Bill > SF2402

Introduced Session

BACKGROUND. This bill amends or enacts provisions relating to different types of business entities existing under the jurisdiction of the secretary of state (secretary), and specifically the secretary’s filing office. A business entity is composed of one or more persons holding a legal interest in a for-profit business entity, cooperative interest in a cooperative association, or beneficial interest in a nonprofit business entity, with the interest holders pooling capital, and being shielded from personal liability from the acts or omissions of the business entity. Specifically, the bill provides for business entities formed in this state (domestic) or formed outside this state and authorized to do or transact business in this state (foreign) as provided in their respective governing Code chapters. These business entities include partnerships (Code chapter 486A), including limited liability partnerships; limited partnerships (Code chapter 488); limited liability companies (Code chapter 489); business corporations (Code chapter 490); traditional cooperative associations (Code chapter 499); housing cooperatives (Code chapter 499A); closed cooperatives (Code chapter 501); cooperative associations (Code chapter 501A); and nonprofit corporations (Code chapter 504). Generally, to be recognized as a business entity, the entity must comply with a number of requirements as set forth in its governing Code chapter. It must file a number of specified documents or records relating to the organization or management of the entity, including a document or record establishing its existence (e.g., for a domestic business corporation, articles of incorporation and for a foreign business corporation, a foreign registration statement). A business entity must maintain a registered agent in the state who may accept service of process. The business entity may also be subject to administrative dissolution proceedings by the secretary under certain circumstances (e.g., a failure to pay taxes, a failure to deliver a biennial report, or a failure to retain a registered agent). BILL’S PROVISIONS —— GENERAL. The bill amends provisions governing business entities in two ways: (1) by providing for the removal of false information in a filing, and (2) by providing for the administrative dissolution of the business entity based on the responses to interrogatories served on the business entity indicating the business entity’s wrongful conduct. BILL’S PROVISIONS —— STATEMENT OF REMOVAL. The bill authorizes the secretary to file a statement of removal (statement) which removes information from a filing. The secretary files the statement based on a review of an affidavit of unauthorized use submitted by a person (affiant) swearing that personal information regarding the affiant was wrongfully included in the filing, including by identifying the affiant as the business entity’s registered agent, providing the affiant’s street address, mailing address, or email address as the address of the registered agent or the business entity’s principal office. Upon filing a statement of removal, the secretary must send a notice to the business entity informing the business entity of the secretary’s decision that the statement is immediately effective. BILL’S PROVISIONS —— INTERROGATORIES. The bill authorizes the secretary to commence administrative dissolution proceedings against a business entity based on a determination by the secretary that the business entity is being used to commit a fraudulent, criminal, or unlawful purpose. The secretary’s determination is based on a review of responses to interrogatories served by the secretary on the business entity. The secretary serves the interrogatories based on credible information which includes an affidavit of unauthorized use, information provided by a government agency, or information collected by the secretary from a credible third-party data set. To be considered responsive, a completed and signed interrogatories form must be received by the secretary within 21 calendar days after the form was mailed.

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Attached to HF 2678. S.J. 748. (on 04/08/2026)

Official Document