PRIOR PRINTER'S NO. 3139 PRINTER'S NO. 4836
No. 2251 Session of 2005
INTRODUCED BY T. STEVENSON, BARRAR, BOYD, CALTAGIRONE, CAPPELLI, CAUSER, CREIGHTON, GEIST, GOODMAN, HERSHEY, KAUFFMAN, KILLION, LEH, MARKOSEK, MARSICO, McILHATTAN, MUSTIO, O'NEILL, PETRI, REICHLEY, ROHRER, ROSS, SCHRODER, R. STEVENSON, E. Z. TAYLOR, THOMAS, TURZAI, WILT, YOUNGBLOOD, BENNINGHOFF, FRANKEL AND ADOLPH, NOVEMBER 21, 2005
AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF REPRESENTATIVES, AS AMENDED, OCTOBER 18, 2006
AN ACT 1 Amending Title 15 (Corporations and Unincorporated Associations) 2 of the Pennsylvania Consolidated Statutes, FURTHER PROVIDING <-- 3 FOR REMOVAL OF DIRECTORS IN BUSINESS CORPORATIONS; repealing 4 annual registration requirements for registered limited 5 liability partnerships and limited liability companies; and 6 making an editorial change. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Sections 8201(e), 8221 and 8998 of Title 15 of <-- 10 the Pennsylvania Consolidated Statutes are amended to read: 11 SECTION 1. SECTION 1726(A)(1) OF TITLE 15 OF THE <-- 12 PENNSYLVANIA CONSOLIDATED STATUTES, AMENDED FEBRUARY 10, 2006 13 (P.L.21, NO.6), IS AMENDED TO READ: 14 § 1726. REMOVAL OF DIRECTORS. 15 (A) REMOVAL BY THE SHAREHOLDERS.-- 16 (1) UNLESS OTHERWISE PROVIDED IN A BYLAW ADOPTED BY THE 17 SHAREHOLDERS, THE ENTIRE BOARD OF DIRECTORS, OR A CLASS OF
1 THE BOARD WHERE THE BOARD IS CLASSIFIED WITH RESPECT TO THE 2 POWER TO SELECT DIRECTORS, OR ANY INDIVIDUAL DIRECTOR OF A 3 BUSINESS CORPORATION MAY BE REMOVED FROM OFFICE WITHOUT 4 ASSIGNING ANY CAUSE BY THE VOTE OF SHAREHOLDERS, OR OF THE 5 HOLDERS OF A CLASS OR SERIES OF SHARES, ENTITLED TO ELECT 6 DIRECTORS, OR THE CLASS OF DIRECTORS. IN CASE THE BOARD OR A 7 CLASS OF THE BOARD OR ANY ONE OR MORE DIRECTORS ARE SO 8 REMOVED, NEW DIRECTORS MAY BE ELECTED AT THE SAME MEETING. 9 NOTWITHSTANDING THE FIRST SENTENCE OF THIS PARAGRAPH, UNLESS 10 OTHERWISE PROVIDED IN THE ARTICLES [BY A SPECIFIC AND 11 UNAMBIGUOUS STATEMENT THAT DIRECTORS MAY BE REMOVED FROM 12 OFFICE WITHOUT ASSIGNING ANY CAUSE, THE ENTIRE BOARD OF 13 DIRECTORS], OR ANY CLASS OF THE BOARD, OR ANY INDIVIDUAL 14 DIRECTOR OF A CORPORATION HAVING A BOARD CLASSIFIED AS 15 PERMITTED BY SECTION 1724(B) (RELATING TO CLASSIFIED BOARD OF 16 DIRECTORS), MAY BE REMOVED FROM OFFICE BY VOTE OF THE 17 SHAREHOLDERS ENTITLED TO VOTE THEREON ONLY FOR CAUSE, IF SUCH 18 CLASSIFICATION HAS BEEN EFFECTED [IN THE ARTICLES OR] BY A 19 BYLAW ADOPTED BY THE SHAREHOLDERS. 20 * * * 21 SECTION 2. SECTIONS 8201(E), 8221 AND 8998 OF TITLE 15 ARE 22 AMENDED TO READ: 23 § 8201. Scope. 24 * * * 25 (e) Prohibited termination.--A registration under this 26 subchapter may not be terminated while the partnership is a 27 bankrupt as that term is defined in section 8903 (relating to 28 definitions and index of definitions). [See section 8221(f) 29 (relating to annual registration).] 30 * * * 20050H2251B4836 - 2 -
1 [§ 8221. Annual registration. 2 (a) General rule.--Every domestic registered limited 3 liability partnership in existence on December 31 of any year 4 and every foreign registered limited liability partnership that 5 is registered to do business in this Commonwealth on December 31 6 of any year shall file in the Department of State with respect 7 to that year, and on or before April 15 of the following year, a 8 certificate of annual registration on a form provided by the 9 department, signed by a general partner and accompanied by the 10 annual registration fee prescribed by subsection (b). The 11 department shall not charge a fee other than the annual 12 registration fee for filing the certificate of annual 13 registration. 14 (b) Annual registration fee.-- 15 (1) The annual registration fee to be paid when filing a 16 certificate of annual registration shall be equal to a base 17 fee of $200 times the number of persons who were general 18 partners of the partnership on December 31 of the year with 19 respect to which the certificate of annual registration is 20 being filed and who: 21 (i) in the case of a natural person, had his 22 principal residence on that date in this Commonwealth; or 23 (ii) in the case of any other person, was 24 incorporated or otherwise organized or existing on that 25 date under the laws of this Commonwealth. 26 (2) The base fee of $200 shall be increased on December 27 31, 1997, and December 31 of every third year thereafter by 28 the percentage increase in the Consumer Price Index for Urban 29 Workers during the most recent three calendar years for which 30 that index is available on the date of adjustment. Each 20050H2251B4836 - 3 -
1 adjustment under this paragraph shall be rounded up to the 2 nearest $10. 3 (c) Notice of annual registration.--Not later than February 4 1 of each year, the department shall give notice to every 5 partnership required to file a certificate of annual 6 registration with respect to the preceding year of the 7 requirement to file the certificate. The notice shall state the 8 amount of the base fee payable under subsection (b)(1), as 9 adjusted pursuant to subsection (b)(2), if applicable, and shall 10 be accompanied by the form of certificate of annual registration 11 to be filed. Failure by the department to give notice to any 12 party, or failure by any party to receive notice, of the annual 13 registration requirement shall not relieve the party of the 14 obligation to file the certificate of annual registration. 15 (d) Credit to Corporation Bureau Restricted Account.--The 16 annual registration fee shall not be deemed to be an amount 17 received by the department under Subchapter C of Chapter 1 for 18 purposes of section 155 (relating to disposition of funds), 19 except that $25 of the fee shall be credited to the Corporation 20 Bureau Restricted Account. 21 (e) Failure to pay annual fee.-- 22 (1) Failure to file the certificate of annual 23 registration required by this section for five consecutive 24 years shall result in the automatic termination of the status 25 of the registered limited liability partnership as such. In 26 addition, any annual registration fee that is not paid when 27 due shall be a lien in the manner provided in this subsection 28 from the time the annual registration fee is due and payable. 29 If a certificate of annual registration is not filed within 30 30 days after the date on which it is due, the department 20050H2251B4836 - 4 -
1 shall assess a penalty of $500 against the partnership, which 2 shall also be a lien in the manner provided in this 3 subsection. The imposition of that penalty shall not be 4 construed to relieve the partnership from liability for any 5 other penalty or interest provided for under other applicable 6 law. 7 (2) If the annual registration fee paid by a registered 8 limited liability partnership is subsequently determined to 9 be less than should have been paid because it was based on an 10 incorrect number of general partners or was otherwise 11 incorrectly computed, that fact shall not affect the 12 existence or status of the registered limited liability 13 partnership as such, but the amount of the additional annual 14 registration fee that should have been paid shall be a lien 15 in the manner provided in this subsection from the time the 16 incorrect payment is discovered by the department. 17 (3) The annual registration fee shall bear simple 18 interest from the date that it becomes due and payable until 19 paid. The interest rate shall be that provided for in section 20 806 of the act of April 9, 1929 (P.L.343, No.176), known as 21 The Fiscal Code, with respect to unpaid taxes. The penalty 22 provided for in paragraph (1) shall not bear interest. The 23 payment of interest shall not relieve the registered limited 24 liability partnership from liability for any other penalty or 25 interest provided for under other applicable law. 26 (4) The lien created by this subsection shall attach to 27 all of the property and proceeds thereof of the registered 28 limited liability partnership in which a security interest 29 can be perfected in whole or in part by filing in the 30 department under 13 Pa.C.S. Div. 9 (relating to secured 20050H2251B4836 - 5 -
1 transactions; sales of accounts, contract rights and chattel 2 paper), whether the property and proceeds are owned by the 3 partnership at the time the annual registration fee or any 4 penalty or interest becomes due and payable or whether the 5 property and proceeds are acquired thereafter. Except as 6 otherwise provided by statute, the lien created by this 7 subsection shall have priority over all other liens, security 8 interests or other charges, except liens for taxes or other 9 charges due the Commonwealth. The lien created by this 10 subsection shall be entered on the records of the department 11 and indexed in the same manner as a financing statement filed 12 under 13 Pa.C.S. Div. 9. At the time an annual registration 13 fee, penalty or interest that has resulted in the creation of 14 a lien under this subsection is paid, the department shall 15 terminate the lien with respect to that annual registration 16 fee, penalty or interest without requiring a separate filing 17 by the partnership for that purpose. 18 (5) If the annual registration fee paid by a registered 19 limited liability partnership is subsequently determined to 20 be more than should have been paid for any reason, no refund 21 of the additional fee shall be made. 22 (6) Termination of the status of a registered limited 23 liability partnership as such, whether voluntarily or 24 involuntarily, shall not release it from the obligation to 25 pay any accrued fees, penalties and interest and shall not 26 release the lien created by this subsection. 27 (f) Exception for bankrupt partnerships.--A partnership that 28 would otherwise be required to pay the annual registration fee 29 set forth in subsection (b) shall not be required to pay that 30 fee with respect to any year during any part of which the 20050H2251B4836 - 6 -
1 partnership is a bankrupt as defined in section 8903 (relating 2 to definitions and index of definitions). The partnership shall, 3 instead, indicate on its certificate of annual registration for 4 that year that it is exempt from payment of the annual 5 registration fee pursuant to this subsection. If the partnership 6 fails to file timely a certificate of annual registration, a 7 lien shall be entered on the records of the department pursuant 8 to subsection (e) which shall not be removed until the 9 partnership files a certificate of annual registration 10 indicating its entitlement to an exemption from payment of the 11 annual registration fee as provided in this subsection. See 12 section 8201(e) (relating to scope). 13 § 8998. Annual registration. 14 (a) General rule.--Every domestic restricted professional 15 company in existence on December 31 of any year and every 16 qualified foreign restricted professional company that is 17 registered to do business in this Commonwealth on December 31 of 18 any year shall file in the Department of State with respect to 19 that year, and on or before April 15 of the following year, a 20 certificate of annual registration on a form provided by the 21 department, executed by the company and accompanied by the 22 annual registration fee prescribed by subsection (b). The 23 department shall not charge a fee other than the annual 24 registration fee for filing the certificate of annual 25 registration. The certificate of annual registration shall 26 include a statement by the company as to whether or not it 27 engaged in any business not permitted by section 8996(a) 28 (relating to purposes of restricted professional companies) 29 during the year with respect to which the certificate is being 30 filed. 20050H2251B4836 - 7 -
1 (b) Annual registration fee.-- 2 (1) The annual registration fee to be paid when filing a 3 certificate of annual registration shall be equal to a base 4 fee of $300 times the number of persons who: 5 (i) were members of the company on December 31 of 6 the year with respect to which the certificate of annual 7 registration is being filed; 8 (ii) were licensed persons; and 9 (iii) had their principal residence at the time in 10 this Commonwealth. 11 (2) The base fee of $300 shall be increased on December 12 31, 1997, and December 31 of every third year thereafter by 13 the percentage increase in the Consumer Price Index for Urban 14 Workers during the most recent three calendar years for which 15 that index is available on the date of adjustment. Each 16 adjustment under this paragraph shall be rounded up to the 17 nearest $10. 18 (c) Notice of annual registration.--Not later than February 19 1 of each year, the department shall give notice to every 20 restricted professional company required to file a certificate 21 of annual registration with respect to the preceding year of the 22 requirement to file the certificate. The notice shall state the 23 amount of the base fee payable under subsection (b)(1), as 24 adjusted pursuant to subsection (b)(2), if applicable, and shall 25 be accompanied by the form of certificate to be filed. Failure 26 by the department to give notice to any party or failure by any 27 party to receive notice of the annual registration requirement 28 shall not relieve the party of the obligation to file the 29 certificate. 30 (d) Credit to Corporation Bureau Restricted Account.--The 20050H2251B4836 - 8 -
1 annual registration fee shall not be deemed to be an amount 2 received by the department under Subchapter C of Chapter 1 3 (relating to Corporation Bureau and UCC fees) for purposes of 4 section 155 (relating to disposition of funds), except that $25 5 of the fee shall be credited to the Corporation Bureau 6 Restricted Account. 7 (e) Functions of Department of State.--The department shall 8 send to the Department of Revenue a copy of any certificate that 9 discloses the conduct of any business not permitted by section 10 8996(a). 11 (f) Annual fee to be lien.-- 12 (1) Failure to file the certificate of annual 13 registration required by this section shall not affect the 14 existence or status of the restricted professional company as 15 such, but the annual registration fee that would have been 16 payable shall be a lien in the manner provided in this 17 subsection from the time the annual registration fee is due 18 and payable. If a certificate of annual registration is not 19 filed within 30 days after the date on which it is due, the 20 department shall assess a penalty of $500 against the 21 company, which shall also be a lien in the manner provided in 22 this subsection. The imposition of that penalty shall not be 23 construed to relieve the company from liability for any other 24 penalty or interest provided for under other applicable law. 25 (2) If the annual registration fee paid by a restricted 26 professional company is subsequently determined to be less 27 than should have been paid because it was based on an 28 incorrect number of members or was otherwise incorrectly 29 computed, that fact shall not affect the existence or status 30 of the restricted professional company as such, but the 20050H2251B4836 - 9 -
1 amount of the additional annual registration fee that should 2 have been paid shall be a lien in the manner provided in this 3 subsection from the time the incorrect payment is discovered 4 by the department. 5 (3) The annual registration fee shall bear simple 6 interest from the date that it becomes due and payable until 7 paid. The interest rate shall be that provided for in section 8 806 of the act of April 9, 1929 (P.L.343, No.176), known as 9 The Fiscal Code, with respect to unpaid taxes. The penalty 10 provided for in paragraph (1) shall not bear interest. The 11 payment of interest shall not relieve the restricted 12 professional company from liability for any other penalty or 13 interest provided for under other applicable law. 14 (4) The lien created by this subsection shall attach to 15 all of the property and proceeds thereof of the restricted 16 professional company in which a security interest can be 17 perfected, in whole or in part, by filing in the department 18 under 13 Pa.C.S. Div. 9 (relating to secured transactions; 19 sales of accounts, contract rights and chattel paper), 20 whether the property and proceeds are owned by the company at 21 the time the annual registration fee or any penalty or 22 interest becomes due and payable or whether the property and 23 proceeds are acquired thereafter. Except as otherwise 24 provided by statute, the lien created by this subsection 25 shall have priority over all other liens, security interests 26 or other charges, except liens for taxes or other charges due 27 the Commonwealth. The lien created by this subsection shall 28 be entered on the records of the department and indexed in 29 the same manner as a financing statement filed under 13 30 Pa.C.S. Div. 9. At the time an annual registration fee, 20050H2251B4836 - 10 -
1 penalty or interest that has resulted in the creation of a
2 lien under this subsection is paid, the department shall
3 terminate the lien with respect to that annual registration
4 fee, penalty or interest without requiring a separate filing
5 by the company for that purpose.
6 (5) If the annual registration fee paid by a restricted
7 professional company is subsequently determined to be more
8 than should have been paid for any reason, no refund of the
9 additional fee shall be made.
10 (g) Cross references.--See section 8907 (relating to
11 execution of documents) and 18 Pa.C.S. § 4904 (relating to
12 unsworn falsification to authorities).]
13 Section 2. This act shall take effect immediately. <--
14 SECTION 3. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: <--
15 (1) THE AMENDMENT OF 15 PA.C.S. § 1726(A)(1) SHALL TAKE
16 EFFECT IN 60 DAYS.
17 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT
18 IMMEDIATELY.
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