- House Committee Substitute -

HCS/SB 896 - This act makes several changes to laws relating to limited liability companies (LLC), not for profit health services corporations and limited liability partnerships (LLP), liens, banks and trust companies and other business organizations.

CENTRALIZED FILING WITH THE DIVISION OF FINANCE - This act provides a centralized filing system for financial institutions. It proposes that all official filings be kept in the public records of the Division of Finance. Similar to SB 866 (2000).

LIMITED LIABILITY COMPANIES (Section 347.141) - Notice requirements for winding up a dissolved LLC would require publication in the Missouri Register or in the local county where the LLC is located.

LIMITED LIABILITY PARTNERSHIPS (Section 359.091) - Allows LLPs to be perpetual in their existence. Current law limits existence to a number of years.

Section 359.481 - Adds notice of winding up and publishing requirements for LLP's which is similar to that for LLCs.

GENERAL BUSINESS ORGANIZATIONS (Section 351.482) - Notice requirements for winding up a dissolved corporation would require publication in the Missouri Register or in the newspaper in the county where the corporation's principal's office is located.

NOT FOR PROFIT HEALTH SERVICES CORPORATIONS - Extends the sunset clause for when not for profit health services corporation may file for and amend its articles of incorporation to become a for profit corporation from August 31, 2000 to August 31, 2001.

TRUSTS - This act also modifies the definition of a "trust" for income tax purposes by requiring that at least one income beneficiary be a resident of Missouri.

BANK TAX CREDIT - This act allows an additional tax credit to banking institutions equal to one-sixtieth of one percent of its outstanding shares and surplus. This portion of the act is similar to SB 866 (2000).

FEE AGENTS - This act allows fee agents to charge #2.50 for each notice of lien processed beginning August 28, 2000.

LIENS ON MOTOR VEHICLES - This act sets forth what the notice of lien shall contain. It also states that a notice which substantially complies with the notice requirements will be effective even though there are minor errors. This act sets forth the requirements of a notice for a lien on future advances. A lien on future advances should be filed within 10 days to comply with federal law. Proof of the lien for future advances will be maintained by the Department of Revenue.

MOTORBOAT LIENS - This act sets forth what a notice of lien must contain for motorboats. Liens may also secure future advances on motorboats and other watercraft. The notice for future advances should be filed within 10 days of its creation to comply with federal law.

A lienholder in possession of a certificate of title does not have to deliver the certificate of title and other related documents if the lien secures future advances.

This act provides that the lienholder must execute a release of his lease once the lien is satisfied provided the owner waives any rights to future advances.

ARTICLES OF INCORPORATION - The articles of incorporation shall set forth a provision, if the incorporators choose to do so, which eliminates the personal liability of a director to the corporation or its shareholders for monetary damages resulting from the director's breach of fiduciary duty as director. The provision shall not eliminate the director's liability for any acts or omissions occurring before the effective date of the provision.

This act allows a corporation to pay cash equal to the value of a fractional share in lieu of issuing fractions of a share.

This act states that the general corporation law chapter shall apply to banks, trust companies, and safe deposit companies when Chapter 362 does not deal with the internal affairs of those types of institutions. Internal affairs includes matters of corporate governance, director and officer liability and financial structure.

This act requires the Director of Finance to obtain approval from the circuit court of Cole County when selling debts of a corporation under liquidation. The act also removes requirement that the Director file an order in the recorder of deeds when selling real property of a corporation undergoing liquidation.

BANKS AND TRUST COMPANIES - This act allows banks and trust companies to establish one or more subsidiaries to offer products and services that a national bank may offer through a financial subsidiary. This act also removes trust companies from certain stock investment restrictions.

This act lowers the minimum number of board of directors to manage the banks and trust companies from five to three.

A bank or trust company may reduce its capital stock to its authorized but unissued shares, its issued shares and its capital stock as represented by such issued shares, including a reduction of capital stock by reverse stock split. A bank or trust company may issue a certificate for a fractional share or may pay cash equal to the value of the fractional share. All certificates relating to the amendment of a bank charter shall filed in the public records of the Division of Finance.

This act allows a foreign corporation to establish a trust representative office in this state to act as a fiduciary if Missouri banks or trust companies are permitted to open a trust representative office in the other state. Banks and trust companies not incorporated under Missouri law shall be deemed to have appointed the Division of Finance as its lawful attorney for service of process in actions growing out of trust matters.

This act allows a dissenting stockholder to receive reasonable value of his stock when a reverse stock split occurs. When determining the reasonable value of the stock at the time of merger, consolidation or reverse stock split, the appraisers shall value the stock to include a minority discount to reflect that the minority shareholders lack control over the corporate decision making and a marketability discount to reflect that the fact that a ready market does not exist for such stock.

This act permits bank holding companies to become financial holding companies if they comply with federal law. Permits other financial companies to acquire banks or bank holding companies and become a financial holding company if they comply with federal law.

This act allows saving and loans associations to invest in stocks and obligations of the Student Loan Marketing Association, the Federal Home Loan Banks and the Federal Farm Credit Banks.

CREDIT INSURANCE LICENSING - This act creates a licensing process for credit insurance companies. The act allows such licensees to employ persons at least 18 years old on a non-commission basis selling credit insurance. The Director of the Department of Insurance will prescribe an application form. The act sets forth the information to be included in the application, the renewal process, and fees. This portion of the act is similar to HB 1680 (2000).

INSURANCE RECORDS - This act states that statements required to be filed by life assurance companies and insurance companies with the Department of Insurance regarding the compensation of any employee or officer shall not be subject to disclosure except to Department of Insurance employees.

REAL ESTATE LOANS AND MORTGAGES - This act exempts fees considered de minimis under federal law from being included in the annual percentage rate for state examination purposes for residential real estate loans and second mortgage loans.

BUSINESS OPPORTUNITY ACT - This act regulates business opportunities. A business opportunity is the sale or lease of any products, equipment, supplies or services which are sold to a purchaser to enable the purchaser to start a business for which the purchaser is required to pay the seller an initial fee in excess of $500. In return, the seller will assist the purchaser with getting started in the business of operating vending machines or currency-operated amusement machines and will guarantee that the purchaser will derive income from the business opportunity.

This act prohibits the business opportunity seller making certain misrepresentations regarding the nature of the business opportunity. A seller convicted of making such misrepresentations shall be guilty of a Class A misdemeanor. The buyer of a business opportunity who has been the victim of misleading statements or has not been provided the proper equipment or supplies to begin the business opportunity, may rescind the business opportunity contract within one year. The purchaser shall be reimbursed all sums he or she has paid to the business seller. Once the purchaser has been reimbursed, he or she shall return all equipment and supplies to the seller. Any purchaser may bring an action for damages, including reasonable attorney fees, for the purchaser's breach of contract. A court may issue an injunction to prevent a business opportunity seller from violating the act. The business opportunity sections are similar to those ones contained in SB 917 (2000).

DEPOSITORY INSTITUTION RECORDS - This act requires persons requesting depository institution records by subpoena to reimburse the institution $15 plus a fee of 35 cents per page for copying and producing such records. The act also permits a depository institution to mail requested records with a business records affidavit in lieu of a depository institution officer appearing at a deposition if the requesting party provides written affidavits from the persons signed by the parties to whom the records pertain. If the officer must appear in court or at a deposition, the requesting party shall be responsible for the institution's reasonable expenses for appearing in court or at the deposition. The court may assess as costs against a party the expenses incurred by the institution for producing records or for making appearances. The depository institution shall have no liability to an account holder for disclosing records in reliance on the affidavits.

GARNISHMENT - This act states that a garnishee does not have to deliver property to court protected from garnishment under state or federal law. The act also allows garnishee to collect court costs, attorney fees and other bona fide expenses in answering interrogatories. This act states that a notice of garnishment and writ of sequestration shall contain the judgment debtor's federal taxpayer identification number rather than his or her social security number. The plaintiff in an attachment case shall pay the garnishee's actual employee costs for defending a case.

LLC PROPERTY MANAGEMENT - This act requires limited liability companies which owns or leases property in Kansas City to file with the circuit clerk an affidavit listing the name and address of at least one person who has management control over such property.

REMOVAL OF CORPORATE TRUSTEES - This act requires the Speaker of the House and the President Pro Tem of the Senate to designate a state organization which focuses on banking to report to the General Assembly by January 1, 2001, its recommendations regarding the removal of a corporate trustee in cases where the original trustee has been replaced due to corporate mergers, acquisitions or cessation of business. This section has an emergency clause provision.

UNIMPAIRED CAPITAL - This act states that certain lending restrictions placed on banks and trust companies shall not apply to debts guaranteed or collateralized by the Student Loan Marketing Association, the Federal Home Loan Home Banks or the Federal Farm Credit Bank. This portion of the act has an emergency clause.

STEPHEN WITTE