the Chapter to be paid prior to reinstatement following the revocation of registration. Authorizes the Secretary to provide notice or forms under the statute by email with consent, and deems any email address provided by a submitting LLP to be confidential and not public record. Makes further clarifying, conforming, and technical changes.

Provides that the requirement to file electronically applies to annual reports due on or after January 1, 2020, for entities having gross revenues of at least $175,000 in their fiscal year ending in 2018; and applies to annual reports due on or after January 1, 2021, for entities having gross revenues less than $175,000 in their fiscal year ending in 2018.

Amends GS 59-35.2 to decrease the fee for submitting the electronic annual report to $125 (was $200 for a paper submission). 

Applies to annual reports due on or after January 1, 2020.

Part V. Limited Partnerships

Enacts GS 59-109 to now require limited partnerships (LP) and foreign limited partnerships (LP) authorized to transact business in this State to electronically submit an annual report to the Secretary of State. Details the required information of the report, which are similar to that required of LPs under GS 59-84.4, as amended, except that it requires the report to include the fiscal year end of the LP and the year for which the annual report applies, as well as certain additional information for foreign LPs, if applicable. Requires the annual report to be current as of the date the annual report is submitted. Provides for submission of the report by the 15th day of the fourth month following the close of the LP's fiscal year. Provides identical provisions regarding incomplete information and amendments to annual reports as those provided for LLPs under GS 59-84.4, as amended. As with LLPs, authorizes the Secretary to provide notice or forms under the statute by email with consent, and deems any email address provided by a submitting LP to be confidential and not public record. 

Enacts GS 59-110, authorizing the Secretary to revoke the registration of an LP or the certificate of authority of a foreign LP if the Secretary determine that (1) the LP has not paid any penalties, fees, or other payments due under the Chapter within 60 days after they are due; (2) the LP does not submit the annual report within 60 days after it is due; (3) the LP has been without a registered agent or registered office in this State for 60 days or more; or (4) the LP does not notify the Secretary within 60 days of the change, resignation, or discontinuance that is registered agent or registered office has been changed, that is registered agent has resigned, or that its registered office has discontinued. Provides for the administrative procedure for the Secretary to revoke registration or the certificate of authority, including written notice, a grace period for the LP to take corrective action, and filing a certificate of revocation reciting the ground(s) for revocation and the effective date, with a copy mailed to the LP. Provides for the LP to apply for reinstatement, with the procedures and appeal the same as those applicable to domestic corporations under GS 55-14-22 and GS 55-14-23. Provides for a name change of the LP if necessary at the time of application for reinstatement. Provides for a reinstatement of an LP to have the same effect as for a corporation under GS 55-14-22.

Amends GS 59-1106, to establish the fee amount for submitting the electronic annual report at $125.  Makes technical changes.

Applies to annual reports due on or after that January 1, 2021.

Part VI. Disallowance of Refunds of Paid Sales and Use Taxes

Amends GS 105-164.14, which authorizes certain refunds of sales and use taxes for nonprofit entities. Now requires the Secretary of Revenue to verify that a nonprofit entity is not delinquent for failure to file an annual report with the Secretary of State based on information received at least 30 days prior to issuing a refund under the statute. Authorizes the Secretary of Revenue to deny the refund request if a nonprofit entity is delinquent for failure to file its annual report, and notify the entity of the denial and reasoning. Provides for cancellation of the denial and granting of the refund upon receipt of information from the Secretary of State that the entity is no loner delinquent in its annual report filing. Prohibits issuing a refund after one year from the date a request was denied for failure to file an annual report with the Secretary of State. 

Effective when the act becomes law, directs the Secretary of State and Department of Revenue to jointly develop a process to verify an applicant for a refund has submitted all required annual reports. Further directs the Secretary of State and Department of Revenue to share specified relevant information upon request, as permitted by law. Requires the process to be operational prior to January 1, 2021. Requires the Department of Revenue to include information regarding nonprofit annual reporting requirements and eligibility for refunds. 

Applies to requests for refunds submitted on or after January 1, 2021. 

Part VII. Reinstatement Fee Revision

Amends GS 105-232, increasing the reinstatement fee payable to the Secretary of Revenue for corporations or LLCs suspended under GS 105-230 from $25 to $50. Requires the Secretary of Revenue to remit $25 of the reinstatement fee to the Secretary of State for reimbursement purposes, with funds in excess of the amount necessary for reimbursement reverting to the General Fund.

Part VIII. Enforcement

Current law, GS 55D-18, makes it a Class 1 misdemeanor to sign a document the person knows is false in any material respect with the intent that the document be delivered to the Secretary of State. Effective when the act becomes law, establishes statewide jurisdiction for the Department of the Secretary of State's law enforcement agents, and authorizes the agents to assist local law enforcement in their investigations and to also initiate and carry out investigations with the coordination of local law enforcement agencies. Grants the agents all powers and authority of law enforcement officers when executing arrest warrants. Authorizes the agents to have fictitious licenses, license tags, and registrations pursuant to GS 20-39(h) and GS 14-250 for purposes of conducting criminal investigations. Makes conforming changes, effective December 1, 2019.

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