SB 0896 Modifies law regarding LLC's, LLP's, corporations, financial institutions and other financial arrangements
LR Number:2777S.13T Fiscal Note:2777-13
Committee:Financial and Governmental Organization
Last Action:06/27/00 - Signed by Governor (w/EC) Journal page:
Title:CCS HS HCS SB 896
Effective Date:August 28, 2000
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Current Bill Summary

CCS/HS/HCS/SB 896 - This act makes several changes regarding Limited Liability Corporations, Limited Liability Partnerships and corporations.

REMOVAL OF CORPORATE TRUSTEES (Section 21.650) - 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.

FEE AGENTS (Section 136.055) - This act allows fee agents to charge $2.50 for each notice of lien processed beginning August 28, 2000.

REAL PROPERTY TAXES (Section 140.110) - Real property taxes received by the county collector shall be applied to back delinquent taxes first before accepting payment for current taxes. This section does not apply to financial institutions who pay tax obligations which the institutions service from escrow accounts.

(Section 141.160) - The three-year statute of limitations for the selling of land to collect back taxes shall not apply to the conveyance of land having a tax exempt status (and the instrument causes the land to become taxable again) where the written instrument has not been recorded. The three-year statute of limitations shall only apply to those types of instruments once the recording of the title has occurred.

TRUSTS (Section 143.331) - 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.

BULLION AND INVESTMENT COINS (Section 144.185) - This act exempts bullion and investment coins from local sales and use taxation. This portion of the act is similar to SB 1042 and HCS/SB 936.

BANK TAX CREDIT (Section 148.064) - 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).

LIENS ON MOTOR VEHICLES (Section 301.600) - 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. Proof of the lien for future advances will be maintained by the Department of Revenue.

MOTORBOAT LIENS (Section 306.400) - This act sets forth what a notice of lien must contain for motorboats. Liens may also secure future advances on motorboats and other watercraft.

FUTURE ADVANCES (Sections 306.410 & 306.420) - 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.

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

NOT FOR PROFIT HEALTH SERVICES CORPORATIONS (Sections 351.025 & 354.065) - Extends the sunset clause for when a not for profit health services corporation (Blue Cross-Blue Shield) may file for and amend its articles of incorporation to become a for profit corporation from August 31, 2000 to August 31, 2001. Similar provisions also contained in HCS/SS/SCS/SBs 678 & 742.

ARTICLES OF INCORPORATION (Section 351.055) - 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.

(Section 351.245) - Prohibits persons from voting any shares which at the time belong to the corporation which issued such shares or which at the time belong to an entity controlled by such corporation.

(Section 351.300) - This act allows a corporation to pay cash equal to the value of a fractional share in lieu of issuing fractions of a share.

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.

(Section 351.690) - This act states that the general corporation law chapter shall apply to banks, trust companies, and safe deposit companies when Chapter 362, RSMo, 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.

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 LLPs which is similar to that for LLCs.

CENTRALIZED FILING WITH THE DIVISION OF FINANCE (Sections 361.230 - 362.035) - 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).

BANKS AND TRUST COMPANIES (Section 362.105) - 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.

UNIMPAIRED CAPITAL (Section 362.170) - 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.

(Section 361.390) - The Director of the Division of Finance shall obtain approval from the Circuit Court of Cole County when selling debts of a corporation under liquidation. The act also removes a requirement that the Director file an order in the recorder of deeds when selling real property of a corporation undergoing liquidation.

(Sections 362.119 & 362.172) - This act removes trust companies from certain stock investment restrictions.

(Section 362.325) - 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.

(Section 362.600) - 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 their lawful attorney for service of process in actions growing out of trust matters.

(Section 362.730 & 362.740) - 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.

(Section 369.219) - Allows an association to invest in the securities of the Student Loan Marketing Association, the Federal Home Loan Banks, and Federal Farm Credit Banks.

SAVINGS AND LOANS RECORDS (Section 369.731) - This act requires persons requesting association 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 association to mail requested records with a business records affidavit in lieu of a association 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 association shall have no liability to an account holder for disclosing records in reliance on the affidavits.

RECIPROCITY OF INSURANCE LICENSING (Section 375.017) - This act also revises the law regarding the licensing of out-of-state insurance agents and brokers. The Director of Insurance shall not charge a nonresident a greater fee for an insurance license simply because he or she resides out of Missouri. An application for a license shall be waived if the person has a valid license from another state and that state grants Missouri residents the same privilege. The completion of continuing education requirements in another state will satisfy Missouri's requirements. Any bank or trust company that sells insurance products shall be subject to the insurance laws and regulations of this state.

CREDIT INSURANCE LICENSING (Sections 375.022 & 375.065) - 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).

(Section 375.347) - Provides that securities and other related assets not exclusively controlled by an insurance company shall not be held by banks, trust companies or securities depositories that are members of or regulated by the SEC, the Federal Reserve System, or the appropriate bank authority.

INSURANCE RECORDS (Sections 376.350 & 379.105) - 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 (Sections 400.3-312 & 408.234) - 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.

(Section 407.125) - The provisions of Chapter 407, RSMo, shall not bar the Commissioner of Securities from administering the provisions of Chapter 409, RSMo.

BUSINESS OPPORTUNITY ACT (Sections 407.2000 - 407.221) - 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).

MORTGAGE INSURANCE (Section 443.415) - Allows mortgage insurance for up to 100% of the market value of the property. This provision is similar to SB 804 (2000).

GARNISHMENT (Sections 525.080 - 525.250) - This act states that a garnishee does not have to deliver property protected from garnishment under state or federal law to court. 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 (Section 1) - This act requires limited liability companies which own or lease 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.