Bill Text: IA SSB3082 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act eliminating requirements providing for the payment of an outstanding tax liability by dissolved business entities as a condition to reinstatement.
Spectrum: Committee Bill
Status: (Introduced) 2024-01-17 - Subcommittee: Webster, Bisignano, and Koelker. [SSB3082 Detail]
Download: Iowa-2023-SSB3082-Introduced.html
Senate
Study
Bill
3082
-
Introduced
SENATE/HOUSE
FILE
_____
BY
(PROPOSED
SECRETARY
OF
STATE
BILL)
A
BILL
FOR
An
Act
eliminating
requirements
providing
for
the
payment
of
an
1
outstanding
tax
liability
by
dissolved
business
entities
as
2
a
condition
to
reinstatement.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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DIVISION
I
1
LIMITED
LIABILITY
COMPANIES
2
Section
1.
Section
489.710,
subsections
1
and
2,
Code
2024,
3
are
amended
to
read
as
follows:
4
1.
A
limited
liability
company
administratively
dissolved
5
under
section
489.708
may
apply
to
the
secretary
of
state
6
for
reinstatement
at
any
time
after
the
effective
date
of
7
dissolution.
The
application
must
meet
all
of
the
following
8
requirements:
9
a.
State
the
name
of
the
limited
liability
company
10
at
its
date
of
dissolution
and
the
effective
date
of
its
11
administrative
dissolution.
12
b.
State
that
the
ground
or
grounds
for
dissolution
either
13
did
not
exist
or
have
been
eliminated.
14
c.
If
the
application
is
received
more
than
five
years
15
after
the
effective
date
of
the
dissolution,
state
a
name
that
16
satisfies
the
requirements
of
section
489.112
.
17
d.
State
the
federal
tax
identification
number
of
the
18
limited
liability
company.
19
2.
a.
The
secretary
of
state
shall
refer
the
federal
20
tax
identification
number
contained
in
the
application
for
21
reinstatement
to
the
department
of
workforce
development.
22
The
department
of
workforce
development
shall
report
to
the
23
secretary
of
state
the
tax
status
of
the
limited
liability
24
company.
If
the
department
reports
to
the
secretary
of
25
state
that
a
filing
delinquency
or
liability
exists
against
26
the
company,
the
secretary
of
state
shall
not
cancel
the
27
certificate
of
dissolution
until
the
filing
delinquency
or
28
liability
is
satisfied.
29
b.
(1)
2.
a.
If
the
secretary
of
state
determines
that
30
the
application
contains
the
information
required
by
subsection
31
1
,
and
that
a
delinquency
or
liability
reported
pursuant
to
32
paragraph
“a”
has
been
satisfied,
and
that
the
information
is
33
correct,
the
secretary
of
state
shall
cancel
the
certificate
34
of
dissolution
and
prepare
a
certificate
of
reinstatement
35
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that
recites
the
secretary
of
state’s
determination
and
the
1
effective
date
of
reinstatement,
file
the
certificate
of
2
reinstatement,
and
deliver
a
copy
to
the
limited
liability
3
company
under
section
489.119
.
4
(2)
b.
If
the
limited
liability
company’s
name
in
5
subsection
1
,
paragraph
“c”
,
is
different
from
the
name
in
6
subsection
1
,
paragraph
“a”
,
the
certificate
of
reinstatement
7
shall
constitute
an
amendment
to
the
company’s
certificate
of
8
organization
insofar
as
it
pertains
to
its
name.
A
company
9
shall
not
relinquish
the
right
to
retain
its
name
if
the
10
reinstatement
is
effective
within
five
years
of
the
effective
11
date
of
the
company’s
dissolution.
12
DIVISION
II
13
BUSINESS
CORPORATIONS
14
Sec.
2.
Section
490.1422,
subsections
1
and
2,
Code
2024,
15
are
amended
to
read
as
follows:
16
1.
A
corporation
administratively
dissolved
under
section
17
490.1421
may
apply
to
the
secretary
of
state
for
reinstatement
18
at
any
time
after
the
effective
date
of
dissolution.
The
19
application
must
meet
all
of
the
following
requirements:
20
a.
State
the
name
of
the
corporation
at
its
date
of
21
dissolution
and
the
effective
date
of
its
administrative
22
dissolution.
23
b.
State
that
the
ground
or
grounds
for
dissolution
either
24
did
not
exist
or
have
been
eliminated.
25
c.
If
the
application
is
received
more
than
five
years
after
26
the
effective
date
of
dissolution,
state
a
corporate
name
that
27
satisfies
the
requirements
of
section
490.401
.
28
d.
State
the
federal
tax
identification
number
of
the
29
corporation.
30
2.
a.
The
secretary
of
state
shall
refer
the
federal
31
tax
identification
number
contained
in
the
application
for
32
reinstatement
to
the
department
of
workforce
development.
The
33
department
shall
report
to
the
secretary
of
state
the
tax
34
status
of
the
corporation.
If
the
department
reports
to
the
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secretary
of
state
that
a
filing
delinquency
or
liability
1
exists
against
the
corporation,
the
secretary
of
state
shall
2
not
cancel
the
certificate
of
dissolution
until
the
filing
3
delinquency
or
liability
is
satisfied.
4
b.
(1)
2.
a.
If
the
secretary
of
state
determines
that
5
the
application
contains
the
information
required
by
subsection
6
1
,
and
that
a
delinquency
or
liability
reported
pursuant
to
7
paragraph
“a”
has
been
satisfied,
and
that
the
information
is
8
correct,
the
secretary
of
state
shall
cancel
the
certificate
9
of
dissolution
and
prepare
a
certificate
of
reinstatement
10
that
recites
the
secretary
of
state’s
determination
and
the
11
effective
date
of
reinstatement,
file
the
certificate
of
12
reinstatement,
and
deliver
a
copy
to
the
corporation
under
13
section
490.504
.
14
(2)
b.
If
the
corporate
name
in
subsection
1
,
paragraph
15
“c”
,
is
different
from
the
corporate
name
in
subsection
16
1
,
paragraph
“a”
,
the
certificate
of
reinstatement
shall
17
constitute
an
amendment
to
the
articles
of
incorporation
18
insofar
as
it
pertains
to
the
corporate
name.
A
corporation
19
shall
not
relinquish
the
right
to
retain
its
corporate
name
20
if
the
reinstatement
is
effective
within
five
years
of
the
21
effective
date
of
the
corporation’s
dissolution.
22
DIVISION
III
23
CLOSED
COOPERATIVES
24
Sec.
3.
Section
501.813,
subsections
1
and
2,
Code
2024,
are
25
amended
to
read
as
follows:
26
1.
A
cooperative
administratively
dissolved
under
section
27
501.812
may
apply
to
the
secretary
of
state
for
reinstatement
28
at
any
time
after
the
effective
date
of
dissolution.
The
29
application
must
meet
all
of
the
following
requirements:
30
a.
Recite
the
name
of
the
cooperative
at
its
date
of
31
dissolution
and
the
effective
date
of
its
administrative
32
dissolution.
33
b.
State
that
the
ground
or
grounds
for
dissolution
have
34
been
eliminated.
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c.
If
the
application
is
received
more
than
five
years
after
1
the
effective
date
of
the
cooperative’s
dissolution,
state
a
2
name
that
satisfies
the
requirements
of
section
501.104
.
3
d.
State
the
federal
tax
identification
number
of
the
4
cooperative.
5
2.
a.
The
secretary
of
state
shall
refer
the
federal
6
tax
identification
number
contained
in
the
application
for
7
reinstatement
to
the
department
of
workforce
development.
8
The
department
of
workforce
development
shall
report
to
the
9
secretary
of
state
the
tax
status
of
the
cooperative.
If
the
10
department
reports
to
the
secretary
of
state
that
a
filing
11
delinquency
or
liability
exists
against
the
cooperative,
12
the
secretary
of
state
shall
not
cancel
the
certificate
of
13
dissolution
until
the
filing
delinquency
or
liability
is
14
satisfied.
15
b.
(1)
2.
a.
If
the
secretary
of
state
determines
that
16
the
application
contains
the
information
required
by
subsection
17
1
,
and
that
a
delinquency
or
liability
reported
pursuant
to
18
paragraph
“a”
has
been
satisfied,
and
that
the
information
is
19
correct,
the
secretary
of
state
shall
cancel
the
certificate
20
of
dissolution
and
prepare
a
certificate
of
reinstatement
21
that
recites
the
secretary
of
state’s
determination
and
the
22
effective
date
of
reinstatement,
file
the
document,
and
deliver
23
a
copy
to
the
cooperative
under
section
501.106
.
24
(2)
b.
If
the
name
of
the
cooperative
as
provided
in
25
subsection
1
,
paragraph
“c”
,
is
different
than
the
name
in
26
subsection
1
,
paragraph
“a”
,
the
certificate
of
reinstatement
27
shall
constitute
an
amendment
to
the
articles
of
association
28
insofar
as
it
pertains
to
the
name.
A
cooperative
shall
not
29
relinquish
the
right
to
retain
its
name
if
the
reinstatement
30
is
effective
within
five
years
of
the
effective
date
of
the
31
cooperative’s
dissolution.
32
DIVISION
IV
33
NONPROFIT
COOPERATIVES
34
Sec.
4.
Section
504.1423,
subsections
1
and
2,
Code
2024,
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are
amended
to
read
as
follows:
1
1.
A
corporation
administratively
dissolved
under
section
2
504.1422
may
apply
to
the
secretary
of
state
for
reinstatement
3
at
any
time
after
the
effective
date
of
dissolution.
The
4
application
must
state
all
of
the
following:
5
a.
The
name
of
the
corporation
and
the
effective
date
of
its
6
administrative
dissolution.
7
b.
That
the
ground
or
grounds
for
dissolution
either
did
not
8
exist
or
have
been
eliminated.
9
c.
If
the
application
is
received
more
than
five
years
after
10
the
effective
date
of
dissolution,
state
the
corporation’s
name
11
satisfies
the
requirements
of
section
504.401
.
12
d.
The
federal
tax
identification
number
of
the
corporation.
13
2.
a.
The
secretary
of
state
shall
refer
the
federal
14
tax
identification
number
contained
in
the
application
for
15
reinstatement
to
the
department
of
workforce
development.
16
The
department
of
workforce
development
shall
report
to
the
17
secretary
of
state
the
tax
status
of
the
corporation.
If
the
18
department
reports
to
the
secretary
of
state
that
a
filing
19
delinquency
or
liability
exists
against
the
corporation,
20
the
secretary
of
state
shall
not
cancel
the
certificate
of
21
dissolution
until
the
filing
delinquency
or
liability
is
22
satisfied.
23
b.
(1)
2.
a.
If
the
secretary
of
state
determines
24
that
the
application
contains
the
information
required
by
25
subsection
1
,
that
a
delinquency
or
liability
reported
pursuant
26
to
paragraph
“a”
has
been
satisfied,
and
that
all
of
the
27
application
information
is
correct,
the
secretary
of
state
28
shall
cancel
the
certificate
of
dissolution
and
prepare
a
29
certificate
of
reinstatement
reciting
that
determination
and
30
the
effective
date
of
reinstatement,
file
the
document,
and
31
deliver
a
copy
to
the
corporation
under
section
504.504
.
32
(2)
b.
If
the
corporate
name
in
subsection
1
,
paragraph
33
“c”
,
is
different
from
the
corporate
name
in
subsection
34
1
,
paragraph
“a”
,
the
certificate
of
reinstatement
shall
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constitute
an
amendment
to
the
articles
of
incorporation
1
insofar
as
it
pertains
to
the
corporate
name.
A
corporation
2
shall
not
relinquish
the
right
to
retain
its
corporate
name
3
if
the
reinstatement
is
effective
within
five
years
of
the
4
effective
date
of
the
corporation’s
dissolution.
5
EXPLANATION
6
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
7
the
explanation’s
substance
by
the
members
of
the
general
assembly.
8
BACKGROUND
(TREATMENT
OF
BUSINESS
ENTITIES).
A
business
9
entity
may
be
organized
on
a
profit,
nonprofit,
or
cooperative
10
basis.
This
bill
provides
for
each
type
of
business
entity,
11
including
a
limited
liability
company
and
business
corporation
12
organized
on
a
profit
basis
for
the
benefit
of
its
investors
13
(members
or
shareholders),
a
closed
cooperative
(closed
coop)
14
organized
for
the
benefit
of
its
investor-patrons
(members),
15
and
a
nonprofit
corporation
organized
under
principles
other
16
than
investor
benefit
(members).
Each
of
these
business
17
entities
is
governed
under
its
own
Code
chapter
and
a
specific
18
form
of
organic
document
(e.g.,
articles
of
incorporation
or
19
operating
agreement)
that
sets
forth
its
powers
and
duties.
20
These
powers
and
duties
include
the
rights
and
obligations
21
of
its
interest
holders
(e.g.,
exercising
voting
power)
and
22
management
(e.g.,
a
board
of
directors
or
officers),
and
the
23
use
or
distribution
of
its
assets
including
earnings
with
24
related
tax
consequences.
The
business
entity
exercises
25
its
powers
and
duties
under
the
general
oversight
of
the
26
secretary
of
state
(secretary).
The
bill
addresses
statutory
27
requirements
for
the
reinstatement
of
a
dissolved
business
28
entity.
29
DISSOLUTION
OF
A
BUSINESS
ENTITY.
Each
Code
chapter
30
governing
a
business
entity
specifies
how
it
may
be
dissolved
31
and
its
activities
and
affairs
are
wound
up
(e.g.,
its
assets
32
liquidated).
For
dissolution
procedures
governing
each
type
of
33
covered
business
entity,
see
Code
chapter
489,
subchapter
VII,
34
for
limited
liability
companies;
Code
chapter
490,
subchapter
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XIV,
for
business
corporations;
Code
chapter
501,
subchapter
1
VIII,
for
closed
cooperatives;
and
Code
chapter
504,
subchapter
2
XIV,
for
nonprofit
corporations.
Generally,
a
dissolution
may
3
be
initiated
by
the
business
entity
on
a
voluntary
basis
(with
4
the
consent
of
its
interest
holders)
or
on
an
involuntarily
5
basis
pursuant
to
a
legal
action
for
administrative
dissolution
6
commenced
by
the
secretary.
Administrative
dissolution
is
7
the
outcome
caused
by
a
business
entity
failing
to
comply
8
with
a
statutory
duty
(e.g.,
a
failure
to
maintain
a
place
of
9
business
or
be
represented
by
a
registered
agent
for
purpose
10
of
receiving
service
of
process).
Once
the
secretary
issues
11
a
certificate
of
dissolution,
the
subject
business
entity
12
can
no
longer
do
business
in
the
state
other
than
winding
13
up
its
affairs.
The
grounds
for
administrative
dissolution
14
may
be
intentional
or
unintentional
(e.g.,
the
inadvertent
15
failure
of
an
officer
of
the
business
entity
to
file
a
biennial
16
report
with
the
secretary).
Several
escape
procedures
allow
a
17
business
entity
to
avoid
dissolution.
First,
the
secretary
of
18
state
is
required
to
notify
the
business
entity
of
its
pending
19
administrative
dissolution
to
allow
the
business
entity
to
20
cure
the
violation.
Second,
a
business
entity
that
has
been
21
issued
a
certificate
of
dissolution
may
apply
to
the
secretary
22
of
state
to
cancel
the
certificate
and
be
reinstated.
If
the
23
secretary
approves
the
application,
the
secretary
issues
a
24
certificate
of
reinstatement.
The
effect
of
the
cancellation
25
and
reinstatement
is
to
retroactively
place
the
business
entity
26
in
the
same
position
it
would
have
been
in
if
there
were
no
27
dissolution,
subject
to
certain
limitations
(e.g.,
restrictions
28
on
the
right
of
the
business
entity
to
regain
its
name
if
the
29
application
was
not
timely
filed).
30
BILL’S
PROVISIONS
(TAX
STATUS
NO
LONGER
REQUIRED
AS
A
31
CONDITION
FOR
REINSTATEMENT).
The
bill
eliminates
provisions
32
that
require
any
of
these
covered
business
entities
to
include
33
their
federal
tax
identification
number
(tax
ID
number)
in
34
its
application
for
administrative
reinstatement.
Secondly,
35
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5345XD
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90
da/jh
7/
8
S.F.
_____
H.F.
_____
the
bill
eliminates
a
requirement
that
the
secretary
refer
1
the
applicant’s
tax
ID
number
to
the
department
of
workforce
2
development
(department)
and
that
the
department
report
to
the
3
secretary
the
applicant’s
tax
status.
The
department
(see
4
Code
chapter
84A)
is
primarily
responsible
for
administering
5
laws
relating
to
unemployment
compensation
insurance
supported
6
by
taxes
collected
from
employers.
The
provisions
to
be
7
eliminated
currently
prohibit
the
secretary
from
canceling
a
8
certificate
of
dissolution
until
the
business
entity
satisfies
9
its
tax
payment
obligation.
10
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LSB
5345XD
(6)
90
da/jh
8/
8
