HB1046: HB1046 Corporations, partnerships, and associations; restrict powers to only the powers the General Assembly expressly grants

26 LC 62 0304 House Bill 1046 By: Representatives Frye of the 122nd, Roberts of the 52nd, Gisler of the 121st, Sanchez of the 42nd, Bell of the 75th, and others A BILL TO BE ENTITLED AN ACT To amend Title 14 of the Official Code of Georgia Annotated, re lating to corporations,1 partnerships, and associations, so as to restrict the powers of business corporations, nonprofit2 corporations, partnerships, limited partnerships, and limited liability companies to only the3 powers the General Assembly expressly grants; to prohibit business corporations, nonprofit4 corporations, partnerships, limited partnerships, and limited l iability companies from5 engaging in ballot issue activity and election activity; to provide for civil enforcement and6 enforcement by the Attorney General; to provide for equitable r emedies; to provide for7 definitions; to provide for related matters; to provide for an effective date and applicability;8 to repeal conflicting laws; and for other purposes.9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10 SECTION 1.11 Title 14 of the Official Code of Georgia Annotated, relating to corporations, partnerships,12 and associations, is amended in Chapter 2, relating to business corporations, by revising13 Code Section 14-2-302, relating to general powers, as follows:14 "14-2-302.15 (a) As used in this Code section, the term:16 H. B. 1046 - 1 - 26 LC 62 0304 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything17 of value to support or oppose a ballot question or initiative.18 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of19 value to support or oppose a candidate, political party, or political committee.20 (b) Every corporation has perpetual duration and succession in its corporate name, unless21 its articles of incorporation adopted on or after April 1, 1969 , or an amendment thereto22 adopted on or after April 1, 1969, provides otherwise. Unless its articles of incorporation23 provide otherwise, every corporation has the same powers as an individual to do all things24 necessary or convenient to carry out its business and affairs, A corporation only has the25 powers expressly prescribed to it by the General Assembly, including to without limitation26 power:27 (1) To sue Sue, be sued, complain, and defend in its corporate name;28 (2) To have Have a corporate seal which may be altered at will, and to use it, or a29 facsimile of it, by impressing or affixing it or in any other manner reproducing it;30 (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation31 or with the laws of this state, for managing the business and regulating the affairs of the32 corporation;33 (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use,34 and otherwise deal with real or personal property or any legal or equitable interest in35 property, wherever located;36 (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all37 or any part of its property;38 (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote,39 use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or40 other interests in, or obligations of, any other entity;41 (7) To make Make contracts and guarantees, incur liabilities, borrow money, iss ue its42 notes, bonds, and other obligations (which may be convertible into or include the option43 H. B. 1046 - 2 - 26 LC 62 0304 to purchase other securities of the corporation), and secure an y of its obligations by44 mortgage or pledge of any of its property, franchises, or income;45 (8) To lend Lend money, invest and reinvest its funds, and receive and hold rea l and46 personal property as security for repayment;47 (9) To be Be a promoter, partner, member, associate, or manager of any partnership, joint48 venture, trust, or other entity;49 (10) To conduct Conduct its business, locate offices, and exercise the powers granted by50 this chapter within or without this state;51 (11) To elect Elect directors and appoint officers, employees, and agents of the52 corporation, define their duties, fix their compensation, and lend them money and credit;53 (12) To pay Pay pensions and establish pension plans, pension trusts, profit s haring54 plans, share bonus plans, share option plans, and benefit or incentive plans for any or all55 of its current or former directors, officers, employees, and agents;56 (13) To make Make donations for the public welfare or for charitable, scientific , or57 educational purposes;58 (14) To transact Transact any lawful business that will aid governmental policy;59 (15) To provide Provide insurance for its benefit on the life or physical or mental ability60 of any of its directors, officers, or employees or any other person whose death or physical61 or mental disability might cause financial loss to the corporat ion; or, pursuant to any62 contractual arrangement with any shareholder concerning the rea cquisition of shares63 owned by him at his death or disability, on the life or physica l or mental ability of that64 shareholder, for the purpose of carrying out such contractual arrangement; or, pursuant65 to any contract obligating the corporation, as part of compensa tion arrangements, or66 pursuant to any contract obligating the corporation as guarantor or surety, on the life of67 the principal obligor, and for these purposes the corporation i s deemed to have an68 insurable interest in such persons; and69 H. B. 1046 - 3 - 26 LC 62 0304 (16) To make Make payments or donations or do any other act not inconsistent with law70 that furthers the business and affairs of the corporation.71 (c) A corporation shall not have the power to conduct ballot i ssue activity or election72 activity.73 (d) Ballot issue activity and election activity do not include any bona fide news story,74 commentary, or editorial distributed through the facilities of any broadcasting station or of75 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,76 unless such broadcasting, print, online, or digital facilities are owned or controlled by a77 political party, political committee, or candidate."78 SECTION 2.79 Said title is further amended in said chapter by adding a new s ubsection to Code Section80 14-2-304, relating to ultra vires, to read as follows:81 "(d) Any ballot issue activity or election activity, as defined in Code Section 14-2-302,82 conducted by a corporation is ultra vires and void. Such activities shall be subject to civil83 action by a member, shareholder, or the Attorney General for injunctive relief or revocation84 of the corporate charter."85 SECTION 3.86 Said title is further amended in Chapter 3, relating to nonprofit corporations, by revising and87 adding new subsections to Code Section 14-3-302, relating to du ration and powers of88 corporation, as follows:89 "14-3-302.90 (a) As used in this Code section, the term:91 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything92 of value to support or oppose a ballot question or initiative.93 H. B. 1046 - 4 - 26 LC 62 0304 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of94 value to support or oppose a candidate, political party, or political committee.95 (b) Every corporation has perpetual duration and succession in its corporate name, unless96 its articles of incorporation adopted on or after April 1, 1969, or in the case of a corporation97 existing prior to or on April 1, 1969, an amendment thereto ado pted on or after98 April 1, 1969, provides otherwise. Unless its articles of incorporation provide otherwise,99 every corporation has the same powers as an individual to do al l t h i n g s n e c e s s a r y o r100 convenient to carry out its business and affairs, A corporation only has the powers101 expressly prescribed to it by the General Assembly, including to without limitation power:102 (1) To sue Sue, be sued, complain, and defend in its corporate name;103 (2) To have Have a corporate seal, which may be altered at will, and to use it, or a104 facsimile of it, by impressing or affixing or in any other manner reproducing it;105 (3) To make Make and amend bylaws, not inconsistent with its articles of incorporation106 or with the laws of this state, for regulating and managing the affairs of the corporation;107 (4) To purchase Purchase, receive, lease, or otherwise acquire, own, hold, improve, use,108 and otherwise deal with real or personal property or any legal or equitable interest in109 property, wherever located;110 (5) To sell Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all111 or any part of its property;112 (6) To purchase Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote,113 use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or114 other interests in, or obligations of, any entity;115 (7) To make Make contracts and guaranties; incur liabilities; borrow money; issue notes,116 bonds, and other obligations; and secure any of its obligations by mortgage or pledge of117 any of its property, franchises, or income;118 H. B. 1046 - 5 - 26 LC 62 0304 (8) To lend Lend money, invest and reinvest its funds, and receive and hold rea l and119 personal property as security for repayment, except as limited by Code Sections 14-3-860120 through 14-3-864;121 (9) To be Be a promoter, fiduciary, shareholder, partner, member, associate, or manager122 of any partnership, joint venture, trust, or other entity;123 (10) To conduct Conduct its activities, locate offices, and exercise the powers granted124 by this chapter within or without this state;125 (11) To elect Elect or appoint directors, officers, delegates, employees, and agents of the126 corporation; define their duties; fix their compensation; and lend them money and credit;127 (12) To pay Pay pensions and establish pension plans, pension trusts, and other benefit128 and incentive plans for any or all of its current or former directors, officers, employees,129 and agents;130 (13) To make Make donations not inconsistent with law for the public welfare or for131 charitable, religious, scientific, or educational purposes and for other purposes that further132 the corporate interest;133 (14) To impose Impose dues, assessments, admission fees, and transfer fees upon its134 members;135 (15) To provide Provide insurance for its benefit on the life or physical or mental ability136 of any of its directors, officers, or employees or any other person whose death or physical137 or mental disability might cause financial loss to the corporat ion; or, pursuant to any138 contract obligating the corporation, as part of compensation ar rangements, or pursuant139 to any contract obligating the corporation as guarantor or sure ty, on the life of the140 principal obligor, and for these purposes the corporation is deemed to have an insurable141 interest in such persons;142 (16) To establish Establish conditions for admission of members, admit members, and143 issue memberships;144 (17) To carry Carry on a business; and145 H. B. 1046 - 6 - 26 LC 62 0304 (18) To do Do all things necessary or convenient, not inconsistent with law, to further146 the activities and affairs of the corporation.147 (c) A corporation shall not have the power to conduct ballot i ssue activity or election148 activity.149 (d) Ballot issue activity and election activity do not include any bona fide news story,150 commentary, or editorial distributed through the facilities of any broadcasting station or of151 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,152 unless such broadcasting, print, online, or digital facilities are owned or controlled by a153 political party, political committee, or candidate."154 SECTION 4.155 Said title is further amended in said chapter by adding a new s ubsection to Code Section156 14-3-304, relating to ultra vires, to read as follows:157 "(d) Any ballot issue activity or election activity, as defined in Code Section 14-3-302,158 conducted by a corporation is ultra vires and void. Such activities shall be subject to civil159 action by a member, shareholder, or the Attorney General for injunctive relief or revocation160 of the corporate charter."161 SECTION 5.162 Said title is further amended in Chapter 8, relating to partner ships, by adding a new Code163 section to read as follows:164 "14-8-65.165 (a) As used in this Code section, the term:166 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything167 of value to support or oppose a ballot question or initiative.168 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of169 value to support or oppose a candidate, political party, or political committee.170 H. B. 1046 - 7 - 26 LC 62 0304 (b) A partnership only has the powers expressly prescribed to it by the General Assembly.171 (c) A partnership shall not have the power to conduct ballot i ssue activity or election172 activity.173 (d) Ballot issue activity and election activity do not include any bona fide news story,174 commentary, or editorial distributed through the facilities of any broadcasting station or of175 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,176 unless such broadcasting, print, online, or digital facilities are owned or controlled by a177 political party, political committee, or candidate.178 (e) Any ballot issue activity or election activity conducted by a partnership is void. Such179 activities shall be subject to civil action by any partner or t he Attorney General for180 injunctive relief or dissolution of such partnership."181 SECTION 6.182 Said title is further amended in Chapter 9, the "Georgia Revised Uniform Limited Partnership183 Act," by adding a new Code section to read as follows:184 "14-9-110.185 (a) As used in this Code section, the term:186 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything187 of value to support or oppose a ballot question or initiative.188 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of189 value to support or oppose a candidate, political party, or political committee.190 (b) A limited partnership only has the powers expressly prescr ibed to it by the General191 Assembly.192 (c) A limited partnership shall not have the power to conduct ballot issue activity or193 election activity.194 (d) Ballot issue activity and election activity do not include any bona fide news story,195 commentary, or editorial distributed through the facilities of any broadcasting station or of196 H. B. 1046 - 8 - 26 LC 62 0304 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,197 unless such broadcasting, print, online, or digital facilities are owned or controlled by a198 political party, political committee, or candidate.199 (e) Any ballot issue activity or election activity conducted by a limited partnership is void. 200 Such activities shall be subject to civil action by any general partner or the Attorney201 General for injunctive relief or dissolution of such partnership."202 SECTION 7.203 Said title is further amended in Chapter 9A, related to limited partnerships, by adding a new204 Code section to read as follows:205 "14-9A-6.206 (a) As used in this Code section, the term:207 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything208 of value to support or oppose a ballot question or initiative.209 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of210 value to support or oppose a candidate, political party, or political committee.211 (b) A limited partnership only has the powers expressly prescr ibed to it by the General212 Assembly.213 (c) A limited partnership shall not have the power to conduct ballot issue activity or214 election activity.215 (d) Ballot issue activity and election activity do not include any bona fide news story,216 commentary, or editorial distributed through the facilities of any broadcasting station or of217 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,218 unless such broadcasting, print, online, or digital facilities are owned or controlled by a219 political party, political committee, or candidate.220 H. B. 1046 - 9 - 26 LC 62 0304 (e) Any ballot issue activity or election activity conducted by a limited partnership is void. 221 Such activities shall be subject to civil action by any general partner or the Attorney222 General for injunctive relief or dissolution of such partnership."223 SECTION 8.224 Said title is further amended in Chapter 11, relating to limite d liability companies, by225 revising Code Section 14-11-202, relating to powers of limited liability companies, as226 follows:227 "14-11-202.228 (a) As used in this Code section, the term:229 (1) 'Ballot issue activity' means paying, contributing, or expending money or anything230 of value to support or oppose a ballot question or initiative.231 (2) 'Election activity' means paying, contributing, or expendi ng money or anything of232 value to support or oppose a candidate, political party, or political committee.233 (b) Each limited liability company formed in this state shall hav e only the powers234 expressly prescribed to it by the General Assembly same powers as any person has to do235 all things necessary to carry out its purpose, business, and affairs.236 (c) A limited liability corporation shall not have the power to conduct ballot issue activity237 or election activity.238 (d) Ballot issue activity and election activity do not include any bona fide news story,239 commentary, or editorial distributed through the facilities of any broadcasting station or of240 any print, online, or digital newspaper, magazine, blog, or any other periodical publication,241 unless such broadcasting, print, online, or digital facilities are owned or controlled by a242 political party, political committee, or candidate.243 (e) Any ballot issue activity or election activity conducted by a limited liability company244 is void. Such activities shall be subject to civil action by a member, shareholder, or the245 Attorney General for injunctive relief or dissolution."246 H. B. 1046 - 10 - 26 LC 62 0304 SECTION 9.247 This Act shall become effective upon its approval by the Governor or upon its becoming law248 without such approval and shall be applicable to ballot issue a ctivity and election activity249 carried out on or after such date.250 SECTION 10.251 All laws and parts of laws in conflict with this Act are repealed.252 H. B. 1046 - 11 -