HS/HCS/SB 680 - This act revises several aspects of corporation laws.

Certain foreign limited liability entities are not deemed to be transacting business within the state solely because they are members of a limited liability company. A foreign corporation may formally withdraw from the state only if it commits to notifying the Secretary of State of any changes of address for the ensuing five years.

The Secretary of State is authorized to conduct business in an electronic format by accepting electronic filings, credit and debit card payments, and electronic signatures on documents in lieu of an original manual signature. Similarly, officials of political subdivisions are permitted to execute contracts either by a manual or facsimile signature.

The provisions of SB 708, the "Digital Signature Act", which establish a formal protocol to allow business to be securely conducted via the Internet or other electronic means are included.

Members of a corporate board of directors are permitted to set the level of their own compensation without the action being deemed a conflict of interest.

A not for profit health service corporation (Blue Cross-Blue Shield), organized under Chapter 354, RSMo, may amend its articles of incorporation to become a for profit corporation under Chapter 351, RSMo, but such action must be taken before August 31, 1999. Additionally, Section 354.065 outlines procedures necessary for a health services corporation to convert to a for profit corporation.

Corporate shares and shareholders are impacted in the following ways:

1. Notice of a shareholder's meeting can be transmitted electronically;

2. Notes or other promises of debt cannot be accepted as payment for original issues of shares in a corporation;

3. Shareholder proxies are irrevocable if they are coupled with an interest in the corporation and can be issued via telephone or electronic means; and

4. A majority of shareholders that are adversely affected by an amendment to a corporation's articles of incorporation must approve such amendment for it to become effective.

Finally, a new right is created for Missouri corporations to form a new parent holding company comprised of wholly owned subsidiaries without an affirmative vote of the corporation's shareholders. Such mergers may take place provided:

1. The old parent corporation and the new entity are the only parties to the transaction;

2. All shares of corporate stock are converted to shares of equal value and standing in the new corporation;

3. The old parent corporation and the new entity are Missouri corporations;

4. The articles of incorporation and bylaws of the new parent are materially identical to the former documents, except that the articles must state that acts requiring shareholder approval in the old company must be similarly approved by the shareholders of the new parent and state any amendments to the classes or shares of authorized stock;

5. The old company remains a subsidiary of the holding company;

6. The board of directors remain the same; and

7. The board of directors must determine that the merger is tax free.

As of the effective date of such merger, any former restrictions that applied to interested shareholders continue to apply to the new holding company and, provided there has been no change in the name of the corporation, stock certificates from the old parent shall represent the shares held in the new parent.

The articles of merger must contain the board's resolution approving the merger, certification that the above requirements have been met, must be filed with the Secretary of State and the articles must contain specific information about the plan of merger in order for the merger to become effective . Mergers pursuant to this procedure do not entitle shareholders to the right to object to the merger and demand fair value for shares owned pursuant to Section 351.455, RSMo.
DENISE GARNIER