Bill Text: AZ HB2054 | 2017 | Fifty-third Legislature 1st Regular | Introduced
Bill Title: Foreign nonprofit corporations; foreign LLCs
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Engrossed - Dead) 2017-03-16 - Senate JUD Committee action: Do Pass, voting: (7-0-0-0) [HB2054 Detail]
Download: Arizona-2017-HB2054-Introduced.html
REFERENCE TITLE: foreign nonprofit corporations; foreign LLCs |
State of Arizona House of Representatives Fifty-third Legislature First Regular Session 2017
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HB 2054 |
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Introduced by Representatives Clark: Rubalcava, Senator Farley
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AN ACT
AMENDING SECTIONS 10-11501 AND 10-11502, ARIZONA REVISED STATUTES; AMENDING TITLE 29, CHAPTER 4, ARTICLE 9, ARIZONA REVISED STATUTES, BY ADDING SECTION 29-800; AMENDING SECTION 29-809, ARIZONA REVISED STATUTES; RELATING TO BUSINESS ENTITIES.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 10-11501, Arizona Revised Statutes, is amended to read:
10-11501. Authority to conduct affairs required
A. A foreign corporation shall not conduct affairs in this state until it is granted authority to transact business in this state as provided in this chapter from the commission. For the purposes of this subsection, "conduct affairs" includes the expenditure of monies for the purpose of influencing the outcome of an election in this state.
B. The following activities, among others, do not constitute conducting affairs within the meaning of subsection A of this section:
1. Maintaining, defending or settling any proceeding.
2. Holding meetings of the board of directors or members or carrying on other activities concerning internal corporate affairs.
3. Maintaining bank accounts.
4. Maintaining offices or agencies for the transfer, exchange and registration of memberships or securities or maintaining trustees or depositaries with respect to those securities.
5. Selling through independent contractors.
6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.
7. Creating or acquiring indebtedness, mortgages and security interests in real or personal property.
8. Securing or collecting debts or enforcing mortgages and security interests in property securing the same.
9. Owning, without more, real or personal property.
10. Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature.
11. Conducting affairs in interstate commerce.
12. Being a limited partner of a limited partnership or a member of a limited liability company.
C. The list of activities in subsection B of this section is not exhaustive.
Sec. 2. Section 10-11502, Arizona Revised Statutes, is amended to read:
10-11502. Consequences of conducting affairs without authority; definition
A. A foreign corporation conducting affairs in this state without a grant of authority shall not be permitted to maintain a proceeding in any court in this state or make an expenditure of monies for the purpose of influencing the outcome of an election in this state until it is authorized to transact business.
B. The successor to a foreign corporation that transacted business in this state without a grant of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding on that cause of action in any court in this state until the foreign corporation or its successor obtains authority to transact business.
C. A court may stay a proceeding commenced by a foreign corporation, its successor or its assignee until it determines whether the foreign corporation, its successor or its assignee requires authority to transact business in this state. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains authority to transact business in this state.
D. A foreign corporation that conducts affairs in this state without authority is liable to this state, for the years or portions of years during which it transacted business in this state without authority, in an amount equal to all fees that would have been imposed by chapters 24 through 40 of this title on the corporation if it had duly applied for and received authority to conduct business in this state as required by chapters 24 through 40 of this title and thereafter filed all reports required by chapters 24 through 40 of this title. In addition to all penalties imposed by chapters 24 through 40 of this title for failure to pay the fees, the corporation shall pay a penalty of up to one thousand dollars to this state for violating this section. The attorney general may bring proceedings to recover all amounts due this state under this section.
E. Notwithstanding subsections A and B of this section, the failure of a foreign corporation to obtain authority to transact business in this state does not impair the validity of its corporate acts or prevent it from defending any proceedings in this state.
F. The attorney general or any other person may bring and maintain an action to enjoin any foreign corporation from transacting business in this state without authority. On a foreign corporation obtaining authority, the action shall be dismissed, but the plaintiff shall recover its costs and reasonable attorney fees. A determination by a court of competent jurisdiction in this state that a party to the action is a foreign corporation that was required but failed to qualify as a foreign corporation under chapters 24 through 40 of this title is a prima facie evidence against the foreign corporation in any other action brought by or against it by any other person of the requirement to and failure to qualify.
G. For the purposes of this section, "conduct business", "conducting affairs" and "transacting business" include the expenditure of monies for the purpose of influencing the outcome of an election in this state.
Sec. 3. Title 29, chapter 4, article 9, Arizona Revised Statutes, is amended by adding section 29-800, to read:
29-800. Definition of transacting business
In this article, unless the context otherwise requires, "transacting business" includes the expenditure of monies for the purpose of influencing the outcome of an election in this state.
Sec. 4. Section 29-809, Arizona Revised Statutes, is amended to read:
29-809. Transaction of business without registration
A. A foreign limited liability company transacting business in this state shall not maintain an action, suit or proceeding in a court of this state or make an expenditure of monies to influence the outcome of an election in this state until it has obtained a certificate of registration to transact business.
B. The failure of a foreign limited liability company to obtain a certificate of registration to transact business does not impair the validity of any contract or act of the foreign limited liability company or prevent the foreign limited liability company from defending any action, suit or proceeding in a court of this state.
C. A member of a foreign limited liability company is not liable for any debt, obligation or liability of the limited liability company by reason of having transacted business in this state without a certificate of registration.
D. A foreign limited liability company that transacts business in this state without a certificate of registration appoints the commission as its agent for service of process with respect to causes of action arising out of the transaction of business in this state.
E. Without excluding other activities that may not constitute transacting business in this state, a foreign limited liability company is not considered to be transacting business in this state for the purposes of this chapter solely because it is carrying on one or more of the following activities in this state:
1. Maintaining, defending or effecting a settlement of an action or suit or an administrative or arbitrative proceeding or effecting the settlement of a claim or dispute.
2. Holding meetings of its members or carrying on any other activities concerning its internal affairs.
3. Maintaining a bank account.
4. Maintaining an office or agency for the transfer, exchange and registration of its securities or appointing and maintaining trustees or depositories with relation to its securities.
5. Effecting sales through an independent contractor.
6. Soliciting or receiving orders outside this state in pursuance of letters, circulars, catalogs or other forms of advertising or solicitation and accepting the orders outside this state and filling them with goods shipped into this state.
7. Creating as borrower or lender or acquiring indebtedness, mortgages or other security interests in real or personal property.
8. Securing or collecting debts or enforcing any right in property securing the debts.
9. Transacting business in interstate commerce.
10. Conducting an isolated transaction completed within a period of thirty days and not in the course of a number of repeated transactions of a similar nature.
F. This section does not apply in determining the context or activities that may subject a foreign limited liability company to service of process, suit, taxation or regulation under any other statute of this state.