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HB440 (BR1177) - J. Richards, T. Kerr, L. Belcher, C. Harris, D. Schamore

     AN ACT relating to business entities.
    Amend KRS 14.105 to allow the use of electronic signatures on statutory trust and unincorporated nonprofit association filings with the Secretary of State; amend KRS 14A.2-010 to allow the Secretary of State to redact statutorily protected information in filings; amend KRS 14A.3-010 to establish the naming requirements for an unincorporated nonprofit association; amend KRS 14A.6-010 to establish the naming requirements for a foreign unincorporated nonprofit association; amend KRS 14A.9-010 to exempt foreign insurers with certificates of authority from the commissioner of the Department of Insurance from having to obtain certificates of authority from the Secretary of State to conduct business in the Commonwealth; amend KRS 271B.1-400 to define the term "appropriate court"; amend KRS 271B.7-400 to enable a corporation to define the "appropriate court" as the proper forum for derivative actions and actions to compel the production of books and records in its articles of incorporation; amend KRS 271B.8-510 to correct technical error in Business Corporation Act and conform the standard of indemnification to the aspiration standard of conduct; amend KRS 271B.11-050 to eliminate the requirement that a plan of merger be filed along with articles of merger; amend KRS 271B.11-060 to eliminate requirement that a plan of merger be filed along with articles of merger; amend KRS 271B.13-020 to clarify the exclusivity of the dissenter rights remedy; establish KRS Chapter 273A and create various sections to enact the Uniform Unincorporated Nonprofit Association Act; amend KRS 275.015 to define "foreign nonprofit corporation"; amend KRS 275.285 to exempt nonprofit limited liability companies without members from certain dissolution requirements; amend KRS 275.376 to allow nonprofit corporations to convert into nonprofit limited liability companies subject to certain restrictions; amend KRS 275.520 to limit composition of nonprofit limited liability companies and restrict the disbursement of income or profits of nonprofit limited liability companies; amend KRS 275.525 to prohibit nonprofit limited liability companies from making certain types of loans; create a new section of KRS Chapter 275 to expressly allow derivative actions under the Kentucky Limited Liability Company Act; amend KRS 273.227 to correct a technical error; amend KRS 275.165 to create the default rule that a member or manager of a limited liability company is not entitled to remuneration for services rendered on behalf of the limited liability company; amend KRS 275.175 to require member approval for certain actions; amend KRS 275.335 to clarify who may cause a limited liability company to bring a legal action; amend KRS 362.605 to clarify how suit is to be brought against a general or limited partnership formed before the adoption of the Kentucky Uniform Partnership or Uniform Limited Partnership Acts; amend KRS 275.360 to simplify filings upon the merger of two or more limited liability companies; amend KRS 275.365 to streamline merger of limited liability companies; amend KRS 362.2-801 to expressly adopt the "merger doctrine" which prevents the same person from being the only general and limited partner in a limited partnership; amend KRS 365.015 to add unincorporated nonprofit associations to the assumed name statute; amend KRS 386A.1-030 to clarify what may be contained in a statutory trust instrument; amend KRS 386A.4-010 amend the Statutory Trust Act to address a series; amend KRS 369.102 to expand the definition of "person" to include statutory trusts, limited partnerships, and limited cooperative associations; amend KRS 386A.4-020 to correct a typographical error; amend KRS 362.2-935 to provide for reasonable attorneys' fees for a defendant who proves that a derivative action against a limited partnership was commenced without reasonable cause or for an improper purpose; amend KRS 360.027 to add statutory trusts to anti-usury provision; create a new section of KRS Chapter 273 to establish how notice is to be given and when notice is effective under KRS Chapter273; create a new section of KRS Chapter 273 to permit the board of directors to act by written consent; amend KRS 273.161 to make definitions consistent with existing definitions in KRS 271B.1-400; amend KRS 273.197 to account for new definition of "notice"; amend KRS 273.217 to expressly authorize directors to act by unanimous written consent and codify current common law rule that directors may not vote by proxy; amend KRS 273.221 to allow only incumbent directors to sit on board committees; amend KRS 273.223 to set default rule for minimum notice of a meeting of the board of directors; amend KRS 273.313 to establish the required elements of an articles of dissolution filing; create a new section of KRS Chapter 273 to amend the Nonprofit Corporation Act to include the effect of dissolution rule contained in KRS 271B.14-050; create a new section of KRS Chapter 273 to allow members to meet by electronic means; create a new section of KRS Chapter 273 to establish definitions consistent with KRS 271B.8-500; create a new section of KRS Chapter 273 to establish indemnity rules consistent with KRS 271B.8-510 and 271B.8-520; create a new section of KRS Chapter 273 to allow a corporation to reimburse the reasonable expenses of a director who is a party to a proceeding in advance of final disposition; create a new section of KRS Chapter 273 to set default rules for director indemnification; create a new section of KRS Chapter 273 to make indemnification of directors consistent with the provisions of KRS 271B.8-550; create a new section of KRS Chapter 273 to allow officer or agent indemnification as a default rule; create a new section of KRS Chapter 273 to allow corporations to purchase liability insurance for directors, officers, employees or agents; create a new section of KRS Chapter 273 to clarify that neither indemnification nor advance of expenses are to be deemed exclusive as to other rights guaranteed by law, agreement, or vote of shareholders or disinterested directors; amend KRS 273.377 to set requirements for written consent in lieu of a meeting of the members; amend KRS 275.290 to allow for judicial supervision of a limited liability company's dissolution when the members and managers fail to wind up the limited liability company's activities after a reasonable time.


HB440 - AMENDMENTS

     HCS1 - Retain original provisions except to remove amendments to KRS 273.221 which allowed only incumbent directors to sit on board committees; remove sections regarding indemnity and liability insurance.
     SCS1 - Retain original provisions; limit the number of circumstances in which a judgment creditor of an unincorporated nonprofit association is permitted to levy an execution on the assets of member of the association to satisfy a judgment based on a claim against the association itself; amend KRS 286.3-065 to modify the duties and liabilities of officers and directors of banks and trust companies.

     Feb 12, 2015 - introduced in House
     Feb 23, 2015 - to Judiciary (H)
     Feb 25, 2015 - taken from Judiciary (H); 1st reading; returned to Judiciary (H); posting waived
     Feb 26, 2015 - reported favorably, 2nd reading, to Rules with Committee Substitute as a Consent Bill
     Feb 27, 2015 - posted for passage in the Consent Orders of the Day for Monday, March 2, 2015; taken from the Consent Orders of the Day, placed in the Regular Orders of the Day
     Mar 02, 2015 - 3rd reading, passed 94-0 with Committee Substitute ; received in Senate
     Mar 03, 2015 - to Judiciary (S)
     Mar 04, 2015 - taken from Judiciary (S); 1st reading; returned to Judiciary (S)
     Mar 09, 2015 - reported favorably, 2nd reading, to Rules with Committee Substitute as a Consent Bill
     Mar 10, 2015 - posted for passage in the Consent Orders of the Day for Tuesday, March 10, 2015; passed over and retained in the Consent Orders of the Day
     Mar 11, 2015 - 3rd reading, passed 36-0 with Committee Substitute ; received in House; to Rules (H); posted for passage for concurrence in Senate Committee Substitute ; House concurred in Senate Committee Substitute ; Bill passed 98-0; enrolled, signed by each presiding officer; delivered to Governor
     Mar 20, 2015 - signed by Governor (Acts, ch. 034)