SB 477 — Amend Bus. Corp. Act/Bus. Opp. Disclosures.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2023 S 21 SENATE BILL 477 Commerce and Insurance Committee Substitute Adopted 4/25/23 Short Title:

Senators Galey and Overcash (Primary Sponsors).

Rules and Operations of the Senate April 4, 2023 A BILL TO BE ENTITLED AN ACT TO MAKE VARIOUS CHANGES TO THE NORTH CAROLINA BUSINESS CORPORATION ACT AND TO ELIMINATE DUPLICATIVE STATE DISCLOSURE REQUIREMENTS FOR BUSINESS OPPORTUNITY SELLERS THAT FILE COMPARABLE DISCLOSURES WITH THE FEDERAL TRADE COMMISSION, AS RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION.

*S477-v-2**S477-v-1* General Assembly Of North Carolina Session 2023 (6) "Distribution" means a Distribution.

Page 2 Senate Bill 477-Second477-First Edition General Assembly Of North Carolina Session 2023 (10) "Foreign corporation" means a Foreign corporation.

Senate Bill 477-Second477-First Edition Page 3 General Assembly Of North Carolina Session 2023 (21) "Shares" means the Shares.

55-1-50 and the shareholder have agreed, and the Page 4 Senate Bill 477-Second477-First Edition General Assembly Of North Carolina Session 2023 shareholder has not provided notice of objection to the corporation, notice by a domestic corporation to its shareholder may be delivered in the form of an electronic record sent by any other electronic means and is effective when it is sent as provided in G.S.

A shareholder, Senate Bill 477-Second477-First Edition Page 5 General Assembly Of North Carolina Session 2023 personallyor by or with the shareholder's representative, is entitled on written demand to inspect and, subject to the requirements of G.S.

The action must be evidenced byone or more unrevoked written consents bearing the date of signature and signed by shareholders sufficient to take the action without a meeting, before or Page 6 Senate Bill 477-Second477-First Edition General Assembly Of North Carolina Session 2023 after such the action, describing the action taken and delivered to the corporation for inclusion in theminutesorfilingwith thecorporaterecords.To theextentthecorporation has agreedpursuant to G.S.

55-6-31(b), there are no remaining authorized shares of the class because the corporation has Senate Bill 477-Second477-First Edition Page 7 General Assembly Of North Carolina Session 2023 acquired all authorized shares of the class and the articles of incorporation prohibit the reissue of the acquired shares.

(e) TheA right of a class or series entitled to vote as a separate voting group under this section by operation of subdivision (6) or (7) of subsection (a) of this section may be restricted in whole or in part if so provided in the Page 8 Senate Bill 477-Second477-First Edition General Assembly Of North Carolina Session 2023 in part if so provided in the original articles of incorporation or by an amendment to the articles of incorporation that is adopted prior to the issuance of any shares of the class or series or that is approved by a majority of the votes of the class or series entitled to be cast on the amendment." SECTION 4.(b) This section becomes effective October 1, 2023.

The disclosure document shall set forth the name of the person, the nature of and the parties to the action or proceeding, the court or other Senate Bill 477-Second477-First Edition Page 9 General Assembly Of North Carolina Session 2023 forum,thedate,thecurrentstatusoftheactionorproceeding,theterms and conditions of any order of decree, the penalties or damages assessed and/or assessed, any terms of settlement, and any other information to enable the purchaser to assess the prior business activities of the seller.

"If the seller fails to deliver the product(s), equipment or supplies necessaryto begin substantial operation of the business within 45 days of the delivery date stated in your contract, you may notify the seller in writing and demand that the contract be cancelled." Page 10 Senate Bill 477-Second477-First Edition General Assembly Of North Carolina Session 2023 (10)j.

66-96 to provide a bond or establish a trust account, he the seller shall file with the SecretaryofSecretary of State two copies of the bond or two copies of the formal notification by the depository that the trust account is established contemporaneously with compliance with subsections (a) or (d).subsection (a) of this section.

EFFECTIVE DATE AND AUTHORIZATION TO PRINT COMMENTS SECTION 6.(a) The Revisor of Statutes shall cause to be printed, as annotations to Chapter 55 of the published General Statutes, all relevant portions of the Official Comments to Senate Bill 477-Second477-First Edition Page 11 General Assembly Of North Carolina Session 2023 the Model Business Corporation Act and all explanatory comments of the drafters of this act as the Revisor may deem appropriate.

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