Bill Text: MS SB2536 | 2024 | Regular Session | Comm Sub
Bill Title: Nonprofit corporations which receive public funds; require reporting to Secretary of State.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2024-03-14 - Died On Calendar [SB2536 Detail]
Download: Mississippi-2024-SB2536-Comm_Sub.html
MISSISSIPPI LEGISLATURE
2024 Regular Session
To: Judiciary, Division A
By: Senator(s) McCaughn
Senate Bill 2536
(COMMITTEE SUBSTITUTE)
AN ACT TO REQUIRE NONPROFIT CORPORATIONS TO FILE AN ANNUAL REPORT WITH THE SECRETARY OF STATE BY A CERTAIN DATE; TO REQUIRE THE REPORT TO CONTAIN CERTAIN INFORMATION; TO PROVIDE THAT INFORMATION IN THE ANNUAL REPORT MUST BE CURRENT AS OF THE DATE THE ANNUAL REPORT IS EXECUTED ON BEHALF OF THE NONPROFIT CORPORATION; TO REQUIRE THE SECRETARY OF STATE TO NOTICE A NONPROFIT CORPORATION OF ANY DEFICIENCIES IN AN ANNUAL REPORT; TO PROVIDE THAT FAILURE TO FILE AN ANNUAL REPORT MAY SUBJECT THE NONPROFIT CORPORATION TO DISSOLUTION OR REVOCATION; TO AMEND SECTION 79-11-127, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "PUBLIC FUNDS" WITHIN THE PROVISIONS OF THE MISSISSIPPI NONPROFIT CORPORATION ACT; TO AMEND SECTIONS 79-11-107, 79-11-347 AND 79-11-385, MISSISSIPPI CODE OF 1972, TO CONFORM; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) All nonprofit corporations shall file an annual report with the Secretary of State by April 15 of each year.
(2) All nonprofit corporations shall set forth in its annual report the following information:
(a) The name of the nonprofit corporation and the state or country or other foreign jurisdiction under whose law it is organized;
(b) The name, email address, and street or physical address of its registered agent in this state;
(c) The address of its principal office;
(d) The name, titles and business address of its principal officer;
(e) A brief description of the nature of its business; and
(f) A statement as to whether it has received public funds and a listing of any governmental entity that distributed the public funds.
(2) Information in the annual report must be current as of the date the annual report is executed on behalf of the nonprofit corporation.
(3) If an annual report does not contain the information required by this section, the Secretary of State shall promptly return the report to the nonprofit corporation with a written notification of the deficiency for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty (30) days after the effective date of the written notice sent under this subsection or before the date the report is otherwise due, the annual report shall be deemed timely filed.
(4) A nonprofit corporation may be subject to administrative dissolution or revocation for failure to file its annual report.
SECTION 2. Section 79-11-127, Mississippi Code of 1972, is amended as follows:
79-11-127. Unless the context otherwise requires in Section 79-11-101 et seq., the following terms shall have the meaning ascribed herein:
(a) "Approved by (or approval by) the members" means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or by a written ballot or written consent in conformity with Section 79-11-101 et seq. or by the affirmative vote, written ballot or written consent of such greater proportion, including the votes of all the members of any class, unit or grouping as may be provided in the articles, bylaws or Section 79-11-101 et seq. for any specified member action.
(b) "Articles of incorporation" or "articles" include amended and restated articles of incorporation and articles of merger.
(c) "Board" or "board of directors" means the board of directors except that no person or group of persons are the board of directors because of powers delegated to that person or group pursuant to Section 79-11-231.
(d) "Bylaws" means the code or codes of rules (other than the articles) adopted pursuant to Section 79-11-101 et seq. for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.
(e) "Class" means a group of memberships which have the same rights with respect to voting, dissolution, redemption and transfer. For the purposes of this section, rights shall be considered the same if they are determined by a formula applied uniformly.
(f) "Conspicuous" means so written, displayed, or presented that a reasonable person against whom the record is to operate should have noticed it. For example, text in italics, boldface, contrasting color or capitals, or that is underlined, is conspicuous.
(g) "Corporation" means a nonprofit corporation subject to the provisions of Section 79-11-101 et seq., except a foreign corporation.
(h) "Delegates" means those persons elected or appointed to vote in a representative assembly for the election of a director or directors or on other matters.
(i) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and electronic transmission, except that delivery to the Secretary of State means actual receipt by the Secretary of State.
(j) "Directors" means individuals, designated in the articles or bylaws or elected by the incorporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board.
(k) "Distribution" means the payment of a dividend or any part of the income or profit of a corporation to its members, directors or officers. Payment of reasonable compensation, fees, or expenses incurred in the performance of duties on behalf of the corporation is not a distribution.
(l) "Domestic corporation" means a corporation.
(m) "Effective date of notice" is defined in Section 79-11-129.
(n) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(o) "Electronic transmission" or "electronically transmitted" means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval and reproduction of information by the recipient.
(p) "Employee" includes an officer but not a director. A director may accept duties that make the director an employee.
(q) "Entity" includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; corporation sole; business trust, estate, partnership, trust and two (2) or more persons having a joint or common economic interest; and state, United States and foreign government.
(r) "File," "filed" or "filing" means filed in the Office of the Secretary of State.
(s) "Foreign corporation" means a corporation organized under a law other than the law of this state which would be a nonprofit corporation if formed under the laws of this state.
(t) "Governmental subdivision" includes authority, county, district and municipality.
(u) "Includes" denotes a partial definition.
(v) "Individual" includes the estate of an incompetent individual.
(w) "Means" denotes a complete definition.
(x) "Member" means (without regard to what a person is called in the articles or bylaws) any person or persons who on more than one (1) occasion, pursuant to a provision of a corporation's articles or bylaws, have the right to vote for the election of a director or directors.
A person is not a member by virtue of any of the following:
(i) Any rights such person has as a delegate;
(ii) Any rights such person has to designate a director or directors; or
(iii) Any rights such person has as a director.
(y) "Membership" refers to the rights and obligations a member or members have pursuant to a corporation's articles, bylaws and Section 79-11-101 et seq.
(z) "Nonprofit corporation" means a corporation, no part of the assets, income or profit of which is distributed to or enures to the benefit of its members, directors or officers, except as otherwise provided under this chapter. In a corporation all of whose members are nonprofit corporations, distribution to members does not deprive it of the status of a nonprofit corporation.
(aa) "Notice" is defined in Section 79-11-129.
( * * *ab) "Person" includes any individual
or entity.
( * * *ac) "Principal office" means
the office (in or out of this state) where the principal executive offices of a
domestic or foreign corporation are located.
( * * *ad) "Proceeding" includes civil
suit and criminal, administrative and investigatory action.
(ae) "Public funds" means monies received by a nonprofit corporation during its most recently completed fiscal year that were received from the State of Mississippi or its political subdivisions, including any local governmental authority within the State of Mississippi.
( * * *af) "Record" means information
that is inscribed on a tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
( * * *ag) "Record date" means the
date established under Section 79-11-209 on which a corporation determines the identity
of its members for the purposes of Section 79-11-101 et seq.
( * * *ah) "Religious corporation"
means a corporation organized and operating primarily or exclusively for religious
purposes.
( * * *ai) "Secretary" means the corporate
officer to whom the board of directors has delegated responsibility under Section
79-11-273 for custody of the minutes of the directors' and members' meetings and
for authenticating the records of the corporation.
( * * *aj) "Sign" means with present
intent to authenticate or adopt a record:
(i) To execute or adopt a tangible symbol; or
(ii) To attach to or logically associate with the record an electronic sound, symbol, or process as defined under Mississippi law.
( * * *ak) "State," when referring
to a part of the United States, includes a state and commonwealth (and their agencies
and governmental subdivisions) and a territory, and insular possession (and their
agencies and governmental subdivisions) of the United States.
( * * *al) "United States" includes
any district, authority, bureau, commission, department and any other agency of
the United States.
( * * *am) "Vote" includes authorization
by written ballot and written consent.
( * * *an) "Voting power" means the
total number of votes entitled to be cast for the election of directors at the time
the determination of voting power is made, excluding a vote which is contingent
upon the happening of a condition or event that has not occurred at the time. Where
a class is entitled to vote as a class for directors, the determination of voting
power of the class shall be based on the percentage of the number of directors the
class is entitled to elect out of the total number of authorized directors.
SECTION 3. Section 79-11-107, Mississippi Code of 1972, is amended as follows:
79-11-107. (1) The
Secretary of State may prescribe and furnish, on request, forms for: (a) an application
for a certificate of existence; (b) a foreign corporation's application for a
certificate of authority to transact business in this state; (c) a foreign
corporation's application for a certificate of withdrawal; * * * (d) the status report; and (e) the annual
report. If the Secretary of State so requires, use of these forms is
mandatory.
(2) The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by Section 79-11-101 et seq., but their use is not mandatory.
SECTION 4. Section 79-11-347, Mississippi Code of 1972, is amended as follows:
79-11-347. The Secretary of State may commence a proceeding under Section 79-11-349 to administratively dissolve a corporation if:
(a) The corporation does not pay within sixty (60) days after they are due any taxes or penalties imposed by Section 79-11-101 et seq. or other law;
(b) The corporation does not deliver a requested status report to the Secretary of State within sixty (60) days after it is due;
(c) The corporation does not deliver an annual report to the Secretary or State within sixty (60) days after it is due;
( * * *d) The corporation is without a registered
agent in this state for sixty (60) days or more;
( * * *e) The corporation does not notify the
Secretary of State within one hundred twenty (120) days that its registered
agent has been changed or that its registered agent has resigned;
( * * *f) The corporation's period of
duration, if any, stated in its articles of incorporation expires;
( * * *g) The corporation fails to report
within the time period specified in Section 79-11-405 the suspension or
revocation of its tax-exempt status under Section 501(c)(3) of the Internal
Revenue Code; or
( * * *h) An incorporator, director, officer or
agent of the corporation signed a document he knew was false in any material
respect with intent that the document be delivered to the Secretary of State
for filing.
SECTION 5. Section 79-11-385, Mississippi Code of 1972, is amended as follows:
79-11-385. (1) The Secretary of State may commence a proceeding under Section 79-11-387 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:
(a) The foreign corporation does not deliver the status report to the Secretary of State within sixty (60) days after it is due;
(b) The foreign corporation does not deliver an annual report to the Secretary or State within sixty (60) days after it is due;
( * * *c) The foreign corporation does not
pay within sixty (60) days after they are due any franchise taxes or penalties
imposed by Section 79-11-101 et seq. or other law;
( * * *d) The foreign corporation is without
a registered agent in this state for sixty (60) days or more;
( * * *e) The foreign corporation does not
inform the Secretary of State by an appropriate filing that its registered
agent has changed or that its registered agent has resigned within ninety (90)
days of the change or resignation;
( * * *f) An incorporator, director, officer
or agent of the foreign corporation signed a document such person knew was
false in any material respect with intent that the document be delivered to the
Secretary of State for filing; or
( * * *g) The Secretary of State receives a
duly authenticated certificate from the Secretary of State or other official
having custody of corporate records in the state or country under whose law the
foreign corporation is incorporated stating that it has been dissolved or has
disappeared as the result of a merger.
(2) The Attorney General may commence a proceeding under Section 79-11-387 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if the foreign corporation has continued to exceed or abuse the authority conferred upon it by law.
SECTION 6. Section 1 of this act shall be codified in Title 79, Chapter 11, Mississippi Code of 1972, within the provisions of the Mississippi Nonprofit Corporation Act.
SECTION 7. This act shall take effect and be in force from and after July 1, 2024.
