General Assembly: 80 (2004 Regular GA) - Chapter 1049 - Revised Iowa nonprofit corporation Act


Published: 2004-04-08

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134LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1048

d. Make an annual certification of compliance with this section. For any year in which the city or municipal utility is not audited in accordance with section 11.6, the city or municipal utility shall contract with or employ the auditor of state or a certified public accountant certi- fied in the state of Iowa to attest to the certification. The attestation report shall be a public record for purposes of chapter 22. 3. This section shall not prohibit the marketing or bundling of other products or services,

in addition to local exchange telecommunications services. However, a city shall include on a billing statement sent to a person receiving services from the city, a separate charge for each service provided to the person. This subsection does not prohibit the city from also including on the billing statement a total amount to be paid by the person. 4. This section shall not apply to telecommunications services provided directly by amunic-

ipal airport.

Sec. 3. VALIDITY OF ACTIONS. Except for an action that violates section 364.3, subsec- tion 7, actions taken prior to July 1, 2004, by a city or municipal utility regarding the provision of cable, internet, or long distance service including financing are deemed valid.

Approved April 8, 2004

_________________________

CH. 1049CH. 1049

CHAPTER 1049

REVISED IOWA NONPROFIT CORPORATION ACT

S.F. 2274

AN ACT relating to the revised Iowa nonprofit corporation Act and providing penalties and effective and applicability dates.

Be It Enacted by the General Assembly of the State of Iowa:

SUBCHAPTER I GENERAL PROVISIONS

PART 1 SHORT TITLE AND APPLICATIONS

Section 1. NEW SECTION. 504.101A SHORT TITLE. This chapter shall be known and may be cited as the “Revised Iowa Nonprofit Corporation

Act”.

Sec. 2. NEWSECTION. 504.101B RESERVATIONOFPOWERTOAMENDORREPEAL. The general assembly has power to amend or repeal all or part of this chapter at any time

and all domestic and foreign corporations subject to this chapter are governed by the amend- ment or repeal.

PART 2 FILING DOCUMENTS

Sec. 3. NEW SECTION. 504.111 FILING REQUIREMENTS. 1. A document must satisfy the requirements of this section, and of any other section that

adds to or varies these requirements, to be entitled to filing by the secretary of state.

135 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

2. This chapter must require or permit filing the document in the office of the secretary of state. 3. The document must contain the information required by this subchapter. It may contain

other information as well. 4. The document must be typewritten or printed. If the document is electronically trans-

mitted, it must be in a format that can be retrieved or reproduced in typewritten or printed form. 5. The document must be in the English language. However, a corporate name need not be

in English if written in English letters or Arabic or Roman numerals. The certificate of exis- tence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation. 6. The document must be executed by one of the following: a. The presiding officer of the board of directors of a domestic or foreign corporation, its

president, or by another of its officers. b. If directors have not been selected or the corporation has not been formed, by an incorpo-

rator. c. If the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary,

by that fiduciary. 7. Theperson executing a document shall sign it and state beneath or opposite the signature

the person’s name and the capacity in which the person signs. The document may contain a corporate seal, an attestation, an acknowledgment, or a verification. 8. If the secretary of state has prescribed a mandatory form for a document under section

504.112, the document must be in or on the prescribed form. 9. The document must be delivered to the office of the secretary of state for filing. Delivery

maybemadeby electronic transmission if and to the extent permitted by the secretary of state. If it is filed in typewritten or printed form and not transmitted electronically, the secretary of state may require one exact or conformed copy to be delivered with the document, except as provided in sections 504.503 and 504.1509. 10. When the document is delivered to the office of the secretary of state for filing, the cor-

rect filing fee, andany franchise tax, license fee, orpenalty, shall bepaid inamannerpermitted by the secretary of state. 11. The secretary of statemay adopt rules for the electronic filing of documents and the cer-

tification of electronically filed documents.

Sec. 4. NEW SECTION. 504.112 FORMS. 1. The secretary of state may prescribe and furnish on request, forms for an application for

a certificate of existence, a foreign corporation’s application for a certificate of authority to transact business in this state, a foreign corporation’s application for a certificate ofwithdraw- al, and thebiennial report. If the secretaryof state so requires, useof these forms ismandatory. 2. The secretary of state may prescribe and furnish on request forms for other documents

required or permitted to be filed by this chapter but their use is not mandatory.

Sec. 5. NEW SECTION. 504.113 FILING, SERVICE, AND COPYING FEES. 1. The secretary of state shall collect the following fees, as providedby the secretary of state,

when the documents described in this subsection are delivered for filing: DOCUMENT FEE

a. Articles of incorporation $_______1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b. Application for use of indistinguishable

name $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c. Application for reserved name $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d. Notice of transfer of reserved name $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e. Application for registered name $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f. Application for renewal of registered name $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

___________________

1 Enrolled Act did not include any fee amounts where a blank line is indicated

136LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

g. Corporation’s statement of change of registered agent or registered office or both $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h. Agent’s statement of change of registered

office for each affected corporation not to exceed a total of _____ $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i. Agent’s statement of resignation no fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . j. Amendment of articles of incorporation $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . k. Restatement of articles of incorporation

with amendments $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l. Articles of merger $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . m. Articles of dissolution $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . n. Articles of revocation of dissolution $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . o. Certificate of administrative dissolution $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. Application for reinstatement following

administrative dissolution $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . q. Certificate of reinstatement no fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . r. Certificate of judicial dissolution no fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . s. Application for certificate of authority $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . t. Application for amended certificate of

authority $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . u. Application for certificate of withdrawal $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v. Certificate of revocation of authority

to transact business no fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . w. Biennial report $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x. Articles of correction $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . y. Application for certificate of existence

or authorization $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . z. Any other document required or permitted

to be filed by this Act $_______. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The secretary of state shall collect a fee upon being served with process under this chap-

ter. The party to a proceeding causing service of process is entitled to recover the fee paid the secretary of state as costs if the party prevails in the proceeding. 3. The secretary of state shall collect fees for copying and certifying the copy of any filed

document relating to a domestic or foreign corporation.

Sec. 6. NEW SECTION. 504.114 EFFECTIVE DATE OF DOCUMENT. 1. Except as provided in subsection 2 and section 504.115, a document is effective at the lat-

er of the following times: a. At the date and time of filing, as evidenced by such means as the secretary of state may

use for the purpose of recording the date and time of filing. b. At the time specified in the document as its effective time on the date it is filed. 2. A documentmay specify a delayed effective time and date, and if it does so the document

becomes effective at the timeanddate specified. If a delayedeffective datebut no time is speci- fied, the document is effective at the close of business on that date. A delayed effective date for a document shall not be later than the ninetieth day after the date filed.

Sec. 7. NEW SECTION. 504.115 CORRECTING FILED DOCUMENT. 1. A domestic or foreign corporation may correct a document filed by the secretary of state

if the document satisfies one of the following: a. The document contains an inaccuracy. b. The document was defectively executed, attested, sealed, verified, or acknowledged. c. The electronic transmission was defective. 2. A document is corrected by doing both of the following: a. By preparing articles of correction that satisfy all of the following requirements:

137 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

(1) Describe the document, including its filing date, or attaching a copy of the document to the articles. (2) Specify the inaccuracy or defect to be corrected. (3) Correct the incorrect statement or defective execution. b. By delivering the articles of correction to the secretary of state for filing. 3. Articles of correction are effective on the effective date of the document they correct ex-

cept as to persons relying on the uncorrected document and adversely affected by the correc- tion. As to those persons, articles of correction are effective when filed.

Sec. 8. NEW SECTION. 504.116 FILING DUTY OF SECRETARY OF STATE. 1. If a document delivered to the office of the secretary of state for filing satisfies the require-

ments of section 504.111, the secretary of state shall file it. 2. The secretary of state files a document by recording the document as filed on the date and

the time of receipt. After filing a document, except as provided in sections 504.504, 504.1510, and 504.1613, the secretary of state shall deliver to the domestic or foreign corporation or its representative a copy of the document with an acknowledgment of the date and time of filing. 3. Upon refusing to file a document, the secretary of state shall return it to the domestic or

foreign corporation or its representative, together with a brief, written explanation of the rea- son or reasons for the refusal. 4. The secretary of state’s duty to file documents under this section is ministerial. Filing or

refusal to file a document does not do any of the following: a. Affect the validity or invalidity of the document in whole or in part. b. Relate to the correctness or incorrectness of information contained in the document. c. Create a presumption that the document is valid or invalid or that information contained

in the document is correct or incorrect.

Sec. 9. NEW SECTION. 504.117 APPEAL FROM SECRETARY OF STATE’S REFUSAL TO FILE DOCUMENT. 1. If the secretary of state refuses to file a document delivered for filing to the secretary of

state’s office, the domestic or foreign corporation may appeal the refusal to the district court in the county where the corporation’s principal office, or if there is none in this state, its regis- tered office, is or will be located. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the secretary of state’s explanation of the refusal to file. 2. The court may summarily order the secretary of state to file the document or take other

action the court considers appropriate. 3. The court’s final decision may be appealed as in other civil proceedings.

Sec. 10. NEW SECTION. 504.118 EVIDENTIARY EFFECT OF COPY OF FILED DOC- UMENT. A certificate from the secretary of state delivered with a copy of a document filed by the sec-

retary of state is conclusive evidence that the original document is on file with the secretary of state.

Sec. 11. NEW SECTION. 504.119 CERTIFICATE OF EXISTENCE. 1. Any person may apply to the secretary of state to furnish a certificate of existence for a

domestic or foreign corporation. 2. The certificate of existence shall set forth all of the following: a. The domestic corporation’s corporate name or the foreign corporation’s corporate name

used in this state. b. That the domestic corporation is duly incorporated under the laws of this state, the date

of its incorporation, and the period of its duration if less than perpetual; or that the foreign cor- poration is authorized to transact business in this state. c. That all fees have been paid.

138LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

d. That its most recent biennial report required by section 504.1613 has been delivered to the secretary of state. e. That articles of dissolution have not been filed. f. Other facts of record in the office of the secretary of state that may be requested by the

applicant. 3. Subject to any qualification stated in the certificate, a certificate of existence issued by

the secretary of state may be relied upon as conclusive evidence that the domestic or foreign corporation is in good standing in this state.

Sec. 12. NEW SECTION. 504.120 PENALTY FOR SIGNING FALSE DOCUMENT. 1. A person commits an offense by signing a document the person knows is false in anyma-

terial respect with intent that the document be delivered to the secretary of state for filing. 2. An offense under this section is a seriousmisdemeanor punishable by a fine not to exceed

one thousand dollars.

PART 3 SECRETARY OF STATE

Sec. 13. NEW SECTION. 504.131 POWERS. The secretary of state has all powers reasonably necessary to perform the duties required

of the secretary of state’s office by this chapter.

PART 4 DEFINITIONS

Sec. 14. NEW SECTION. 504.141 CHAPTER DEFINITIONS. As used in this chapter, unless the context otherwise requires: 1. “Approved by the members” or “approval by the members” means approved or ratified

by the affirmative vote of amajority of the votes represented and voting at a duly heldmeeting at which a quorum is present which affirmative votes also constitute amajority of the required quorumor by awritten ballot orwritten consent in conformitywith this chapter or by the affir- mative vote, written ballot, or written consent of such greater proportion, including the votes of all the members of any class, unit, or grouping as may be provided in the articles, bylaws, or this chapter for any specified member action. 2. “Articles of incorporation” or “articles” includes amended and restated articles of incor-

poration and articles of merger. 3. “Board” or “board of directors” means the board of directors of a corporation except that

no person or group of persons are2 the board of directors because of powers delegated to that person or group pursuant to section 504.801. 4. “Bylaws”means the code or codes of rules other than the articles adopted pursuant to this

chapter for the regulation or management of the affairs of a corporation irrespective of the name or names by which such rules are designated. 5. “Class”means agroupofmembershipswhichhave the same rightswith respect to voting,

dissolution, redemption, and transfer. For purposes of this section, rights shall be considered the same if they are determined by a formula applied uniformly. 6. “Corporation” means a public benefit, mutual benefit, or religious corporation. 7. “Delegates” means those persons elected or appointed to vote in a representative assem-

bly for the election of a director or directors or on other matters. 8. “Deliver” or “delivery” means any method of delivery used in conventional commercial

practice, including delivery in person, by mail, commercial delivery, and electronic transmis- sion. 9. “Directors” means individuals, designated in the articles or bylaws or elected by the in-

corporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board.

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2 The word “is” probably intended

139 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

10. “Distribution” means the payment of a dividend or any part of the income or profit of a corporation to its members, directors, or officers. 11. “Domestic corporation” means a corporation. 12. “Effective date of notice” is defined in section 504.142. 13. “Electronic transmission” or “electronically transmitted”means any process of commu-

nication not directly involving the physical transfer of paper that is suitable for the retention, retrieval, and reproduction of information by the recipient. 14. “Employee” does not include an officer or director of a corporationwho is not otherwise

employed by the corporation. 15. “Entity” includes a corporation and foreign corporation; business corporation and for-

eign business corporation; limited liability company and foreign limited liability company; profit and nonprofit unincorporated association; corporation sole; business trust, estate, part- nership, trust, and twoormore personshaving a joint or commoneconomic interest; and state, the United States, and foreign government. 16. “File”, “filed”, or “filing” means filed in the office of the secretary of state. 17. “Foreign corporation” means a corporation organized under laws other than the laws

of this state which would be a nonprofit corporation if formed under the laws of this state. 18. “Governmental subdivision” includes an authority, county, district, and municipality. 19. “Includes” denotes a partial definition. 20. “Individual” includes the estate of an incompetent individual. 21. “Means” denotes a complete definition. 22. “Member” means a person who on more than one occasion, pursuant to the provisions

of a corporation’s articles or bylaws, has a right to vote for the election of a director or directors of a corporation, irrespective of how amember is defined in the articles or bylaws of the corpo- ration. A person is not a member because of any of the following: a. The person’s rights as a delegate. b. The person’s rights to designate a director. c. The person’s rights as a director. 23. “Membership” refers to the rights and obligations amember ormembers have pursuant

to a corporation’s articles, bylaws, and this chapter. 24. “Mutual benefit corporation” means a domestic or foreign corporation that is required

to be a mutual benefit corporation pursuant to section 504.1705. 25. “Notice” is defined in section 504.142. 26. “Person” includes any individual or entity. 27. “Principal office” means the office in or out of this state so designated in the biennial

report filed pursuant to section 504.1613 where the principal offices of a domestic or foreign corporation are located. 28. “Proceeding” includes a civil suit and criminal, administrative, or investigatory actions. 29. “Public benefit corporation” means a domestic or foreign corporation that is required

to be a public benefit corporation pursuant to section 504.1705. 30. “Record date” means the date established under subchapter VI or VII on which a corpo-

ration determines the identity of its members for the purposes of this subchapter. 31. “Religious corporation” means a domestic or foreign corporation, that engages in reli-

gious activity as one of the corporation’s principal purposes. 32. “Secretary” means the corporate officer to whom the board of directors has delegated

responsibility under section 504.841, subsection 2, for custody of the minutes of the directors’ and members’ meetings and for authenticating the records of the corporation. 33. “Sign” or “signature” includes a manual, facsimile, conformed, or electronic signature. 34. “State”, when referring to a part of the United States, includes a state and common-

wealth and their agencies and governmental subdivisions, and a territory and insular posses- sion and their agencies and governmental subdivisions of the United States. 35. “United States” includes a district, authority, bureau, commission, department, and any

other agency of the United States. 36. “Vote” includes authorization by written ballot and written consent. 37. “Voting power” means the total number of votes entitled to be cast for the election of

140LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

directors at the time thedetermination of voting power ismade, excluding a vote that is contin- gent upon thehappeningof a conditionor event that hasnot occurredat the time. Whenaclass is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

Sec. 15. NEW SECTION. 504.142 NOTICE. 1. Notice under this chapter must be in writing unless oral notice is reasonable under the

circumstances. Notice by electronic transmission is written notice. 2. Subject to subsection 1, noticemay be communicated in person, bymail, or othermethod

of delivery; or by telephone, voice mail, or other electronic means. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published or by radio, television, or other form of public broadcast commu- nication. 3. Oral notice is effective when communicated if communicated in a comprehensible man-

ner. 4. Written notice by a domestic or foreign corporation to itsmember, if in a comprehensible

form, is effective according to one of the following: a. Upon deposit in the United States mail, if mailed postpaid and correctly addressed to the

member’s address shown in the corporation’s current record of members. b. When electronically transmitted to the shareholder in amanner authorized by the share-

holder. 5. Except as provided in subsection 4, written notice, if in a comprehensible form, is effec-

tive at the earliest of the following: a. When received. b. Fivedays after its deposit in theUnitedStatesmail, ifmailed correctly addressed andwith

first-class postage affixed. c. On the date shown on the return receipt, if sent by registered or certified mail, return re-

ceipt requested, and the receipt is signed by or on behalf of the addressee. d. Thirty days after its deposit in the United States mail, if mailed correctly addressed and

with other than first-class, registered, or certified postage affixed. 6. Written notice is correctly addressed to a member of a domestic or foreign corporation

if addressed to the member’s address shown in the corporation’s current list of members. 7. Awrittennotice or report delivered as part of a newsletter,magazine, or other publication

regularly sent to members shall constitute a written notice or report if addressed or delivered to the member’s address shown in the corporation’s current list of members, or in the case of members who are residents of the same household and who have the same address in the cor- poration’s current list of members, if addressed or delivered to one of such members, at the address appearing on the current list of members. 8. Written notice is correctly addressed to a domestic or foreign corporation authorized to

transact business in this state, other than in its capacity as a member, if addressed to its regis- tered agent or to its secretary at its principal office shown in its most recent biennial report or, in the case of a foreign corporation that has not yet delivered an annual report, in its applica- tion for a certificate of authority. 9. If section 504.705, subsection 2, or any other provision of this chapter prescribes notice

requirements for particular circumstances, those requirements govern. If articles or bylaws prescribe notice requirements not inconsistent with this section or other provisions of this chapter, those requirements govern.

PART 5 JUDICIAL RELIEF

Sec. 16. NEW SECTION. 504.151 JUDICIAL RELIEF. 1. If for any reason it is impractical or impossible for a corporation to call or conduct a

141 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

meeting of its members, delegates, or directors, or otherwise obtain their consent, in theman- ner prescribed by its articles, bylaws, or this chapter, then upon petition of a director, officer, delegate, member, or the attorney general, the district court may order that such ameeting be called or that a written ballot or other form of obtaining the vote of members, delegates, or di- rectors be authorized, in such amanner as the court finds fair and equitable under the circum- stances. 2. The court shall, in an order issued pursuant to this section, provide for amethod of notice

reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the articles, bylaws, and this chapter, whether or not the method re- sults in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this section, the court may determine who the mem- bers or directors are. 3. An order issued pursuant to this section may dispense with any requirement relating to

the holding of or voting at meetings or obtaining votes, including any requirement as to quo- rums or as to the number or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws, or this chapter. 4. Whenever practical, an order issued pursuant to this section shall limit the subjectmatter

of meetings or other forms of consent authorized to items, including amendments to the ar- ticles or bylaws, the resolution ofwhichwill ormay enable the corporation to continuemanag- ing its affairswithout further resort to this section; provided, however, that an order under this section may also authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of assets. 5. Ameeting or othermethod of obtaining the vote ofmembers, delegates, or directors con-

ducted pursuant to an order issued under this section, and which complies with all the provi- sions of such order, is for all purposes a valid meeting or vote, as the case may be, and shall have the same force and effect as if it compliedwith every requirement imposedby the articles, bylaws, and this chapter.

SUBCHAPTER II ORGANIZATION

Sec. 17. NEW SECTION. 504.201 INCORPORATORS. One ormore personsmay act as the incorporator or incorporators of a corporation by deliv-

ering articles of incorporation to the secretary of state for filing.

Sec. 18. NEW SECTION. 504.202 ARTICLES OF INCORPORATION. 1. The articles of incorporation shall set forth all of the following: a. A corporate name for the corporation that satisfies the requirements of section 504.401. b. The address of the corporation’s initial registered office and the name of its initial regis-

tered agent at that office. c. The name and address of each incorporator. d. Whether the corporation will have members. A corporation incorporated prior to Janu-

ary 1, 2005, may state whether it will have members in either the articles of incorporation or in the corporate bylaws. e. For corporations incorporated after January 1, 2005, provisions not inconsistent with law

regarding the distribution of assets on dissolution. 2. The articles of incorporation may set forth any of the following: a. Thepurpose forwhich the corporation is organized,whichmaybe, either aloneor in com-

bination with other purposes, the transaction of any lawful activity. b. The names and addresses of the individuals who are to serve as the initial directors. c. Provisions not inconsistent with law regarding all of the following: (1) Managing and regulating the affairs of the corporation. (2) Defining, limiting, and regulating the powers of the corporation, its board of directors,

and members, or any class of members.

142LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

(3) The characteristics, qualifications, rights, limitations, and obligations attaching to each or any class of members. d. A provision eliminating or limiting the liability of a director to the corporation or itsmem-

bers for money damages for any action taken, or any failure to take any action, as a director, except liability for any of the following: (1) The amount of a financial benefit received by a director to which the director is not en-

titled. (2) An intentional infliction of harm on the corporation or its members. (3) A violation of section 504.834. (4) An intentional violation of criminal law. A provision set forth in the articles of incorporation pursuant to this paragraph shall not

eliminate or limit the liability of a director for an act or omission that occurs prior to the date when the provision becomes effective. The absence of a provision eliminating or limiting the liability of a director pursuant to this paragraph shall not affect the applicability of section 504.901. e. A provision permitting or requiring a corporation to indemnify a director for liability, as

defined in section 504.851, subsection 5, to a person for any action taken, or any failure to take any action, as a director except liability for any of the following: (1) Receipt of a financial benefit to which the person is not entitled. (2) Intentional infliction of harm on the corporation or its members. (3) A violation of section 504.834. (4) Intentional violation of criminal law. f. Anyprovision that under this chapter is required or permitted to be set forth in thebylaws. 3. An incorporator named in the articles must sign the articles. 4. The articles of incorporation need not set forth any of the corporate powers enumerated

in this chapter.

Sec. 19. NEW SECTION. 504.203 INCORPORATION. 1. Unless a delayed effective date is specified, the corporate existence begins when the ar-

ticles of incorporation are filed. 2. The secretary of state’s filing of the articles of incorporation is conclusive proof that the

incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

Sec. 20. NEW SECTION. 504.204 LIABILITY FOR PREINCORPORATION TRANSAC- TIONS. All persons purporting to act as or on behalf of a corporation, knowing therewas no incorpo-

ration under this chapter, are jointly and severally liable for all liabilities created while so act- ing.

Sec. 21. NEW SECTION. 504.205 ORGANIZATION OF CORPORATION. 1. After incorporation: a. If initial directors arenamed in the articles of incorporation, the initial directors shall hold

an organizational meeting, at the call of a majority of the directors, to complete the organiza- tion of the corporation by appointing officers, adopting bylaws, and carrying on any other business brought before the meeting. b. If initial directors are not named in the articles, the incorporator or incorporators shall

hold an organizational meeting at the call of a majority of the incorporators to do one of the following: (1) Elect directors and complete the organization of the corporation. (2) Elect a board of directors who shall complete the organization of the corporation. 2. Action required or permitted by this chapter to be taken by incorporators at an organiza-

tionalmeetingmay be takenwithout ameeting if the action taken is evidenced by one ormore written consents describing the action taken and signed by each incorporator.

143 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

3. An organizational meeting may be held in or out of this state in accordance with section 504.821.

Sec. 22. NEW SECTION. 504.206 BYLAWS. 1. The incorporators or board of directors of a corporation shall adopt bylaws for the corpo-

ration. 2. The bylawsmay contain any provision for regulating andmanaging the affairs of the cor-

poration that is not inconsistent with law or the articles of incorporation.

Sec. 23. NEW SECTION. 504.207 EMERGENCY BYLAWS AND POWERS. 1. Unless the articles provide otherwise the directors of a corporation may adopt, amend,

or repeal bylaws to be effective only in an emergency as described in subsection 4. The emer- gency bylaws,which are subject to amendment or repeal by themembers,may provide special procedures necessary formanaging the corporation during the emergency, including all of the following: a. How to call a meeting of the board. b. Quorum requirements for the meeting. c. Designation of additional or substitute directors. 2. All provisions of the regular bylaws consistent with the emergency bylaws remain effec-

tive during the emergency. The emergency bylaws are not effective after the emergency ends. 3. Corporate action taken in good faith in accordancewith the emergency bylaws does both

of the following: a. Binds the corporation. b. Shall not be used to impose liability on a corporate director, officer, employee, or agent. 4. An emergency exists for purposes of this section if a quorum of the corporation’s direc-

tors cannot readily be assembled because of some catastrophic event.

SUBCHAPTER III PURPOSES AND POWERS

Sec. 24. NEW SECTION. 504.301 PURPOSES. 1. Every corporation incorporated under this chapter has the purpose of engaging in any

lawful activity unless a more limited purpose is set forth in the articles of incorporation. 2. A corporation engaging in an activity that is subject to regulation under another statute

of this state may incorporate under this chapter only if incorporation under this chapter is not prohibited by the other statute. The corporation shall be subject to all limitations of the other statute.

Sec. 25. NEW SECTION. 504.302 GENERAL POWERS. Unless its articles of incorporation provide otherwise, every corporation has perpetual dura-

tion and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its affairs, including without limitation all of the following powers: 1. Sue and be sued, complain, and defend in its corporate name. 2. Have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by

impressing, affixing, or in any other manner reproducing it. 3. Make and amend bylaws not inconsistent with its articles of incorporation or with the

laws of this state, for regulating and managing the affairs of the corporation. 4. Purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and other-

wise deal with real or personal property, or any legal or equitable interest in property, wherev- er located. 5. Sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part

of its property. 6. Purchase, receive, subscribe for, or otherwise acquire, own, hold, vote, use, sell, mort-

144LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

gage, lend, pledge, or otherwise dispose of, and deal in and with, shares or other interests in, or obligations of, any entity. 7. Make contracts and guarantees, incur liabilities, borrowmoney, issue notes, bonds, and

other obligations, and secure anyof its obligationsbymortgageorpledgeof anyof its property, franchises, or income. 8. Lendmoney, invest and reinvest its funds, and receive and hold real and personal proper-

ty as security for repayment, except as limited by section 504.833. 9. Be a promoter, partner,member, associate, ormanager of any partnership, joint venture,

trust, or other entity. 10. Conduct its activities, locate offices, and exercise the powers granted by this chapter in

or out of this state. 11. Elect or appoint directors, officers, employees, and agents of the corporation, define

their duties, and fix their compensation. 12. Pay pensions and establish pension plans, pension trusts, and other benefit and incen-

tive plans for any or all of its current or former directors, officers, employees, and agents. 13. Make donations not inconsistent with law for the public welfare or for charitable, reli-

gious, scientific, or educational purposes and for other purposes that further the corporate in- terest. 14. Impose dues, assessments, and admission and transfer fees upon its members. 15. Establish conditions for admission of members, admit members, and issue member-

ships. 16. Carry on a business. 17. Do all things necessary or convenient, not inconsistent with law, to further the activities

and affairs of the corporation.

Sec. 26. NEW SECTION. 504.303 EMERGENCY POWERS. 1. In anticipation of or during an emergency as described in subsection 4, the board of direc-

tors of a corporation may do both of the following: a. Modify lines of succession to accommodate the incapacity of any director, officer, em-

ployee, or agent. b. Relocate the principal office, designate alternative principal offices or regional offices,

or authorize an officer to do so. 2. During an emergency described in subsection 4, unless emergency bylaws provide other-

wise, all of the following shall apply: a. Notice of a meeting of the board of directors need be given only to those directors whom

it is practicable to reach and such notice may be given in any practicable manner, including by publication and radio. b. One ormore officers of the corporation present at ameeting of the board of directorsmay

be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum. 3. Corporate action taken in good faith during an emergency under this section to further

the ordinary affairs of the corporation does both of the following: a. Binds the corporation. b. Shall not be used to impose liability on a corporate director, officer, employee, or agent. 4. An emergency exists for purposes of this section if a quorum of the corporation’s direc-

tors cannot readily be assembled because of some catastrophic event.

Sec. 27. NEW SECTION. 504.304 ULTRA VIRES. 1. Except as provided in subsection 2, the validity of corporate action may3 not be chal-

lenged on the ground that the corporation lacks or lacked power to act. 2. A corporation’s power to act may be challenged in a proceeding against the corporation

to enjoin an act when a third party has not acquired rights. The proceeding may be brought by the attorney general, a director, or by a member or members in a derivative proceeding. 3. A corporation’s power to act may be challenged in a proceeding against an incumbent or

former director, officer, employee, or agent of the corporation. The proceeding may be brought by a director, the corporation, directly, derivatively, or through a receiver, a trustee

___________________

3 See chapter 1175, §384 herein

145 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

or other legal representative, or in the case of a public benefit corporation, by the attorney gen- eral.

SUBCHAPTER IV NAMES

Sec. 28. NEW SECTION. 504.401 CORPORATE NAME. 1. A corporate name shall not contain language stating or implying that the corporation is

organized for apurposeother than that permittedbysection504.301and its articles of incorpo- ration. 2. Except as authorized by subsections 3 and 4, a corporate name must be distinguishable

upon the records of the secretary of state from: a. The corporate name of any other nonprofit or business corporation incorporated or au-

thorized to do business in this state. b. A corporate name reserved or registered under section 490.402, 490.403, 504.402, or

504.403. c. The fictitious name of a foreign business or nonprofit corporation authorized to transact

business in this state because its real name is unavailable. 3. A corporation may apply to the secretary of state for authorization to use a name that is

not distinguishable upon the secretary of state’s records from one or more of the names de- scribed in subsection 2. The secretary of state shall authorize use of the name applied for if either of the following applies: a. The other corporation consents to the use of the name in writing and submits an under-

taking in a formsatisfactory to the secretary of state to change its name to a name that is distin- guishable upon the records of the secretary of state from thenameof the applying corporation. b. The applicant delivers to the secretary of state a certified copy of a final judgment from

a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state. 4. A corporation may use the name, including the fictitious name, of another domestic or

foreign business or nonprofit corporation that is being used in this state if the other corpora- tion is incorporated or authorized to do business in this state and the proposed user corpora- tion submits documentation to the satisfaction of the secretary of state establishing any of the following conditions: a. The user corporation has merged with the other corporation. b. The user corporation has been formed by reorganization of the other corporation. c. The user corporation has acquired all or substantially all of the assets, including the cor-

porate name, of the other corporation. 5. This subchapter does not control the use of fictitious names; however, if a corporation or

a foreign corporation uses a fictitious name in this state it shall deliver to the secretary of state for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name.

Sec. 29. NEW SECTION. 504.402 RESERVED NAME. 1. A person may reserve the exclusive use of a corporate name, including a fictitious name

for a foreign corporation whose corporate name is not available by delivering an application to the secretary of state for filing. Upon finding that the corporate name applied for is avail- able, the secretary of state shall reserve the name for the applicant’s exclusive use for a nonre- newable one hundred twenty-day period. 2. The owner of a reserved corporate name may transfer the reservation to another person

by delivering to the secretary of state a signed notice of the transfer that states the name and address of the transferee.

Sec. 30. NEW SECTION. 504.403 REGISTERED NAME. 1. A foreign corporation may register its corporate name, or its corporate name with any

146LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

change required by section 504.1506, if the name is distinguishable upon the records of the secretary of state from both of the following: a. The corporate name of a nonprofit or business corporation incorporated or authorized

to do business in this state. b. A corporate name reserved under section 490.402, 490.403, or 504.402, or registered un-

der this section. 2. A foreign corporation shall register its corporate name, or its corporate name with any

change required by section 504.1506, by delivering to the secretary of state an application that does both of the following: a. Sets forth its corporate name, or its corporate namewith any change required by section

504.1506, the state or country and date of its incorporation, and a brief description of the na- ture of the activities in which it is engaged. b. Is accompanied by a certificate of existence, or a document of similar import, from the

state or country of incorporation. 3. The name is registered for the applicant’s exclusive use upon the effective date of the ap-

plication. 4. A foreign corporation whose registration is effective may renew it for successive years

by delivering to the secretary of state for filing a renewal application which complies with the requirements of subsection 2, betweenOctober 1 andDecember 31 of the preceding year. The renewal application renews the registration for the following calendar year. 5. A foreign corporation whose registration is effective may thereafter qualify as a foreign

corporation under that name or consent in writing to the use of that name by a corporation thereafter incorporated under this chapter or by another foreign corporation thereafter autho- rized to transact business in this state. The registration terminates when the domestic corpo- ration is incorporated or the foreign corporation qualifies or consents to the qualification of another foreign corporation under the registered name.

SUBCHAPTER V OFFICE AND AGENT

Sec. 31. NEW SECTION. 504.501 REGISTERED OFFICE AND REGISTERED AGENT. A corporation shall continuously maintain both of the following in this state: 1. A registered office with the same address as that of the registered agent. 2. A registered agent, who may be any of the following: a. An individual who resides in this state andwhose business office is identical with the reg-

istered office. b. A domestic business or nonprofit corporation whose business office is identical to the

registered office. c. A foreign business or nonprofit corporation authorized to transact business in this state

whose business office is identical to the registered office.

Sec. 32. NEW SECTION. 504.502 CHANGE OF REGISTERED OFFICE OR REG- ISTERED AGENT. 1. A corporationmaychange its registeredoffice or registeredagent bydelivering to the sec-

retary of state for filing a statement of change that sets forth all of the following: a. The name of the corporation. b. If the current registered office is to be changed, the address of the new registered office. c. If the current registered agent is to be changed, the name of the new registered agent and

the new agent’s written consent, either on the statement or attached to it, to the change. d. That after the change or changes are made, the addresses of its registered office and the

office of its registered agent will be identical. 2. If the address of a registered agent’s business office is changed, the registered agentmay

change the address of the registered office of any corporation for which the registered agent is the registered agent by notifying the corporation in writing of the change and by signing,

147 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

either manually or in facsimile, and delivering to the secretary of state for filing, a statement that complies with the requirements of subsection 1 and recites that the corporation has been notified of the change. 3. If a registered agent changes the registered agent’s business address to another place, the

registered agent may change the address of the registered office of any corporation for which the registered agent is the registered agent by filing a statement as required in subsection 2 for each corporation, or by filing a single statement for all corporations named in the notice, except that it need be signed, eithermanually or in facsimile, only once by the registered agent andmust recite that a copy of the statement has beenmailed to each corporation named in the notice.

Sec. 33. NEW SECTION. 504.503 RESIGNATION OF REGISTERED AGENT. 1. A registered agent may resign as registered agent by signing and delivering to the secre-

tary of state for filing a signed original statement of resignation. The statement may include a statement that the registered office is also discontinued. The registered agent shall send a copy of the statement of resignation by certified mail to

the corporation at its principal office and to the registered office, if not discontinued. The reg- istered agent shall certify to the secretary of state that copies havebeen sent to the corporation, including the date the copies were sent. 2. The agency appointment is terminated, and the registered office discontinued if so pro-

vided, on the date the statement was filed.

Sec. 34. NEW SECTION. 504.504 SERVICE ON CORPORATION. 1. A corporation’s registered agent is the corporation’s agent for service of process, notice,

or demand required or permitted by law to be served on the corporation. 2. If a corporation has no registered agent, or the agent cannot with reasonable diligence

be served, the corporation may be served by registered or certified mail, return receipt re- quested, addressed to the secretary of the corporation at its principal office shown in themost recent biennial report filed pursuant to section 504.1613. Service is perfected under this sub- section on the earliest of any of the following: a. The date the corporation receives the mail. b. The date shown on the return receipt, if signed on behalf of the corporation. c. Five days after its deposit in theUnitedStatesmail, ifmailed and correctly addressedwith

first class postage affixed. 3. This section does not prescribe the only means, or necessarily the required means, of

servinga corporation. A corporationmayalsobe served in anyothermannerpermittedby law.

SUBCHAPTER VI MEMBERS AND MEMBERSHIPS

PART 1 ADMISSION OF MEMBERS

Sec. 35. NEW SECTION. 504.601 ADMISSION. 1. The articles or bylaws may establish criteria or procedures for admission of members. 2. A person shall not be admitted as a member without the person’s consent or affirmative

action evidencing consent.

Sec. 36. NEW SECTION. 504.602 CONSIDERATION. Except as provided in its articles or bylaws, a corporationmay admitmembers for no consid-

eration or for such consideration as is determined by the board.

Sec. 37. NEW SECTION. 504.603 NO REQUIREMENT OF MEMBERS. A corporation is not required to have members.

148LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

PART 2 TYPES OF MEMBERSHIPS — MEMBERS’ RIGHTS AND OBLIGATIONS

Sec. 38. NEW SECTION. 504.611 DIFFERENCES IN RIGHTS AND OBLIGATIONS OF MEMBERS. All members shall have the same rights and obligations with respect to voting, dissolution,

redemption, and transfer, unless the articles or bylaws establish classes of membership with different rights or obligations. All members shall have the same rights and obligations with respect to any other matters, except as set forth in or authorized by the articles or bylaws. A person that does not meet the qualifications for a member under section 504.141, subsection 22, and is identified as a member in the articles or bylaws of the corporation shall have only those rights set forth for such a member in the articles or bylaws of the corporation.

Sec. 39. NEW SECTION. 504.612 TRANSFERS. 1. Except as set forth in or authorizedby thearticles orbylaws, amemberof amutual benefit

corporation shall not transfer a membership or any right arising therefrom. 2. Amember of a public benefit or religious corporation shall not transfer a membership or

any right arising therefrom. 3. Where transfer rights have been provided, a restriction on them shall not be bindingwith

respect to a member holding a membership issued prior to the adoption of the restriction un- less the restriction is approved by the members and the affected member.

Sec. 40. NEW SECTION. 504.613 MEMBER’S LIABILITY TO THIRD PARTIES. Amember of a corporation is not, as such, personally liable for the acts, debts, liabilities, or

obligations of the corporation.

Sec. 41. NEW SECTION. 504.614 MEMBER’S LIABILITY FOR DUES, ASSESSMENTS, AND FEES. A member may become liable to the corporation for dues, assessments, or fees. However,

an article or bylaw provision or a resolution adopted by the board authorizing or imposing dues, assessments, or fees does not, of itself, create liability.

Sec. 42. NEW SECTION. 504.615 CREDITOR’S ACTION AGAINST MEMBER. 1. A proceeding shall not be brought by a creditor to reach the liability, if any, of a member

to the corporation unless final judgment has been rendered in favor of the creditor against the corporationandexecutionhasbeen returnedunsatisfied inwholeor inpart orunless suchpro- ceeding would be useless. 2. All creditors of the corporation, with or without reducing their claims to judgment, may

intervene in any creditor’s proceeding brought under subsection 1 to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding.

PART 3 RESIGNATION AND TERMINATION

Sec. 43. NEW SECTION. 504.621 RESIGNATION. 1. A member may resign at any time. 2. The resignation of amember does not relieve themember from any obligations themem-

bermayhave to the corporation as a result of obligations incurred or commitmentsmade prior to resignation.

Sec. 44. NEW SECTION. 504.622 TERMINATION, EXPULSION, OR SUSPENSION. 1. A member of a public benefit or mutual benefit corporation shall not be expelled or sus-

pended, and a membership or memberships in such a corporation shall not be terminated or

149 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

suspended except pursuant to a procedure which is fair and reasonable and is carried out in good faith. 2. A procedure is fair and reasonable when either of the following occurs: a. The articles or bylaws set forth a procedure which provides both of the following: (1) Not less than fifteen days’ prior written notice of the expulsion, suspension, or termina-

tion and the reasons therefor. (2) An opportunity for the member to be heard, orally or in writing, not less than five days

before the effective date of the expulsion, suspension, or termination by a person or persons authorized to decide that the proposed expulsion, termination, or suspension not take place. b. The procedure requires consideration of all relevant facts and circumstances surround-

ing the expulsion, suspension, or termination by a person or persons authorized tomake a de- cision regarding the proposed expulsion, termination, or suspension. 3. Any written notice given by mail pursuant to this section must be given by first class or

certified mail sent to the last address of the member shown on the corporation’s records. 4. A proceeding challenging an expulsion, suspension, or termination, including a proceed-

ing alleging defective notice, must be commenced within one year after the effective date of the expulsion, suspension, or termination. 5. Amemberwhohas been expelled or suspendedmay be liable to the corporation for dues,

assessments, or fees as a result of obligations incurred or commitments made prior to expul- sion or suspension.

Sec. 45. NEW SECTION. 504.623 PURCHASE OF MEMBERSHIPS. 1. Apublic benefit or religious corporation shall not purchase any of itsmemberships or any

right arising therefrom. 2. A mutual benefit corporation may purchase the membership of a member who resigns

or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by its articles or bylaws. A payment shall not bemade in violation of subchap- ter 13.

PART 4 DERIVATIVE PROCEEDINGS

Sec. 46. NEW SECTION. 504.631 DERIVATIVE PROCEEDINGS — DEFINITION. In this part, unless the context otherwise requires, “derivative proceeding”means a civil suit

in the right of a domestic corporation or, to the extent provided in section 504.638, in the right of a foreign corporation.

Sec. 47. NEW SECTION. 504.632 STANDING. A derivative proceeding may be brought by any of the following persons: 1. Amember ormembers of the corporation representing five percent ormore of the voting

power of the corporation or by fifty members, whichever is less. 2. A director of the corporation.

Sec. 48. NEW SECTION. 504.633 DEMAND. A derivative proceeding shall not be commenced until both of the following have occurred: 1. A written demand has been made upon the corporation to take suitable action. 2. Ninety days have expired from the date the demand was made, unless the member or di-

rector has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the ninety- day period.

Sec. 49. NEW SECTION. 504.634 STAY OF PROCEEDINGS. If a corporation commences an inquiry into the allegations made in a demand or complaint,

the court may stay any derivative proceeding for a period of time as the court deems appropri- ate.

150LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

Sec. 50. NEW SECTION. 504.635 DISMISSAL. 1. A derivative proceeding shall be dismissed by the court on motion by the corporation if

one of the groups specified in subsection 2 or 6 has determined in good faith after conducting a reasonable inquiry uponwhich its conclusions are based that themaintenance of the deriva- tive proceeding is not in the best interests of the corporation. A corporationmoving to dismiss on this basis shall submit in support of themotion a short and concise statement of the reasons for its determination. 2. Unless a panel is appointed pursuant to subsection 6, the determination in subsection 1

shall be made by one of the following: a. A majority vote of independent directors present at a meeting of the board of directors

if the independent directors constitute a quorum. b. A majority vote of a committee consisting of two or more independent directors ap-

pointed by majority vote of independent directors present at a meeting of the board of direc- tors, whether or not such independent directors constitute a quorum. 3. None of the following shall by itself cause a director to be considered not independent for

purposes of this section: a. The nomination or election of the director by persons who are defendants in the deriva-

tive proceeding or against whom action is demanded. b. The naming of the director as a defendant in the derivative proceeding or as a person

against whom action is demanded. c. The approval by the director of the act being challenged in the derivative proceeding or

demand if the act resulted in no personal benefit to the director. 4. If a derivative proceeding is commenced after a determination has been made rejecting

ademandby amemberor director, the complaint shall allegewithparticularity facts establish- ing one of the following: a. That a majority of the board of directors did not consist of independent directors at the

time the determination was made. b. That the requirements of subsection 1 have not been met. All discovery and other proceedings shall be stayed during the pendency of any motion to

dismiss unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or prevent undue prejudice to that party. 5. If amajority of the board of directors does not consist of independent directors at the time

the determination is made, the corporation shall have the burden of proving that the require- ments of subsection 1havebeenmet. If amajority of theboardof directors consists of indepen- dent directors at the time thedetermination ismade, theplaintiff shall have theburdenof prov- ing that the requirements of subsection 1 have not been met. 6. The court may appoint a panel of one or more independent persons upon motion by the

corporation to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. In such case, the plaintiff shall have the burden of proving that the requirements of subsection 1 have not been met.

Sec. 51. NEW SECTION. 504.636 DISCONTINUANCE OR SETTLEMENT. A derivative proceeding shall not be discontinued or settled without the court’s approval.

If the court determines that a proposed discontinuance or settlement will substantially affect the interests of a corporation’s member or class of members or director, the court shall direct that notice be given to the members or director affected.

Sec. 52. NEW SECTION. 504.637 PAYMENT OF EXPENSES. On termination of a derivative proceeding, the court may do either of the following: 1. Order the corporation to pay the plaintiff’s reasonable expenses, including attorney fees

incurred in the proceeding, if it finds that the proceeding has resulted in a substantial benefit to the corporation. 2. Order the plaintiff to pay any defendant’s reasonable expenses, including attorney fees

incurred in defending the proceeding, if it finds that the proceeding was commenced ormain- tained without reasonable cause or for an improper purpose.

151 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

Sec. 53. NEW SECTION. 504.638 APPLICABILITY TO FOREIGN CORPORATIONS. In anyderivative proceeding in the right of a foreign corporation, thematters covered by this

part shall be governed by the laws of the jurisdiction of incorporation of the foreign corpora- tion except that sections 504.634, 504.636, and 504.637 shall apply.

PART 5 DELEGATES

Sec. 54. NEW SECTION. 504.641 DELEGATES. 1. A corporationmay provide in its articles or bylaws for delegates having some or all of the

authority of members. 2. The articles or bylaws may set forth provisions relating to all of the following: a. The characteristics, qualifications, rights, limitations, and obligations of delegates in-

cluding their selection and removal. b. Calling, noticing, holding, and conducting meetings of delegates. c. Carrying on corporate activities during and between meetings of delegates.

SUBCHAPTER VII MEMBERS’ MEETINGS AND VOTING

PART 1 MEETINGS AND ACTION WITHOUT MEETINGS

Sec. 55. NEW SECTION. 504.701 ANNUAL AND REGULAR MEETINGS. 1. A corporation with members shall hold a membership meeting annually at a time stated

in or fixed in accordance with the bylaws. 2. A corporation with members may hold regular membership meetings at the times stated

in or fixed in accordance with the bylaws. 3. Annual or regular membership meetings may be held in or out of this state at the place

stated in or fixed in accordance with the bylaws. If a place is not stated in or fixed in accor- dancewith thebylaws, annual and regularmeetings shall beheld at the corporation’s principal office. 4. At the annual meeting all of the following shall occur: a. The president and chief financial officer shall report on the activities and financial condi-

tion of the corporation. b. Themembers shall consider and act upon such othermatters asmay be raised consistent

with the notice requirements of sections 504.705 and 504.713, subsection 4. 5. At regular meetings, the members shall consider and act upon such matters as may be

raised consistent with the notice requirements of sections 504.705 and 504.713, subsection 4. 6. The failure to hold an annual or regularmeeting at a time stated in or fixed in accordance

with a corporation’s bylaws does not affect the validity of any corporate action.

Sec. 56. NEW SECTION. 504.702 SPECIAL MEETING. 1. A corporation with members shall hold a special meeting of members when either of the

following occurs: a. At the call of its board or the person or persons authorized to do so by the corporation’s

articles or bylaws. b. Except as provided in the articles or bylaws of a religious corporation, if the holders of

at least five percent of the voting power of any corporation sign, date, and deliver to any corpo- rate officer one or more written demands for the meeting describing the purpose for which it is to be held. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect received by the corporation prior to the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

152LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

2. The closeof business on the thirtiethdaybeforedeliveryof thedemand for a specialmeet- ing to any corporate officer is the record date for the purpose of determining whether the five percent requirement of subsection 1, paragraph “b”, has been met. 3. If a notice for a specialmeetingdemanded under subsection 1, paragraph “b”, is not given

pursuant to section 504.705 within thirty days after the date the written demand or demands are delivered to a corporate officer, regardless of the requirements of subsection 4, a person signing the demandmay set the time and place of themeeting and give notice pursuant to sec- tion 504.705. 4. Specialmeetings ofmembersmaybeheld in or out of this state at a place stated in or fixed

in accordance with the bylaws. If a place is not stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation’s principal office. 5. Only those matters that are within the purpose described in the meeting notice required

by section 504.705 may be considered at a special meeting of members.

Sec. 57. NEW SECTION. 504.703 COURT-ORDERED MEETING. 1. Thedistrict court of the countywhere a corporation’s principal office is located or, if none

is located in this state, where its registered office is located, may summarily order a meeting to be held when any of the following occurs: a. On application of anymember or other person entitled to participate in an annual or regu-

lar meeting of the corporation, if an annual meeting was not held within the earlier of six months after the end of the corporation’s fiscal year or fifteen months after its last annual meeting. b. On application of anymember or other person entitled to participate in a regularmeeting

of the corporation, if a regular meeting was not held within forty days after the date it was re- quired to be held. c. On application of a member who signed a demand for a special meeting valid under sec-

tion 504.702, or a person entitled to call a special meeting, if any of the following applies: (1) The notice of the special meeting was not given within thirty days after the date the de-

mand was delivered to a corporate officer. (2) The special meeting was not held in accordance with the notice. 2. The courtmay fix the time and place of themeeting, specify a record date for determining

members entitled to notice of and to vote at themeeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting or direct that the votes represented at themeeting constitute a quorum for action on thosemat- ters, and enter other orders necessary to accomplish the purpose of the meeting. 3. If the court orders ameeting, it may also order the corporation to pay themember’s costs,

including reasonable attorney fees, incurred to obtain the order.

Sec. 58. NEW SECTION. 504.704 ACTION BY WRITTEN CONSENT. 1. Unless limited or prohibited by the articles or bylaws of the corporation, action required

or permitted by this subchapter to be approved by the members of a corporation may be ap- proved without a meeting of members if the action is approved by members holding at least eighty percent of the voting power. The actionmust be evidenced by one ormore written con- sents describing the action taken, signed by those members representing at least eighty per- cent of the voting power, and delivered to the corporation for inclusion in theminutes or filing with the corporate records. A written consent may be revoked by a writing to that effect re- ceived by the corporation prior to the receipt by the corporation of unrevokedwritten consents sufficient in number to take corporation action. 2. If not otherwise determined under section 504.703 or 504.707, the record date for deter-

mining members entitled to take action without a meeting is the date the first member signs the consent under subsection 1. 3. A consent signed under this section has the effect of ameeting vote andmay be described

as such in any document filed with the secretary of state. 4. Written notice ofmember approval pursuant to this section shall be given to all members

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who have not signed the written consent. If written notice is required, member approval pur- suant to this section shall be effective ten days after such written notice is given.

Sec. 59. NEW SECTION. 504.705 NOTICE OF MEETING. 1. A corporation shall give notice consistentwith its bylaws ofmeetings ofmembers in a fair

and reasonable manner. 2. Anynoticewhich conforms to the requirements of subsection 3 is fair and reasonable, but

other means of giving notice may also be fair and reasonable when all the circumstances are considered. However, notice of matters referred to in subsection 3, paragraph “b”, must be given as provided in subsection 3. 3. Notice is fair and reasonable if all of the following occur: a. The corporation notifies its members of the place, date, and time of each annual, regular,

and special meeting of members not more than sixty days and not less than ten days, or if no- tice is mailed by other than first class or registered mail, not less than thirty days, before the date of the meeting. b. Thenotice of an annual or regularmeeting includes adescriptionof anymatter ormatters

which must be considered for approval by the members under sections 504.833, 504.857, 504.1003, 504.1022, 504.1104, 504.1202, 504.1401, and 504.1402. c. The notice of a special meeting includes a description of the purpose for which themeet-

ing is called. 4. Unless thebylaws require otherwise, if an annual, regular, or specialmeetingofmembers

is adjourned to a different date, time, or place, notice need not be given of the new date, time, or place, if the new date, time, or place is announced at the meeting before adjournment. If a new record date for the adjournedmeeting is ormust be fixed under section 504.707, howev- er, notice of the adjournedmeetingmust be given under this section to themembers of record as of the new record date. 5. When giving notice of an annual, regular, or special meeting of members, a corporation

shall give notice of a matter a member intends to raise at the meeting if requested in writing to do so by a person entitled to call a specialmeeting and if the request is received by the secre- tary or president of the corporation at least ten days before the corporation gives notice of the meeting.

Sec. 60. NEW SECTION. 504.706 WAIVER OF NOTICE. 1. A member may waive any notice required by this subchapter, the articles, or bylaws be-

fore or after the date and time stated in the notice. The waiver must be in writing, be signed by the member entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records. 2. A member’s attendance at a meeting does all of the following: a. Waives objection to lack of notice or defective notice of the meeting, unless the member

at the beginning of the meeting objects to holding the meeting or transacting business at the meeting. b. Waives objection to consideration of a particular matter at the meeting that is not within

the purpose described in the meeting notice, unless the member objects to considering the matter when it is presented.

Sec. 61. NEW SECTION. 504.707 RECORD DATE — DETERMINING MEMBERS EN- TITLED TO NOTICE AND VOTE. 1. The bylaws of a corporation may fix or provide the manner of fixing a date as the record

date for determining the members entitled to notice of a members’ meeting. If the bylaws do not fix or provide for fixing such a record date, the boardmay fix a future date as such a record date. If a record date is not fixed,members at the close of business on the business day preced- ing the day on which notice is given, or if notice is waived, at the close of business on the busi- ness day preceding the day on which the meeting is held are entitled to notice of the meeting. 2. The bylaws of a corporation may fix or provide the manner of fixing a date as the record

154LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

date for determining themembers entitled to vote at amembers’meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If a record date is not fixed,members on the date of themeetingwho are otherwise eligi- ble to vote are entitled to vote at the meeting. 3. The bylaws may fix or provide the manner for determining a date as the record date for

the purpose of determining themembers entitled to exercise any rights in respect of any other lawful action. If the bylaws do not fix or provide for fixing such a record date, the board may fix in advance such a record date. If a record date is not fixed,members at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later, are entitled to exercise such rights. 4. A record date fixed under this section shall not be more than seventy days before the

meeting or action requiring a determination of members occurs. 5. A determination of members entitled to notice of or to vote at a membership meeting is

effective for any adjournment of themeetingunless the board fixes a newdate for determining the right to notice or the right to vote, which it must do if the meeting is adjourned to a date more than seventy days after the record date for determiningmembers entitled to notice of the original meeting. 6. If a court orders a meeting adjourned to a date more than one hundred twenty days after

the date fixed for the original meeting, it may provide that the original record date for notice or voting continues in effect or it may fix a new record date for notice or voting.

Sec. 62. NEW SECTION. 504.708 ACTION BY WRITTEN BALLOT. 1. Unless prohibited or limited by the articles or bylaws, any action which may be taken at

any annual, regular, or specialmeeting ofmembersmay be takenwithout ameeting if the cor- poration delivers a written ballot to every member entitled to vote on the matter. 2. A written ballot shall do both of the following: a. Set forth each proposed action. b. Provide an opportunity to vote for or against each proposed action. 3. Approval by written ballot pursuant to this section shall be valid only when the number

of votes cast by ballot equals or exceeds the quorum required to be present at ameeting autho- rizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot. 4. All solicitations for votes by written ballot shall do all of the following: a. Indicate the number of responses needed to meet the quorum requirements. b. State the percentage of approvals necessary to approve each matter other than election

of directors. c. Specify the time by which a ballot must be received by the corporation in order to be

counted. 5. Except as otherwise provided in the articles or bylaws, a written ballot shall not be re-

voked. 6. Unless prohibited by the articles or bylaws, a written ballot may be delivered and a vote

may be cast on that ballot by electronic transmission. An electronic transmission of a written ballot shall contain or be accompanied by information indicating that a member, a member’s agent, or a member’s attorney authorized the electronic transmission of the ballot.

PART 2 VOTING

Sec. 63. NEW SECTION. 504.711 MEMBERS’ LIST FOR MEETING. 1. After fixing a record date for a notice of a meeting, a corporation shall prepare an alpha-

betical list of the names of all its members who are entitled to notice of the meeting. The list must show the address of each member and number of votes each member is entitled to cast at the meeting. The corporation shall prepare on a current basis through the time of the

155 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

membership meeting a list of members, if any, who are entitled to vote at themeeting, but not entitled to notice of the meeting. This list shall be prepared on the same basis as and be part of the list of members. 2. Except as set forth in section 504.1602, subsection 6, the list ofmembersmust beavailable

for inspectionby anymember for thepurposeof communicationwithothermembers concern- ing themeeting, beginning two business days after notice is given of themeeting forwhich the list was prepared and continuing through the meeting, at the corporation’s principal office or at a reasonable place identified in themeeting notice in the citywhere themeetingwill be held. Except as set forth in section 504.1602, subsection 6, a member, a member’s agent, or a mem- ber’s attorney is entitled onwritten demand to inspect and, subject to the limitations of section 504.1602, subsection 3, and section 504.1605, to copy the list, at a reasonable time and at the member’s expense, during the period it is available for inspection. 3. Except as set forth in section 504.1602, subsection 6, a corporation shall make the list of

members available at the meeting, and any member, a member’s agent, or a member’s attor- ney is entitled to inspect the list at any time during the meeting or any adjournment. 4. Except as set forth in section 504.1602, subsection 6, if a corporation refuses to allow a

member, a member’s agent, or a member’s attorney to inspect the list of members before or at the meeting or copy the list as permitted by subsection 2, the district court of the county where a corporation’s principal office is located or, if none is located in this state, where its registered office is located, on application of themember,may summarily order the inspection or copying of themembership list at the corporation’s expense, may postpone themeeting for which the list was prepared until the inspection or copying is complete, andmay order the cor- poration to pay the member’s costs, including reasonable attorney fees incurred to obtain the order. 5. Unless awritten demand to inspect and copy amembership list hasbeenmadeunder sub-

section 2 prior to the membership meeting and a corporation improperly refuses to comply with the demand, refusal or failure to comply with this section does not affect the validity of action taken at the meeting. 6. The articles or bylaws of a religious corporationmay limit or abolish the rights of amem-

ber under this section to inspect and copy any corporate record.

Sec. 64. NEW SECTION. 504.712 VOTING ENTITLEMENT GENERALLY. 1. The right of themembers of a corporation, or any class or classes ofmembers, to votemay

be limited, enlarged, or denied to the extent specified in the articles of incorporation or, if the articles of incorporation soprovide, by thebylaws. Unless so limited, enlarged, or denied, each member, regardless of class, shall be entitled to one vote on each matter submitted to a vote of members. 2. Unless the articles or bylaws provide otherwise, if a membership stands of record in the

names of two ormore persons, the persons’ actswith respect to voting shall have the following effect: a. If only one votes, such act binds all. b. If more than one votes, the vote shall be divided on a pro rata basis.

Sec. 65. NEW SECTION. 504.713 QUORUM REQUIREMENTS. 1. Unless this subchapter, or the articles or bylaws of a corporation provide for a higher or

lower quorum, ten percent of the votes entitled to be cast on a matter must be represented at a meeting of members to constitute a quorum on that matter. 2. A bylaw amendment to decrease the quorum for anymember actionmay be approved by

the members or, unless prohibited by the bylaws, by the board. 3. A bylaw amendment to increase the quorum required for anymember actionmust be ap-

proved by the members. 4. Unless one-third or more of the voting power is present in person or by proxy, the only

matters that may be voted upon at an annual or regularmeeting ofmembers are thosematters that are described in the meeting notice.

156LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

Sec. 66. NEW SECTION. 504.714 VOTING REQUIREMENTS. 1. Unless this subchapter, or the articles or bylaws of a corporation require a greater vote

or voting by class, if a quorum is present, the affirmative vote of the votes represented and vot- ing, which affirmative votes also constitute amajority of the required quorum, is the act of the members. 2. A bylaw amendment to increase or decrease the vote required for any member action

must be approved by the members.

Sec. 67. NEW SECTION. 504.715 PROXIES. 1. Unless the articles or bylaws of a corporation prohibit or limit proxy voting, a member

or the member’s agent or attorney in fact may appoint a proxy to vote or otherwise act for the member by signing an appointment form or by an electronic transmission. An electronic transmissionmust contain or be accompaniedby information fromwhich it canbedetermined that the member, the member’s agent, or the member’s attorney in fact authorized the elec- tronic transmission. 2. An appointment of a proxy is effective when a signed appointment form or an electronic

transmission of an appointment form is received by the secretary or other officer or agent au- thorized to tabulate votes. An appointment is valid for elevenmonths unless a different period is expressly provided for in the appointment. However, a proxy shall not be valid formore than three years from its date of execution. 3. An appointment of a proxy is revocable by the member. 4. The death or incapacity of themember appointing a proxy does not affect the right of the

corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exer- cises authority under the appointment. 5. Appointment of a proxy is revoked by the person appointing the proxy if either of the fol-

lowing occurs: a. The person appointing the proxy attends any meeting and votes in person. b. The person appointing the proxy signs anddelivers or sends through electronic transmis-

sion to the secretary orother officer or agent authorized to tabulateproxy votes either awriting or electronic transmission stating that the appointment of theproxy is revokedor a subsequent appointment form. 6. Subject to section 504.718 and any express limitation on the proxy’s authority appearing

on the faceof theappointment form, a corporation is entitled toaccept theproxy’s vote or other action as that of the member making the appointment.

Sec. 68. NEW SECTION. 504.716 CUMULATIVE VOTING FOR DIRECTORS. 1. If the articles or bylawsof a corporationprovide for cumulative votingbymembers,mem-

bers may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and casting the product for a single candidate or distributing the product among two or more candidates. 2. A director elected by cumulative voting may be removed by the members without cause

if the requirements of section 504.808aremet unless the votes cast against removal, or not con- senting in writing to such removal, would be sufficient to elect such director if voted cumula- tively at an election atwhich the same total number of voteswere cast or, if such action is taken by written ballot, all memberships entitled to vote were voted, and the entire number of direc- tors authorized at the time of the director’s most recent election were then being elected. 3. Members shall not cumulatively vote if the directors and members are identical.

Sec. 69. NEW SECTION. 504.717 OTHER METHODS OF ELECTING DIRECTORS. A corporation may provide in its articles or bylaws for election of directors by members or

delegates on the basis of chapter or other organizational unit, by region or other geographic unit, by preferential voting, or by any other reasonable method.

157 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

Sec. 70. NEW SECTION. 504.718 CORPORATION’S ACCEPTANCE OF VOTES. 1. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the

nameof amember, the corporation if acting in good faith is entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member. 2. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond

to the record name of amember, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver, or proxy appointment and give it effect as the act of the member if any of the following is applicable: a. The member is an entity and the name signed purports to be that of an officer or agent

of the entity. b. The name signed purports to be that of an attorney in fact of themember and if the corpo-

ration requests, evidence acceptable to the corporation of the signatory’s authority to sign for the member has been presented with respect to the vote, consent, waiver, or proxy appoint- ment. c. Two or more persons hold the membership as cotenants or fiduciaries and the name

signed purports to be the name of at least one of the coholders and the person signing appears to be acting on behalf of all the coholders. d. In the case of a mutual benefit corporation: (1) The name signed purports to be that of an administrator, executor, guardian, or conser-

vator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment. (2) The name signed purports to be that of a receiver or trustee in bankruptcy of the mem-

ber, and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment. 3. The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the

secretaryor otherofficer or agent authorized to tabulate votes, acting ingood faith, has reason- able basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the member. 4. The corporation and its officer or agent who accepts or rejects a vote, consent, waiver,

or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection. 5. Corporate action based on the acceptance or rejection of a vote, consent,waiver, or proxy

appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

PART 3 VOTING AGREEMENTS

Sec. 71. NEW SECTION. 504.721 VOTING AGREEMENTS. 1. Two or more members of a corporation may provide for the manner in which they will

vote by signing an agreement for that purpose. For public benefit corporations, such agree- mentsmust have a reasonable purpose not inconsistent with the corporation’s public or chari- table purposes. 2. A voting agreement created under this section is specifically enforceable.

SUBCHAPTER VIII DIRECTORS AND OFFICERS

PART 1 BOARD OF DIRECTORS

Sec. 72. NEW SECTION. 504.801 REQUIREMENT FOR AND DUTIES OF BOARD. 1. Each corporation must have a board of directors. 2. Except as otherwise provided in this subchapter or subsection 3, all corporate powers

158LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

shall be exercised by or under the authority of, and the affairs of the corporationmanaged un- der the direction of, its board. 3. The articles of incorporation may authorize a person or persons to exercise some or all

of the powers which would otherwise be exercised by a board. To the extent so authorized, any such person or persons shall have the duties and responsibilities of the directors, and the directors shall be relieved to that extent from such duties and responsibilities.

Sec. 73. NEW SECTION. 504.802 QUALIFICATIONS OF DIRECTORS. All directors of a corporationmust be individuals. The articles or bylawsmay prescribe oth-

er qualifications for directors.

Sec. 74. NEW SECTION. 504.803 NUMBER OF DIRECTORS. 1. The board of directors of a corporation must consist of one or more individuals, with the

number specified in or fixed in accordance with the articles or bylaws. 2. The number of directorsmay be increased or decreased from time to time by amendment

to or in the manner prescribed in the articles or bylaws.

Sec. 75. NEW SECTION. 504.804 ELECTION, DESIGNATION, AND APPOINTMENT OF DIRECTORS. 1. If the corporation has members, all the directors, except the initial directors, shall be

elected at the first annual meeting of members, and at each annual meeting thereafter, unless the articles or bylaws provide some other time or method of election, or provide that some of the directors are appointed by some other person or designated. 2. If a corporationdoesnot havemembers, all the directors, except the initial directors, shall

be elected, appointed, or designated as provided in the articles or bylaws. If nomethod of des- ignation or appointment is set forth in the articles or bylaws, the directors other than the initial directors shall be elected by the board.

Sec. 76. NEW SECTION. 504.805 TERMS OF DIRECTORS GENERALLY. 1. The articles or bylaws of a corporation must specify the terms of directors. Except for

designated or appointed directors, and except as otherwise provided in the articles or bylaws, the terms of directors shall not exceed five years. In the absence of any term specified in the articles or bylaws, the term of each director shall be one year. Directors may be elected for successive terms. 2. A decrease in the number or term of directors does not shorten an incumbent director’s

term. 3. Except as provided in the articles or bylaws, both of the following apply: a. The term of a director filling a vacancy in the office of a director elected by members ex-

pires at the next election of directors by members. b. The term of a director filling any other vacancy expires at the end of the unexpired term

which such director is filling. 4. Despite the expiration of a director’s term, the director continues to serve until the direc-

tor’s successor is elected, designated, or appointed, and qualifies, or until there is a decrease in the number of directors.

Sec. 77. NEW SECTION. 504.806 STAGGERED TERMS FOR DIRECTORS. The articles or bylaws of a corporation may provide for staggering the terms of directors by

dividing the total number of directors into groups. The terms of the several groups need not be uniform.

Sec. 78. NEW SECTION. 504.807 RESIGNATION OF DIRECTORS. 1. A director of a corporation may resign at any time by delivering written notice to the

board of directors, its presiding officer, or the president or secretary. 2. A resignation is effective when the notice is effective unless the notice specifies a later

effective date. If a resignation is made effective at a later date, the board may fill the pending

159 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

vacancy before the effective date if the board provides that the successor does not take office until the effective date.

Sec. 79. NEWSECTION. 504.808 REMOVALOFDIRECTORSELECTEDBYMEMBERS OR DIRECTORS. 1. Themembers of a corporationmay remove oneormore directors elected by themembers

without cause. 2. If a director is electedby a class, chapter, or otherorganizational unit or by regionorother

geographic grouping, the directormay be removed only by themembers of that class, chapter, unit, or grouping. 3. Except as provided in subsection 9, a director may be removed under subsection 1 or 2

only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors. 4. If cumulative voting is authorized, a director shall not be removed if the number of votes,

or if the director was elected by a class, chapter, unit, or grouping of members, the number of votes of that class, chapter, unit, or grouping, sufficient to elect the director under cumulative voting, is voted against the director’s removal. 5. A director elected bymembersmay be removed by themembers only at a meeting called

for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is the removal of the director. 6. For thepurposeof computingwhether a director is protected fromremoval under subsec-

tions 2 through 4, it should be assumed that the votes against removal are cast in an election for the number of directors of the group to which the director to be removed belonged on the date of that director’s election. 7. An entire board of directors may be removed under subsections 1 through 5. 8. A director elected by the board may be removed without cause by the vote of two-thirds

of the directors then in office or such greater number as is set forth in the articles or bylaws. However, a director elected by the board to fill the vacancy of a director elected by the mem- bers may be removed without cause by the members, but not by the board. 9. If at the beginning of a director’s term on the board the articles or bylaws provide that a

director may be removed for missing a specified number of board meetings, the board may remove the director for failing to attend the specified number of meetings. The director may be removed only if a majority of the directors then in office votes for the removal. 10. The articles or bylaws of a religious corporation may do both of the following: a. Limit the application of this section. b. Set forth the vote and procedures by which the board or any person may remove with or

without cause a director elected by the members or the board.

Sec. 80. NEW SECTION. 504.809 REMOVAL OF DESIGNATED OR APPOINTED DI- RECTORS. 1. A designated director of a corporation may be removed by an amendment to the articles

or bylaws deleting or changing the designation. 2. a. Except as otherwise provided in the articles or bylaws, an appointed director may be

removed without cause by the person appointing the director. b. The person removing the appointed director shall do so by giving written notice of the

removal to the director and either the presiding officer of the board or the corporation’s presi- dent or secretary. c. A removal of an appointed director is effective when the notice is effective unless the no-

tice specifies a future effective date.

Sec. 81. NEWSECTION. 504.810 REMOVALOFDIRECTORSBY JUDICIALPROCEED- ING. 1. The district court of the countywhere a corporation’s principal office is located or if there

is no principal office located in this state, where the registered office is located, may remove

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a director of the corporation from office in a proceeding commenced by or in the right of the corporation by a member or director if the court finds both of the following apply: a. A director engaged in fraudulent conduct with respect to the corporation or its members

grossly abused the position of director, or intentionally inflicted harm on the corporation. b. Upon consideration of the director’s course of conduct and the inadequacy of other avail-

able remedies, the court determines that removal is in the best interest of the corporation. 2. A member or a director who proceeds by or in the right of a corporation pursuant to sub-

section 1 shall comply with all of the requirements of section 504.631 and sections 504.633 through 504.638. 3. The court, in addition to removing a director, may bar the director from serving on the

board for a period of time prescribed by the court. 4. This section does not limit the equitable powers of the court to order other relief that the

court determines is appropriate. 5. The articles or bylaws of a religious corporation may limit or prohibit the application of

this section.

Sec. 82. NEW SECTION. 504.811 VACANCY ON BOARD. 1. Unless the articles or bylaws of a corporation provide otherwise, and except as provided

in subsections 2 and3, if a vacancyoccurs on theboardof directors, includinga vacancy result- ing from an increase in the number of directors, any of the following may occur: a. The members, if any, may fill the vacancy. If the vacant office was held by a director

electedby a class, chapter, or other organizational unit or by regionorother geographic group- ing, onlymembers of the class, chapter, unit, or grouping are entitled to vote to fill the vacancy if it is filled by the members. b. The board of directors may fill the vacancy. c. If the directors remaining in office constitute fewer than a quorumof the board, theymay

fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. 2. Unless the articles or bylaws provide otherwise, if a vacant office was held by an ap-

pointed director, only the person who appointed the director may fill the vacancy. 3. If a vacant officewas held by a designated director, the vacancy shall be filled as provided

in the articles or bylaws. In the absenceof an applicable article or bylawprovision, the vacancy shall be filled by the board. 4. A vacancy that will occur at a specific later date by reason of a resignation effective at a

later date under section 504.807, subsection 2, or otherwise, may be filled before the vacancy occurs, but the new director shall not take office until the vacancy occurs.

Sec. 83. NEW SECTION. 504.812 COMPENSATION OF DIRECTORS. Unless the articles or bylaws of a corporation provide otherwise, a board of directors may

fix the compensation of directors.

PART 2 MEETINGS AND ACTION OF THE BOARD

Sec. 84. NEW SECTION. 504.821 REGULAR AND SPECIAL MEETINGS. 1. If the time and place of a directors’ meeting is fixed by the bylaws or the board, themeet-

ing is a regular meeting. All other meetings are special meetings. 2. A board of directors may hold regular or special meetings in or out of this state. 3. Unless the articles or bylaws provide otherwise, a board may permit any or all directors

to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Sec. 85. NEW SECTION. 504.822 ACTION WITHOUT MEETING. 1. Except to the extent the articles or bylaws of a corporation require that action by the

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board of directors be taken at a meeting, action required or permitted by this subchapter to be taken by the board of directorsmay be takenwithout ameeting if each director signs a con- sent describing the action to be taken, and delivers it to the corporation. 2. Action taken under this section is the act of the board of directors when one ormore con-

sents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken is to be effective. A director’s consent may be withdrawn by revocation signed by the director and delivered to the corporation prior to the delivery to the corporation of unrevoked written consents signed by all of the directors. 3. A consent signedunder this sectionhas the effect of action taken at ameetingof theboard

of directors and may be described as such in any document.

Sec. 86. NEW SECTION. 504.823 CALL AND NOTICE OF MEETINGS. 1. Unless the articles or bylaws of a corporation, or subsection 3, provide otherwise, regular

meetings of the board may be held without notice. 2. Unless the articles, bylaws, or subsection 3 provide otherwise, special meetings of the

boardmust beprecededbyat least twodays’ notice to eachdirector of thedate, time, andplace, but not the purpose, of the meeting. 3. In corporations without members, any board action to remove a director or to approve

a matter which would require approval by the members if the corporation had members shall not be valid unless each director is given at least seven days’ written notice that thematterwill be voted upon at a directors’ meeting or unless notice is waived pursuant to section 504.824. 4. Unless the articles or bylaws provide otherwise, the presiding officer of the board, the

president, or twenty percent of thedirectors then in officemay call andgive notice of ameeting of the board.

Sec. 87. NEW SECTION. 504.824 WAIVER OF NOTICE. 1. A director may at any time waive any notice required by this subchapter, the articles, or

bylaws. Except as provided in subsection 2, thewaivermust be inwriting, signed by the direc- tor entitled to the notice, and filed with the minutes or the corporate records. 2. A director’s attendance at or participation in ameeting waives any required notice of the

meeting unless the director, upon arriving at the meeting or prior to the vote on a matter not noticed in conformitywith this subchapter, the articles, or bylaws, objects to lack of notice and does not thereafter vote for or assent to the objected-to action.

Sec. 88. NEW SECTION. 504.825 QUORUM AND VOTING. 1. Except as otherwise provided in this subchapter, or the articles or bylaws of a corpora-

tion, aquorumof aboardof directors consists of amajority of thedirectors in office immediate- ly before a meeting begins. The articles or bylaws shall not authorize a quorum of fewer than one-third of the number of directors in office. 2. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors

present is the act of the board unless this subchapter, the articles, or bylaws require the vote of a greater number of directors.

Sec. 89. NEW SECTION. 504.826 COMMITTEES OF THE BOARD. 1. Unless prohibited or limited by the articles or bylaws of a corporation, the board of direc-

tors may create one or more committees of the board and appoint members of the board to serve on them. Each committee shall have two or more directors, who serve at the pleasure of the board. 2. The creation of a committee and appointment of members to it must be approved by the

greater of either of the following: a. A majority of all the directors in office when the action is taken. b. The number of directors required by the articles or bylaws to take action under section

504.825. 3. Sections 504.821 through 504.825, which govern meetings, action without meetings,

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notice and waiver of notice, and quorum and voting requirements of the board, apply to com- mittees of the board and their members as well. 4. To the extent specified by the board of directors or in the articles or bylaws, each commit-

tee of the board may exercise the board’s authority under section 504.801. 5. A committee of the board shall not, however, do any of the following: a. Authorize distributions. b. Approve or recommend to members dissolution, merger, or the sale, pledge, or transfer

of all or substantially all of the corporation’s assets. c. Elect, appoint, or remove directors or fill vacancies on the board or on any of its commit-

tees. d. Adopt, amend, or repeal the articles or bylaws. 6. The creation of, delegation of authority to, or action by a committee does not alone consti-

tute compliance by a director with the standards of conduct described in section 504.831.

PART 3 STANDARDS OF CONDUCT

Sec. 90. NEW SECTION. 504.831 GENERAL STANDARDS FOR DIRECTORS. 1. Each member of the board of directors of a corporation, when discharging the duties of

a director, shall act in conformity with all of the following: a. In good faith. b. In amanner the director reasonably believes to be in the best interests of the corporation. 2. The members of the board of directors or a committee of the board, when becoming in-

formed in connection with their decision-making functions, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances. 3. In discharging board or committee duties, a director who does not have knowledge that

makes reliance unwarranted is entitled to rely on the performance by any of the persons speci- fied in subsection 5, paragraph “a”, to whom the board may have delegated, formally or infor- mally by course of conduct, the authority or duty to perform one or more of the board’s func- tions that are delegable under applicable law. 4. In discharging board or committee duties, a director is entitled to rely on information,

opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by any of the persons specified in subsection 5. 5. A director is entitled to rely, in accordancewith subsection 3 or 4, on any of the following: a. One or more officers or employees of the corporation whom the director reasonably be-

lieves to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided by the officer or employee. b. Legal counsel, public accountants, or other persons as to matters involving skills or ex-

pertise the director reasonably believes are either of the following: (1) Matters within the particular person’s professional or expert competence. (2) Matters as to which the particular person merits confidence. c. A committee of the board of which the director is not a member, as to matters within its

jurisdiction, if the director reasonably believes the committee merits confidence. d. In the case of religious corporations, religious authorities and ministers, priests, rabbis,

or other persons whose position or duties in the religious organization the director believes justify reliance and confidence and whom the director believes to be reliable and competent in the matters presented. 6. A director shall not be deemed to be a trustee with respect to the corporation or with re-

spect to any property held or administered by the corporation, includingwithout limit, proper- ty that may be subject to restrictions imposed by the donor or transferor of such property.

Sec. 91. NEW SECTION. 504.832 STANDARDS OF LIABILITY FOR DIRECTORS. 1. A director shall not be liable to the corporation or its members for any decision to take

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or not to take action, or any failure to take any action, as director, unless the party asserting liability in a proceeding establishes both of the following: a. That section 504.901 or the protection afforded by section 504.831, if interposed as a bar

to the proceeding by the director, does not preclude liability. b. That the challenged conduct consisted or was the result of one of the following: (1) Action not in good faith. (2) A decision that satisfies one of the following: (a) That the director did not reasonably believe to be in the best interests of the corporation. (b) As to which the director was not informed to an extent the director reasonably believed

appropriate in the circumstances. (3) A lack of objectivity due to the director’s familial, financial, or business relationship

with, or lack of independence due to the director’s domination or control by, another person having a material interest in the challenged conduct which also meets both of the following criteria: (a) Which relationship or which domination or control could reasonably be expected to

have affected the director’s judgment respecting the challenged conduct in a manner adverse to the corporation. (b) After a reasonable expectation to such effect has been established, the director shall not

have established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation. (4) A sustained failure of the director to devote attention to ongoing oversight of the busi-

ness and affairs of the corporation, or a failure to devote timely attention, by making, or caus- ing to be made, appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefor. (5) Receipt of a financial benefit to which the director was not entitled or any other breach

of the director’s duties to deal fairly with the corporation and its members that is actionable under applicable law. 2. a. A party seeking to hold a director liable formoney damages shall also have the burden

of establishing both of the following: (1) That harm to the corporation or its members has been suffered. (2) The harm suffered was proximately caused by the director’s challenged conduct. b. A party seeking to hold a director liable for other money payment under a legal remedy,

such as compensation for the unauthorized use of corporate assets, shall also have whatever burden of persuasion thatmaybe called for to establish that the payment sought is appropriate in the circumstances. c. A party seeking to hold a director liable for othermoneypayment under an equitable rem-

edy, such as profit recovery by or disgorgement to the corporation, shall also have whatever burden of persuasion that may be called for to establish that the equitable remedy sought is appropriate in the circumstances. 3. This section shall not do any of the following: a. In any instancewhere fairness is at issue, such as consideration of the fairness of a trans-

action to the corporation under section 504.833, alter the burden of proving the fact or lack of fairness otherwise applicable. b. Alter the fact or lack of liability of a director under another section of this chapter, such

as theprovisions governing the consequences of a transactional interest under section 504.833 or an unlawful distribution under section 504.835. c. Affect any rights towhich the corporation or a shareholdermay be entitled under another

statute of this state or the United States.

Sec. 92. NEW SECTION. 504.833 DIRECTOR CONFLICT OF INTEREST. 1. A conflict of interest transaction is a transaction with the corporation in which a director

of the corporation has a direct or indirect interest. A conflict of interest transaction is not void- able by the corporation on the basis of the director’s interest in the transaction if the transac- tion was fair at the time it was entered into or is approved as provided in subsection 2.

164LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

2. A transaction in which a director of amutual benefit corporation has a conflict of interest may be approved if either of the following occurs: a. The material facts of the transaction and the director’s interest were disclosed or known

to the board of directors or a committee of the board and the board or committee of the board authorized, approved, or ratified the transaction. b. The material facts of the transaction and the director’s interest were disclosed or known

to the members and they authorized, approved, or ratified the transaction. 3. For the purposes of this section, a director of the corporation has an indirect interest in

a transaction under either of the following circumstances: a. If another entity in which the director has a material interest or in which the director is

a general partner is a party to the transaction. b. If another entity ofwhich thedirector is adirector, officer, or trustee is a party to the trans-

action. 4. For purposes of subsection 2, a conflict of interest transaction is authorized, approved,

or ratified if it receives the affirmative vote of a majority of the directors on the board or on a committee of the board,whohave no direct or indirect interest in the transaction, but a trans- action shall not be authorized, approved, or ratified under this section by a single director. If a majority of the directors on the board who have no direct or indirect interest in the transac- tion vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under sub- section 2, paragraph “a”, if the transaction is otherwise approved as provided in subsection 2. 5. For purposes of subsection 2, paragraph “b”, a conflict of interest transaction is autho-

rized, approved, or ratified by the members if it receives a majority of the votes entitled to be counted under this subsection. Votes cast by or voted under the control of a director who has a direct or indirect interest in the transaction, and votes cast by or voted under the control of an entity described in subsection 3, paragraph “a”, shall not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interest transaction under subsection 2, paragraph “b”. The vote of these members, however, is counted in determining whether the transaction is approved under other sections of this subchapter. Amajority of the voting power, whether or not present, that is entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section. 6. The articles, bylaws, or a resolution of the boardmay impose additional requirements on

conflict of interest transactions.

Sec. 93. NEWSECTION. 504.834 LOANSTOORGUARANTEESFORDIRECTORSAND OFFICERS. 1. A corporation shall not lend money to or guarantee the obligation of a director or officer

of the corporation. 2. The fact that a loan or guarantee is made in violation of this section does not affect the

borrower’s liability on the loan.

Sec. 94. NEW SECTION. 504.835 LIABILITY FOR UNLAWFUL DISTRIBUTIONS. 1. Unless a director complies with the applicable standards of conduct described in section

504.831, a director who votes for or assents to a distributionmade in violation of this subchap- ter is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating this subchapter. 2. A director held liable for an unlawful distribution under subsection 1 is entitled to con-

tribution from both of the following: a. Every other directorwho voted for or assented to the distributionwithout complyingwith

the applicable standards of conduct described in section 504.831. b. Each person who received an unlawful distribution for the amount of the distribution

whether or not the person receiving the distribution knew it wasmade in violation of this sub- chapter.

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PART 4 OFFICERS

Sec. 95. NEW SECTION. 504.841 REQUIRED OFFICERS. 1. Unless otherwise provided in the articles or bylaws of a corporation, a corporation shall

have a president, a secretary, a treasurer, and such other officers as are appointed by the board. An officer may appoint one or more officers if authorized by the bylaws or the board of directors. 2. The bylaws or the board shall delegate to one of the officers responsibility for preparing

minutes of the directors’ andmembers’ meetings and for authenticating records of the corpo- ration. 3. The same individual may simultaneously hold more than one office in a corporation.

Sec. 96. NEW SECTION. 504.842 DUTIES AND AUTHORITY OF OFFICERS. Each officer of a corporation has the authority and shall perform the duties set forth in the

bylaws or, to the extent consistent with the bylaws, the duties and authority prescribed in a resolution of the board or by direction of an officer authorized by the board to prescribe the duties and authority of other officers.

Sec. 97. NEW SECTION. 504.843 STANDARDS OF CONDUCT FOR OFFICERS. 1. An officer, when performing in such capacity, shall act in conformity with all of the fol-

lowing: a. In good faith. b. With the care that a person in a like positionwould reasonably exercise under similar cir-

cumstances. c. In a manner the officer reasonably believes to be in the best interests of the corporation

and its members, if any. 2. In discharging the officer’s duties, an officer who does not have knowledge that makes

reliance unwarranted, is entitled to rely on any of the following: a. The performance of properly delegated responsibilities by one or more employees of the

corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated. b. Information, opinions, reports, or statements, including financial statements and other

financial data, prepared or presented by one or more officers or employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented. c. Legal counsel, public accountants, or other persons retained by the corporation as tomat-

ters involving the skills or expertise the officer reasonably believes arewithin the person’s pro- fessional or expert competence, or as to which the particular person merits confidence. d. In the case of religious corporations, religious authorities, and ministers, priests, rabbis,

or other persons whose position or duties in the religious organization the officer believes jus- tify reliance and confidence and whom the officer believes to be reliable and competent in the matters presented. 3. An officer shall not be liable as an officer to the corporation or its members for any deci-

sion to take or not to take action, or any failure to take any action, if the duties of the officer are performed in compliance with this section. Whether an officer who does not comply with this section shall have liability will depend in such instance on applicable law, including those principles of sections 504.832 and 504.901 that have relevance.

Sec. 98. NEW SECTION. 504.844 RESIGNATION AND REMOVAL OF OFFICERS. 1. An officer of a corporationmay resign at any time by delivering notice to the corporation.

A resignation is effective when the notice is effective unless the notice specifies a future effec- tive time. If a resignation ismade effective at a future time and the board or appointing officer accepts the future effective time, its board or appointing officer may fill the pending vacancy before the effective time if the board or appointing officer provides that the successor does not take office until the effective time.

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2. An officer may be removed at any time with or without cause by any of the following: a. The board of directors. b. The officer who appointed such officer, unless the bylaws or the board of directors pro-

vide otherwise. c. Any other officer if authorized by the bylaws or the board of directors. d. In this section, “appointingofficer”means theofficer, includingany successor to that offi-

cer, who appointed the officer resigning or being removed.

Sec. 99. NEW SECTION. 504.845 CONTRACT RIGHTS OF OFFICERS. 1. The appointment of an officer of a corporation does not itself create contract rights. 2. An officer’s removal does not affect the officer’s contract rights, if any, with the corpora-

tion. An officer’s resignation does not affect the corporation’s contract rights, if any, with the officer.

Sec. 100. NEW SECTION. 504.846 OFFICERS’ AUTHORITY TO EXECUTE DOC- UMENTS. 1. A contract or other instrument in writing executed or entered into between a corporation

and any other person is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the contract or other instrument if it is signed by any two officers in category 1 or by one officer in category 1 and one officer in category 2 as set out in subsection 2. 2. a. Category 1 officers include the presiding officer of the board and the president. b. Category 2 officers include a vice president and the secretary, treasurer, and executive

director.

PART 5 INDEMNIFICATION

Sec. 101. NEW SECTION. 504.851 DEFINITIONS. As used in this part, unless the context otherwise requires: 1. “Corporation” includes any domestic or foreign predecessor entity of a corporation in a

merger. 2. “Director” or “officer”means an individualwho is orwas a director or officer of a corpora-

tion or an individual who, while a director or officer of a corporation, is or was serving at the corporation’s request as a director, officer, partner, trustee, employee, or agent of another for- eign or domestic business or nonprofit corporation, partnership, joint venture, trust, employee benefit plan, or other entity. A “director” or “officer” is considered to be serving an employee benefit plan at the corporation’s request if the director’s or officer’s duties to the corporation also impose duties on, or otherwise involve services by, the director or officer to the plan or to participants in or beneficiaries of the plan. “Director” or “officer” includes, unless the con- text otherwise requires, the estate or personal representative of a director or officer. 3. “Disinterested director” means a director who at the time of a vote referred to in section

504.854, subsection 3, or a vote or selection referred to in section 504.856, subsection 2 or 3, is not either of the following: a. A party to the proceeding. b. An individual having a familial, financial, professional, or employment relationship with

thedirectorwhose indemnification or advance for expenses is the subject of the decisionbeing made, which relationship would, in the circumstances, reasonably be expected to exert an in- fluence on the director’s judgment when voting on the decision being made. 4. “Expenses” includes attorney fees. 5. “Liability” means the obligation to pay a judgment, settlement, penalty, or fine including

an excise tax assessed with respect to an employee benefit plan, or reasonable expenses actu- ally incurred with respect to a proceeding.

167 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

6. “Official capacity” means either of the following: a. When used with respect to a director, the office of director in a corporation. b. When used with respect to an officer, as contemplated in section 504.857, the office in a

corporation held by the officer. “Official capacity” does not include service for any other for- eign or domestic business or nonprofit corporation or any partnership joint venture, trust, em- ployee benefit plan, or other entity. 7. “Party” means an individual who was, is, or is threatened to be made a defendant or re-

spondent in a proceeding. 8. “Proceeding” means any threatened, pending, or completed action, suit, or proceeding

whether civil, criminal, administrative, or investigative and whether formal or informal.

Sec. 102. NEW SECTION. 504.852 PERMISSIBLE INDEMNIFICATION. 1. Except as otherwise provided in this section, a corporation may indemnify an individual

who is a party to a proceeding because the individual is a director, against liability incurred in the proceeding if all of the following apply: a. The individual acted in good faith. b. The individual reasonably believed either of the following: (1) In the case of conduct in the individual’s official capacity, that the individual’s conduct

was in the best interests of the corporation. (2) In all other cases, that the individual’s conduct was at least not opposed to the best inter-

ests of the corporation. c. In the case of any criminal proceeding, the individual had no reasonable cause to believe

the individual’s conduct was unlawful. d. The individual engaged in conduct for which broader indemnification has been made

permissible or obligatory under a provision of the articles of incorporation as authorized by section 504.202, subsection 2, paragraph “d”. 2. A director’s conduct with respect to an employee benefit plan for a purpose the director

reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirements of subsection 1, paragraph “b”, subparagraph (2). 3. The termination of a proceeding by judgment, order, settlement, conviction, or upon a

plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section. 4. Unless ordered by a court under section 504.855, subsection 1, paragraph “b”, a corpora-

tion shall not indemnify a director under this section under either of the following circum- stances: a. In connection with a proceeding by or in the right of the corporation, except for reason-

able expenses incurred in the relevant standard of conduct under subsection 1. b. In connectionwith any proceedingwith respect to conduct forwhich the directorwas ad-

judged liable on the basis that the director received a financial benefit to which the director was not entitled, whether or not involving action in the director’s official capacity.

Sec. 103. NEW SECTION. 504.853 MANDATORY INDEMNIFICATION. A corporation shall indemnify a director who was wholly successful, on themerits or other-

wise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses actually incurred by the director in connection with the proceeding.

Sec. 104. NEW SECTION. 504.854 ADVANCE FOR EXPENSES. 1. A corporation may, before final disposition of a proceeding, advance funds to pay for or

reimburse the reasonable expenses incurred by a director who is a party to a proceeding be- cause the person is a director if the person delivers all of the following to the corporation: a. A written affirmation of the director’s good faith belief that the director has met the rele-

vant standard of conduct described in section 504.852 or that the proceeding involved conduct

168LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

for which liability has been eliminated under a provision of the articles of incorporation as au- thorized by section 504.202, subsection 2, paragraph “d”. b. The director’s written undertaking to repay any funds advanced if the director is not en-

titled to mandatory indemnification under section 504.853 and it is ultimately determined un- der section 504.855 or 504.856 that the director has not met the relevant standard of conduct described in section 504.852. 2. The undertaking required by subsection 1, paragraph “b”, must be an unlimited general

obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment. 3. Authorizations under this section shall be made according to one of the following: a. By the board of directors as follows: (1) If there are two ormore disinterested directors, by amajority vote of all the disinterested

directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee of two or more disinterested directors appointed by such vote. (2) If there are fewer than two disinterested directors, by the vote necessary for action by

the board in accordance with section 504.825, subsection 2, in which authorization directors who do not qualify as disinterested directors may participate. b. By themembers, but thedirectorwho, at the timedoesnot qualify as adisinteresteddirec-

tor, may4 not vote as a member or on behalf of a member.

Sec. 105. NEW SECTION. 504.855 COURT-ORDERED INDEMNIFICATION. 1. A director who is a party to a proceeding because the person is a director may apply for

indemnification or an advance for expenses to the court conducting the proceeding or to an- other court of competent jurisdiction. After receipt of an application, and after giving any no- tice the court considers necessary, the court shall do one of the following: a. Order indemnification if the court determines that the director is entitled to mandatory

indemnification under section 504.853. b. Order indemnification or advance for expenses if the court determines that the director

is entitled to indemnification or advance for expenses pursuant to a provision authorized by section 504.859, subsection 1. c. Order indemnification or advance for expenses if the court determines, in view of all the

relevant circumstances, that it is fair and reasonable to do one of the following: (1) To indemnify the director. (2) To indemnify or advance expenses to the director, even if the director has not met the

relevant standard of conduct set forth in section 504.852, subsection 1, failed to comply with section 504.854 or was adjudged liable in a proceeding referred to in section 504.852, subsec- tion 4, paragraph “a” or “b”, but if the director was adjudged so liable the director’s indemnifi- cation shall be limited to reasonable expenses incurred in connection with the proceeding. 2. If the court determines that the director is entitled to indemnification under subsection

1, paragraph “a”, or to indemnification or advance for expenses under subsection 1, paragraph “b”, it shall also order the corporation to pay the director’s reasonable expenses incurred in connectionwithobtainingcourt-ordered indemnificationor advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under sub- section 1, paragraph “c”, it may also order the corporation to pay the director’s reasonable ex- penses to obtain court-ordered indemnification or advance for expenses.

Sec. 106. NEW SECTION. 504.856 DETERMINATION AND AUTHORIZATION OF IN- DEMNIFICATION. 1. A corporation shall not indemnify a director under section 504.852 unless authorized for

a specific proceeding after a determination has beenmade that indemnification of the director is permissible because the director has met the standard of conduct set forth in section 504.852. 2. The determination shall be made by any of the following: a. If there are two or more disinterested directors, by the board of directors by a majority

___________________

4 See chapter 1175, §385 herein

169 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

vote of all the disinterested directors, a majority of whom shall for such purpose constitute a quorum, or by amajority of themembers of a committee of two ormore disinterested directors appointed by such vote. b. By special legal counsel under one of the following circumstances: (1) Selected in the manner prescribed in paragraph “a”. (2) If there are fewer than two disinterested directors selected by the board in which selec-

tion directors who do not qualify as disinterested directors may participate. c. By themembers of amutual benefit corporation, but directors who are at the time parties

to the proceeding shall not vote on the determination. 3. Authorization of indemnification shall bemade in the samemanner as the determination

that indemnification is permissible, except that if there are fewer than two disinterested direc- tors or if the determination is made by special legal counsel, authorization of indemnification shall bemade by those entitled under subsection 2, paragraph “c”, to select special legal coun- sel.

Sec. 107. NEW SECTION. 504.857 INDEMNIFICATION OF OFFICERS. 1. A corporation may indemnify and advance expenses under this part to an officer of the

corporation who is a party to a proceeding because the person is an officer, according to all of the following: a. To the same extent as to a director. b. If the person is an officer but not a director, to such further extent as may be provided by

the articles of incorporation, the bylaws, a resolution of the board of directors, or contract, ex- cept for either of the following: (1) Liability in connection with a proceeding by or in the right of the corporation other than

for reasonable expenses incurred in connection with the proceeding. (2) Liability arising out of conduct that constitutes any of the following: (a) Receipt by the officer of a financial benefit to which the officer is not entitled. (b) An intentional infliction of harm on the corporation or the shareholders. (c) An intentional violation of criminal law. 2. The provisions of subsection 1, paragraph “b”, shall apply to an officerwho is also a direc-

tor if the basis on which the officer is made a party to a proceeding is an act or omission solely as an officer. 3. An officer of a corporation who is not a director is entitled to mandatory indemnification

under section 504.853, and may apply to a court under section 504.855 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those provisions.

Sec. 108. NEW SECTION. 504.858 INSURANCE. A corporation may purchase and maintain insurance on behalf of an individual who is a di-

rector or officer of the corporation, orwho,while a director or officer of the corporation, serves at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another domestic business or nonprofit corporation, partnership, joint venture, trust, employ- ee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from the individual’s status as a director or officer, whether or not the corporationwould havepower to indemnify or advance expenses to that individual against the same liability under this part.

Sec. 109. NEW SECTION. 504.859 APPLICATION OF PART. 1. A corporationmay, by a provision in its articles of incorporation or bylaws or in a resolu-

tion adopted or a contract approved by its board of directors ormembers, obligate itself in ad- vance of the act or omission giving rise to a proceeding to provide indemnification in accor- dance with section 504.852 or advance funds to pay for or reimburse expenses in accordance with section 504.854. Any such obligatory provision shall be deemed to satisfy the require- ments for authorization referred to in section 504.854, subsection 3, and in section 504.856,

170LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

subsection2or 3. Any suchprovision that obligates the corporation toprovide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordancewith section 504.854 to the fullest extent permitted by law, unless the provision specifically provides otherwise. 2. Any provision pursuant to subsection 1 shall not obligate the corporation to indemnify

or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for in- demnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or members of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by section 504.1104. 3. A corporation may, by a provision in its articles of incorporation, limit any of the rights

to indemnification or advance for expenses created by or pursuant to this part. 4. This part does not limit a corporation’s power to pay or reimburse expenses incurred by

a director or an officer in connection with the director’s or officer’s appearance as a witness in a proceeding at a time when the director or officer is not a party. 5. This part does not limit a corporation’s power to indemnify, advance expenses to, or pro-

vide or maintain insurance on behalf of an employee or agent.

Sec. 110. NEW SECTION. 504.860 EXCLUSIVITY OF PART. A corporation may provide indemnification or advance expenses to a director or an officer

only as permitted by this part.

SUBCHAPTER IX PERSONAL LIABILITY

Sec. 111. NEW SECTION. 504.901 PERSONAL LIABILITY. Except as otherwise provided in this chapter, a director, officer, employee, or member of a

corporation is not liable for the corporation’s debts or obligations and a director, officer,mem- ber, or other volunteer is not personally liable in that capacity, to any person for any action taken or failure to take any action in the discharge of the person’s duties except liability for any of the following: 1. The amount of any financial benefit to which the person is not entitled. 2. An intentional infliction of harm on the corporation or the members. 3. A violation of section 504.834. 4. An intentional violation of criminal law.

SUBCHAPTER X AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

PART 1 ARTICLES OF INCORPORATION

Sec. 112. NEW SECTION. 504.1001 AUTHORITY TO AMEND. A corporation may amend its articles of incorporation at any time to add or change a provi-

sion that is required or permitted in the articles or to delete a provision not required in the ar- ticles. Whether a provision is required or permitted in the articles is determined asof the effec- tive date of the amendment.

Sec. 113. NEW SECTION. 504.1002 AMENDMENT BY DIRECTORS. 1. Unless the articles provide otherwise, a corporation’s board of directors may adopt one

or more amendments to the corporation’s articles without member approval to do any of the following: a. Extend the duration of the corporation if it was incorporated at a timewhen limited dura-

tion was required by law. b. Delete the names and addresses of the initial directors.

171 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

c. Delete the name and address of the initial registered agent or registered office, if a state- ment of change is on file with the secretary of state. d. Change the corporate name by substituting the word “corporation”, “incorporated”,

“company”, “limited”, or the abbreviation “corp.”, “inc.”, “co.”, or “ltd.”, for a similar word or abbreviation in the name, or by adding, deleting, or changing a geographical attribution to the name. e. Make any other change expressly permitted by this subchapter to be made by director

action. 2. If a corporation has nomembers, its incorporators, until directors have been chosen, and

thereafter its board of directors, may adopt one or more amendments to the corporation’s ar- ticles subject to any approval required pursuant to section 504.1031. The corporation shall provide notice of any meeting at which an amendment is to be voted upon. The notice shall be in accordance with section 504.823, subsection 3. The notice must also state that the pur- pose, or one of the purposes, of the meeting is to consider a proposed amendment to the ar- ticles and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by a majority of the di- rectors in office at the time the amendment is adopted.

Sec. 114. NEW SECTION. 504.1003 AMENDMENT BY DIRECTORS AND MEMBERS. 1. Unless this chapter, the articles or bylaws of a corporation, themembers acting pursuant

to subsection 2, or the board of directors acting pursuant to subsection 3, require a greater vote or voting by class, or unless the articles or bylaws impose other requirements, an amendment to the corporation’s articles must be approved by all of the following to be adopted: a. The board if the corporation is a public benefit or religious corporation and the amend-

ment doesnot relate to the number of directors, the composition of theboard, the termof office of directors, or the method or way in which directors are elected or selected. b. Except as provided in section 504.1002, subsection 1, by the members by two-thirds of

the votes cast by the members or a majority of the members’ voting power that could be cast, whichever is less. c. In writing by any person or persons whose approval is required by a provision of the ar-

ticles authorized by section 504.1031. 2. The members may condition the adoption of an amendment on receipt of a higher per-

centage of affirmative votes or on any other basis. 3. If the board initiates an amendment to the articles or board approval is required by sub-

section 1 to adopt an amendment to the articles, the board may condition the amendment’s adoption on receipt of a higher percentage of affirmative votes or any other basis. 4. If the board or the members seek to have the amendment approved by the members at

amembershipmeeting, the corporation shall give notice to itsmembers of the proposedmem- bership meeting in writing in accordance with section 504.705. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment. 5. If the board or the members seek to have the amendment approved by the members by

written consent or written ballot, the material soliciting the approval shall contain or be ac- companied by a copy or summary of the amendment.

Sec. 115. NEW SECTION. 504.1004 CLASS VOTING BY MEMBERS ON AMEND- MENTS. 1. Unless the articles or bylaws of the corporation provide otherwise, themembers of a class

in a public benefit corporation are entitled to vote as a class on a proposed amendment to the articles if the amendment would change the rights of that class as to voting in amanner differ- ent than such amendment affects another class or members of another class. 2. Unless the articles or bylaws of the corporation provide otherwise, themembers of a class

in amutual benefit corporation are entitled to vote as a class on a proposed amendment to the articles if the amendment would do any of the following:

172LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

a. Affect the rights, privileges, preferences, restrictions, or conditions of that class as to vot- ing, dissolution, redemption, or transfer of memberships in a manner different than such amendment would affect another class. b. Change the rights, privileges, preferences, restrictions, or conditions of that class as to

voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, re- strictions, or conditions of another class. c. Increase or decrease the number of memberships authorized for that class. d. Increase the number of memberships authorized for another class. e. Effect an exchange, reclassification, or termination of the memberships of that class. f. Authorize a new class of memberships. 3. The members of a class of a religious corporation are entitled to vote as a class on a pro-

posed amendment to the articles only if a class vote is provided for in the articles or bylaws. 4. Unless the articles or bylaws of the corporation provide otherwise, if a class is to be divid-

ed into two or more classes as a result of an amendment to the articles of a public benefit or mutual benefit corporation, the amendment must be approved by the members of each class that would be created by the amendment. 5. Except as provided in the articles or bylaws of a religious corporation, if a class vote is

required to approve an amendment to the articles of the corporation, the amendment must be approved by themembers of the class by two-thirds of the votes cast by the class or amajority of the voting power of the class, whichever is less.

Sec. 116. NEW SECTION. 504.1005 ARTICLES OF AMENDMENT. A corporation amending its articles shall deliver to the secretary of state articles of amend-

ment setting forth: 1. The name of the corporation. 2. The text of each amendment adopted. 3. The date of each amendment’s adoption. 4. If approval by members was not required, a statement to that effect and a statement that

the amendment was approved by a sufficient vote of the board of directors or incorporators. 5. If approval by members was required, both of the following: a. The designation, number of memberships outstanding, number of votes entitled to be

cast by each class entitled to vote separately on the amendment, and number of votes of each class indisputably voting on the amendment. b. Either the total numberof votes cast for and against the amendment by each class entitled

to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each class and a statement that the number of votes cast for the amendment by each class was sufficient for approval by that class. 6. If approval of the amendment by some person or persons other than the members, the

board, or the incorporators is required pursuant to section 504.1031, a statement that the ap- proval was obtained.

Sec. 117. NEW SECTION. 504.1006 RESTATED ARTICLES OF INCORPORATION. 1. A corporation’s board of directorsmay restate the corporation’s articles of incorporation

at any time with or without approval by members or any other person. 2. The restatementmay include one ormore amendments to the articles. If the restatement

includes an amendment requiring approval by the members or any other person, it must be adopted as provided in section 504.1003. 3. If the restatement includes an amendment requiring approval by members, the board

must submit the restatement to the members for their approval. 4. If the board seeks to have the restatement approved by the members at a membership

meeting, the corporation shall notify each of its members of the proposed membership meet- ing in writing in accordancewith section 504.705. The noticemust also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and must con- tain or be accompanied by a copy or summary of the restatement that identifies any amend- ments or other changes the restatement would make in the articles.

173 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

5. If the board seeks to have the restatement approved by the members by written ballot or written consent, thematerial soliciting the approval shall contain or be accompanied by a copy or summary of the restatement that identifies any amendments or other changes the restate- ment would make in the articles. 6. A restatement requiring approval by themembers must be approved by the same vote as

an amendment to articles under section 504.1003. 7. If the restatement includes an amendment requiring approval pursuant to section

504.1031, the board must submit the restatement for such approval. 8. A corporation restating its articles shall deliver to the secretary of state articles of restate-

ment setting forth thenameof the corporation and the text of the restatedarticles of incorpora- tion together with a certificate setting forth all of the following: a. Whether the restatement contains anamendment to thearticles requiringapproval by the

members or anyother personother than theboard of directors and, if it doesnot, that theboard of directors adopted the restatement. b. If the restatement contains an amendment to the articles requiring approval by themem-

bers, the information required by section 504.1005. c. If the restatement contains an amendment to the articles requiring approval by a person

whose approval is required pursuant to section 504.1031, a statement that such approval was obtained. 9. Duly adopted restated articles of incorporation supersede the original articles of incorpo-

ration and all amendments to the original articles. 10. The secretary of state may certify restated articles of incorporation as the articles of in-

corporation currently in effect without including the certificate information required by sub- section 8.

Sec. 118. NEW SECTION. 504.1007 AMENDMENT PURSUANT TO JUDICIAL RE- ORGANIZATION. 1. A corporation’s articles may be amended without board approval or approval by the

members or approval required pursuant to section 504.1031 to carry out a plan of reorganiza- tion ordered or decreed by a court of competent jurisdiction under federal statute if the articles after amendment contain only provisions required or permitted by section 504.202. 2. An individual or individuals designated by the court shall deliver to the secretary of state

articles of amendment setting forth all of the following: a. The name of the corporation. b. The text of each amendment approved by the court. c. The date of the court’s order or decree approving the articles of amendment. d. The title of the reorganization proceeding in which the order or decree was entered. e. A statement that the court had jurisdiction of the proceeding under federal statute. 3. This section does not apply after entry of a final decree in the reorganization proceeding

even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.

Sec. 119. NEW SECTION. 504.1008 EFFECT OF AMENDMENT AND RESTATEMENT. An amendment to articles of incorporation does not affect a cause of action existing against

or in favor of the corporation, a proceeding to which the corporation is a party, any require- ment or limitation imposed upon the corporation or any property held by it by virtue of any trust uponwhich such property is held by the corporation or the existing rights of persons oth- er thanmembers of the corporation. An amendment changing a corporation’s name does not abate a proceeding brought by or against the corporation in its former name.

PART 2 BYLAWS

Sec. 120. NEW SECTION. 504.1021 AMENDMENT BY DIRECTORS. If a corporation has no members, its incorporators, until directors have been chosen, and

174LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

thereafter its board of directors, may adopt one or more amendments to the corporation’s by- laws subject to any approval required pursuant to section 504.1031. The corporation shall pro- vide notice of any meeting of directors at which an amendment is to be approved. The notice must begiven in accordancewith section 504.823, subsection 3. Thenoticemust also state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the bylaws and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by amajority of the directors in office at the time the amendment is adopted.

Sec. 121. NEW SECTION. 504.1022 AMENDMENT BY DIRECTORS AND MEMBERS. 1. Unless this chapter, the articles, bylaws, the members acting pursuant to subsection 2,

or the board of directors acting pursuant to subsection 3, require a greater vote or voting by class, or the articles or bylaws provide otherwise, an amendment to a corporation’s bylaws must be approved by all of the following to be adopted: a. By the board if the corporation is a public benefit or religious corporation and the amend-

ment doesnot relate to the number of directors, the composition of theboard, the termof office of directors, or the method or way in which directors are elected or selected. b. By themembers by two-thirds of the votes cast or amajority of thevotingpower,whichev-

er is less. c. In writing by any person or persons whose approval is required by a provision of the ar-

ticles authorized by section 504.1031. 2. Themembersmay condition the amendment’s adoption on its receipt of a higher percent-

age of affirmative votes or on any other basis. 3. If the board initiates an amendment to the bylaws or board approval is required by sub-

section 1 to adopt an amendment to the bylaws, the board may condition the amendment’s adoption on receipt of a higher percentage of affirmative votes or on any other basis. 4. If the board or the members seek to have the amendment approved by the members at

amembershipmeeting, the corporation shall give notice to itsmembers of the proposedmem- bershipmeeting inwriting in accordancewith section 504.705. The noticemust also state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment. 5. If the board or the members seek to have the amendment approved by the members by

written consent or written ballot, the material soliciting the approval shall contain or be ac- companied by a copy or summary of the amendment.

Sec. 122. NEW SECTION. 504.1023 CLASS VOTING BY MEMBERS ON AMEND- MENTS. 1. Unless the articles or bylaws of the corporation provide otherwise, themembers of a class

in a public benefit corporation are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would change the rights of that class as to voting in amanner differ- ent than such amendment affects another class or members of another class. 2. Unless the articles or bylaws of the corporation provide otherwise, members of a class in

a mutual benefit corporation are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would do any of the following: a. Affect the rights, privileges, preferences, restrictions, or conditions of that class as to vot-

ing, dissolution, redemption, or transfer of memberships in a manner different than such amendment would affect another class. b. Change the rights, privileges, preferences, restrictions, or conditions of that class as to

voting, dissolution, redemption, or transfer by changing the rights, privileges, preferences, re- strictions, or conditions of another class. c. Increase or decrease the number of memberships authorized for that class. d. Increase the number of memberships authorized for another class. e. Effect an exchange, reclassification, or termination of all or part of the memberships of

that class.

175 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

f. Authorize a new class of memberships. 3. The members of a class of a religious corporation are entitled to vote as a class on a pro-

posed amendment to the bylaws only if a class vote is provided for in the articles or bylaws. 4. Unless the articles or bylaws of the corporation provide otherwise, if a class is to be divid-

ed into two or more classes as a result of an amendment to the bylaws, the amendment must be approved by the members of each class that would be created by the amendment. 5. Unless the articles or bylaws of the corporation provide otherwise, if a class vote is re-

quired to approve an amendment to the bylaws, the amendment must be approved by the members of the class by two-thirds of the votes cast by the class or amajority of the votingpow- er of the class, whichever is less.

PART 3 ARTICLES OF INCORPORATION AND BYLAWS

Sec. 123. NEW SECTION. 504.1031 APPROVAL BY THIRD PERSONS. The articles of a corporationmay require that an amendment to the articles or bylaws be ap-

proved in writing by a specified person or persons other than the board. Such a provision in the articles may only be amended with the approval in writing of the person or persons speci- fied in the provision.

Sec. 124. NEW SECTION. 504.1032 AMENDMENT TERMINATINGMEMBERS OR RE- DEEMING OR CANCELING MEMBERSHIPS. 1. Unless the articles or bylaws provide otherwise, an amendment to the articles or bylaws

of a public benefit or mutual benefit corporation which would terminate all members or any class ofmembers or redeemor cancel allmemberships or any class ofmembershipsmustmeet the requirements of this chapter and this section. 2. Before adopting a resolution proposing such an amendment, the board of amutual bene-

fit corporation shall give notice of the general nature of the amendment to the members. 3. After adopting a resolution proposing such an amendment, the notice to members pro-

posing such amendment shall include one statement of up to five hundredwords opposing the proposed amendment, if such statement is submitted by any fivemembers ormembers having three percent or more of the voting power, whichever is less, not later than twenty days after the board has voted to submit such amendment to the members for their approval. In public benefit corporations, the production andmailing costs of the statement opposing theproposed amendment shall be paid by the requestingmembers. Inmutual benefit corporations, the pro- duction and mailing costs of the statement opposing the proposed amendment shall be paid by the corporation. 4. Any such amendment shall be approved by the members by two-thirds of the votes cast

by each class. 5. The provisions of section 504.622 shall not apply to any amendmentmeeting the require-

ments of this chapter and this section.

SUBCHAPTER XI MERGER

Sec. 125. NEW SECTION. 504.1101 APPROVAL OF PLAN OF MERGER. 1. Subject to the limitations set forth in section 504.1102, one or more nonprofit corpora-

tionsmaymergewithor intoanyoneormore corporationsornonprofit corporationsor limited liability companies, if the plan of merger is approved as provided in section 504.1103. 2. The plan of merger shall set forth all of the following: a. The name of each corporation or limited liability company planning to merge and the

name of the surviving corporation into which each plans to merge. b. The terms and conditions of the planned merger. c. The manner and basis, if any, of converting the memberships of each public benefit or

176LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

religious corporation intomembershipsof the survivingcorporationor limited liability compa- ny. d. If the merger involves a mutual benefit corporation, themanner and basis, if any, of con-

verting memberships of each merging corporation into memberships, obligations, or securi- ties of the surviving or any other corporation or limited liability company or into cash or other property in whole or in part. 3. The plan of merger may set forth any of the following: a. Any amendments to the articles of incorporation or bylaws of the surviving corporation

or limited liability company to be effected by the planned merger. b. Other provisions relating to the planned merger.

Sec. 126. NEW SECTION. 504.1102 LIMITATIONS ON MERGERS BY PUBLIC BENE- FIT OR RELIGIOUS CORPORATIONS. 1. Without the prior approval of the district court, a public benefit or religious corporation

may merge only with one of the following: a. A public benefit or religious corporation. b. A foreign corporation which would qualify under this chapter as a public benefit or reli-

gious corporation. c. Awholly owned foreign or domestic business ormutual benefit corporation, provided the

public benefit or religious corporation is the surviving corporation and continues tobe apublic benefit or religious corporation after the merger. d. A business or mutual benefit corporation or limited liability company, provided that all

of the following apply: (1) On or prior to the effective date of the merger, assets with a value equal to the greater

of the fairmarket valueof thenet tangible and intangible assets, includinggoodwill, of thepub- lic benefit or religious corporation or the fair market value of the public benefit or religious corporation if it were to be operated as a business concern are transferred or conveyed to one or more persons who would have received its assets under section 504.1406, subsection 1, paragraphs “e” and “f”, had it dissolved. (2) The business or mutual benefit corporation or limited liability company shall return,

transfer, or convey any assets held by it upon condition requiring return, transfer, or convey- ance, which condition occurs by reason of the merger, in accordance with such condition. (3) Themerger is approvedbyamajority of directorsof thepublic benefit or religious corpo-

ration who are not and will not become members or shareholders in or officers, employees, agents, or consultants of the surviving corporation. 2. Without the prior approval of the district court in a proceeding in which a guardian ad

litem has been appointed to represent the interests of the corporation, a member of a public benefit or religious corporation shall not receive or keep anything as a result of amerger other than a membership in the surviving public benefit or religious corporation. The court shall approve the transaction if it is in the public interest.

Sec. 127. NEW SECTION. 504.1103 ACTION ON PLAN BY BOARD, MEMBERS, AND THIRD PERSONS. 1. Unless this chapter, the articles, bylaws, or the board of directors ormembers acting pur-

suant to subsection 3 require a greater vote or voting by class, or the articles or bylaws impose other requirements, a plan ofmerger for a corporationmust be approvedby all of the following to be adopted: a. The board. b. The members, if any, by two-thirds of the votes cast or a majority of the voting power,

whichever is less. c. In writing by any person or persons whose approval is required by a provision of the ar-

ticles authorized by section 504.1031 for an amendment to the articles or bylaws. 2. If the corporation does not have members, the merger must be approved by a majority

of the directors in office at the time the merger is approved. In addition, the corporation shall

177 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

providenotice of anydirectors’meeting atwhich suchapproval is to beobtained in accordance with section 504.823, subsection 3. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed merger. 3. The board may condition its submission of the proposed merger, and the members may

condition their approval of the merger, on receipt of a higher percentage of affirmative votes or on any other basis. 4. If the board seeks to have the plan approved by the members at a membership meeting,

the corporation shall give notice to itsmembersof theproposedmembershipmeeting in accor- dancewith section504.705. Thenoticemust also state that thepurpose, or oneof thepurposes, of the meeting is to consider the plan of merger and contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan formembers of the surviving corpora- tion shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitlemembers to vote on the provision. The copy or summa- ry of the plan for members of the disappearing corporation shall include a copy or summary of the articles and bylaws which will be in effect immediately after the merger takes effect. 5. If theboard seeks tohave theplanapprovedby themembersbywritten consent orwritten

ballot, the material soliciting the approval shall contain or be accompanied by a copy or sum- mary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incor- poration or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing corporation shall include a copy or summary of the articles and bylaws which will be in effect immediately after the merger takes effect. 6. Voting by a class of members is required on a plan of merger if the plan contains a provi-

sion that, if contained in a proposed amendment to articles of incorporation or bylaws, would entitle the class of members to vote as a class on the proposed amendment under section 504.1004 or 504.1023. The plan must be approved by a class of members by two-thirds of the votes cast by the class or a majority of the voting power of the class, whichever is less. 7. After amerger is adopted, and at any time before articles ofmerger are filed, the planned

merger may be abandoned subject to any contractual rights without further action by mem- bers or other persons who approved the plan in accordancewith the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.

Sec. 128. NEW SECTION. 504.1104 ARTICLES OF MERGER. After a plan of merger is approved by the board of directors, and if required by section

504.1103, by themembers and any other persons, the surviving or acquiring corporation shall deliver to the secretary of state articles of merger setting forth all of the following, as applica- ble: 1. The plan of merger. 2. If approval of members was not required, a statement to that effect and a statement that

the plan was approved by a sufficient vote of the board of directors. 3. If approval by members was required, both of the following: a. The designation, number of memberships outstanding, number of votes entitled to be

cast by each class entitled to vote separately on the plan, and number of votes of each class indisputably voting on the plan. b. Either the total number of votes cast for and against the plan by each class entitled to vote

separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number of votes cast for the plan by each class was sufficient for ap- proval by that class. 4. If approval of the plan by some person or persons other than the members of the board

is required pursuant to section 504.1103, subsection 1, paragraph “c”, a statement that the ap- proval was obtained.

Sec. 129. NEW SECTION. 504.1105 EFFECT OF MERGER. When a merger takes effect, all of the following occur:

178LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

1. Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases. 2. The title to all real estate andotherproperty ownedby eachcorporationparty to themerg-

er is vested in the surviving corporation without reversion or impairment subject to any and all conditions to which the property was subject prior to the merger. 3. The surviving corporation has all the liabilities and obligations of each corporation party

to the merger. 4. A proceeding pending against any corporation party to the merger may be continued as

if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased. 5. The articles of incorporation and bylaws of the surviving corporation are amended to the

extent provided in the plan of merger.

Sec. 130. NEW SECTION. 504.1106 MERGER WITH FOREIGN CORPORATION. 1. Except as provided in section 504.1102, one ormore foreign business or nonprofit corpo-

rations may merge with one or more domestic nonprofit corporations if all of the following conditions are met: a. The merger is permitted by the law of the state or country under whose law each foreign

corporation is incorporated and each foreign corporation complies with that law in effecting the merger. b. The foreign corporation complies with section 504.1104 if it is the surviving corporation

of the merger. c. Each domestic nonprofit corporation complies with the applicable provisions of sections

504.1101 through 504.1103 and, if it is the surviving corporation of the merger, with section 504.1104. 2. Upon the merger taking effect, the surviving foreign business or nonprofit corporation

is deemed tohave irrevocably appointed the secretaryof state as its agent for service of process in any proceeding brought against it.

Sec. 131. NEW SECTION. 504.1107 BEQUESTS, DEVISES, AND GIFTS. Any bequest, devise, gift, grant, or promise contained in a will or other instrument of dona-

tion, subscription, or conveyance, that is made to a constituent corporation and which takes effect or remains payable after the merger, inures to the surviving corporation unless the will or other instrument otherwise specifically provides.

Sec. 132. NEW SECTION. 504.1108 CONVERSION. A corporation organized under this chapter that is an insurance company may voluntarily

elect to be organized as amutual insurance company under chapter 490 or 491 pursuant to the procedures set forth in section 514.23.

SUBCHAPTER XII SALE OF ASSETS

Sec. 133. NEW SECTION. 504.1201 SALE OF ASSETS IN REGULAR COURSE OF AC- TIVITIES AND MORTGAGE OF ASSETS. 1. A corporation may on the terms and conditions and for the consideration determined by

the board of directors do either of the following: a. Sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property in the

usual and regular course of its activities. b. Mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without

recourse, or otherwise encumber any or all of its propertywhether or not in theusual and regu- lar course of its activities. 2. Unless the articles require it, approval of the members or any other persons of a transac-

tion described in subsection 1 is not required.

179 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

Sec. 134. NEW SECTION. 504.1202 SALE OF ASSETS OTHER THAN IN REGULAR COURSE OF ACTIVITIES. 1. A corporation may sell, lease, exchange, or otherwise dispose of all, or substantially all,

of its property, with or without the goodwill, other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the corpora- tion’s board if the proposed transaction is authorized by subsection 2. 2. Unless this chapter, the articles, bylaws, or the board of directors ormembers acting pur-

suant to subsection 4 require a greater vote or voting by a class or the articles or bylaws impose other requirements, the proposed transaction to be authorized must be approved by all of the following: a. The board. b. Themembers by two-thirds of the votes cast or amajority of the voting power, whichever

is less. c. In writing by any person or persons whose approval is required by a provision of the ar-

ticles authorized by section 504.1031 for an amendment to the articles or bylaws. 3. If the corporation does not have members, the transaction must be approved by a vote of

a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors’ meeting at which such approval is to be ob- tained in accordance with section 504.823, subsection 3. The notice shall also state that the purpose, or oneof thepurposes, of themeeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction. 4. The board may condition its submission of the proposed transaction, and the members

may condition their approval of the transaction, on receipt of a higher percentage of affirma- tive votes or on any other basis. 5. If the corporation seeks to have the transaction approved by the members at a member-

ship meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with section 504.705. The notice must also state that the purpose, or one of the purposes, of themeeting is to consider the sale, lease, exchange, or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accom- panied by a copy or summary of a description of the transaction. 6. If the board is required to have the transaction approved by themembers by written con-

sent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of a description of the transaction. 7. After a sale, lease, exchange, or other disposition of property is authorized, the transac-

tion may be abandoned, subject to any contractual rights, without further action by the mem- bers or any other person who approved the transaction in accordance with the procedure set forth in the resolution proposing the transaction or, if none is set forth, in the manner deter- mined by the board of directors.

SUBCHAPTER XIII DISTRIBUTIONS

Sec. 135. NEW SECTION. 504.1301 PROHIBITED DISTRIBUTIONS. Except as authorized by section 504.1302, a corporation shall not make any distributions.

Sec. 136. NEW SECTION. 504.1302 AUTHORIZED DISTRIBUTIONS. 1. Amutual benefit corporationmay purchase itsmemberships if after the purchase is com-

pleted, both of the following apply: a. The corporation will be able to pay its debts as they become due in the usual course of

its activities. b. The corporation’s total assets will at least equal the sum of its total liabilities. 2. Corporationsmaymakedistributions upondissolution in conformitywith subchapter 14.

180LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

SUBCHAPTER XIV DISSOLUTION

PART 1 VOLUNTARY DISSOLUTION

Sec. 137. NEW SECTION. 504.1401 DISSOLUTION BY INCORPORATORS OR DIREC- TORS AND THIRD PERSONS. 1. A majority of the incorporators of a corporation that has no directors and no members

or amajority of the directors of a corporation that has nomembersmay, subject to any approv- al required by the articles or bylaws, dissolve the corporation by delivering articles of dissolu- tion to the secretary of state. 2. The corporation shall give notice of any meeting at which dissolution will be approved.

The notice must be in accordance with section 504.823, subsection 3. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation. 3. The incorporators or directors in approving dissolution shall adopt a plan of dissolution

indicating to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

Sec. 138. NEW SECTION. 504.1402 DISSOLUTION BY DIRECTORS, MEMBERS, AND THIRD PERSONS. 1. Unless this chapter, the articles, bylaws, or the board of directors ormembers acting pur-

suant to subsection 3 require a greater vote or voting by class or the articles or bylaws impose other requirements, dissolution is authorized if it is approved by all of the following: a. The board. b. The members, if any, by two-thirds of the votes cast or a majority of the voting power,

whichever is less. c. In writing by any person or persons whose approval is required by a provision of the ar-

ticles authorized by section 504.1031 for an amendment to the articles or bylaws. 2. If the corporation does not have members, dissolution must be approved by a vote of a

majority of the directors in office at the time the transaction is approved. In addition, the cor- poration shall providenotice of any directors’meeting atwhich suchapproval is to beobtained in accordance with section 504.823, subsection 3. The noticemust also state that the purpose, or one of the purposes, of themeeting is to consider dissolution of the corporation and contain or be accompanied by a copy or summary of the plan of dissolution. 3. The board may condition its submission of the proposed dissolution, and the members

may condition their approval of the dissolution, on receipt of a higher percentage of affirma- tive votes or on any other basis. 4. If the board seeks to have dissolution approved by the members at a membership meet-

ing, the corporation shall give notice to its members of the proposed membership meeting in accordance with section 504.705. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation and must contain or be ac- companied by a copy or summary of the plan of dissolution. 5. If the board seeks to have the dissolution approved by the members by written consent

orwrittenballot, thematerial soliciting theapproval shall contain orbe accompaniedby a copy or summary of the plan of dissolution. 6. Theplanofdissolution shall indicate towhomtheassets ownedorheldby the corporation

will be distributed after all creditors have been paid.

Sec. 139. NEW SECTION. 504.1404 ARTICLES OF DISSOLUTION. 1. At any time after dissolution is authorized, a corporation may dissolve by delivering ar-

ticles of dissolution to the secretary of state setting forth all of the following: a. The name of the corporation. b. The date dissolution was authorized. c. A statement that dissolution was approved by a sufficient vote of the board.

181 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

d. If approval of members was not required, a statement to that effect and a statement that dissolution was approved by a sufficient vote of the board of directors or incorporators. e. If approval by members was required, both of the following: (1) The designation, number of memberships outstanding, number of votes entitled to be

cast by each class entitled to vote separately on dissolution, and number of votes of each class indisputably voting on dissolution. (2) Either the total number of votes cast for and against dissolution by each class entitled

to vote separately on dissolution or the total number of undisputed votes cast for dissolution by each class and a statement that the number cast for dissolution by each class was sufficient for approval by that class. f. If approval of dissolution by some person or persons other than the members, the board,

or the incorporators is required pursuant to section 504.1402, subsection 1, paragraph “c”, a statement that the approval was obtained. 2. A corporation is dissolved upon the effective date of its articles of dissolution.

Sec. 140. NEW SECTION. 504.1405 REVOCATION OF DISSOLUTION. 1. A corporation may revoke its dissolution within one hundred twenty days of its effective

date. 2. Revocation of dissolution must be authorized in the samemanner as the dissolution was

authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without action by the members or any other person. 3. After the revocation of dissolution is authorized, the corporationmay revoke the dissolu-

tionbydelivering to the secretary of state for filing, articles of revocationof dissolution, togeth- er with a copy of its articles of dissolution, that set forth all of the following: a. The name of the corporation. b. The effective date of the dissolution that was revoked. c. The date that the revocation of dissolution was authorized. d. If the corporation’s board of directors or incorporators revoked the dissolution, a state-

ment to that effect. e. If the corporation’s board of directors revoked a dissolution authorized by the members

alone or in conjunction with another person or persons, a statement that revocation was per- mitted by action of the board of directors alone pursuant to that authorization. f. If member or third person action was required to revoke the dissolution, the information

required by section 504.1404, subsection 1, paragraphs “e” and “f”. 4. Revocation of dissolution is effective upon the effective date of the articles of revocation

of dissolution. 5. When the revocation of dissolution is effective, it relates back to and takes effect as of the

effective date of the dissolution and the corporation resumes carrying on its activities as if dis- solution had never occurred.

Sec. 141. NEW SECTION. 504.1406 EFFECT OF DISSOLUTION. 1. A dissolved corporation continues its corporate existence but shall not carry on any activ-

ities except those appropriate towindupand liquidate its affairs, including all of the following: a. Preserving and protecting its assets and minimizing its liabilities. b. Discharging or making provision for discharging its liabilities and obligations. c. Disposing of its properties that will not be distributed in kind. d. Returning, transferring, or conveying assets held by the corporation upon a condition re-

quiring return, transfer, or conveyance, which condition occurs by reason of the dissolution, in accordance with such condition. e. Transferring, subject to any contractual or legal requirements, its assets as provided in

or authorized by its articles of incorporation or bylaws. f. If the corporation is a public benefit or religious corporation, and a provision has not been

made in its articles or bylaws for distribution of assets on dissolution, transferring, subject to any contractual or legal requirement, its assets to one or more persons described in section

182LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

501(c)(3) of the Internal Revenue Code, or if the dissolved corporation is not described in sec- tion 501(c)(3) of the Internal RevenueCode, to one ormore public benefit or religious corpora- tions. g. If the corporation is a mutual benefit corporation and a provision has not been made in

its articles or bylaws for distribution of assets on dissolution, transferring its assets to itsmem- bers or, if it has nomembers, those personswhom the corporation holds itself out as benefiting or serving. h. Doing every other act necessary to wind up and liquidate its assets and affairs. 2. Dissolution of a corporation does not do any of the following: a. Transfer title to the corporation’s property. b. Subject its directors or officers to standards of conduct different from those prescribed

in subchapter 8. c. Change quorum or voting requirements for its board or members; change provisions for

selection, resignation, or removal of its directors or officers or both; or change provisions for amending its bylaws. d. Prevent commencement of a proceeding by or against the corporation in its corporate

name. e. Abate or suspendaproceedingpendingbyor against the corporation on the effectivedate

of dissolution. f. Terminate the authority of the registered agent.

Sec. 142. NEW SECTION. 504.1407 KNOWN CLAIMS AGAINST DISSOLVED COR- PORATION. 1. A dissolved corporationmay dispose of the known claims against it by following the pro-

cedure described in this section. 2. The dissolved corporation shall notify its known claimants in writing of the dissolution

at any time after the effective date of the dissolution. The written notice must do all of the fol- lowing: a. Describe information that must be included in a claim. b. Provide a mailing address where a claim may be sent. c. State the deadline,which shall not be fewer than onehundred twenty days from the effec-

tive date of the written notice, by which the dissolved corporation must receive the claim. d. State that the claim will be barred if not received by the deadline. 3. A claim against the dissolved corporation is barred if either of the following occurs: a. A claimant who was given written notice under subsection 2 does not deliver the claim

to the dissolved corporation by the deadline. b. A claimant whose claim was rejected by the dissolved corporation does not commence

a proceeding to enforce the claim within ninety days from the effective date of the rejection notice. 4. For purposes of this section, “claim” does not include a contingent liability or a claim

based on an event occurring after the effective date of dissolution.

Sec. 143. NEW SECTION. 504.1408 UNKNOWNCLAIMS AGAINST DISSOLVEDCOR- PORATION. 1. A dissolved corporation may also publish notice of its dissolution and request that per-

sons with claims against the corporation present them in accordance with the notice. 2. The notice must do all of the following: a. Be published one time in a newspaper of general circulation in the county where the dis-

solved corporation’s principal office is located, or, if none is located in this state, where its reg- istered office is or was last located. b. Describe the information that must be included in a claim and provide a mailing address

where the claim may be sent. c. State that a claim against the corporation will be barred unless a proceeding to enforce

the claim is commenced within five years after publication of the notice.

183 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

3. If the dissolved corporation publishes a newspaper notice in accordance with subsection 2, the claim of each of the following claimants is barred unless the claimant commences a pro- ceeding to enforce the claim against the dissolved corporationwithin five years after the publi- cation date of the newspaper notice: a. A claimant who did not receive written notice under section 504.1407. b. A claimant whose claim was timely sent to the dissolved corporation but not acted on. c. A claimant whose claim is contingent or based on an event occurring after the effective

date of dissolution. 4. A claim may be enforced under this section to the following extent, as applicable: a. Against the dissolved corporation, to the extent of its undistributed assets. b. If the assets havebeen distributed in liquidation, against anyperson, other than a creditor

of the corporation, towhom the corporation distributed its property to the extent of the distrib- utee’s pro rata share of the claim or the corporate assets distributed to such person in liquida- tion, whichever is less, but the distributee’s total liability for all claims under this section shall not exceed the total amount of assets distributed to the distributee.

PART 2 ADMINISTRATIVE DISSOLUTION

Sec. 144. NEW SECTION. 504.1421 GROUNDS FOR ADMINISTRATIVE DISSOLU- TION. The secretary of state may commence a proceeding under section 504.1422 to administra-

tively dissolve a corporation if any of the following occurs: 1. The corporation does not deliver its biennial report to the secretary of state, in a form that

meets the requirements of section 504.1613, within sixty days after the report is due. 2. The corporation is without a registered agent or registered office in this state for sixty

days or more. 3. The corporation does not notify the secretary of state within sixty days that its registered

agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued. 4. The corporation’s period of duration, if any, stated in its articles of incorporation expires.

Sec. 145. NEW SECTION. 504.1422 PROCEDURE FOR AND EFFECT OF ADMINIS- TRATIVE DISSOLUTION. 1. Upon determining that one or more grounds exist under section 504.1421 for dissolving

a corporation, the secretary of state shall serve the corporation with written notice of that de- termination under section 504.504. 2. If the corporation does not correct each ground for dissolution or demonstrate to the rea-

sonable satisfaction of the secretary of state that each ground determined by the secretary of state does not exist within at least sixty days after service of notice is perfected under section 504.504, the secretary of state may administratively dissolve the corporation by signing a cer- tificate of dissolution that recites the ground or grounds for dissolution and its effective date. The secretary of state shall file the original of the certificate of dissolution and serve a copy on the corporation under section 504.504. 3. A corporation that is administratively dissolved continues its corporate existence but

may5not carry on any activities except those necessary towind up and liquidate its affairs pur- suant to section 504.1406 and notify its claimants pursuant to sections 504.1407 and 504.1408. 4. Theadministrative dissolutionof a corporationdoesnot terminate the authority of its reg-

istered agent. 5. The secretary of state’s administrative dissolution of a corporation pursuant to this sec-

tion appoints the secretary of state as the corporation’s agent for service of process in any pro- ceedingbasedona cause of actionwhicharoseduring the time the corporationwas authorized to transact business in this state. Service of process on the secretary of state under this subsec- tion is service on the corporation. Upon receipt of process, the secretary of state shall serve

___________________

5 See chapter 1175, §386 herein

184LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

a copy of the process on the corporation as provided in section 504.504. This subsection does not preclude service on the corporation’s registered agent, if any.

Sec. 146. NEW SECTION. 504.1423 REINSTATEMENT FOLLOWING ADMINIS- TRATIVE DISSOLUTION. 1. A corporation administratively dissolved under section 504.1422may apply to the secre-

tary of state for reinstatement within two years after the effective date of dissolution. The ap- plication must state all of the following: a. The name of the corporation and the effective date of its administrative dissolution. b. That the ground or grounds for dissolution either did not exist or have been eliminated. c. That the corporation’s name satisfies the requirements of section 504.401. d. The federal tax identification number of the corporation. 2. a. The secretary of state shall refer the federal tax identification number contained in the

application for reinstatement to the department of revenue and finance.6 The department of revenue and finance shall report to the secretary of state the tax status of the corporation. If the department reports to the secretary of state that a filing delinquency or liability exists against the corporation, the secretary of state shall not cancel the certificate of dissolution un- til the filing delinquency or liability is satisfied. b. If the secretary of state determines that the application contains the information required

by subsection 1, that a delinquency or liability reported pursuant to paragraph “a” has been satisfied, and that all of the application information is correct, the secretary of state shall can- cel the certificate of dissolution and prepare a certificate of reinstatement reciting that deter- mination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under section 504.504. If the corporate name in subsection 1, para- graph “c”, is different from the corporate name in subsection 1, paragraph “a”, the certificate of reinstatement shall constitute an amendment to the articles of incorporation insofar as it pertains to the corporate name. 3. When reinstatement is effective, it relates back to and takes effect as of the effective date

of the administrative dissolution and the corporation shall resume carrying on its activities as if the administrative dissolution had never occurred.

Sec. 147. NEW SECTION. 504.1424 APPEAL FROM DENIAL OF REINSTATEMENT. 1. The secretary of state, upondenying a corporation’s application for reinstatement follow-

ing administrative dissolution, shall serve the corporationunder section 504.504with awritten notice that explains the reason or reasons for denial. 2. The corporationmay appeal the denial of reinstatement to the district court within ninety

days after service of the notice of denial is perfected by petitioning to set aside the dissolution and attaching to the petition copies of the secretary of state’s certificate of dissolution, the cor- poration’s application for reinstatement, and the secretary of state’s notice of denial of re- instatement. 3. The court may summarily order the secretary of state to reinstate the dissolved corpora-

tion or may take other action the court considers appropriate. 4. The court’s final decision may be appealed as in other civil proceedings.

PART 3 JUDICIAL DISSOLUTION

Sec. 148. NEW SECTION. 504.1431 GROUNDS FOR JUDICIAL DISSOLUTION. 1. The district court may dissolve a corporation in any of the following ways: a. In a proceeding brought by the attorney general, if any of the following is established: (1) The corporation obtained its articles of incorporation through fraud. (2) The corporationhas continued toexceedor abuse theauthority conferredupon it by law. b. Except as provided in the articles or bylaws of a religious corporation, in a proceeding

brought by fifty members or members holding five percent of the voting power, whichever is

___________________

6 The “department of revenue” probably intended

185 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

less, or by a director or any person specified in the articles, if any of the following is estab- lished: (1) The directors are deadlocked in themanagement of the corporate affairs, and themem-

bers, if any, are unable to break the deadlock. (2) The directors or those in control of the corporation have acted, are acting, or will act in

a manner that is illegal, oppressive, or fraudulent. (3) Themembers are deadlocked in voting power and have failed, for a period that includes

at least two consecutive annual meeting dates, to elect successors to directors whose terms have, or would otherwise have, expired. (4) The corporate assets are being misapplied or wasted. c. In a proceeding brought by a creditor, if either of the following is established: (1) The creditor’s claim has been reduced to judgment, the execution on the judgment is re-

turned unsatisfied, and the corporation is insolvent. (2) The corporation has admitted in writing that the creditor’s claim is due and owing and

the corporation is insolvent. d. In a proceeding brought by the corporation to have its voluntary dissolution continued

under court supervision. 2. Prior to dissolving a corporation, the court shall consider whether: a. There are reasonable alternatives to dissolution. b. Dissolution is in the public interest, if the corporation is a public benefit corporation. c. Dissolution is the best way of protecting the interests of members, if the corporation is

a mutual benefit corporation.

Sec. 149. NEW SECTION. 504.1432 PROCEDURE FOR JUDICIAL DISSOLUTION. 1. Venue for a proceeding brought by the attorney general to dissolve a corporation lies in

Polk county. Venue for a proceeding brought by any other party named in section 504.1431 lies in the county where a corporation’s principal office is located or, if none is located in this state, where its registered office is or was last located. 2. It is not necessary tomake directors ormembers parties to a proceeding to dissolve a cor-

poration unless relief is sought against them individually. 3. A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint

a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, or carry on the activities of the corporation until a full hearing can be held.

Sec. 150. NEW SECTION. 504.1433 RECEIVERSHIP OR CUSTODIANSHIP. 1. A court in a judicial proceeding brought to dissolve a public benefit ormutual benefit cor-

poration may appoint one or more receivers to wind up and liquidate, or one or more custo- dians tomanage, the affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before ap- pointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all of its property wherever located. 2. The court may appoint an individual, or a domestic or foreign business or nonprofit cor-

poration authorized to transact business in this state as a receiver or custodian. The courtmay require the receiver or custodian to post bond,with orwithout sureties, in an amount the court directs. 3. The court shall describe the powers and duties of the receiver or custodian in its appoint-

ing order, which may be amended including the following: a. The receiver or custodian may dispose of all or any part of the assets of the corporation

wherever located, at a public or private sale, if authorizedby the court. However, the receiver’s or custodian’s power to dispose of the assets of the corporation is subject to any trust and other restrictions that would be applicable to the corporation. The receiver or custodian may sue and defend in the receiver’s or custodian’s name as receiver or custodian of the corporation, as applicable, in all courts of this state.

186LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

b. The custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corpora- tion in the best interests of its members and creditors. 4. The court during a receivership may redesignate the receiver a custodian, and during a

custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its members, and creditors. 5. The court during the receivership or custodianshipmay order compensation paid and ex-

pense disbursements or reimbursements made to the receiver or custodian and to the receiv- er’s or custodian’s attorney from the assets of the corporation or proceeds from the sale of the assets.

Sec. 151. NEW SECTION. 504.1434 DECREE OF DISSOLUTION. 1. If after a hearing the court determines that one or more grounds for judicial dissolution

described in section 504.1431 exist, the court may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the secretary of state, who shall file it. 2. After entering the decree of dissolution, the court shall direct thewindingupof the corpo-

ration’s affairs and liquidation of the corporation in accordancewith section 504.1406 and the notification of its claimants in accordance with sections 504.1407 and 504.1408.

PART 4 MISCELLANEOUS

Sec. 152. NEW SECTION. 504.1441 DEPOSIT WITH STATE TREASURER. Assets of a dissolved corporation which should be transferred to a creditor, claimant, or

member of the corporationwho cannot be found orwho is not competent to receive them shall be reduced to cash subject to known trust restrictions and depositedwith the treasurer of state for safekeeping. However, in the treasurer of state’s discretion, propertymay be received and held in kind. When the creditor, claimant, or member furnishes satisfactory proof of entitle- ment to the amount deposited or property held in kind, the treasurer of state shall deliver to the creditor,member, or other person or to the representative of the creditor,member, or other person that amount or property.

SUBCHAPTER XV FOREIGN CORPORATIONS

PART 1 CERTIFICATE OF AUTHORITY

Sec. 153. NEW SECTION. 504.1501 AUTHORITY TO TRANSACT BUSINESS RE- QUIRED. 1. A foreign corporation shall not transact business in this state until it obtains a certificate

of authority from the secretary of state. 2. The following activities, among others, do not constitute transacting business within the

meaning of subsection 1: a. Maintaining, defending, or settling any proceeding. b. Holding meetings of the board of directors or members or carrying on other activities

concerning internal corporate affairs. c. Maintaining bank accounts. d. Maintaining offices or agencies for the transfer, exchange, or registration of member-

ships or securities or maintaining trustees or depositaries with respect to those securities. e. Selling through independent contractors. f. Soliciting or obtaining orders, whether by mail or through employees or agents or other-

wise, if the orders require acceptance outside this state before they become contracts.

187 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

g. Creating or acquiring indebtedness, mortgages, or security interests in real or personal property. h. Securing or collecting debts or enforcing mortgages or security interests in property se-

curing the debts. i. Owning, without more, real or personal property. j. Conducting an isolated transaction that is completedwithin thirty days and that is not one

in the course of repeated transactions of a like nature. k. Transacting business in interstate commerce.

Sec. 154. NEW SECTION. 504.1502 CONSEQUENCES OF TRANSACTING BUSINESS WITHOUT AUTHORITY. 1. A foreign corporation transacting business in this state without a certificate of authority

shall not maintain a proceeding in any court in this state until it obtains a certificate of author- ity. 2. The successor to a foreign corporation that transacted business in this statewithout a cer-

tificate of authority and the assignee of a cause of action arising out of that business shall not maintain a proceeding on that cause of action in any court in this state until the foreign corpo- ration or its successor obtains a certificate of authority. 3. A court may stay a proceeding commenced by a foreign corporation, its successor, or as-

signee until the court determines whether the foreign corporation or its successor requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains the certificate. 4. A foreign corporation is liable for a civil penalty of an amount not to exceed a total of one

thousand dollars if it transacts business in this state without a certificate of authority. The at- torney general may collect all penalties due under this subsection. 5. Notwithstanding subsections 1 and 2, the failure of a foreign corporation to obtain a cer-

tificate of authority does not impair the validity of its corporate acts or prevent it from defend- ing any proceeding in this state.

Sec. 155. NEW SECTION. 504.1503 APPLICATION FOR CERTIFICATE OF AUTHOR- ITY. 1. A foreign corporation may apply for a certificate of authority to transact business in this

state by delivering an application to the secretary of state. The application must set forth all of the following: a. The name of the foreign corporation or, if its name is unavailable for use in this state, a

corporate name that satisfies the requirements of section 504.1506. b. The name of the state or country under whose law it is incorporated. c. The date of incorporation and period of duration. d. The address of its principal office. e. The address of its registered office in this state and the name of its registered agent at that

office. f. The names and usual business or home addresses of its current directors and officers. g. Whether the foreign corporation has members. 2. The foreign corporation shall deliver the completed application to the secretary of state,

and shall also deliver to the secretary of state a certificate of existence or a document of similar import duly authenticatedby the secretary of state or other official havingcustodyof corporate records in the state or country underwhose law it is incorporatedwhich is datednoearlier than ninety days prior to the date the application is filed with the secretary of state.

Sec. 156. NEW SECTION. 504.1504 AMENDED CERTIFICATE OF AUTHORITY. 1. A foreign corporation authorized to transact business in this state shall obtain an

amended certificate of authority from the secretary of state if it changes any of the following: a. Its corporate name. b. The period of its duration.

188LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

c. The state or country of its incorporation. 2. The requirements of section 504.1503 for obtaining an original certificate of authority ap-

ply to obtaining an amended certificate under this section.

Sec. 157. NEW SECTION. 504.1505 EFFECT OF CERTIFICATE OF AUTHORITY. 1. A certificate of authority authorizes the foreign corporation to which it is issued to trans-

act business in this state subject, however, to the right of the state to revoke the certificate as provided in this chapter. 2. A foreign corporation with a valid certificate of authority has the same rights and has the

same privileges as and, except as otherwise provided by this chapter, is subject to the same duties, restrictions, penalties, and liabilities now or later imposed on a domestic corporation of like character. 3. This chapter does not authorize this state to regulate the organization or internal affairs

of a foreign corporation authorized to transact business in this state.

Sec. 158. NEW SECTION. 504.1506 CORPORATE NAME OF FOREIGN CORPORA- TION. 1. If the corporatenameof a foreign corporationdoesnot satisfy the requirements of section

504.401, the foreign corporation, to obtain or maintain a certificate of authority to transact business in this state,may use a fictitious name to transact business in this state if the corpora- tion’s real name is unavailable and it delivers to the secretary of state for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name. 2. Except as authorized by subsections 3 and 4, the corporate nameof a foreign corporation,

including a fictitious name, must be distinguishable upon the records of the secretary of state from all of the following: a. The corporate name of a nonprofit or business corporation incorporated or authorized

to transact business in this state. b. A corporate name reserved or registered under section 504.402 or 504.403 or section

490.402 or 490.403. c. The fictitious name of another foreign business or nonprofit corporation authorized to

transact business in this state. 3. A foreign corporation may apply to the secretary of state for authorization to use in this

state the name of another corporation incorporated or authorized to transact business in this state that is not distinguishable upon the records of the secretary of state from the name ap- plied for. The secretary of state shall authorize use of the name applied for if either of the fol- lowing applies: a. Theother corporation consents to theuse inwritingand submits anundertaking in a form

satisfactory to the secretary of state to change its name to a name that is distinguishable upon the records of the secretary of state from the name of the applying corporation. b. The applicant delivers to the secretary of state a certified copy of a final judgment of a

court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state. 4. A foreign corporationmay use in this state the name, including the fictitious name, of an-

other domestic or foreignbusiness ornonprofit corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and the foreign cor- poration has filed documentation satisfactory to the secretary of state of the occurrence of any of the following: a. The foreign corporation has merged with the other corporation. b. The foreign corporation has been formed by reorganization of the other corporation. c. The foreign corporation has acquired all or substantially all of the assets, including the

corporate name, of the other corporation. 5. If a foreign corporation authorized to transact business in this state changes its corporate

name to one that does not satisfy the requirements of section 504.401, it shall not transact busi-

189 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

ness in this state under the changed name until it adopts a name satisfying the requirements of section 504.401 and obtains an amended certificate of authority under section 504.1504.

Sec. 159. NEWSECTION. 504.1507 REGISTEREDOFFICE ANDREGISTEREDAGENT OF FOREIGN CORPORATION. Each foreign corporation authorized to transact business in this state shall continuously

maintain in this state both of the following: 1. A registered office with the same address as that of its registered agent. 2. A registered agent, who may be any of the following: a. An individual who resides in this state and whose office is identical to the registered of-

fice. b. A domestic business or nonprofit corporation whose office is identical to the registered

office. c. A foreign business or nonprofit corporation authorized to transact business in this state

whose office is identical to the registered office.

Sec. 160. NEW SECTION. 504.1508 CHANGE OF REGISTERED OFFICE OR REG- ISTERED AGENT OF FOREIGN CORPORATION. 1. A foreign corporation authorized to transact business in this state may change its regis-

tered office or registered agent by delivering to the secretary of state for filing a statement of change that sets forth all of the following that apply: a. The name of its registered office or registered agent. b. If the current registered office is to be changed, the address of its new registered office. c. If the current registered agent is to be changed, the name of its new registered agent and

the new agent’s written consent to the appointment, either on the statement or attached to it. d. That after the change or changes are made, the addresses of its registered office and the

office of its registered agent will be identical. 2. If a registered agent changes the address of its business office, the agent may change the

address of the registered office of any foreign corporation forwhich the agent is the registered agent by notifying the corporation in writing of the change and signing either manually or in facsimile and delivering to the secretary of state for filing a statement of change that complies with the requirements of subsection 1 and recites that the corporation has been notified of the change. 3. If a registered agent changes the registered agent’s business address to another place, the

registered agent may change the address of the registered office of any corporation for which the registered agent is the registered agent by filing a statement as required in subsection 2 for each corporation, or by filing a single statement for all corporations named in the notice, except that it must be signed either manually or in facsimile only by the registered agent and must recite that a copy of the statement has beenmailed to each corporation named in the no- tice. 4. A corporation may also change its registered office or registered agent in its biennial re-

port as provided in section 504.1613.

Sec. 161. NEWSECTION. 504.1509 RESIGNATIONOF REGISTEREDAGENTOF FOR- EIGN CORPORATION. 1. The registered agent of a foreign corporationmay resign as agent by signing and deliver-

ing to the secretary of state for filing the original statement of resignation. The statement of resignation may include a statement that the registered office is also discontinued. The registered agent shall send a copy of the statement of resignation by certified mail to

the corporation at its principal office and to the registered office, if not discontinued. The reg- istered agent shall certify to the secretary of state that the copies have been sent to the corpora- tion, including the date the copies were sent. 2. The agency appointment is terminated, and the registered office discontinued if so pro-

vided, on the date on which the statement is filed with the secretary of state.

190LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

Sec. 162. NEW SECTION. 504.1510 SERVICE ON FOREIGN CORPORATION. 1. The registered agent of a foreign corporation authorized to transact business in this state

is the corporation’s agent for service of process, notice, or demand required or permitted by law to be served on the foreign corporation. 2. A foreign corporation may be served by registered or certified mail, return receipt re-

quested, addressed to the secretary of the foreign corporation at its principal office shown in its application for a certificate of authority or in itsmost recent biennial report filed under sec- tion 504.1613 if any of the following conditions apply: a. The foreign corporation has no registered agent or its registered agent cannot with rea-

sonable diligence be served. b. The foreign corporation haswithdrawn from transacting business in this state under sec-

tion 504.1521. c. The foreign corporation has had its certificate of authority revoked under section

504.1532. 3. Service is perfected under subsection 2 at the earliest of any of the following: a. The date the foreign corporation receives the mail. b. The date shown on the return receipt, if signed on behalf of the foreign corporation. c. Five days after its deposit in the United States mail, as evidenced by the postmark, if

mailed postpaid and correctly addressed. 4. This section does not prescribe the only means, or necessarily the required means, of

serving a foreign corporation. A foreign corporation may also be served in any other manner permitted by law.

PART 2 WITHDRAWAL

Sec. 163. NEW SECTION. 504.1521 WITHDRAWAL OF FOREIGN CORPORATION. 1. A foreign corporation authorized to transact business in this state shall not withdraw

from this state until it obtains a certificate of withdrawal from the secretary of state. 2. A foreign corporation authorized to transact business in this statemay apply for a certifi-

cate of withdrawal by delivering an application to the secretary of state for filing. The applica- tion shall set forth all of the following: a. The name of the foreign corporation and the name of the state or country under whose

law it is incorporated. b. That it is not transacting business in this state and that it surrenders its authority to trans-

act business in this state. c. That it revokes the authority of its registered agent to accept service on its behalf and ap-

points the secretary of state as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to do business in this state. d. A mailing address to which the secretary of state may mail a copy of any process served

on the secretary of state under paragraph “c”. 3. After the withdrawal of the corporation is effective, service of process on the secretary

of state under this section is service on the foreign corporation. Upon receipt of process, the secretary of state shall mail a copy of the process to the foreign corporation at the mailing ad- dress set forth in its application for withdrawal.

PART 3 REVOCATION OF CERTIFICATE OF AUTHORITY

Sec. 164. NEW SECTION. 504.1531 GROUNDS FOR REVOCATION. 1. The secretary of statemay commence a proceeding under section 504.1532 to revoke the

certificate of authority of a foreign corporation authorized to transact business in this state if any of the following applies:

191 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

a. The foreign corporation does not deliver the biennial report to the secretary of state in a form that meets the requirements of section 504.1613 within sixty days after it is due. b. The foreign corporation is without a registered agent or registered office in this state for

sixty days or more. c. The foreign corporation does not inform the secretary of state under section 504.1508 or

504.1509 that its registered agent or registered office has changed, that its registered agent has resigned, or that its registered office has been discontinued within ninety days of the change, resignation, or discontinuance. d. An incorporator, director, officer, or agent of the foreign corporation signed a document

that suchpersonknewwas false in anymaterial respectwith intent that thedocument bedeliv- ered to the secretary of state for filing. e. The secretary of state receives a duly authenticated certificate from the secretary of state

or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated, stating that it has been dissolved or disappeared as the result of a merger. 2. The attorney general may commence a proceeding under section 504.1532 to revoke the

certificate of authority of a foreign corporation authorized to transact business in this state if the corporation has continued to exceed or abuse the authority conferred upon it by law.

Sec. 165. NEW SECTION. 504.1532 PROCEDURE FOR AND EFFECT OF REVOCA- TION. 1. The secretary of state, upon determining that one or more grounds exist under section

504.1531 for revocation of a certificate of authority, shall serve the foreign corporation with written notice of that determination under section 504.1510. 2. The attorney general, upon determining that one or more grounds exist under section

504.1531, subsection 2, for revocation of a certificate of authority, shall request the secretary of state to serve, and the secretary of state shall serve, the foreign corporationwithwritten no- tice of that determination under section 504.1510. 3. If the foreign corporation does not correct each ground for revocation or demonstrate to

the reasonable satisfaction of the secretary of state or attorney general that each ground for revocation determined by the secretary of state or attorney general does not exist within sixty days after service of the notice is perfected under section 504.1510, the secretary of state may revoke the foreign corporation’s certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The secretary of state shall file the original of the certificate and serve a copy on the foreign corporation under sec- tion 504.1510. 4. The authority of a foreign corporation to transact business in this state ceases on the date

shown on the certificate revoking its certificate of authority. 5. The secretary of state’s revocation of a foreign corporation’s certificate of authority ap-

points the secretary of state the foreign corporation’s agent for service of process in any pro- ceeding based on a cause of action that arose during the time the foreign corporation was au- thorized to transact business in this state. Service of process on the secretary of state under this subsection is service on the foreign corporation. Upon receipt of process, the secretary of state shall mail a copy of the process to the secretary of the foreign corporation at its princi- pal office shown in its most recent biennial report or in any subsequent communications re- ceived from the corporation stating the current mailing address of its principal office, or, if none are on file, in its application for a certificate of authority. 6. Revocation of a foreign corporation’s certificate of authority does not terminate the au-

thority of the registered agent of the corporation.

Sec. 166. NEW SECTION. 504.1533 APPEAL FROM REVOCATION. 1. A foreign corporation may appeal the secretary of state’s revocation of its certificate of

authority to the district court within thirty days after the service of the certificate of revocation is perfected under section 504.1510 by petitioning to set aside the revocation and attaching to

192LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

thepetition copies of its certificateof authority and the secretary of state’s certificate of revoca- tion. 2. The courtmay summarily order the secretary of state to reinstate the certificate of author-

ity or may take any other action the court considers appropriate. 3. The court’s final decision may be appealed as in other civil proceedings.

SUBCHAPTER XVI RECORDS AND REPORTS

PART 1 RECORDS

Sec. 167. NEW SECTION. 504.1601 CORPORATE RECORDS. 1. A corporation shall keep as permanent records minutes of all meetings of its members

and board of directors, a record of all actions taken by the members or directors without a meeting, anda recordof all actions takenby committees of theboardof directors as authorized by section 504.826, subsection 4. 2. A corporation shall maintain appropriate accounting records. 3. A corporation or its agent shall maintain a record of its members in a form that permits

preparation of a list of the names and addresses of all members, in alphabetical order by class, showing the number of votes each member is entitled to vote. 4. A corporation shallmaintain its records inwritten formor in another formcapable of con-

version into written form within a reasonable time. 5. A corporation shall keep a copy of all of the following records: a. Its articles or restated articles of incorporation and all amendments to them currently in

effect. b. Its bylaws or restated bylaws and all amendments to them currently in effect. c. Resolutions adopted by its board of directors relating to the characteristics, qualifica-

tions, rights, limitations, and obligations of members or any class or category of members. d. Theminutes of all meetings ofmembers and records of all actions approved by themem-

bers for the past three years. e. All written communications to members generally within the past three years, including

the financial statements furnished for the past three years under section 504.1611. f. A list of the names and business or home addresses of its current directors and officers. g. Its most recent biennial report delivered to the secretary of state under section 504.1613.

Sec. 168. NEW SECTION. 504.1602 INSPECTION OF RECORDS BY MEMBERS. 1. Subject to subsection 5, amember is entitled to inspect and copy, at a reasonable timeand

location specified by the corporation, any of the records of the corporationdescribed in section 504.1601, subsection 5, if themembergives the corporationwrittennotice or awritten demand at least five business days before the date on which the member wishes to inspect and copy. 2. Subject to subsection7 5 and 6, a member is entitled to inspect and copy, at a reasonable

time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection 3 and gives the corporation writtennotice at least ten businessdaysbefore thedateonwhich thememberwishes to inspect and copy: a. Excerpts from any records required to bemaintained under section 504.1601, subsection

1, to the extent not subject to inspection under section 504.1602, subsection 1. b. Accounting records of the corporation. c. The membership list. 3. A member may inspect and copy the records identified in subsection 2 only if all of the

following apply: a. The member’s demand is made in good faith and for a proper purpose. b. The member describes with reasonable particularity the purpose of the demand and the

records the member desires to inspect.

___________________

7 The word “subsections” probably intended

193 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

c. The records are directly connected to the purpose described. d. The board consents, if consent is required by section 504.1605. 4. This section does not affect either of the following: a. The right of a member to inspect records under section 504.711 or, if the member is in

litigation with the corporation, to the same extent as any other litigant. b. The power of a court, independently of this chapter, to compel the production of corpo-

rate records for examination. 5. Thearticles or bylawsof a religious corporationmay limit or abolish the right of amember

under this section to inspect and copy any corporate record. 6. A corporation may, within ten business days after receiving a demand for inspection of

amembership list under section 504.711 or subsection 2 of this section, respond to the demand with awritten proposal offering a reasonable alternative to the demand for inspection thatwill achieve the purpose of the demand without providing access to or a copy of the membership list. A proposal offering an alternative that reasonably and in a timely manner accomplishes a proper purpose identified in a demand for inspection shall be considered to offer a reason- able alternative. A proposal for a reasonable alternative that has been accepted by the person making the demand for inspection shall cease to be considered a reasonable alternative if the terms of the proposal are not carried out by the corporation within a reasonable time after ac- ceptance of the proposal. For the purposes of this subsection, a reasonable alternative may include, but is not limited to, a communicationpreparedby amember andmailedby the corpo- ration at the expense of the member.

Sec. 169. NEW SECTION. 504.1603 SCOPE OF INSPECTION RIGHT. 1. Amember’s agent or attorney has the same inspection and copying rights as themember

the agent or attorney represents. 2. The right to copy records under section 504.1602 includes, if reasonable, the right to re-

ceive copies made by photographic, xerographic, or other means. 3. The corporationmay impose a reasonable charge, covering the costs of labor andmateri-

al, for copies of any documents provided to themember. The charge shall not exceed the esti- mated cost of production or reproduction of the records. 4. The corporation may comply with a member’s demand to inspect the record of members

under section 504.1602, subsection 2, paragraph “c”, by providing the member with a list of its members that was compiled no earlier than the date of the member’s demand.

Sec. 170. NEW SECTION. 504.1604 COURT-ORDERED INSPECTION. 1. If a corporation does not allow amemberwho complieswith section 504.1602, subsection

1, to inspect and copy any records required by that subsection to be available for inspection, the district court in the county where the corporation’s principal office is located or, if none is located in this state, where its registered office is located, may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the member. 2. If a corporation does not within a reasonable time allow a member to inspect and copy

any other records, or propose a reasonable alternative to such inspection and copying, the member who complies with section 504.1602, subsections 2 and 3, may apply to the district court in the county where the corporation’s principal office is located or, if none is located in this state, where its registered office is located, for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis. 3. If the court orders inspectionandcopyingof the recordsdemandedorother relief deemed

appropriate by the court, it shall also order the corporation to pay themember’s costs, includ- ing reasonable attorney fees incurred, to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.

194LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

4. If the court orders inspectionandcopyingof the recordsdemandedorother relief deemed appropriate by the court, it may impose reasonable restrictions on the use or distribution of the records by the demanding member.

Sec. 171. NEW SECTION. 504.1605 LIMITATIONS ON USE OF CORPORATE REC- ORDS. Without consent of the board, no corporate record may be obtained or used by any person

for any purpose unrelated to amember’s interest as amember. Without limiting the generality of the foregoing,without the consent of the board, corporate records including,without limita- tion, a membership list or any part thereof, shall not be used for any of the following: 1. To solicit money or property unless such money or property will be used solely to solicit

the votes of the members in an election to be held by the corporation. 2. For any commercial purpose. 3. For sale to or purchase by any person. 4. For any purpose that is detrimental to the interests of the corporation.

Sec. 172. NEW SECTION. 504.1606 INSPECTION OF RECORDS BY DIRECTORS. 1. A director of a corporation is entitled to inspect and copy the books, records, and docu-

ments of the corporation at any reasonable time to the extent reasonably related to the perfor- mance of the director’s duties as a director, including duties as a member of a committee, but not for any other purpose or in any manner that would violate any duty to the corporation. 2. The district court of the county where the corporation’s principal office, or if none in this

state, its registered office, is located may order inspection and copying of the books, records, and documents at the corporation’s expense, upon application of a director who has been re- fused such inspection rights, unless the corporation establishes that the director is not entitled to such inspection rights. The court shall dispose of an application under this subsection on an expedited basis. 3. If an order is issued, the court may include provisions protecting the corporation from

undue burden or expense, and prohibiting the director from using information obtained upon exercise of the inspection rights in a manner that would violate a duty to the corporation, and may also order the corporation to reimburse the director for the director’s costs, including rea- sonable counsel fees, incurred in connection with the application.

PART 2 REPORTS

Sec. 173. NEW SECTION. 504.1611 FINANCIAL STATEMENTS FOR MEMBERS. 1. Except as provided in the articles or bylaws of a religious corporation, a corporation upon

written demand from a member shall furnish that member the corporation’s latest annual fi- nancial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries or affiliates, as appropriate, that include a balance sheet as of the end of the fiscal year and a statement of operations for that year. 2. If annual financial statements are reported upon by a public accountant, the accountant’s

report must accompany them.

Sec. 174. NEW SECTION. 504.1612 REPORT OF INDEMNIFICATION TO MEMBERS. If a corporation indemnifies or advances expenses to a director under section 504.852,

504.853, 504.854, or 504.855 in connection with a proceeding by or in the right of the corpora- tion, the corporation shall report the indemnification or advance in writing to the members with or before the notice of the next meeting of members.

Sec. 175. NEW SECTION. 504.1613 BIENNIAL REPORT FOR SECRETARY OF STATE. 1. Eachdomestic corporation, and each foreign corporation authorized to transact business

195 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

in this state, shall deliver to the secretary of state for filing a biennial report on a form pre- scribed and furnished by the secretary of state that sets forth all of the following: a. The name of the corporation and the state or country under whose law it is incorporated. b. The address of the corporation’s registered office and thenameof the corporation’s regis-

tered agent at that office in this state, together with the consent of any new registered agent. c. The address of the corporation’s principal office. d. The names and addresses of the president, secretary, treasurer, and one member of the

board of directors. e. Whether or not the corporation has members. 2. The information in the biennial report must be current on the date the biennial report is

executed on behalf of the corporation. 3. The first biennial report shall be delivered to the secretary of state between January 1 and

April 1 of the first odd-numbered year following the calendar year in which a domestic corpo- ration was incorporated or a foreign corporation was authorized to transact business. Subse- quent biennial reports must be delivered to the secretary of state between January 1 and April 1 of the following odd-numbered calendar years. 4. a. If a biennial report does not contain the information required by this section, the secre-

tary of state shall promptly notify the reporting domestic or foreign corporation in writing and return the report to the corporation for correction. b. A filing fee for the biennial report shall be determined by the secretary of state. c. For purposes of this section, each biennial report shall contain information related to the

two-year period immediately preceding the calendar year in which the report is filed. 5. The secretary of state may provide for the change of registered office or registered agent

on the form prescribed by the secretary of state for the biennial report, provided that the form contains the information required in section 504.502 or 504.503. If the secretary of state deter- mines that a biennial report does not contain the information required by this section but otherwise meets the requirements of section 504.502 or 504.503 for the purpose of changing the registered office or registeredagent, the secretary of state shall file the statement of change of registered office or registered agent, effective as provided in section 504.114, before return- ing the biennial report to the corporation as provided in this section. A statement of change of registered office or agent pursuant to this subsection shall be executed by a person autho- rized to execute the biennial report.

SUBCHAPTER XVII TRANSITION PROVISIONS

Sec. 176. NEW SECTION. 504.1701 APPLICATION TO EXISTING DOMESTIC COR- PORATIONS. 1. A domestic corporation that is incorporated under chapter 504A is subject to this chapter

beginning on July 1, 2005. 2. Prior to July 1, 2005, only the following corporations are subject to the provisions of this

chapter: a. A corporation formed on or after January 1, 2005. b. A corporation incorporated under chapter 504A, that voluntarily elects to be subject to

the provisions of this chapter, in accordance with the procedures set forth in subsection 3. 3. A corporation incorporated under chapter 504Amay voluntarily elect to be subject to the

provisions of this chapter by doing all of the following: a. The corporation shall amend or restate its articles of incorporation to indicate that the

corporation voluntarily elects to be subject to the provisions of this chapter. b. The corporation shall deliver a copy of the amended or restated articles of incorporation

to the secretary of state for filing and recording in the office of the secretary of state. 4. After the amended or restated articles of incorporation have been filedwith the secretary

of state all of the following shall occur:

196LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

a. The corporation shall be subject to all provisions of this chapter. b. The secretary of state shall issue a certificate of filing of the corporation’s amended or

restated articles of incorporation indicating that the corporationhasmadea voluntary election to be subject to the provisions of this chapter and shall deliver the certificate to the corporation or to the corporation’s representative. c. The secretary of state shall not file the amended or restated articles of incorporation of

a corporation pursuant to this subsection unless at the time of filing the corporation is validly organized under the chapter under which it is incorporated, and has filed all biennial reports that are required and paid all fees that are due in connection with such reports. 5. The voluntary election of a corporation to be subject to the provisions of this chapter that

ismadepursuant to this sectiondoesnot affect any right accruedor established, or any liability or penalty incurred by the corporation pursuant to the chapter under which the corporation was organized prior to such voluntary election.

Sec. 177. NEW SECTION. 504.1702 APPLICATION TO QUALIFIED FOREIGN COR- PORATIONS. A foreign corporation authorized to transact business in this state prior to January 1, 2005,

is subject to this chapter beginning on July 1, 2005, but is not required to obtain a new certifi- cate of authority to transact business under this chapter.

Sec. 178. NEW SECTION. 504.1703 SAVINGS PROVISIONS. 1. Except as provided in subsection 2, the repeal of a statute by this Act does not affect any

of the following: a. The operation of the statute or any action taken under it before its repeal. b. Any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or in-

curred under the statute before its repeal. c. Any violation of the statute or any penalty, forfeiture, or punishment incurred because

of the violation, before its repeal. d. Any proceeding, reorganization, or dissolution commenced under the statute before its

repeal, and the proceeding, reorganization, or dissolution may be completed in accordance with the statute as if it had not been repealed. 2. If a penalty or punishment imposed for violation of a statute repealed by this Act is re-

duced by this chapter, the penalty or punishment, if not already imposed, shall be imposed in accordance with this chapter.

Sec. 179. NEW SECTION. 504.1704 SEVERABILITY. If anyprovisionof this chapter or its application toanypersonor circumstance is held invalid

by a court of competent jurisdiction, the invalidity does not affect other provisions or applica- tions of the chapter that can be given effect without the invalid provision or application, and to this end the provisions of the chapter are severable.

Sec. 180. NEW SECTION. 504.1705 PUBLIC BENEFIT, MUTUAL BENEFIT, AND RELI- GIOUS CORPORATIONS. For thepurposesof this chapter, eachdomestic corporation shall bedeemedapublic benefit,

mutual benefit, or religious corporation as follows: 1. A corporation designated by statute as a public benefit corporation, amutual benefit cor-

poration, or a religious corporation is deemed to be the type of corporation designated by that statute. 2. A corporation that does not comewithin subsection 1 but is organized primarily or exclu-

sively for religious purposes is a religious corporation. 3. A corporation that does not come within subsection 1 or 2 but which is recognized as ex-

empt under section 501(c)(3) of the Internal Revenue Code, or any successor section, is a pub- lic benefit corporation. 4. A corporation that does not come within subsection 1, 2, or 3, but which is organized for

197 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

a public or charitable purpose andwhich upon dissolutionmust distribute its assets to a public benefit corporation, theUnited States, a state, or a person recognized as exempt under section 501(c)(3) of the Internal Revenue Code, or any successor section, is a public benefit corpora- tion. 5. A corporation that does not comewithin subsection 1, 2, 3, or 4 is amutual benefit corpo-

ration.

Sec. 181. Section 15E.64, subsection 2, unnumbered paragraph 1, Code 2003, is amended to read as follows: To facilitate the organization of an Iowa capital investment corporation, both of the follow-

ing persons shall serve as incorporators as provided in section 504.201 or 504A.28, as applica- ble:

Sec. 182. Section 230A.12, unnumbered paragraph 1, Code Supplement 2003, is amended to read as follows: Each community mental health center established or continued in operation pursuant to

section 230A.3, shall be organized under the Iowa nonprofit corporation Act appearing as chapter 504A, Code and Code Supplement 2003, except that a community mental health cen- ter organized after January 1, 2005, and a communitymental health center continued in opera- tion after July 1, 2005, shall be organized under the revised Iowa nonprofit corporation Act appearing as chapter 504, and except that a communitymental health center organized under former chapter 504prior to July 1, 1974, and existingunder theprovisions of chapter 504,Code 1989, shall not be required by this chapter to adopt the Iowa nonprofit corporation Act or the revised Iowanonprofit corporationAct if it is not otherwise required todo soby law. Theboard of directors of each such community mental health center shall enter into an agreement with the county or affiliated counties which are to be served by the center, which agreement shall include but need not be limited to the period of time for which the agreement is to be in force, what services the center is to provide for residents of the county or counties to be served, stan- dards the center is to follow in determining whether and to what extent persons seeking ser- vices from the center shall be considered able to pay the cost of the services received, and poli- cies regarding availability of the center’s services to persons who are not residents of the county or counties served by the center. The board of directors, in addition to exercising the powers of the board of directors of a nonprofit corporation may:

Sec. 183. Section 490.401, subsection 2, paragraph b, Code 2003, is amended to read as fol- lows: b. A corporate name reserved or registered under section 490.402, 490.403, 504.402, or

504A.7.

Sec. 184. Section 497.22, unnumbered paragraph 1, Code 2003, is amended to read as fol- lows: Sections Section 504.1613 or sections 504A.83 and 504A.84 apply to a cooperative associa-

tion organized under this chapter in the samemanner as those sections apply to a corporation organized under chapter 504 or 504A. In addition to the information required to be set forth in the biennial report under section 504.1613 or 504A.83, the cooperative association shall also set forth the total amount of business transacted, number ofmembers, total expense of opera- tion, total amount of indebtedness, and total profits or losses for each calendar or fiscal year of the two-year periodwhich ended immediately preceding the first day of January of the year in which the report is filed.

Sec. 185. Section 498.24, unnumbered paragraph 1, Code 2003, is amended to read as fol- lows: Sections Section 504.1613 or sections 504A.83 and 504A.84 apply to a cooperative associa-

tion organized under this chapter in the samemanner as those sections apply to a corporation

198LAWS OF THE EIGHTIETH G.A., 2004 SESSIONCH. 1049

organized under chapter 504 or 504A. In addition to the information required to be set forth in the biennial report under section 504.1613 or 504A.83, the cooperative association shall also set forth the total amount of business transacted, number ofmembers, total expense of opera- tion, total amount of indebtedness, and total profits or losses for each calendar or fiscal year of the two-year periodwhich ended immediately preceding the first day of January of the year in which the report is filed.

Sec. 186. Section 499.49, Code 2003, is amended to read as follows: 499.49 BIENNIAL REPORT. Sections Section 504.1613 or sections 504A.83 and 504A.84 apply to a cooperative organized

under this chapter in the samemanner as those sections apply to a corporation organized un- der chapter 504 or 504A. In addition to the information required to be set forth in the biennial report under section 504.1613 or 504A.83, the cooperative shall also set forth the number of members of the cooperative, the percentage of the cooperative’s business done with or for its ownmembers during each of the fiscal or calendar years of the preceding two-year period, the percentage of the cooperative’s business donewith or for each class of nonmembers specified in section 499.3, and any other information deemed necessary by the secretary of state to ad- vise the secretary whether the cooperative is actually functioning as a cooperative.

Sec. 187. Section 504A.102, Code 2003, is amended to read as follows: 504A.102 FARM AID ASSOCIATIONS — TERMINATION AND ELECTION TO BE GOV-

ERNED UNDER THE IOWA NONPROFIT CORPORATION ACT OR REVISED IOWA NON- PROFIT CORPORATION ACT. 1. TERMINATION. A corporation incorporated and governed under chapter 176 as an as-

sociation organized under chapter 176 prior to July 1, 2005, that is not governed as a corpora- tion under this chapter on or before January 1, 2005, or under chapter 504 on or after January 1, 2005, but prior to June 30, 2005, as provided in this section is terminated on July 1, 2005. 2. ELECTION PROCEDURE. A corporation incorporated and governed under chapter 176

as an association organized under chapter 176 prior to July 1, 2005, may elect to be governed as a corporation under this chapter prior to January 1, 2005, or under chapter 504 on or after January 1, 2005, but prior to July 1, 2005. The association governed under chapter 176 shall be a corporation governed under this chapter or chapter 504 by complying with all of the fol- lowing requirements: a. The adoption of a resolution or resolutions at a meeting of the board of directors upon

receiving the vote of amajority of the directors in office and of themembers of the association in the samemanner as provided in section 504A.35 or 504.1003. The resolution or resolutions shall recite that the association voluntarily elects to be governed as a corporation under this chapter. The resolutionmust designate the address of the association’s initial registeredoffice and the name of the association’s registered agent at that office, if any. b. The adoption of articles of incorporation in compliance with section 504A.29 or 504.202

at a meeting of the board of directors upon receiving the vote of a majority of the directors in office and of the members of the association in the same manner as provided in section 504A.35 or 504.1003. The articles of incorporation may be a restatement, substitution, or amendment of articles of incorporation adopted by the association pursuant to section 176.3. The articles of incorporationmay bemade part of the resolution or resolutions adopted by the association pursuant to paragraph “a” of this subsection. c. Upon the adoption of a resolution or resolutions and articles of incorporation as provided

in paragraphs “a” and “b” of this subsection, the president or vice president and secretary or an assistant secretary shall execute an instrument of verification. The instrument of verifica- tion shall certify all of the following: (1) The association name as provided in the association’s articles of incorporation pursuant

to section 176.3 and the new corporation’s corporate name, if different, as provided in section 504A.6 or 504.401. (2) An identification of each resolution adopted under paragraph “a” of this subsection,

199 LAWS OF THE EIGHTIETH G.A., 2004 SESSION CH. 1049

including the date of each resolution’s adoption, and a recitation that each resolution and the articles of incorporation for the new corporation are filed with the office of secretary of state. (3) The address of the new corporation’s registered office and the name of the new corpora-

tion’s registered agent as provided in section 504A.8 or 504.501. d. All of the following shall be delivered to the office of the secretary of state for filing and

recording as provided in section 504A.30 or 504.111: (1) Each resolution adopted pursuant to paragraph “a” of this subsection. (2) The new corporation’s articles of incorporation adopted pursuant to paragraph “b” of

this subsection. (3) The instrument of verification that is executed pursuant to paragraph “c” of this subsec-

tion. 3. CERTIFICATE OF INCORPORATION. Upon For an association electing to be governed

under this chapter prior to January 1, 2005, upon filing of the resolution or resolutions, the ar- ticles of incorporation, and the instrument of verification as provided in subsection 2, theoffice of secretary of state shall issue a certificate of incorporation and send the certificate to the cor- poration or its representative as provided in section 504A.30. For an association electing to be governed under chapter 504 on or after January 1, 2005, but prior to July 1, 2005, unless a delayed effective date is specified, the corporate existence beginswhen the articles of incorpo- ration are filed as provided in section 504.203. 4. LIABILITIES AND RIGHTS PRIOR TO THE ELECTION. An association’s election to be

governed as a corporation under this chapter or chapter 504 does not affect any right accrued or established, or any liability or penalty incurred, under the provisions of chapter 176, prior to filing of the resolution or resolutions, articles of incorporation, and instrument of verifica- tion by the association as provided in subsection 2. 5. REPEAL. This section is repealed on July 1, 2005.

Sec. 188. Section 534.501, subsection 4, Code 2003, is amended to read as follows: 4. AMENDMENT PROCEDURE. The procedure for amending articles of incorporation or

adopting restated articles for mutual associations is that specified in section 504A.35 or chap- ter 504, subchapter 10, as applicable, and for stock associations it is that specified in section 490.726 and sections 490.1002 through 490.1005.

Sec. 189. Section 602.8102, subsection 70, Code Supplement 2003, is amended to read as follows: 70. Certify a copy of a decree of dissolution of a nonprofit corporation to the secretary of

state and the recorder in the county in which the corporation is located as provided in section 504A.62 or 504.1434, as applicable.

Sec. 190. Chapter 504A, Code 2005, is repealed effective July 1, 2005.

Sec. 191. CODEEDITORDIRECTIVE. After July 1, 2005, the Code editor is directed to re- move Code references to chapter 504A as required due to the July 1, 2005, repeal of sections 504A.1 through 504A.102 by this Act.

Sec. 192. EFFECTIVE DATE. Except as otherwise provided in this Act, this Act takes ef- fect July 1, 2004.

Approved April 8, 2004