Florida Senate - 2008 (Reformatted) SB 304

By Senator Aronberg

27-00048-08 2008304__

A bill to be entitled

An act relating to corporations not for profit; amending

s. 617.01201, F.S.; requiring a document that is

electronically transmitted to be in a format that can be

retrieved in typewritten or printed form; requiring that a

document be executed by a director of the domestic or

foreign corporation; authorizing the delivery of a

document by electronic transmission to the extent

permitted by the Department of State; amending s.

617.0122, F.S.; requiring the department to collect a fee

for filing an agent's statement of resignation from an

inactive corporation; amending s. 617.0124, F.S.;

authorizing a domestic or foreign corporation to correct a

document filed by the department within 30 days after

filing under certain circumstances; amending s. 617.01401,

F.S.; defining the terms "distribution," "mutual benefit

corporation," and "voting power"; amending s. 617.0205,

F.S.; requiring the incorporators to hold an

organizational meeting after incorporation if the initial

directors are not named in the articles of incorporation;

amending s. 617.0302, F.S.; authorizing a corporation not

for profit to make contracts and guaranties; amending s.

617.0503, F.S.; providing that an alien business

organization may withdraw its registered agent designation

by delivering an application for certificate of withdrawal

to the department; amending s. 617.0505, F.S.; prohibiting

a corporation from making distributions to its members;

providing an exception; deleting provisions related to the

issuance of certificates; amending s. 617.0601, F.S.;

correcting a reference to the Solicitation of

Contributions Act; providing that certain stock

certificates constitute certificates of membership;

requiring that a resignation, expulsion, or termination of

membership be recorded in the membership book; creating s.

617.0605, F.S.; prohibiting a member of a corporation from

transferring a membership under certain circumstances;

creating s. 617.0606, F.S.; providing that the resignation

of a member does not relieve the member from obligations

incurred and commitments made prior to resignation;

creating s. 617.0607, F.S.; requiring that a member of a

corporation be terminated or suspended pursuant to a

procedure that is fair and reasonable; providing criteria

that must be met for a procedure to satisfy the

requirements of fairness and reasonability; requiring that

written notice given by mail be delivered by certified

mail or first-class mail; requiring that a proceeding

challenging an expulsion, suspension, or termination be

commenced within 1 year after the effective date of such

expulsion, suspension, termination; providing that a

member who has been expelled or suspended may be liable to

the corporation for dues, assessments, or fees; creating

s. 617.0608, F.S.; prohibiting a corporation from

purchasing any of its memberships; authorizing a mutual

benefit corporation to purchase the membership of a member

who resigns or whose membership is terminated; amending s.

617.0701, F.S.; authorizing the holders of at least 5

percent of the voting power of a corporation to call a

special meeting of the members under certain

circumstances; authorizing a person who signs a demand for

a special meeting to call a special meeting of the members

under certain circumstances; amending s. 617.0721, F.S.;

providing that members and proxy holders who are not

physically present at a meeting may participate by means

of remote communication and are deemed to be present at

the meeting under certain circumstances; amending s.

617.0725, F.S.; requiring an amendment to the articles of

incorporation or the bylaws which adds a greater or lesser

quorum or voting requirement to meet certain requirements;

creating s. 617.07401, F.S.; prohibiting a person from

commencing a proceeding in the right of a domestic or

foreign corporation unless the person was a member of the

corporation or became a member through transfer by

operation of law; requiring that a complaint in a

proceeding brought in the right of a domestic or foreign

corporation be verified and allege the demand with

particularity; authorizing the court to dismiss a

derivative proceeding if the court finds that a

determination was made in good faith after a reasonable

investigation; prohibiting certain proceedings from being

discontinued or settled without the approval of the court;

authorizing the court to require a plaintiff to pay a

defendant's reasonable expenses upon termination of a

proceeding, including attorney's fees; amending s.

617.0801, F.S.; providing the duties of the board of

directors; amending s. 617.0806, F.S.; providing that

directors may be divided into classes; amending s.

617.0808, F.S.; providing that any member of the board of

directors may be removed from office with or without cause

by a certain vote; providing that a director who is

elected by a class, chapter, or other organizational unit

may be removed only by members of that class, chapter, or

organizational unit; providing that a director elected or

appointed by the board may be removed without cause by a

vote of two-thirds of the directors then in office;

providing that a director of a corporation described in s.

501(c) of the Internal Revenue Code may be removed from

office pursuant to procedures provided in the articles of

incorporation or the bylaws; amending s. 617.0809, F.S.;

providing that a vacancy on the board of directors for a

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director elected by a class, chapter, unit, or group may

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be filled only by members of that class, chapter, unit, or

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group; providing that the term of a director elected or

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appointed to fill a vacancy expires at the next annual

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meeting at which directors are elected; amending s.

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617.0830, F.S.; authorizing a director to consider such

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factors as he or she deems relevant in discharging his or

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her duties; amending s. 617.0832, F.S.; deleting a

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provision that authorizes common or interested directors

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to be counted in determining the presence of a quorum at a

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meeting that ratifies a contract between a corporation and

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one of its directors and any other corporation in which

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one of its directors is financially interested; providing

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circumstances under which a conflict-of-interest

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transaction is authorized; amending s. 617.0833, F.S.;

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providing an exception to the requirement that a loan may

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not be made by a corporation to its directors; amending s.

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617.0834, F.S.; providing that an officer or director of a

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certain nonprofit organization or agricultural or

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horticultural organization is immune from civil liability;

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amending s. 617.1007, F.S.; providing that a restatement

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of the articles of incorporation of a corporation may

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include one or more amendments; amending s. 617.1101,

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F.S.; providing requirements for a plan of merger;

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creating s. 617.1102, F.S.; providing a limitation on the

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merger of a corporation not for profit; creating s.

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617.1301, F.S.; prohibiting a corporation from making

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distributions to its members under certain circumstances;

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creating s. 617.1302, F.S.; providing that a mutual

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benefit corporation may purchase its memberships only

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under certain circumstances; authorizing a corporation to

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make distributions upon dissolution; amending s. 617.1405,

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F.S.; providing that the name of a dissolved corporation

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may be available for immediate assumption by another

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corporation if the dissolved corporation provides the

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department with an affidavit permitting such use; creating

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s. 617.1407, F.S.; authorizing a dissolved corporation or

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successor entity to execute certain procedures to resolve

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payment of unknown claims against it; providing that

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certain claims against a dissolved corporation are barred;

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providing that a claim may be entered against a dissolved

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corporation under certain circumstances; creating s.

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617.1408, F.S.; authorizing a dissolved corporation or

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successor entity to execute certain procedures to dispose

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of known claims against it; requiring a dissolved

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corporation deliver written notice of the dissolution to

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each of its known claimants; providing a procedure under

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which a dissolved corporation may reject a claim made

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against it; requiring that a dissolved corporation give

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notice of the dissolution to persons having known claims

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that are contingent, conditional, or unmatured; requiring

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that a dissolved corporation follow certain procedures in

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offering compensation to a claimant if the claim matures;

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requiring that a dissolved corporation petition the

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circuit court to determine the amount and form of security

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that will be sufficient to provide compensation to certain

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claimants; providing that the giving of notice or making

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of an offer does not revive a claim that has been barred;

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providing that directors of a dissolved corporation or

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governing persons of a successor entity that has complied

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with certain procedures are not personally liable to the

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claimants of a dissolved corporation; providing that

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certain members of a dissolved corporation are not liable

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for any claim against the corporation; providing a limit

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on the aggregate liability of any member of a dissolved

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corporation; defining the term "successor entity";

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repealing s. 617.1421(6), F.S., relating to the assumption

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and use of the name of a dissolved corporation; amending

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s. 617.1422, F.S.; deleting certain requirements for an

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application to reinstate a corporation that has been

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dissolved; requiring that a corporation submit a

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reinstatement form prescribed and furnished by the

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department; providing that the name of a dissolved

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corporation is not available for assumption or use by

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another corporation until 1 year after the effective date

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of dissolution; providing an exception; amending s.

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617.1430, F.S.; revising the requirements for members to

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dissolve a corporation in circuit court; amending s.

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617.1503, F.S.; requiring a foreign corporation to deliver

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a certificate of existence authenticated by the Secretary

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of State; amending s. 617.1504, F.S.; requiring that a

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foreign corporation make application to the department to

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obtain an amended certificate of authority within 90 days

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after the occurrence of a change; amending s. 617.1506,

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F.S.; requiring that an alternate corporate name adopted

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for use in this state be cross-referenced to the real

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corporate name in the records of the Division of

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Corporations; requiring that the corporate name of a

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foreign corporation be distinguishable from the corporate

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name of a corporation for profit incorporated or

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authorized to transact business in this state; amending s.

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617.1530, F.S.; requiring that the department receive an

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authenticated certificate from the Secretary of State

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before commencing a proceeding to revoke the certificate

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of authority of a foreign corporation; amending s.

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617.1601, F.S.; requiring that a corporation keep a copy

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of its articles of incorporation; amending s. 617.1602,

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F.S.; providing that a member of a corporation is entitled

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to inspect and copy certain records of the corporation at

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a reasonable location specified by the corporation;

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requiring that a member give the corporation written

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notice 10 days before the date on which he or she wishes

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to inspect and copy records; amending s. 617.1605, F.S.;

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revising the circumstances under which a corporation is

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required to furnish a member with its latest annual

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financial statement; creating s. 617.1703, F.S.; providing

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for the applicability of certain provisions to

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corporations regulated under the act; amending s.

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617.1803, F.S.; providing for certain changes when a

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foreign not-for-profit corporation becomes domesticated;

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amending s. 617.1806, F.S.; revising the provisions for

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conversion to a corporation not for profit; amending s.

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617.1807, F.S.; correcting a reference to the articles of

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incorporation regarding the process of conversion to a

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corporation not for profit; amending s. 617.1907, F.S.;

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providing that the repeal or amendment of a statute does

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not affect certain operations and proceedings; repealing

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s. 617.2103, F.S., relating to exemptions for certain

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corporations; providing an effective date.

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Be It Enacted by the Legislature of the State of Florida:

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Section 1. Subsections (4), (6), and (9) of section

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617.01201, Florida Statutes, are amended to read:

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617.01201 Filing requirements.--

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(4) The document must be typewritten or printed and must be

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legible. If electronically transmitted, the document must be in a

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format that can be retrieved or reproduced in typewritten or

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printed form.

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(6) The document must be executed:

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(a) By a director the chair or any vice chair of the board

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of directors of a domestic or foreign corporation, or by its

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president or by another of its officers;

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(b) If directors or officers have not been selected or the

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corporation has not been formed, by an incorporator; or

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trustee, or other court-appointed fiduciary, by that fiduciary.

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(9) The document must be delivered to the office of the

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Department of State for filing. Delivery may be made by

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electronic transmission if and to the extent permitted by the

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Department of State. If the document is filed in typewritten or

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printed form and not transmitted electronically, the Department

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of State may require that and may be accompanied by one exact or

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conformed copy be delivered with the document, (except as

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provided in s. 617.1508. The document), and must be accompanied

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by the correct filing fee and any other tax or penalty required

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by this act or other law.

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Section 2. Subsection (7) of section 617.0122, Florida

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Statutes, is amended to read:

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617.0122 Fees for filing documents and issuing

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certificates.--The Department of State shall collect the

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following fees on documents delivered to the department for

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filing:

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(7) Agent's statement of resignation from inactive

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administratively dissolved corporation: $35.

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Any citizen support organization that is required by rule of the

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Department of Environmental Protection to be formed as a

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nonprofit organization and is under contract with the department

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is exempt from any fees required for incorporation as a nonprofit

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organization, and the Secretary of State may not assess any such

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fees if the citizen support organization is certified by the

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Department of Environmental Protection to the Secretary of State

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as being under contract with the Department of Environmental

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Protection.

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Section 3. Subsections (1) and (2) of section 617.0124,

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Florida Statutes, are amended to read:

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617.0124 Correcting filed document.--

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(1) A domestic or foreign corporation may correct a

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document filed by the Department of State within 30 10 business

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days after filing if the document:

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(a) The document contains an incorrect statement; or

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(b) The document was defectively executed, attested,

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sealed, verified, or acknowledged; or.

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defective.

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(2) A document is corrected:

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(a) By preparing articles of correction that:

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1. Describe the document, (including its filing date) or

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attach a copy of it to the articles;

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2. Specify the incorrect statement and the reason it is

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incorrect or the manner in which the execution was defective; and

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3. Correct the incorrect statement or defective execution;

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and

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(b) By delivering the executed articles of correction to

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the Department of State for filing.

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Section 4. Section 617.01401, Florida Statutes, is amended

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to read:

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617.01401 Definitions.--As used in this act, unless the

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context otherwise requires, the term:

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(1) "Articles of incorporation" includes original, amended,

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and restated articles of incorporation, articles of

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consolidation, and articles of merger, and all amendments

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thereto, including documents designated by the laws of this state

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as charters, and, in the case of a foreign corporation, documents

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equivalent to articles of incorporation in the jurisdiction of

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incorporation.

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(2) "Board of directors" means the group of persons vested

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with the management of the affairs of the corporation

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irrespective of the name by which such group is designated,

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including, but not limited to, managers or trustees.

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(3) "Bylaws" means the code or codes of rules adopted for

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the regulation or management of the affairs of the corporation

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irrespective of the name or names by which such rules are

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designated.

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(4) "Corporation" or "domestic corporation" means a

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corporation not for profit, subject to the provisions of this

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act, except a foreign corporation.

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(5) "Corporation not for profit" means a corporation no

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part of the income or profit of which is distributable to its

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members, directors, or officers, except as otherwise provided.

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(6) "Distribution" means the payment of a dividend or any

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part of the income or profit of a corporation to its members,

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directors, or officers.

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(7)(6) "Electronic transmission" means any form of

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communication, not directly involving the physical transmission

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or transfer of paper, which creates a record that may be

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retained, retrieved, and reviewed by a recipient thereof and

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which may be directly reproduced in a comprehensible and legible

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paper form by such recipient through an automated process.

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Examples of electronic transmission include, but are not limited

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to, telegrams, facsimile transmissions of images, and text that

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is sent via electronic mail between computers.

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(8)(7) "Foreign corporation" means a corporation not for

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profit organized under laws other than the laws of this state.

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(9)(8) "Insolvent" means the inability of a corporation to

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pay its debts as they become due in the usual course of its

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affairs.

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(10)(9) "Mail" means the United States mail, facsimile

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transmissions, and private mail carriers handling nationwide mail

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services.

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(11)(10) "Member" means one having membership rights in a

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corporation in accordance with the provisions of its articles of

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incorporation or bylaws or the provisions of this act.

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(12) "Mutual benefit corporation" means a domestic

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corporation that is not organized primarily or exclusively for

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religious purposes; is not recognized as exempt under s.

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501(c)(3) of the Internal Revenue Code of 1986, as amended, or of

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the corresponding section of a subsequently enacted federal

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revenue act; and is not organized for a public or charitable

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purpose that is required upon its dissolution to distribute its

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assets to the United States, a state, a local subdivision

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thereof, or a person that is recognized as exempt under s.

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501(c)(3) of the Internal Revenue Code of 1986, as amended, or of

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the corresponding section of a subsequently enacted federal

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revenue act.

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(13)(11) "Person" includes individual and entity.

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(14) "Voting power" means the total number of votes

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entitled to be cast for the election of directors at the time the

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determination of voting power is made, excluding a vote that is

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contingent upon the happening of a condition or event that has

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not occurred at the time. If the holders of the shares of a class

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are entitled to vote as a class to elect directors, the

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determination of voting power of the class shall be based on the

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percentage of the number of directors the class is entitled to

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elect out of the total number of authorized directors.

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Section 5. Subsection (1) of section 617.0205, Florida

357

Statutes, is amended to read:

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617.0205 Organizational meeting of directors.--

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(1) After incorporation:

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(a) If initial directors are named in the articles of

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incorporation, the initial directors shall hold an organizational

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meeting, at the call of a majority of the directors, to complete

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the organization of the corporation by appointing officers,

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adopting bylaws, and carrying on any other business brought

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before the meeting;

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(b) If initial directors are not named in the articles of

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incorporation, the incorporators shall hold an organizational

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meeting at the call of a majority of the incorporators:

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1. To elect directors and complete the organization of the

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corporation; or

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2. To elect a board of directors who shall complete the

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organization of the corporation.

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Section 6. Subsections (7) and (16) of section 617.0302,

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Florida Statutes, are amended to read:

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617.0302 Corporate powers.--Every corporation not for

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profit organized under this act, unless otherwise provided in its

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articles of incorporation or bylaws, shall have power to:

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(7) Make contracts and guaranties, incur liabilities,

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borrow money at such rates of interest as the corporation may

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determine, issue its notes, bonds, and other obligations, and

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secure any of its obligations by mortgage and pledge of all or

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any of its property, franchises, or income.

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(16) Merge with other corporations or other business

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entities as identified in s. 607.1108(1), both for profit and not

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for profit, domestic and foreign, if the surviving corporation or

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other surviving business entity is a corporation not for profit

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or other business entity that has been organized as a not-for-

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profit entity under a governing statute or other applicable law

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that permits such a merger.

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Section 7. Subsection (12) is added to section 617.0503,

391

Florida Statutes, to read:

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617.0503 Registered agent; duties; confidentiality of

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investigation records.--

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(12) Any alien business organization may withdraw its

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registered agent designation by delivering an application for

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certificate of withdrawal to the Department of State for filing.

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The application shall set forth:

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(a) The name of the alien business organization and the

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jurisdiction under the law of which it is incorporated or

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organized; and

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(b) That it is no longer required to maintain a registered

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agent in this state.

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Section 8. Section 617.0505, Florida Statutes, is amended

404

to read:

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617.0505 Distributions Payment of dividends and

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distribution of income to members prohibited; issuance of

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certificates of membership; effect of stock issued under prior

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law.--

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(1) Except as authorized in s. 617.1302, A dividend may not

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be paid, and any part of the income or profit of a corporation

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may not make distributions be distributed, to its members,

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directors, or officers. A mutual benefit corporation, such as a

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private club that is established for social, pleasure, or

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recreational purposes and that is organized as a corporation of

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which the equity interests are held by the members, may, subject

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to s. 617.1302, purchase the equity membership interest of any

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member, and the payment for such interest is not a distribution

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for purposes of this section. A corporation may pay compensation

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in a reasonable amount to its members, directors, or officers for

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services rendered, may confer benefits upon its members in

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conformity with its purposes, and, upon dissolution or final

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liquidation, may make distributions to its members as permitted

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by this act. If expressly permitted by its articles of

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incorporation, a corporation may make distributions upon partial

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liquidation to its members, as permitted by this section. Any

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such payment, benefit, or distribution does not constitute a

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dividend or a distribution of income or profit for purposes of

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this section. Any corporation that which is a utility exempt from

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regulation under s. 367.022(7), whose articles of incorporation

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state that it is exempt from taxation under s. 501(c)(12) of the

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Internal Revenue Code or of the corresponding section of a

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subsequently enacted federal revenue act, may make such refunds

433

to its members, prior to a dissolution or liquidation, as its

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managing board deems necessary to establish or preserve its tax-

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exempt status. Any such refund does not constitute a dividend or

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a distribution of income or profit for purposes of this section.

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(2) Subject to subsection (1), a corporation may issue

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certificates in any form evidencing membership in the

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corporation.

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(3) Stock certificates issued under former s. 617.011(2),

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Florida Statutes (1989), constitute membership certificates for

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purposes of this act.

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Section 9. Subsections (1), (2), and (5) of section

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617.0601, Florida Statutes, are amended to read:

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617.0601 Members, generally.--

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(1)(a) A corporation may have one or more classes of

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members or may have no members. If the corporation has one or

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more classes of members, the designation of such class or

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classes, the qualifications and rights of the members of each

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class, any quorum and voting requirements for meetings and

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activities of the members, and notice requirements sufficient to

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provide notice of meetings and activities of the members must be

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set forth in the articles of incorporation or in the bylaws.

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(b) The articles of incorporation or bylaws of any

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corporation not for profit that maintains chapters or affiliates

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may grant representatives of such chapters or affiliates the

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right to vote in conjunction with the board of directors of the

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corporation notwithstanding applicable quorum or voting

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requirements of this act if the corporation is registered with

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the Department of State pursuant to ss. 496.401-496.424 ss.

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496.001-496.011, the Solicitation of Contributions Funds Act.

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association organized under chapter 718.

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(2) A corporation may issue certificates of membership.

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Stock certificates issued under former s. 617.011(2), Florida

466

Statutes (1989), constitute certificates of membership for

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purposes of this act.

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(5) Membership in the corporation may be terminated in the

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manner provided by law, by the articles of incorporation, or by

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the bylaws, and A resignation, expulsion, or termination of

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membership pursuant to s. 617.0606 or s. 617.0607 shall be

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recorded in the membership book. Unless otherwise provided in

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the articles of incorporation or the bylaws, all the rights and

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privileges of a member cease on termination of membership.

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Section 10. Section 617.0605, Florida Statutes, is created

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to read:

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617.0605 Transfer of membership interests.--

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(1) A member of a corporation may not transfer a membership

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or any right arising therefrom other than pursuant to subsection

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(2).

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(2) Except as set forth in the articles of incorporation or

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bylaws of a mutual benefit corporation, a member of a mutual

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benefit corporation may not transfer a membership or any right

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arising therefrom.

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(3) Where transfer rights have been provided for one or

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more members of a mutual benefit corporation, a restriction on

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such rights is not binding with respect to a member holding a

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membership issued prior to the adoption of the restriction unless

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the restriction is approved by the members and the affected

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member.

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Section 11. Section 617.0606, Florida Statutes, is created

492

to read:

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617.0606 Resignation of members.--

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(1) Except as may be provided in the articles of

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incorporation or bylaws of a corporation, a member of a mutual

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benefit corporation may not transfer a membership or any right

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arising therefrom.

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(2) The resignation of a member does not relieve the member

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from any obligations that the member may have to the corporation

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as a result of obligations incurred or commitments made prior to

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resignation.

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Section 12. Section 617.0607, Florida Statutes, is created

503

to read:

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617.0607 Termination, expulsion, and suspension.--

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(1) A member of a corporation may not be expelled or

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suspended, and a membership in the corporation may not be

507

terminated or suspended, except pursuant to a procedure that is

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fair and reasonable and is carried out in good faith.

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(2) A procedure is fair and reasonable if:

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(a) The articles of incorporation or bylaws set forth a

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procedure that provides:

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1. Written notice not less than 15 days before the

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expulsion, suspension, or termination and the reasons therefore;

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and

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2. An opportunity for the member to be heard, orally or in

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writing, not less than 5 days before the effective date of the

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expulsion, suspension, or termination by a person or persons

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authorized to decide that the proposed expulsion, termination, or

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suspension should not take place; and

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(b) All of the relevant facts and circumstances are taken

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into consideration.

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(3) Any written notice given by mail must be delivered by

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certified mail or first-class mail to the last address of the

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member shown on the records of the corporation.

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(4) Any proceeding challenging an expulsion, suspension, or

526

termination, including a proceeding in which the defective notice

527

is alleged, must be commenced within 1 year after the effective

528

date of the expulsion, suspension, or termination.

529

(5) A member who has been expelled or suspended may be

530

liable to the corporation for dues, assessments, or fees as a

531

result of obligations incurred or commitments made prior to

532

expulsion or suspension.

533

Section 13. Section 617.0608, Florida Statutes, is created

534

to read:

535

617.0608 Purchase of memberships.--

536

(1) A corporation may not purchase any of its memberships

537

or any right arising therefrom except as provided in s. 617.0505

538

or subsection (2).

539

(2) Subject to s. 617.1302, a mutual benefit corporation

540

shall have the power to purchase the membership of a member who

541

resigns or whose membership is terminated for the amount and

542

pursuant to the conditions set forth in its articles of

543

incorporation or bylaws.

544

Section 14. Subsections (3) and (4) of section 617.0701,

545

Florida Statutes, are amended to read:

546

617.0701 Meetings of members, generally; failure to hold

547

annual meeting; special meeting; consent to corporate actions

548

without meetings; waiver of notice of meetings.--

549

(3) Special meetings of the members may be called by:

550

(a) The president;,

551

(b) The chair of the board of directors;,

552

553

(d) Other officers or persons as are provided for in the

554

articles of incorporation or the bylaws;.

555

(e) The holders of at least 5 percent of the voting power

556

of a corporation when one or more written demands for the

557

meeting, which describe the purpose for which the meeting is to

558

be held, are signed, dated, and delivered to a corporate officer,

559

except as provided in the articles of incorporation or bylaws; or

560

(f) A person who signs a demand for a special meeting

561

pursuant to paragraph (e) if notice for a special meeting is not

562

given within 30 days after receipt of the demand. The person

563

signing the demand may set the time and place of the meeting and

564

give notice under this subsection.

565

(4)(a) Unless otherwise provided in the articles of

566

incorporation, action required or permitted by this act to be

567

taken at an annual or special meeting of members may be taken

568

without a meeting, without prior notice, and without a vote if

569

the action is taken by the members entitled to vote on such

570

action and having not less than the minimum number of votes

571

necessary to authorize such action at a meeting at which all

572

members entitled to vote on such action were present and voted.

573

In order to be effective, the action must be evidenced by one or

574

more written consents describing the action taken, dated and

575

signed by approving members having the requisite number of votes

576

and entitled to vote on such action, and delivered to the

577

corporation by delivery to its principal office in this state,

578

its principal place of business, the corporate secretary, or

579

another officer or agent of the corporation having custody of the

580

book in which proceedings of meetings of members are recorded.

581

Written consent shall not be effective to take the corporate

582

action referred to in the consent unless the consent is signed by

583

members having the requisite number of votes necessary to

584

authorize the action within 60 days of the date of the earliest

585

dated consent and is delivered in the manner required by this

586

section.

587

(b) Any written consent may be revoked prior to the date

588

that the corporation receives the required number of consents to

589

authorize the proposed action. A revocation is not effective

590

unless in writing and until received by the corporation at its

591

principal office in this state or its principal place of

592

business, or received by the corporate secretary or other officer

593

or agent of the corporation having custody of the book in which

594

proceedings of meetings of members are recorded.

595

596

written consent, notice must be given to those members who are

597

entitled to vote on the action but who have not consented in

598

writing. The notice must fairly summarize the material features

599

of the authorized action.

600

(d) A consent signed under this section has the effect of a

601

meeting vote and may be described as such in any document.

602

(e) If the action to which the members consent is such as

603

would have required the filing of articles or a certificate under

604

any other section of this act if such action had been voted on by

605

members at a meeting thereof, the articles or certificate filed

606

under such other section must state that written consent has been

607

given in accordance with the provisions of this section.

608

(f) Whenever action is taken pursuant to this section, the

609

written consent of the members consenting to such action or the

610

written reports of inspectors appointed to tabulate such consents

611

must be filed with the minutes of proceedings of members.

612

Section 15. Present subsections (3), (4), (5), and (6) of

613

section 617.0721, Florida Statutes, are redesignated as

614

subsections (4), (5), (6), and (7), respectively, and amended,

615

and a new subsection (3) is added to that section, to read:

616

617.0721 Voting by members.--

617

(3) If authorized by the board of directors, and subject to

618

such guidelines and procedures as the board of directors may

619

adopt, members and proxy holders who are not physically present

620

at a meeting may, by means of remote communication:

621

(a) Participate in the meeting.

622

(b) Be deemed to be present in person and vote at the

623

meeting if:

624

1. The corporation implements reasonable means to verify

625

that each person deemed present and permitted to vote by means of

626

remote communication is a member or proxy holder; and

627

2. The corporation implements reasonable measures to

628

provide such members or proxy holders with a reasonable

629

opportunity to participate in the meeting and to vote on matters

630

submitted to the members including, without limitation, an

631

opportunity to communicate and to read or hear the proceedings of

632

the meeting substantially concurrent with such proceedings.

633

634

If any member or proxy holder votes or takes other action by

635

means of remote communication, a record of such vote or other

636

action shall be maintained by the corporation.

637

(4)(3) If any corporation, whether for profit or not for

638

profit, is a member of a corporation organized under this act,

639

the chair of the board, president, any vice president, the

640

secretary, or the treasurer of the member corporation, and any

641

such officer or cashier or trust officer of a banking or trust

642

corporation holding such membership, and any like officer of a

643

foreign corporation whether for profit or not for profit, holding

644

membership in a domestic corporation, shall be deemed by the

645

corporation in which membership is held to have the authority to

646

vote on behalf of the member corporation and to execute proxies

647

and written waivers and consents in relation thereto, unless,

648

before a vote is taken or a waiver or consent is acted upon, it

649

is made to appear by a certified copy of the bylaws or resolution

650

of the board of directors or executive committee of the member

651

corporation that such authority does not exist or is vested in

652

some other officer or person. In the absence of such

653

certification, a person executing any such proxies, waivers, or

654

consents or presenting himself or herself at a meeting as one of

655

such officers of a corporate member shall be, for the purposes of

656

this section, conclusively deemed to be duly elected, qualified,

657

and acting as such officer and to be fully authorized. In the

658

case of conflicting representation, the corporate member shall be

659

deemed to be represented by its senior officer, in the order

660

first stated in this subsection.

661

(5)(4) The articles of incorporation or the bylaws may

662

provide that, in all elections for directors, every member

663

entitled to vote has the right to cumulate his or her votes and

664

to give one candidate a number of votes equal to the number of

665

votes he or she could give if one director were being elected

666

multiplied by the number of directors to be elected or to

667

distribute such votes on the same principles among any number of

668

such candidates. A corporation may not have cumulative voting

669

unless such voting is expressly authorized in the articles of

670

incorporation.

671

(6)(5) If a corporation has no members or its members do

672

not have the right to vote, the directors shall have the sole

673

voting power.

674

(7)(6) Subsections (1), (2), (5) (4), and (6) (5) do not

675

apply to a corporation that is an association as defined in s.

676

720.301.

677

Section 16. Section 617.0725, Florida Statutes, is amended

678

to read:

679

617.0725 Quorum.--An amendment to the articles of

680

incorporation or the bylaws which adds, that changes, or deletes

681

a greater or lesser quorum or voting requirement must meet the

682

same quorum or voting requirement and be adopted by the same vote

683

and voting groups required to take action under the quorum and

684

voting requirements then in effect or proposed to be adopted,

685

whichever is greater prescribed in the provision being amended.

686

Section 17. Section 617.07401, Florida Statutes, is created

687

to read:

688

617.07401 Members' derivative actions.--

689

(1) A person may not commence a proceeding in the right of

690

a domestic or foreign corporation unless the person was a member

691

of the corporation when the transaction complained of occurred or

692

unless the person became a member through transfer by operation

693

of law from one who was a member at that time.

694

(2) A complaint in a proceeding brought in the right of a

695

domestic or foreign corporation must be verified and allege with

696

particularity the demand made to obtain action by the board of

697

directors and that the demand was refused or ignored by the board

698

of directors for a period of at least 90 days following the date

699

of the first demand unless, prior to the expiration of the 90

700

days, the person was notified in writing that the corporation

701

rejected the demand, or unless irreparable injury to the

702

corporation would result by waiting for the expiration of the 90-

703

day period. If the corporation commences an investigation of the

704

charges made in the demand or complaint, the court may stay any

705

proceeding until the investigation is completed.

706

(3) The court may dismiss a derivative proceeding if, on

707

motion by the corporation, the court finds that one of the groups

708

specified in paragraphs (a)-(c) has made a determination in good

709

faith after conducting a reasonable investigation upon which its

710

conclusions are based that the maintenance of the derivative suit

711

is not in the best interests of the corporation. The corporation

712

has the burden of proving the independence and good faith of the

713

group making the determination and the reasonableness of the

714

investigation. The determination shall be made by:

715

(a) A majority vote of independent directors present at a

716

meeting of the board of directors, if the independent directors

717

constitute a quorum;

718

(b) A majority vote of a committee consisting of two or

719

more independent directors appointed by a majority vote of

720

independent directors present at a meeting of the board of

721

directors, whether or not such independent directors constitute a

722

quorum; or

723

724

the court upon motion by the corporation.

725

(4) A proceeding commenced under this section may not be

726

discontinued or settled without the approval of the court. If the

727

court determines that a proposed discontinuance or settlement

728

will substantially affect the interest of the members of the

729

corporation, or a class, series, or voting group of members, the

730

court shall direct that notice be given to the members affected.

731

The court may determine which party or parties to the proceeding

732

shall bear the expense of giving the notice.

733

(5) Upon termination of the proceeding, the court may

734

require the plaintiff to pay any defendant's reasonable expenses,

735

including reasonable attorney's fees, incurred in defending the

736

proceeding if it finds that the proceeding was commenced without

737

reasonable cause.

738

(6) The court may award reasonable expenses for maintaining

739

the proceeding, including reasonable attorney's fees, to a

740

successful plaintiff or to the person commencing the proceeding

741

who receives any relief, whether by judgment, compromise, or

742

settlement, and may require that the person account for the

743

remainder of any proceeds to the corporation; however, this

744

subsection does not apply to any relief rendered for the benefit

745

of injured members only and limited to a recovery of the loss or

746

damage of the injured members.

747

Section 18. Section 617.0801, Florida Statutes, is amended

748

to read:

749

617.0801 Requirement for and Duties of board of

750

directors.--All corporate powers must be exercised by or under

751

the authority of, and the affairs of the corporation managed

752

under the direction of, its board of directors, subject to any

753

limitation set forth in the articles of incorporation.

754

Section 19. Section 617.0806, Florida Statutes, is amended

755

to read:

756

617.0806 Staggered terms for directors.--The articles of

757

incorporation or bylaws may provide that directors may be divided

758

into classes and the terms of office of the several classes need

759

not be uniform. Each director shall hold office for the term to

760

which he or she is elected or appointed and until his or her

761

successor has been elected or appointed and qualified or until

762

his or her earlier resignation, removal from office, or death.

763

Section 20. Section 617.0808, Florida Statutes, is amended

764

to read:

765

617.0808 Removal of directors.--

766

(1) Subject to subsection (2), a director may be removed

767

from office pursuant to procedures provided in the articles of

768

incorporation or the bylaws, which shall provide the following,

769

and if they do not do so, shall be deemed to include the

770

following:

771

(a)(1) Any member of the board of directors may be removed

772

from office with or without cause by:

773

1. A majority of all votes of the directors, if the

774

director was elected or appointed by the directors; or

775

2. A majority of all votes of the members, if the director

776

was elected or appointed by the members.

777

(b) If a director is elected by a class, chapter, or other

778

organizational unit, or by region or other geographic grouping,

779

the director may be removed only by the members of that class,

780

chapter, unit, or grouping. However:

781

1. A director may be removed only if the number of votes

782

cast to remove the director would be sufficient to elect the

783

director at a meeting to elect directors, except as provided in

784

subparagraphs 2. and 3.

785

2. If cumulative voting is authorized, a director may not

786

be removed if the number of votes sufficient to elect the

787

director under cumulative voting is voted against the removal of

788

the director.

789

3. If at the beginning of the term of a director the

790

articles of incorporation or bylaws provide that the director may

791

be removed for missing a specified number of board meetings, the

792

board may remove the director for failing to attend the specified

793

number of meetings. The director may be removed only if a

794

majority of the directors then in office vote for the removal the

795

vote or agreement in writing by a majority of all votes of the

796

membership.

797

(c)(2) The notice of a meeting of the members to recall a

798

member or members of the board of directors shall state the

799

specific directors sought to be removed.

800

(d)(3) A proposed removal of a director at a meeting shall

801

require a separate vote for each director whose removal is board

802

member sought to be removed. Where removal is sought by written

803

consent agreement, a separate consent agreement is required for

804

each director board member to be removed.

805

(e)(4) If removal is effected at a meeting, any vacancies

806

created thereby shall be filled by the members or directors

807

eligible to vote for the removal at the same meeting.

808

(f)(5) Any director who is removed from the board is shall

809

not be eligible to stand for reelection until the next annual

810

meeting of the members.

811

(g)(6) Any director removed from office shall turn over to

812

the board of directors within 72 hours any and all records of the

813

corporation in his or her possession.

814

(h)(7) If a director who is removed does shall not

815

relinquish his or her office or turn over records as required

816

under this section, the circuit court in the county where the

817

corporation's principal office is located may summarily order the

818

director to relinquish his or her office and turn over corporate

819

records upon application of any member.

820

(i) A director elected or appointed by the board may be

821

removed without cause by a vote of two-thirds of the directors

822

then in office or such greater number as is set forth in the

823

articles of incorporation or bylaws.

824

(2) A director of a corporation described in s. 501(c) of

825

the Internal Revenue Code of 1986, as amended, may be removed

826

from office pursuant to procedures provided in the articles of

827

incorporation or the bylaws, and the corporation may provide in

828

the articles of incorporation or the bylaws that it is subject to

829

the provisions of subsection (1).

830

Section 21. Section 617.0809, Florida Statutes, is amended

831

to read:

832

617.0809 Vacancy on board.--

833

(1) Except as provided in s. 617.0808(1)(f), any vacancy

834

occurring on the board of directors may be filled by the

835

affirmative vote of the majority of the remaining directors, even

836

though the remaining directors constitute less than a quorum, or

837

by the sole remaining director, as the case may be, or, if the

838

vacancy is not so filled or if no director remains, by the

839

members or, on the application of any person, by the circuit

840

court of the county where the registered office of the

841

corporation is located.

842

(2) Whenever a vacancy occurs with respect to a director

843

elected by a class, chapter, unit, or group, the vacancy may be

844

filled only by members of that class, chapter, unit, or group, or

845

by a majority of the directors then in office elected by such

846

class, chapter, unit, or group.

847

(3)(2) The term of a director elected or appointed to fill

848

a vacancy expires at the next annual meeting at which directors

849

are elected shall be elected or appointed for the unexpired term

850

of his or her predecessor in office. Any directorship to be

851

filled by reason of an increase in the number of directors may be

852

filled by the board of directors, but only for a term of office

853

continuing until the next election of directors by the members

854

or, if the corporation has no members or no members having the

855

right to vote thereon, for such term of office as is provided in

856

the articles of incorporation or the bylaws.

857

(4)(3) A vacancy that will occur at a specific later date,

858

by reason of a resignation effective at a later date under s.

859

617.0807 or otherwise, may be filled before the vacancy occurs.

860

However, the new director may not take office until the vacancy

861

occurs.

862

Section 22. Present subsection (4) of section 617.0830,

863

Florida Statutes, is redesignated as subsection (5), and a new

864

subsection (4) is added to that section, to read:

865

617.0830 General standards for directors.--

866

(4) In discharging his or her duties, a director may

867

consider such factors as the director deems relevant, including

868

the interests of the corporation and its members and such other

869

factors as may be necessary or relevant to exercise the

870

director's reasonable business judgment.

871

Section 23. Subsection (2) of section 617.0832, Florida

872

Statutes, is amended, and subsection (3) is added to that

873

section, to read:

874

617.0832 Director conflicts of interest.--

875

(2) For purposes of paragraph (1)(a) only, a conflict-of-

876

interest transaction is authorized, approved, or ratified if it

877

receives the affirmative vote of a majority of the directors on

878

the board of directors, or on the committee, who have no

879

relationship or interest in the transaction described in

880

subsection (1), but a transaction may not be authorized,

881

approved, or ratified under this section by a single director. If

882

a majority of the directors who have no such relationship or

883

interest in the transaction vote to authorize, approve, or ratify

884

the transaction, a quorum is present for the purpose of taking

885

action under this section. The presence of, or a vote cast by, a

886

director having such relationship or interest in the transaction

887

does not affect the validity of any action taken under paragraph

888

(1)(a) if the transaction is otherwise authorized, approved, or

889

ratified as provided in that subsection, but such presence or

890

vote of such a director may be counted for purposes of

891

determining whether the transaction is approved under other

892

sections of this act.

893

(3) For purposes of paragraph (1)(b), a conflict-of-

894

interest transaction is authorized, approved, or ratified if it

895

receives the vote of a majority in interest of the members

896

entitled to vote under this subsection. A director who has a

897

relationship or interest in the transaction described in

898

subsection (1) may not vote to determine whether to authorize,

899

approve, or ratify a conflict-of-interest transaction under

900

paragraph (1)(b). However, the vote of that director is counted

901

in determining whether the transaction is approved under other

902

sections of this act. A majority in interest of the members

903

entitled to vote on the transaction under this subsection

904

constitutes a quorum for the purpose of taking action under this

905

section. Common or interested directors may be counted in

906

determining the presence of a quorum at a meeting of the board of

907

directors or a committee thereof which authorizes, approves, or

908

ratifies such contract or transaction.

909

Section 24. Section 617.0833, Florida Statutes, is amended

910

to read:

911

617.0833 Loans to directors or officers.--Loans, other than

912

through the purchase of bonds, debentures, or similar obligations

913

of the type customarily sold in public offerings, or through

914

ordinary deposit of funds in a bank, may not be made by a

915

corporation to its directors or officers, or to any other

916

corporation, firm, association, or other entity in which one or

917

more of its directors or officers is a director or officer or

918

holds a substantial financial interest, except a loan by one

919

corporation which is exempt from federal income taxation under s.

920

501(c)(3) of the Internal Revenue Code of 1986, as amended, or of

921

the corresponding section of a subsequently enacted federal

922

revenue act, to another corporation which is exempt from federal

923

income taxation under s. 501(c)(3) of the Internal Revenue Code

924

of 1986, as amended, or of the corresponding section of a

925

subsequently enacted federal revenue act. A loan made in

926

violation of this section is a violation of the duty to the

927

corporation of the directors or officers authorizing it or

928

participating in it, but the obligation of the borrower with

929

respect to the loan is shall not be affected thereby.

930

Section 25. Subsection (1) of section 617.0834, Florida

931

Statutes, is amended to read:

932

617.0834 Officers and directors of certain corporations and

933

associations not for profit; immunity from civil liability.--

934

(1) An officer or director of a nonprofit organization

935

recognized under s. 501(c)(3) or s. 501(c)(4) or s. 501(c)(6) of

936

the Internal Revenue Code of 1986, as amended, or of the

937

corresponding section of a subsequently enacted federal revenue

938

act, or of an agricultural or a horticultural organization

939

recognized under s. 501(c)(5), of the Internal Revenue Code of

940

1986, as amended, or of the corresponding section of a

941

subsequently enacted federal revenue act, is not personally

942

liable for monetary damages to any person for any statement,

943

vote, decision, or failure to take an action, regarding

944

organizational management or policy by an officer or director,

945

unless:

946

(a) The officer or director breached or failed to perform

947

his or her duties as an officer or director; and

948

(b) The officer's or director's breach of, or failure to

949

perform, his or her duties constitutes:

950

1. A violation of the criminal law, unless the officer or

951

director had reasonable cause to believe his or her conduct was

952

lawful or had no reasonable cause to believe his or her conduct

953

was unlawful. A judgment or other final adjudication against an

954

officer or director in any criminal proceeding for violation of

955

the criminal law estops that officer or director from contesting

956

the fact that his or her breach, or failure to perform,

957

constitutes a violation of the criminal law, but does not estop

958

the officer or director from establishing that he or she had

959

reasonable cause to believe that his or her conduct was lawful or

960

had no reasonable cause to believe that his or her conduct was

961

unlawful;

962

2. A transaction from which the officer or director derived

963

an improper personal benefit, either directly or indirectly; or

964

3. Recklessness or an act or omission which was committed

965

in bad faith or with malicious purpose or in a manner exhibiting

966

wanton and willful disregard of human rights, safety, or

967

property.

968

Section 26. Subsections (2) and (3) of section 617.1007,

969

Florida Statutes, are amended to read:

970

617.1007 Restated articles of incorporation.--

971

(2) The restatement may include one or more amendments to

972

the articles of incorporation. If the restatement includes an

973

amendment requiring member approval, it must be adopted as

974

provided in s. 617.1002.

975

(3) A corporation restating its articles of incorporation

976

shall deliver to the Department of State for filing articles of

977

restatement, executed in accordance with the provisions of s.

978

617.01201, setting forth the name of the corporation and the text

979

of the restated articles of incorporation together with a

980

certificate setting forth:

981

(a) Whether the restatement contains an amendment to the

982

articles of incorporation requiring member approval and, if it

983

does not, that the board of directors adopted the restatement; or

984

(b) If the restatement contains an amendment to the

985

articles of incorporation requiring member approval, the

986

information required by s. 617.1006.

987

Section 27. Subsection (2) of section 617.1101, Florida

988

Statutes, is amended, and subsection (3) is added to that

989

section, to read:

990

617.1101 Plan of merger.--

991

(2) Each corporation must adopt a plan of merger setting

992

forth:

993

(a) The names of the corporations proposing to merge and

994

the name of the surviving corporation into which each other

995

corporation plans to merge, which is hereinafter designated as

996

the surviving corporation;

997

(b) The terms and conditions of the proposed merger;

998

999

incorporation of the surviving corporation to be effected by such

1000

merger; and

1001

(d) The manner and basis, if any, of converting the

1002

memberships of each merging corporation into memberships,

1003

obligations, or securities of the surviving corporation or any

1004

other corporation or, in whole or in part, into cash or other

1005

property. Such other provisions with respect to the proposed

1006

merger as are deemed necessary or desirable.

1007

(3) The plan of merger may set forth:

1008

(a) Amendments to, or a restatement of, the articles of

1009

incorporation of the surviving corporation;

1010

(b) The effective date of the merger, which may be on or

1011

after the date of filing the articles of incorporation or merger;

1012

1013

1014

Section 28. Section 617.1102, Florida Statutes, is created

1015

to read:

1016

617.1102 Limitation on merger.--A corporation not for

1017

profit organized under this act may merge only with one or more

1018

other business entities, as identified in s. 607.1108(1), if the

1019

surviving entity of such merger is a corporation not for profit

1020

or other business entity that has been organized as a not-for-

1021

profit entity under a governing statute or other applicable law

1022

that permits such a merger.

1023

Section 29. Section 617.1301, Florida Statutes, is created

1024

to read:

1025

617.1301 Prohibited distributions.--Except as authorized by

1026

ss. 617.0505 and 617.1302, a corporation may not make any

1027

distributions to its members.

1028

Section 30. Section 617.1302, Florida Statutes, is created

1029

to read:

1030

617.1302 Authorized distributions.--

1031

(1) A mutual benefit corporation may purchase its

1032

memberships pursuant to s. 617.0608 only if, after the purchase

1033

is completed:

1034

(a) The mutual benefit corporation would be able to pay its

1035

debts as they become due in the usual course of its activities;

1036

and

1037

(b) The total assets of the mutual benefit corporation

1038

would at least equal the sum of its total liabilities.

1039

(2) A corporation may make distributions upon dissolution

1040

in conformity with the dissolution provisions of this act.

1041

Section 31. Subsection (4) of section 617.1405, Florida

1042

Statutes, is amended to read:

1043

617.1405 Effect of dissolution.--

1044

(4) The name of a dissolved corporation is shall not be

1045

available for assumption or use by another corporation until

1046

after 120 days after the effective date of dissolution unless the

1047

dissolved corporation provides the Department of State with an

1048

affidavit, executed pursuant to s. 617.01201, permitting the

1049

immediate assumption or use of the name by another corporation.

1050

Section 32. Section 617.1407, Florida Statutes, is created

1051

to read:

1052

617.1407 Unknown claims against dissolved corporation.--A

1053

dissolved corporation or successor entity, as defined in s.

1054

617.1408(15), may choose to execute one of the following

1055

procedures to resolve payment of unknown claims.

1056

(1) A dissolved corporation or successor entity may file

1057

notice of its dissolution with the department on the form

1058

prescribed by the department and request that persons having

1059

claims against the corporation which are not known to the

1060

corporation or successor entity present them in accordance with

1061

the notice. The notice must:

1062

(a) State the name of the corporation and the date of

1063

dissolution;

1064

(b) Describe the information that must be included in a

1065

claim and provide a mailing address to which the claim may be

1066

sent; and

1067

1068

subsection will be barred unless a proceeding to enforce the

1069

claim is commenced within 4 years after the filing of the notice.

1070

(2) A dissolved corporation or successor entity may, within

1071

10 days after filing articles of dissolution with the department,

1072

publish a "Notice of Corporate Dissolution." The notice must

1073

appear once a week for 2 consecutive weeks in a newspaper of

1074

general circulation in a county in the state in which the

1075

corporation has its principal office, if any, or, if none, in a

1076

county in the state in which the corporation owns real or

1077

personal property. Such newspaper shall meet the requirements as

1078

are prescribed by law for such purposes. The notice must:

1079

(a) State the name of the corporation and the date of

1080

dissolution;

1081

(b) Describe the information that must be included in a

1082

claim and provide a mailing address to which the claim may be

1083

sent; and

1084

1085

subsection will be barred unless a proceeding to enforce the

1086

claim is commenced within 4 years after the date of the second

1087

consecutive weekly publication of the notice authorized by this

1088

section.

1089

(3) If the dissolved corporation or successor entity

1090

complies with subsection (1) or subsection (2), the claim of each

1091

of the following claimants is barred unless the claimant

1092

commences a proceeding to enforce the claim against the dissolved

1093

corporation within 4 years after the date of filing the notice

1094

with the department or the date of the second consecutive weekly

1095

publication, as applicable:

1096

(a) A claimant who did not receive written notice under s.

1097

617.1408(9), or whose claim is not provided for under s.

1098

617.1408(10), whether such claim is based on an event occurring

1099

before or after the effective date of dissolution.

1100

(b) A claimant whose claim was timely sent to the dissolved

1101

corporation but on which no action was taken.

1102

(4) A claim may be entered under this section:

1103

(a) Against the dissolved corporation, to the extent of its

1104

undistributed assets; or

1105

(b) If the assets have been distributed in liquidation,

1106

against a member of the dissolved corporation to the extent of

1107

such member's pro rata share of the claim or the corporate assets

1108

distributed to such member in liquidation, whichever is less;

1109

however, the aggregate liability of any member of a dissolved

1110

corporation arising under this section, or otherwise, may not

1111

exceed the amount distributed to the member in dissolution.

1112

Section 33. Section 617.1408, Florida Statutes, is created

1113

to read:

1114

617.1408 Known claims against dissolved corporation.--

1115

(1) A dissolved corporation or successor entity, as defined

1116

in subsection (15), may dispose of the known claims against it by

1117

following the procedures described in subsections (2), (3), and

1118

(4).

1119

(2) The dissolved corporation or successor entity shall

1120

deliver to each of its known claimants written notice of the

1121

dissolution at any time after its effective date. The written

1122

notice must:

1123

(a) Provide a reasonable description of the claim that the

1124

claimant may be entitled to assert;

1125

(b) State whether the claim is admitted or not admitted, in

1126

whole or in part, and, if admitted:

1127

1. The amount that is admitted, which may be as of a given

1128

date; and

1129

2. Any interest obligation if fixed by an instrument of

1130

indebtedness;

1131

1132

(d) State the deadline, which may not be less than 120 days

1133

after the effective date of the written notice, by which

1134

confirmation of the claim must be delivered to the dissolved

1135

corporation or successor entity; and

1136

(e) State that the corporation or successor entity may make

1137

distributions thereafter to other claimants and the members of

1138

the corporation or persons interested as having been such without

1139

further notice.

1140

(3) A dissolved corporation or successor entity may reject,

1141

in whole or in part, any claim made by a claimant pursuant to

1142

this subsection by mailing notice of such rejection to the

1143

claimant within 90 days after receipt of such claim and, in all

1144

events, at least 150 days before expiration of 3 years following

1145

the effective date of dissolution. A notice sent by the dissolved

1146

corporation or successor entity pursuant to this subsection must

1147

be accompanied by a copy of this section.

1148

(4) A dissolved corporation or successor entity electing to

1149

follow the procedures described in subsections (2) and (3) must

1150

also give notice of the dissolution of the corporation to persons

1151

having known claims that are contingent upon the occurrence or

1152

nonoccurrence of future events, or are otherwise conditional or

1153

unmatured, and request that such persons present such claims in

1154

accordance with the terms of such notice. Such notice must be in

1155

substantially the form, and sent in the same manner, as described

1156

in subsection (2).

1157

(5) A dissolved corporation or successor entity shall offer

1158

any claimant whose known claim is contingent, conditional, or

1159

unmatured such security as the corporation or such entity

1160

determines is sufficient to provide compensation to the claimant

1161

if the claim matures. The dissolved corporation or successor

1162

entity shall deliver such offer to the claimant within 90 days

1163

after receipt of such claim and, in all events, at least 150 days

1164

before expiration of 3 years following the effective date of

1165

dissolution. If the claimant offered such security does not

1166

deliver in writing to the dissolved corporation or successor

1167

entity a notice rejecting the offer within 120 days after receipt

1168

of such offer for security, the claimant is deemed to have

1169

accepted such security as the sole source from which to satisfy

1170

his or her claim against the corporation.

1171

(6) A dissolved corporation or successor entity that has

1172

given notice in accordance with subsections (2) and (4) shall

1173

petition the circuit court in the county where the corporation's

1174

principal office is located or was located at the effective date

1175

of dissolution to determine the amount and form of security which

1176

will be sufficient to provide compensation to any claimant who

1177

has rejected the offer for security made pursuant to subsection

1178

(5).

1179

(7) A dissolved corporation or successor entity that has

1180

given notice in accordance with subsection (2) shall petition the

1181

circuit court in the county where the corporation's principal

1182

office is located or was located at the effective date of

1183

dissolution to determine the amount and form of security which

1184

will be sufficient to provide compensation to claimants whose

1185

claims are known to the corporation or successor entity but whose

1186

identities are unknown. The court shall appoint a guardian ad

1187

litem to represent all claimants whose identities are unknown in

1188

any proceeding brought under this subsection. The reasonable fees

1189

and expenses of such guardian, including all reasonable expert

1190

witness fees, shall be paid by the petitioner in such proceeding.

1191

(8) The giving of any notice or making of any offer

1192

pursuant to the provisions of this section does not revive any

1193

claim then barred, does not constitute acknowledgment by the

1194

dissolved corporation or successor entity that any person to whom

1195

such notice is sent is a proper claimant, and does not operate as

1196

a waiver of any defense or counterclaim in respect of any claim

1197

asserted by any person to whom such notice is sent.

1198

(9) A dissolved corporation or successor entity that has

1199

followed the procedures described in subsections (2)-(7) shall:

1200

(a) Pay the claims admitted or made and not rejected in

1201

accordance with subsection (3);

1202

(b) Post the security offered and not rejected pursuant to

1203

subsection (5);

1204

1205

proceeding under subsections (6) and (7); and

1206

(d) Pay or make provision for all other known obligations

1207

of the corporation or the successor entity. Such claims or

1208

obligations shall be paid in full, and any such provision for

1209

payments shall be made in full if there are sufficient funds. If

1210

there are insufficient funds, such claims and obligations shall

1211

be paid or provided for according to their priority and, among

1212

claims of equal priority, ratably to the extent of funds legally

1213

available for payment thereof. Any remaining funds shall be

1214

distributed to the members of the dissolved corporation; however,

1215

such distribution may not be made before the expiration of 150

1216

days following the date of the last notice of rejections given

1217

pursuant to subsection (3). In the absence of actual fraud, the

1218

judgment of the directors of the dissolved corporation or the

1219

governing persons of the successor entity as to the provisions

1220

made for the payment of all obligations under this paragraph is

1221

conclusive.

1222

(10) A dissolved corporation or successor entity that has

1223

not followed the procedures described in subsections (2) and (3)

1224

shall pay or make reasonable provision to pay all known claims

1225

and obligations, including all contingent, conditional, or

1226

unmatured claims known to the corporation or the successor entity

1227

and all claims that are known to the dissolved corporation or the

1228

successor entity but for which the identity of the claimant is

1229

unknown. Such claims shall be paid in full, and any such

1230

provision for payment made shall be made in full if there are

1231

sufficient funds. If there are insufficient funds, such claims

1232

and obligations shall be paid or provided for according to their

1233

priority and, among claims of equal priority, ratably to the

1234

extent of funds legally available for payment thereof. Any

1235

remaining funds shall be distributed to the members of the

1236

dissolved corporation.

1237

(11) Directors of a dissolved corporation or governing

1238

persons of a successor entity that has complied with subsection

1239

(9) or subsection (10) are not personally liable to the claimants

1240

of the dissolved corporation.

1241

(12) A member of a dissolved corporation the assets of

1242

which were distributed pursuant to subsection (9) or subsection

1243

(10) is not liable for any claim against the corporation in an

1244

amount in excess of such member's pro rata share of the claim or

1245

the amount distributed to the member, whichever is less.

1246

(13) A member of a dissolved corporation, the assets of

1247

which were distributed pursuant to subsection (9), is not liable

1248

for any claim against the corporation which claim is known to the

1249

corporation or successor entity and on which a proceeding is not

1250

begun prior to the expiration of 3 years following the effective

1251

date of dissolution.

1252

(14) The aggregate liability of any member of a dissolved

1253

corporation for claims against the dissolved corporation arising

1254

under this section, or otherwise, may not exceed the amount

1255

distributed to the member in dissolution.

1256

(15) As used in this section and s. 617.1407, the term

1257

"successor entity" includes any trust, receivership, or other

1258

legal entity that is governed by the laws of this state to which

1259

the remaining assets and liabilities of a dissolved corporation

1260

are transferred and that exists solely for the purposes of

1261

prosecuting and defending suits by or against the dissolved

1262

corporation and enabling the dissolved corporation to settle and

1263

close the business of the dissolved corporation, to dispose of

1264

and convey the property of the dissolved corporation, to

1265

discharge the liabilities of the dissolved corporation, and to

1266

distribute to the dissolved corporation's members any remaining

1267

assets, but not for the purpose of continuing the business for

1268

which the dissolved corporation was organized.

1269

Section 34. Subsection (6) of section 617.1421, Florida

1270

Statutes, is repealed.

1271

Section 35. Section 617.1422, Florida Statutes, is amended

1272

to read:

1273

617.1422 Reinstatement following administrative

1274

dissolution.--

1275

(1)(a) A corporation administratively dissolved under s.

1276

617.1421 may apply to the Department of State for reinstatement

1277

at any time after the effective date of dissolution. The

1278

corporation must submit a reinstatement form prescribed and

1279

furnished by the Department of State or a current uniform

1280

business report signed by a registered agent and an officer or

1281

director and submit application must:

1282

1. Recite the name of the corporation and the effective

1283

date of its administrative dissolution;

1284

2. State that the ground or grounds for dissolution either

1285

did not exist or have been eliminated and that no further grounds

1286

currently exist for dissolution;

1287

3. State that the corporation's name satisfies the

1288

requirements of s. 617.0401; and

1289

4. State that all fees owed by the corporation and computed

1290

at the rate provided by law at the time the corporation applies

1291

for reinstatement. have been paid; or

1292

(b) Submit a current annual report, signed by the

1293

registered agent and an officer or director, which substantially

1294

complies with the requirements of paragraph (a).

1295

(2) If the department of State determines that the

1296

application contains the information required by subsection (1)

1297

and that the information is correct, it shall file the document,

1298

cancel the certificate of dissolution, and reinstate the

1299

corporation effective on the date which the reinstatement

1300

document is filed.

1301

(3) When the reinstatement is effective, it relates back to

1302

and takes effect as of the effective date of the administrative

1303

dissolution and the corporation resumes carrying on its business

1304

affairs as if the administrative dissolution had never occurred.

1305

(4) The name of the dissolved corporation is not available

1306

for assumption or use by another corporation until 1 year after

1307

the effective date of dissolution unless the dissolved

1308

corporation provides the department with an affidavit executed as

1309

required by s. 617.01201 permitting the immediate assumption or

1310

use of the name by another corporation.

1311

(5)(4) If the name of the dissolved corporation has been

1312

lawfully assumed in this state by another corporation, the

1313

department of State shall require the dissolved corporation to

1314

amend its articles of incorporation to change its name before

1315

accepting its application for reinstatement.

1316

Section 36. Subsection (2) of section 617.1430, Florida

1317

Statutes, is amended to read:

1318

617.1430 Grounds for judicial dissolution.--A circuit court

1319

may dissolve a corporation:

1320

(2) Except as provided in the articles of incorporation or

1321

bylaws of a corporation, in a proceeding by at least 50 members

1322

or members holding at least 10 percent of the voting power of any

1323

corporation, whichever is less, or by a director or any person

1324

authorized in the articles of incorporation, In a proceeding by a

1325

member if it is established that:

1326

(a) The directors are deadlocked in the management of the

1327

corporate affairs, the members are unable to break the deadlock,

1328

and irreparable injury to the corporation is threatened or being

1329

suffered;

1330

(b) The members are deadlocked in voting power and have

1331

failed to elect successors to directors whose terms have expired

1332

or would have expired upon qualification of their successors; or

1333

1334

Section 37. Subsection (2) of section 617.1503, Florida

1335

Statutes, is amended to read:

1336

617.1503 Application for certificate of authority.--

1337

(2) The foreign corporation shall deliver with the

1338

completed application a certificate of existence, (or a document

1339

of similar import,) duly authenticated, not more than 90 days

1340

prior to delivery of the application to the Department of State,

1341

by the Secretary of State or other official having custody of

1342

corporate records in the jurisdiction under the law of which it

1343

is incorporated. A translation of the certificate, under oath of

1344

the translator, must be attached to a certificate that which is

1345

in a language other than the English language.

1346

Section 38. Subsection (2) of section 617.1504, Florida

1347

Statutes, is amended to read:

1348

617.1504 Amended certificate of authority.--

1349

(2) Such application shall be made within 90 30 days after

1350

the occurrence of any change mentioned in subsection (1), shall

1351

be made on forms prescribed by the Department of State, shall be

1352

executed and filed in the same manner as an original application

1353

for authority, and shall set forth:

1354

(a) The name of the foreign corporation as it appears on

1355

the records of the Department of State;

1356

(b) The jurisdiction of its incorporation;

1357

1358

this state;

1359

(d) If the name of the foreign corporation has been

1360

changed, the name relinquished, the new name, a statement that

1361

the change of name has been effected under the laws of the

1362

jurisdiction of its incorporation, and the date the change was

1363

effected;

1364

(e) If the period of duration has been changed, a statement

1365

of such change and the date the change was effected;

1366

(f) If the jurisdiction of incorporation has been changed,

1367

a statement of such change and the date the change was effected;

1368

and

1369

(g) If the purpose or purposes that which the corporation

1370

intends to pursue in this state have been changed, a statement of

1371

such new purpose or purposes, and a further statement that the

1372

corporation is authorized to pursue such purpose or purposes in

1373

the jurisdiction of its incorporation.

1374

Section 39. Section 617.1506, Florida Statutes, is amended

1375

to read:

1376

617.1506 Corporate name of foreign corporation.--

1377

(1) A foreign corporation is not entitled to file an

1378

application for a certificate of authority unless the corporate

1379

name of such corporation satisfies the requirements of s.

1380

617.0401. To obtain or maintain a certificate of authority to

1381

transact business in this state, the foreign corporation:

1382

(a) May add the word "corporation" or "incorporated" or the

1383

abbreviation "corp." or "inc." or words of like import, as will

1384

clearly indicate that it is a corporation instead of a natural

1385

person or partnership or other business entity; however, to its

1386

corporate name for use in this state, provided, the name of a

1387

foreign corporation may not contain the word "company" or the

1388

abbreviation "co."; or

1389

(b) May use an alternate name to transact business in this

1390

state if its real name is unavailable. Any such alternate

1391

corporate name adopted for use in this state shall be cross-

1392

referenced to the real corporate name in the records of the

1393

Division of Corporations. If the real corporate name of the

1394

corporation becomes available in this state or if the corporation

1395

chooses to change its alternate name, and it delivers to the

1396

Department of State, for filing, a copy of the resolution of its

1397

board of directors, changing or withdrawing the alternate name,

1398

executed as required by s. 617.01201, must be delivered for

1399

filing adopting an alternate name.

1400

(2) The corporate name, including the alternate name, of a

1401

foreign corporation must be distinguishable, within the records

1402

of the Division of Corporations, from:

1403

(a) Any corporate name of a corporation for profit

1404

incorporated or authorized to transact business in this state.

1405

(b)(a) The alternate name of another foreign corporation

1406

authorized to transact business in this state.

1407

(c)(b) The corporate name of a not-for-profit corporation

1408

incorporated or authorized to transact business in this state.

1409

(d)(c) The names of all other entities or filings, except

1410

fictitious name registrations pursuant to s. 865.09, organized,

1411

or registered under the laws of this state, that are on file with

1412

the Division of Corporations.

1413

(3) If a foreign corporation authorized to transact

1414

business in this state changes its corporate name to one that

1415

does not satisfy the requirements of s. 607.0401, such

1416

corporation may not transact business in this state under the

1417

changed name until the corporation adopts a name satisfying the

1418

requirements of s. 607.0401.

1419

(4) The corporate name must be distinguishable from the

1420

names of all other entities or filings, organized, registered, or

1421

reserved under the laws of the state that are on file with the

1422

Division of Corporations, except fictitious name registrations

1423

pursuant to s. 865.09.

1424

Section 40. Subsection (6) of section 617.1530, Florida

1425

Statutes, is amended to read:

1426

617.1530 Grounds for revocation of authority to conduct

1427

affairs.--The Department of State may commence a proceeding under

1428

s. 617.1531 to revoke the certificate of authority of a foreign

1429

corporation authorized to conduct its affairs in this state if:

1430

(6) The Department of State receives a duly authenticated

1431

certificate from the Secretary secretary of State state or other

1432

official having custody of corporate records in the jurisdiction

1433

under the law of which the foreign corporation is incorporated

1434

stating that it has been dissolved or disappeared as the result

1435

of a merger.

1436

Section 41. Paragraph (a) of subsection (5) of section

1437

617.1601, Florida Statutes, is amended to read:

1438

617.1601 Corporate records.--

1439

(5) A corporation shall keep a copy of the following

1440

records:

1441

(a) Its articles of incorporation or restated articles of

1442

incorporation and all amendments to them currently in effect.

1443

Section 42. Subsections (1), (2), and (4) of section

1444

617.1602, Florida Statutes, are amended to read:

1445

617.1602 Inspection of records by members.--

1446

(1) A member of a corporation is entitled to inspect and

1447

copy, during regular business hours at the corporation's

1448

principal office or at a reasonable location specified by the

1449

corporation, any of the records of the corporation described in

1450

s. 617.1601(5), if the member gives the corporation written

1451

notice of his or her demand at least 10 5 business days before

1452

the date on which he or she wishes to inspect and copy.

1453

(2) A member of a corporation is entitled to inspect and

1454

copy, during regular business hours at a reasonable location

1455

specified by the corporation, any of the following records of the

1456

corporation if the member meets the requirements of subsection

1457

(3) and gives the corporation written notice of his or her demand

1458

at least 10 5 business days before the date on which he or she

1459

wishes to inspect and copy:

1460

(a) Excerpts from minutes of any meeting of the board of

1461

directors, records of any action of a committee of the board of

1462

directors while acting in place of the board of directors on

1463

behalf of the corporation, minutes of any meeting of the members,

1464

and records of action taken by the members or board of directors

1465

without a meeting, to the extent not subject to inspection under

1466

subsection (1).

1467

(b) Accounting records of the corporation.

1468

1469

(d) Any other books and records.

1470

(4) This section does not affect:

1471

(a) The right of a member to inspect and copy records under

1472

s. 617.0730(6), or, if the member is in litigation with the

1473

corporation to inspect and copy records, to the same extent as

1474

any other litigant.

1475

(b) The power of a court, independently of this act, to

1476

compel the production of corporate records for examination.

1477

Section 43. Section 617.1605, Florida Statutes, is amended

1478

to read:

1479

617.1605 Financial reports for members.--A corporation,

1480

upon written demand from a member, shall furnish that member its

1481

latest annual financial statements, which may be consolidated or

1482

combined statements of the corporation and one or more of its

1483

subsidiaries or affiliates, as appropriate, and which include a

1484

balance sheet as of the end of the fiscal year and a statement of

1485

operations for that year. If financial statements are prepared

1486

for the corporation on the basis of generally accepted accounting

1487

principles, the annual financial statements must also be prepared

1488

on such basis. Within 60 days following the end of the fiscal or

1489

calendar year or annually on such date as is otherwise provided

1490

in the bylaws of the corporation, the board of directors of the

1491

corporation shall mail or furnish by personal delivery to each

1492

member a complete financial report of actual receipts and

1493

expenditures for the previous 12 months. The report shall show

1494

the amounts of receipts by accounts and receipt classifications

1495

and shall show the amounts of expenses by accounts and expense

1496

classifications.

1497

Section 44. Section 617.1703, Florida Statutes, is created

1498

to read:

1499

617.1703 Application to condominiums, homeowners'

1500

associations, cooperatives, and mobile home park lot

1501

tenancies.--In the event of any conflict between the provisions

1502

of this act and the provisions of chapter 718 regarding

1503

condominiums, chapter 719 regarding cooperatives, chapter 720

1504

regarding homeowners' associations, or chapter 723 regarding

1505

mobile home park lot tenancies, the provisions of such other

1506

chapters shall apply. The provisions of ss. 617.0605-617.0608 do

1507

not apply to corporations regulated by any of the foregoing

1508

chapters or to any other corporation in which membership in the

1509

corporation is required pursuant to a document recorded in the

1510

county property records.

1511

Section 45. Subsection (8) is added to section 617.1803,

1512

Florida Statutes, to read:

1513

617.1803 Domestication of foreign not-for-profit

1514

corporations.--

1515

(8) When a domestication becomes effective:

1516

(a) The title to all real and personal property, both

1517

tangible and intangible, of the foreign corporation remains in

1518

the domesticated corporation without reversion or impairment;

1519

(b) The liabilities of the foreign corporation remain the

1520

liabilities of the domesticated corporation;

1521

1522

continues against the domesticated corporation as if the

1523

domestication had not occurred;

1524

(d) The articles of incorporation attached to the

1525

certificate of domestication constitute the articles of

1526

incorporation of the domesticated corporation; and

1527

(e) Membership interests in the foreign corporation remain

1528

identical in the domesticated corporation.

1529

Section 46. Section 617.1806, Florida Statutes, is amended

1530

to read:

1531

617.1806 Conversion to corporation not for profit; petition

1532

and contents.--A petition for conversion to a corporation not for

1533

profit pursuant to s. 617.1805 shall be accompanied by the

1534

written consent of all the shareholders authorizing the change in

1535

the corporate nature and directing an authorized officer to file

1536

such petition before the court, together with a statement

1537

agreeing to accept all the property of the petitioning

1538

corporation and agreeing to assume and pay all its indebtedness

1539

and liabilities and the proposed articles of incorporation signed

1540

by the president and secretary of the petitioning corporation

1541

which shall set forth the provisions required in original

1542

articles of incorporation by s. 617.0202.

1543

Section 47. Section 617.1807, Florida Statutes, is amended

1544

to read:

1545

617.1807 Conversion to corporation not for profit;

1546

authority of circuit judge.--If the circuit judge to whom the

1547

petition and proposed articles of incorporation are presented

1548

finds that the petition and proposed articles of incorporation

1549

are in proper form, he or she shall approve the articles of

1550

incorporation and endorse his or her approval thereon; such

1551

approval shall provide that all of the property of the

1552

petitioning corporation shall become the property of the

1553

successor corporation not for profit, subject to all indebtedness

1554

and liabilities of the petitioning corporation. The articles of

1555

incorporation with such endorsements thereupon shall be sent to

1556

the Department of State, which shall, upon receipt thereof and

1557

upon payment of all taxes due the state by the petitioning

1558

corporation, if any, issue a certificate showing the receipt of

1559

the articles of incorporation with the endorsement of approval

1560

thereon and of the payment of all taxes to the state. Upon

1561

payment of the filing fees specified in s. 617.0122, the

1562

Department of State shall file the articles of incorporation, and

1563

from thenceforth the petitioning corporation shall become a

1564

corporation not for profit under the name adopted in the articles

1565

of incorporation and subject to all the rights, powers,

1566

immunities, duties, and liabilities of corporations not for

1567

profit under state law, and its rights, powers, immunities,

1568

duties, and liabilities as a corporation for profit shall cease

1569

and determine.

1570

Section 48. Section 617.1907, Florida Statutes, is amended

1571

to read:

1572

617.1907 Effect of repeal or amendment of prior acts.--

1573

(1) Except as provided in subsection (2), the repeal or

1574

amendment of a statute by this act does not affect:

1575

(a) The operation of the statute or any action taken under

1576

it before its repeal or amendment;

1577

(b) Any ratification, right, remedy, privilege, obligation,

1578

or liability acquired, accrued, or incurred under the statute

1579

before its repeal or amendment;

1580

1581

forfeiture, or punishment incurred because of the violation,

1582

before its repeal or amendment; or

1583

(d) Any proceeding, reorganization, or dissolution

1584

commenced under the statute before its repeal or amendment, and

1585

the proceeding, reorganization, or dissolution may be completed

1586

in accordance with the statute as if it had not been repealed or

1587

amended.

1588

(2) If a penalty or punishment imposed for violation of a

1589

statute repealed or amended by this act is reduced by this act,

1590

the penalty or punishment if not already imposed shall be imposed

1591

in accordance with this act.

1592

Section 49. Section 617.2103, Florida Statutes, is

1593

repealed.

1594

Section 50. This act shall take effect October 1, 2008.

CODING: Words stricken are deletions; words underlined are additions.