Florida Senate - 2024 COMMITTEE AMENDMENT Bill No. CS for SB 1198 Ì422858LÎ422858 LEGISLATIVE ACTION Senate . House Comm: RCS . 02/08/2024 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Rules (Martin) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete lines 418 - 649 4 and insert: 5 (b) A filing was not previously filed in respect of the 6 defective corporate action, 7 8 in lieu of a filing otherwise required under this chapter, the 9 corporation must file articles of validation in accordance with 10 this section, and such articles of validation will serve to 11 amend or be a substitute for any other filing with respect to 12 such defective corporate action required by this chapter. 13 (2) The articles of validation must specify all of the 14 following: 15 (a) The defective corporate action that is the subject of 16 the articles of validation, including, in the case of any 17 defective corporate action involving the issuance of putative 18 shares, the number and type of putative shares issued and the 19 date or dates upon which such putative shares were purported to 20 have been issued. 21 (b) The date of the defective corporate action. 22 (c) The nature of the failure of authorization in respect 23 of the defective corporate action. 24 (d) A statement that the defective corporate action was 25 ratified in accordance with s. 607.0147, including the date on 26 which the board of directors ratified such defective corporate 27 action and, if applicable, the date on which the shareholders 28 approved the ratification of such defective corporate action. 29 (e)1. If a filing was previously made in respect of the 30 defective corporate action and such filing requires any change 31 to give effect to the ratification of such defective corporate 32 action pursuant to s. 607.0147: 33 a. The name, title, and filing date of the filing 34 previously made and any articles of correction for that filing; 35 b. A statement that a filing containing all of the 36 information required to be included under the applicable 37 provisions of this chapter to give effect to such defective 38 corporate action is attached as an exhibit to the articles of 39 validation; and 40 c. The date and time that such filing is deemed to have 41 become effective. 42 2. If a filing was not previously made in respect of the 43 defective corporate action and the defective corporate action 44 ratified pursuant to s. 607.0147 would have required a filing 45 under any other provision of this chapter: 46 a. A statement that a filing containing all of the 47 information required to be included under the applicable 48 provisions of this chapter to give effect to such defective 49 corporate action is attached as an exhibit to the articles of 50 validation; and 51 b. The date and time that such filing is deemed to have 52 become effective. 53 Section 8. Section 607.0152, Florida Statutes, is created 54 to read: 55 607.0152 Judicial proceedings regarding validity of 56 corporate actions.— 57 (1) Subject to subsection (4), upon application by the 58 corporation, any successor entity to the corporation, a director 59 of the corporation, any shareholder, beneficial shareholder, or 60 unrestricted voting trust beneficial owner of the corporation, 61 including any such shareholder, beneficial shareholder, or 62 unrestricted voting trust beneficial owner as of the date of the 63 defective corporate action ratified pursuant to s. 607.0147; or 64 any other person claiming to be substantially and adversely 65 affected by a ratification in accordance with s. 607.0147, the 66 circuit court in the applicable county may take any one or more 67 of the following actions: 68 (a) Determine the validity and effectiveness of any 69 corporate action or defective corporate action ratified pursuant 70 to s. 607.0147. 71 (b) Determine the validity and effectiveness of any 72 ratification of any defective corporate action pursuant to s. 73 607.0147. 74 (c) Determine the validity and effectiveness of any 75 defective corporate action not ratified or not ratified 76 effectively pursuant to s. 607.0147. 77 (d) Determine the validity of any putative shares. 78 (e) Modify or waive any of the procedures specified in s. 79 607.0147 or s. 607.0148 to ratify a defective corporate action. 80 (2) In connection with an action brought under this 81 section, the court may make such findings or issue such orders 82 and take into account any one or more factors or considerations 83 as it deems proper under the circumstances, including, but not 84 limited to, any one or more of the factors, considerations, 85 findings, and orders set forth in subsections (5) and (6). 86 (3) Service of process of the application under subsection 87 (1) on the corporation may be made in any manner provided in 88 chapter 48 for service on a corporation, and no other party need 89 be joined in order for the court to adjudicate the matter. In an 90 action filed by the corporation, the court may require that 91 notice of the action be provided to other persons specified by 92 the court and permit such other persons to intervene in the 93 action. 94 (4) Notwithstanding any other law to the contrary, any 95 action asserting that the ratification of a defective corporate 96 action, and any putative shares issued as a result of such 97 defective corporate action, should not be effective, or should 98 be effective only on certain conditions, must be brought, if at 99 all, within 120 days after the validation effective time. 100 (5) In connection with the resolution of matters under 101 subsection (2), the court may consider any of the following: 102 (a) Whether the defective corporate action was originally 103 approved or effectuated with the belief that the approval or 104 effectuation was in compliance with the provisions of this 105 chapter, the articles of incorporation, or the bylaws of the 106 corporation. 107 (b) Whether the corporation and board of directors have 108 treated the defective corporate action as a valid act or 109 transaction and whether any person has acted in reliance on the 110 public record that such defective corporate action was valid. 111 (c) Whether any person will be or was harmed by the 112 ratification or validation of the defective corporate action, 113 excluding any harm that would have resulted if the defective 114 corporate action had been valid when approved or effectuated. 115 (d) Whether any person will be harmed by the failure to 116 ratify or validate the defective corporate action. 117 (e) Whether the defective corporate action was a conflict 118 of interest transaction. 119 (f) Any other factors or considerations the court deems 120 just and equitable. 121 (6) In connection with an action under this section, the 122 court may do any one or more of the following: 123 (a) Declare that a ratification in accordance with and 124 pursuant to s. 607.0147 is not effective or shall only be 125 effective at a time or upon conditions established by the court. 126 (b) Validate and declare effective any defective corporate 127 action or putative shares and impose conditions upon such 128 validation. 129 (c) Require measures to remedy or avoid harm to any person 130 substantially and adversely affected by a ratification in 131 accordance with and pursuant to s. 607.0147 or by any order of 132 the court pursuant to this section, excluding any harm that 133 would have resulted if the defective corporate action had been 134 valid when approved or effectuated. 135 (d) Order the department to accept an instrument for filing 136 with an effective time specified by the court, which effective 137 time may be before or after the date and time of such order, 138 provided that the filing date of such instrument shall be 139 determined in accordance with s. 607.0123. 140 (e) Approve a stock ledger for the corporation that 141 includes any shares ratified or validated in accordance with 142 this section or s. 607.0147. 143 (f) Declare that the putative shares are valid shares or 144 require a corporation to issue and deliver valid shares in place 145 of any putative shares. 146 (g) Order that a meeting of holders of valid shares or 147 putative shares be held and exercise such powers as it deems 148 appropriate with respect to such a meeting. 149 (h) Declare that a defective corporate action validated by 150 the court shall be effective as of the date and time of the 151 defective corporate action or at such other date and time as 152 determined by the court. 153 (i) Declare that putative shares validated by the court 154 shall be deemed to be identical valid shares or fractions of 155 valid shares as of the date and time originally issued or 156 purportedly issued or at such other date and time as determined 157 by the court. 158 (j) Require payment by the corporation of reasonable 159 expenses, including attorney fees and costs, that the court 160 finds just and equitable under the circumstances. 161 (k) Issue other orders as it deems necessary and proper 162 under the circumstances. 163 Section 9. Subsection (2) of section 605.0115, Florida 164 Statutes, is amended, and subsection (6) is added to that 165 section, to read: 166 605.0115 Resignation of registered agent.— 167 (2) After delivering the statement of resignation to the 168 department for filing, the registered agent must promptly mail a 169 copy to the limited liability company’s or foreign limited 170 liability company’s current mailing address; provided, however, 171 that if a composite statement of resignation is being filed 172 pursuant to subsection (6), the registered agent must promptly 173 mail a copy of either the composite statement of resignation or 174 a separate notice of resignation for each respective limited 175 liability company, in each case using the respective mailing 176 address of the respective limited liability company that then 177 appears in the records of the department. 178 (6)(a) If a registered agent is resigning as registered 179 agent from more than one limited liability company that each has 180 been dissolved, either voluntarily, administratively, or by 181 court action, for a continuous period of 10 years or longer, the 182 registered agent may elect to file the statement of resignation 183 separately for each such limited liability company or may elect 184 to file a single composite statement of resignation covering two 185 or more limited liability companies. Any such composite 186 statement of resignation must set forth, for each such limited 187 liability company covered by the statement of resignation, the 188 name of the respective limited liability and the date 189 dissolution became effective for the respective limited 190 liability company. 191 (b) This subsection is applicable only to resignations from 192 limited liability companies as defined in this chapter. 193 Section 10. Subsection (2) of section 607.0503, Florida 194 Statutes, is amended, and subsection (6) is added to that 195 section, to read: 196 607.0503 Resignation of registered agent.— 197 (2) After delivering the statement of resignation to the 198 department for filing, the registered agent must promptly mail a 199 copy to the corporation at its current mailing address; 200 provided, however, that if a composite statement of resignation 201 is being filed pursuant to subsection (6), the registered agent 202 must promptly mail a copy of either the composite statement of 203 resignation or a separate notice of resignation for each 204 respective corporation, in each case using the respective 205 mailing address of the respective corporation that then appears 206 in the records of the department. 207 (6)(a) If a registered agent is resigning as registered 208 agent from more than one corporation that each has been 209 dissolved, either voluntarily, administratively, or by court 210 action, for a continuous period of 10 years or longer, the 211 registered agent may elect to file the statement of resignation 212 separately for each such corporation or may elect to file a 213 single composite statement of resignation covering two or more 214 corporations. Any such composite statement of resignation must 215 set forth, for each such corporation covered by the statement of 216 resignation, the name of the respective corporation and the date 217 that dissolution became effective for the respective 218 corporation. 219 (b) This subsection is applicable only to resignations by 220 registered agents from domestic corporations. 221 Section 11. Subsection (2) of section 617.0502, Florida 222 Statutes, is amended to read: 223 617.0502 Change of registered office or registered agent; 224 resignation of registered agent.— 225 (2)(a) Any registered agent may resign his or her agency 226 appointment by signing and delivering for filing with the 227 Department of State a statement of resignation and mailing a 228 copy of such statement to the corporation at its mailing address 229 of the respective corporation that then appears in the records 230 of the Department of State; provided, however, that if a 231 composite statement of resignation is being filed pursuant to 232 paragraph (b), the registered agent must promptly mail a copy of 233 either the composite statement of resignation or a separate 234 notice of resignation for each respective corporation, in each 235 case using the respective mailing address of the respective 236 corporation that then appears in the records of the Department 237 of Stateprincipal238 239 ================= T I T L E A M E N D M E N T ================ 240 And the title is amended as follows: 241 Delete lines 12 - 83 242 and insert: 243 properly ratified; providing for a process whereby 244 putative shares can be validated in the event of an 245 overissue; creating s. 607.0147, F.S.; requiring the 246 board of directors to take certain action to ratify a 247 defective corporate action; authorizing those 248 exercising the powers of the directors to take certain 249 action when certain defective actions are related to 250 the ratification of the initial board of directors; 251 requiring members of the board of directors to seek 252 approval of the shareholders, in connection with 253 ratifying a defective corporate action under certain 254 conditions; authorizing the board of directors to 255 abandon ratification at any time before the validation 256 effective time after action by the board and, if 257 required, approval of the shareholders; creating s. 258 607.0148, F.S.; providing quorum and voting 259 requirements for the ratification of certain defective 260 corporate actions; requiring the board, in connection 261 with a shareholder meeting held to ratify a defective 262 corporate action, to send notice to all identifiable 263 shareholders of a certain meeting date; requiring that 264 the notice state that a purpose of the meeting is to 265 consider ratification of a defective corporate action; 266 requiring the notice sent to be accompanied with 267 certain information; specifying the quorum and voting 268 requirements applicable to ratification of the 269 election of directors; requiring that votes cast 270 within the voting group favoring ratification of the 271 election of a director exceed the votes cast within 272 the voting group opposing such ratification; 273 prohibiting holders of putative shares from voting on 274 ratification of any defective corporate action and 275 providing that they may not be counted for quorum 276 purposes or in certain written consents; requiring 277 approval of certain amendments to the corporation’s 278 articles of incorporation under certain circumstances; 279 creating s. 607.0149, F.S.; requiring that notice be 280 given to shareholders of certain corporate action 281 taken by the board of directors; providing that notice 282 is not required for holders of certain shares whose 283 identities or addresses for notice cannot be 284 determined; providing requirements for such notice; 285 providing requirements for such notice for 286 corporations subject to certain federal reporting 287 requirements; creating s. 607.0150, F.S.; specifying 288 the effects of ratification; creating s. 607.0151, 289 F.S.; requiring corporations to file articles of 290 validation under certain circumstances; providing 291 applicability; providing requirements for articles of 292 validation; creating s. 607.0152, F.S.; authorizing 293 certain persons and entities to file certain motions; 294 providing for service of process; requiring that 295 certain actions be filed within a specified timeframe; 296 authorizing the court to consider certain factors in 297 resolving certain issues; authorizing the courts to 298 take certain actions in cases involving defective 299 corporate actions; amending ss. 605.0115, 607.0503, 300 and 617.0502, F.S.; providing that a registered agent 301 may resign from certain limited liability companies or 302 foreign limited liability companies, certain dissolved 303 corporations, and certain active or dissolved 304 corporations, respectively, by delivering a specified 305 statement of resignation to the Department of State; 306 providing requirements for the statement; providing 307 that a registered agent who is resigning from more 308 than one such corporation or limited liability company 309 may elect to file a statement of resignation for each 310 such company or corporation or a composite statement; 311 providing requirements for composite statements; 312 requiring that a copy of each of the statements of 313 resignation or the composite statement be mailed to 314 the address on file with the department for the 315 company or corporation or companies or corporations, 316 as applicable; amending ss. 605.0213 and