SB 5003 — Concerning Washington's business corporation act.

S-0676.1SUBSTITUTEZ-0218.1SENATE SENATE BILL 5003State of Washington66th Legislature2019 Regular SessionBySenateSessionBySenators Law & Justice (originally sponsored by Senators Pedersen and Padden;

by request of Washington State Bar Association)READAssociationPrefiled FIRST12/03/18.AN TIME 01/25/19.AN ACT Relating to Washington's business corporation act;

or(b) A shareholder who has the right to cumulate the shareholder's votes gives notice to the corporation not less than seventy-two hours before the time set for the meeting of the shareholder's intent to cumulate votes during the meeting, and if one shareholder gives this notice all other shareholders in the same voting group participatingparticipating.(4) in the election are entitled to cumulate their votes without giving further notice.(4) Unless otherwise provided in the articles of incorporation or in a bylaw adopted under RCW 23B.10.205, in any election of directors the candidates elected are those receiving the largest numbers of votes cast by the shares entitled to vote in the election, up to the number of directors to be elected by such shares.Sec.

The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.(32) "Registered office" means the address of the corporation's registered agent.(33) "Secretary" means the corporate officer to whom the board of directors has delegated responsibility under RCW 23B.08.400(3) for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.(34) "Shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.(35) "Shares" means the units into which the proprietary interests in a corporation are divided.(36) "Social purpose" includes any general social purpose and any specific social purpose.(37) "Social purpose corporation" means a corporation that has elected to be governed as a social purpose corporation under chapter 23B.25 RCW.(38) "Specific social purpose" means the specific social purpose or purposes for which a social purpose corporation is organized as set forth in the articles of incorporation of the corporation in accordance with RCW 23B.25.040(2)(a).(39) "State," when referring to a part of the United States, includes a state and commonwealth, and their agencies and governmental subdivisions, and a territory and insular possession, and their agencies and governmental subdivisions, of the United States.(40) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.(41) "Subsidiary" means an entity in which the corporation has, directly or indirectly,(42)indirectly, a controlling interest.(42) "Tangible medium" means a writing, copy of a writing, or facsimile, or a physical reproduction, each on paper or on other tangible material.(43) "United States" includes a district, authority, bureau, commission, department, and any other agency of the United States.(44) "Voting group" means all shares of one or more classes or series that under the articles of incorporation or this title are entitled to vote and be counted together collectively on a matter at a meeting of shareholders.

or(b) To mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of ((its))the corporation's property and assets, regardless of whether or not ((any of)) these actions are in the usual and regular course of its business.(2) Unless the articles of incorporation ((require it, approval by the shareholders of a transaction described in subsection (1) of this section is not required.))providerequired.(3) A dedication of a))provide otherwise, approval by a corporation's shareholders is not required to dedicate the corporation's property and assets to the repayment of its creditors ((may be effected by the board of directors)) through an assignment for the benefit of creditors in accordance with chapter 7.08 RCW ((or by obtaining))that is approved by the board of directors, or by the appointment of a general receiver in ((accordance with))a proceeding under chapter 7.60 RCW((, and))that is approved by the board of directors.

The articles of incorporation may require a greater or lesser vote than provided in this subsection, or a greater or lesser vote by any separate voting groups provided for in the articles of incorporation, so long as the required vote is not less than a majority of all the votes entitled to be cast on the ((transaction))proposed disposition and of each other voting group entitled to vote separately on the ((transaction))proposed disposition.(((6)))(9) After a ((sale, lease, exchange, or other disposition of property and assets has been approved as required by this section, the transaction may be abandoned, subject to any contractual rights, without further shareholder approval, in a manner determined by the board of directors.))proposeddirectors.(7)))proposed disposition has been approved by the shareholders as required by this section, and at any time before the proposed disposition has been consummated, the board of directors may abandon the proposed disposition without further action by the shareholders, subject to any contractual rights of other parties relating thereto.(10) A ((transaction))disposition that constitutes a distribution is governed by RCW 23B.06.400 and not by this section.(((8)))(11) Unless the articles of incorporation otherwise require, approval by the shareholders of a parent corporation is not required for the transfer of any or all of the parent corporation's property and assets to one or more ((subsidiary corporations or other entities))subsidiaries all of the shares or interests of which are owned, directly or indirectly, by the parent corporation.(((9) The sale, lease, exchange, or other disposition of all, or substantially all, the assets of one or more subsidiaries of a corporation, if not in the usual and regular course of business as conducted by that subsidiary or those subsidiaries, is to be treated as a disposition by the parent corporation within the meaning of subsection (1) of this section if the subsidiary or subsidiaries constitute all, or substantially all, the assets of the parent corporation.))(12) The assets of a subsidiary are to be treated as the assets of its parent corporation for purposes of this section.--- END ---