Internet Securities Offering. Offerings of unregistered securities may now be made in Virginia on the Internet. The State Corporation Commission has been authorized to promulgate regulations regarding the utilization of this registration exemption. (HB 1849)
Annual Reports and Registration Fees. Under current law, annual reports and annual registration fees are due each year on April 1 for all Virginia corporations. This bill permits the State Corporation Commission to designate the month in which the corporation was incorporated or authorized to transact business as the month during which annual reports or fees would be due. Similar changes have been made to the provisions governing the date of automatic revocation of certificate of authority and corporate existence. These provisions take effect on January 1, 1998. (HB 2109)
Shareholder Agreements and Membership Agreements. Under current law, only corporations with 35 or fewer shareholders of record are permitted to adopt shareholder agreements regarding the governance of a Virginia corporation. This bill will permit the flexibility and versatility of shareholder agreements to be enjoyed by corporations with 300 or fewer shareholders. A similar amendment effectuates the same change with respect to members of nonstock corporations. (HB 2436, HB 2126)
Shareholder Voting Rights. A corporation's articles of incorporation may give different classes or series of shares voting rights as separate voting groups with respect to proposed amendments to the articles of incorporation. This bill also provides that shares convertible into another class or series are not permitted to vote on changes affecting that class or series, unless provided in the articles of incorporation. (HB 2408)
Limited Liability Companies. The Virginia General Assembly continues to clarify and modify the Virginia Limited Liability Company Act to provide greater flexibility. New provisions have been adopted:
(a) permitting mergers with general partnerships;
(b) permitting the domestication of non-United States entities in Virginia;
(c) permitting the conversion of non-Virginia general partnerships to Virginia limited liability companies;
(d) permitting limited liability companies to elect perpetual duration (as is the case with corporations).
Traditionally, unless otherwise provided in an operating agreement or articles of organization, the consent of all members was necessary in order to approve a new member. This amendment changes the law such that a majority vote of the managers (if the members have delegated management to a manager) or the consent of a majority of the members is required to admit new members.
This amendment also clarifies the following:
(a) issues relating to the annual registration fee, effect of failure to timely pay and reinstatement;
(b) the scope of an operating agreement in a single member limited liability company. (HB 2474)
Nicholas C. Conte
Mr. Conte is a Principal in the Firm.
E-mail: conte@woodsrogers.com