Last week, The North Carolina House began discussing portions of their proposed budget, which is expected to see action this week in various House Committees and on the House floor. Like the proposed Senate budget, the House budget will focus on priorities that affect your business around transportation, workforce development, broadband access, education, health care, tax reductions, and unemployment. Once the House finalizes their proposed budged, they will work with the Senate to reach an agreement on the differences between the two proposals and send a final budget to Governor Cooper for his consideration. We will update you as soon as things move forward.
Additionally, Senate Bill 507: Modify Business Corporation Act which makes various changes to the NC Business Corporation Act, as recommended by the NC Bar Association, passed out of the General Assembly last week. The bill has six sections which include the following:
- Section 1 extends existing provisions relating to voting of shares held by a subsidiary to situations in which the subsidiary entity is not a corporation.
- Section 2 clarifies the authority of the board of directors to fix the compensation of directors for services in any capacity as director, codifying a decision of the North Carolina Business Court interpreting this statutory provision.
- Section 3 provides that, except as otherwise fixed in the articles of incorporation or bylaws, a majority of a board of directors constitutes a quorum.
- Section 4 allows the board of directors of a corporation with a single class of shares outstanding to change the corporate name without shareholder approval.
- Section 5 provides that in a proceeding brought in superior court by a shareholder seeking an appraisal, the court must determine whether the shareholder is entitled to appraisal rights, on which issue the shareholder would bear the burden of proof. If the court determines that the shareholder is not entitled to appraisal rights, the court would be required to dismiss the proceeding as to the shareholder.
- Section 6 makes several changes to the law governing corporate records and shareholder inspection rights, includes some of the following:
- Eliminating the current requirement that particular records be maintained at the corporation’s principal office.
- Requiring all relevant records to be maintained in a manner permitting them to be made available for inspection within a reasonable time.
Senate Bill 507 has been presented to Governor Cooper for his consideration. We will keep you updated on further action from the Governor.
To learn more about our GA priorities, track legislative bills, or to read our blog posts, you can visit our webpage or follow us on Twitter @RcgaJ, @tierra_rcga, or @raleighchamber.