Title 12 — Corporations and Associations

Title 12 Corporations and Associations

§ 12:1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Acts 1984, No. 841, §1, eff. July 13, 1984; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

CHAPTER 1 BUSINESS CORPORATION ACT

PART 1 GENERAL PROVISIONS

SUBPART A SHORT TITLE AND RESERVATION OF POWER

§ 12:1-101 Short title

This Chapter shall be known and may be cited as the "Business Corporation Act". References in this Chapter and elsewhere in the Revised Statutes to the Business Corporation Act or the Business Corporation Law shall be deemed to be references to this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-102 Reservation of power to amend or repeal

The legislature 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 amendment or repeal.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B FILING DOCUMENTS

§ 12:1-120 Requirements for documents; extrinsic facts

A. A document must satisfy the requirements of this Section, and of any other provision of this Chapter that adds to or varies these requirements, to be entitled to filing by the secretary of state.

B. The filing of the document in the office of the secretary of state must be required or permitted by this Chapter.

C. The document must contain the information required by this Chapter. It may contain other information as well.

D. The document must be typewritten or printed or, if transmitted electronically or online, it must be in a format that can be retrieved or reproduced in typewritten or printed form. The inclusion of handwritten notations or entries on a typewritten or printed document does not affect the eligibility of the document for filing.

E. The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

F. The document must be signed by one of the following:

(1) By the chairman of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers.

(2) If directors have not been selected or the corporation has not been formed, by an incorporator.

(3) If the corporation is in the hands of a receiver, liquidator, trustee, or other court-appointed fiduciary, by that fiduciary.

G. The person executing the document shall sign it and state, beneath or opposite the person's signature, the person's name and the capacity in which the document is signed. The document may but need not contain a corporate seal.

H. Except as provided in R.S. 12:1701, the following documents shall be acknowledged by one of the persons who signs the document or instead shall be executed by authentic act:

(1) Articles of incorporation.

(2) Written consent to appointment by a registered agent.

(3) Articles of correction.

(4) Articles of amendment.

(5) Articles of merger.

(6) Articles of share exchange.

(7) Articles of domestication.

(8) Articles of nonprofit conversion.

(9) Articles of nonprofit domestication and conversion.

(10) Articles of entity conversion.

(11) Articles of dissolution.

(12) Articles of revocation of dissolution.

(13) Articles of termination.

(14) Articles of reinstatement.

(15) Contract acknowledgment statement by a corporation that contracts with the state.

(16) Articles of charter surrender.

I. If the secretary of state has prescribed a mandatory form for the document pursuant to R.S. 12:1-121, the document must be in or on the prescribed form.

J. The document must be delivered to the office of the secretary of state for filing. Delivery may be made by electronic or online 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 or online, the secretary of state may require one exact or conformed copy to be delivered with the document, except as provided in R.S. 12:1-503.

K. When the document is delivered to the office of the secretary of state for filing, the correct filing fee and any tax, fee, or penalty required to be paid therewith by this Chapter or other provision of law must be paid, or provision for payment made, in a manner permitted by the secretary of state.

L. Whenever a provision of this Chapter permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:

(1) The manner in which the facts will operate upon the terms of the plan or filed document shall be set forth in the plan or filed document.

(2) The facts may include any of the following but are not limited to:

(a) Any of the following that is available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data.

(b) A determination or action by any person or body, including the corporation or any other party to a plan or filed document.

(c) The terms of, or actions taken under, an agreement to which the corporation is a party or any other agreement or document.

(3) As used in this Subsection:

(a) "Filed document" means a document filed with the secretary of state under any provision of this Chapter except R.S. 12:1-1621.

(b) "Plan" means a plan of domestication, nonprofit conversion, entity conversion, merger, or share exchange.

(4) The following provisions of a plan or filed document may not be made dependent on facts outside the plan or filed document:

(a) The name and address of any person required in a filed document.

(b) The registered office of any entity required in a filed document.

(c) The registered agent of any entity required in a filed document.

(d) The number of authorized shares and designation of each class or series of shares.

(e) The effective date of a filed document.

(f) Any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given.

(5) If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is not ascertainable by reference to a source described in Subparagraph (L)(2)(a) of this Section or a document that is a matter of public record, or the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the secretary of state articles of amendment setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this Paragraph are deemed to be authorized by the authorization of the original filed document or plan to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.

M. As used in this Section, "online" means through the secretary of state's commercial online computer system.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 554, §2, eff. Jan. 1, 2018; Acts 2023, No. 26, §2.

§ 12:1-121 Forms

A.(1) The secretary of state may prescribe and furnish on request forms for any of the following:

(a) An application for a certificate of existence and standing.

(b) A foreign corporation's application for a certificate of authority to do business in this state.

(c) A foreign corporation's application for a certificate of withdrawal.

(d) The annual report.

(2) If the secretary of state so requires, use of these forms is mandatory.

B. The secretary of state may prescribe and furnish forms for other documents required or permitted to be filed by this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1-122 Filing, service, and copying fees

The secretary of state shall collect the fee authorized in R.S. 49:222 when a document described in this Chapter is delivered to the secretary of state for filing.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-123 Effective time and date of document

A. Except as provided in Subsections B and C of this Section and in R.S. 12:1-124(C), a document accepted for filing is effective at one of the following:

(1) The date and time of its receipt for filing, as evidenced by such means as the secretary of state may use for the purpose of recording the date and time of receipt.

(2) A later time, on the date of receipt, specified in the document as its effective time.

B. Except as provided in Subsection C of this Section, a corporation's original articles of incorporation become effective when signed as provided in R.S. 12:1-120 if all of the following conditions are met:

(1) The articles are received for filing by the secretary of state within five days, exclusive of legal holidays, after the date that the articles are signed.

(2) The articles are accepted for filing.

C. A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be earlier than the first date and time that the document otherwise would have become effective under this Section or later than the ninetieth day after the date the document is received for filing by the secretary of state.

D. A document is accepted for filing when the secretary of state files the document as provided in R.S. 12:1-125(B).

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-124 Correcting filed document

A. A domestic or foreign corporation may correct a document filed with the secretary of state if any of the following apply:

(1) The document contains an inaccuracy.

(2) The document was defectively signed, attested, sealed, verified, or acknowledged.

(3) The electronic transmission was defective.

B. A document is corrected by delivering to the secretary of state for filing articles of correction. The articles of correction shall do all of the following:

(1) Describe the document, including its filing date, or attach a copy of it to the articles.

(2) Specify the inaccuracy or defect to be corrected.

(3) Correct the inaccuracy or defect.

C. Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-125 Filing duty of secretary of state

A. If a document delivered to the office of the secretary of state for filing satisfies the requirements of R.S. 12:1-120, the secretary of state shall file it.

B. The secretary of state files a document by recording it as filed on the date and time of receipt. After filing a document, except as provided in R.S. 12:1-503, 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 of filing.

C. If the secretary of state refuses to file a document, it shall be returned to the domestic or foreign corporation or its representative within five days after the document was delivered, together with a brief, written explanation of the reason for the refusal.

D. The secretary of state's duty to file documents under this Section is ministerial. The secretary's filing or refusing to file a document does not do any of the following:

(1) Affect the validity or invalidity of the document in whole or part.

(2) Relate to the correctness or incorrectness of information contained in the document.

(3) Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-126 Appeal from secretary of state's refusal to file document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-127 Evidentiary effect of copy of filed document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-128 Certificate of existence and standing

A. Anyone may apply to the secretary of state to furnish a certificate of existence and standing for a domestic corporation or a certificate of authorization and standing for a foreign corporation.

B. A certificate of existence, or authorization, and standing shall state all of the following:

(1) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state.

(2) One of the following:

(a) That the domestic corporation is duly incorporated under the law of this state, along with the date of its incorporation and the period of its duration if less than perpetual.

(b) That the foreign corporation is authorized to do business in this state.

(3) [Reserved.]

(4) That its most recent annual report required by R.S. 12:1-1621 or R.S. 12:309 has been filed with the secretary of state and that the corporation is in good standing, or that its most recent annual report has not been filed as required by law.

(5) That the corporation is not dissolved or terminated.

C. Subject to any qualification stated in the certificate, a certificate of existence, or authorization, and standing issued by the secretary of state may be relied upon as conclusive evidence that the domestic corporation is in existence or the foreign corporation is authorized to transact business in this state, and, if the certificate so states, that the corporation is in good standing.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-129 Penalty for signing false document

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C SECRETARY OF STATE

§ 12:1-130 Powers

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D DEFINITIONS

§ 12:1-140 Definitions

In this Chapter:

(1) "Articles of incorporation" means the original articles of incorporation, all amendments thereof, and any other documents permitted or required to be filed by a domestic business corporation with the secretary of state under any provision of this Chapter except R.S. 12:1-1621. If an amendment of the articles or any other document filed under this Chapter restates the articles in their entirety, thenceforth the "articles" shall not include any prior documents.

(2) "Authorized shares" means the shares of all classes a domestic or foreign corporation is authorized to issue.

(2A) "Beneficial shareholder" means a person who owns the beneficial interest in shares, including a record shareholder or a person on whose behalf shares are registered in the name of an intermediary or nominee.

(3) "Conspicuous" means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it. For example, text in italics, boldface, contrasting color, capitals, or underlined is conspicuous.

(4) "Corporation", "domestic corporation", or "domestic business corporation" means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of this Chapter.

(5) "Deliver" or "delivery" means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery, and, if authorized in accordance with R.S. 12:1-141, by electronic transmission.

(6) "Distribution" means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in any of the following forms:

(a) A declaration or payment of a dividend.

(b) A purchase, redemption, or other acquisition of shares.

(c) A distribution of indebtedness.

(d) Any other form.

(6A) "Document" means either of the following:

(a) Any tangible medium on which information is inscribed, and includes any writing or written instrument.

(b) An electronic record.

(6B) "Domestic unincorporated entity" means an unincorporated entity whose internal affairs are governed by the laws of this state.

(7) "Effective date of notice" is defined in R.S. 12:1-141.

(7A) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(7B) "Electronic record" means information that is stored in an electronic or other medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with R.S. 12:1-141(J).

(7C) "Electronic transmission" or "electronically transmitted" means any form or process of communication, not directly involving the physical transfer of paper or another tangible medium, that is both of the following:

(a) Suitable for the retention, retrieval, and reproduction of information by the recipient.

(b) Retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with R.S. 12: 1-141(J).

(7D) "Eligible entity" means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.

(7E) "Eligible interests" means interests or memberships.

(8) [Reserved.]

(9) "Entity" includes a domestic and foreign business corporation, a domestic and foreign nonprofit corporation, an estate, a trust, a domestic and foreign unincorporated entity, and a state, the United States, and a foreign government.

(9A) The phrase "facts objectively ascertainable" outside of a filed document or plan is defined in R.S. 12:1-120(L).

(9B) "Expenses" means reasonable expenses of any kind, including attorney's fees and other litigation-related expenses, that are incurred in connection with a matter.

(9C) "Filing entity" means an unincorporated entity that is required by law to file a public organic document for any of the purposes stated in the definition of that term.

(10) "Foreign corporation" means a corporation incorporated under a law other than the law of this state, that would be a business corporation if incorporated under the laws of this state.

(10A) "Foreign nonprofit corporation" means a corporation incorporated under a law other than the law of this state, that would be a nonprofit corporation if incorporated under the laws of this state.

(10B) "Foreign unincorporated entity" means an unincorporated entity whose internal affairs are governed by an organic law of a jurisdiction other than this state.

(11) "Governmental subdivision" includes parish, authority, county, district, municipality, and any other state or local political subdivision.

(12) "Includes" denotes a partial definition.

(13) "Individual" means a natural person.

(13A) "Intangible property" means a thing that is classified as incorporeal, as distinguished from corporeal, or property that is classified as intangible, as distinguished from tangible, by the law of the jurisdiction that governs its ownership.

(13B) "Interest" means either or both of the following rights under the organic law of an unincorporated entity:

(a) The right to receive distributions from the entity either in the ordinary course or upon liquidation, other than as an assignee or other similar role.

(b) The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs.

(13C) "Interest holder" means a person who owns an interest.

(13D) "Knowledge" means actual knowledge. "Know" has a corresponding meaning.

(14) "Means" denotes an exhaustive definition.

(14A) "Membership" means the rights of a member in a domestic or foreign nonprofit corporation.

(14B) "Nonfiling entity" means an unincorporated entity that is not a filing entity.

(14C) "Nonprofit corporation" or "domestic nonprofit corporation" means a corporation incorporated under the laws of this state and subject to the provisions of the Nonprofit Corporation Law.

(15) "Notice" is defined in R.S. 12:1-141.

(15A) "Organic document" means a public organic document or a private organic document.

(15B) "Organic law" means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity.

(15C) "Owner liability" means personal liability for a debt, obligation, or liability of a domestic or foreign business or nonprofit corporation or unincorporated entity that is imposed on a person solely by reason of the person's status as a shareholder, partner, member, or interest holder or solely by the terms of articles of incorporation, bylaws, or an organic document under a provision of the organic law of an entity authorizing the articles of incorporation, bylaws or an organic document to make one or more specified shareholders, partners, members, or interest holders liable in their capacity as shareholders, partners, members, or interest holders for all or specified debts, obligations, or liabilities of the entity.

(16) "Person" includes an individual and an entity.

(16A) "Personal property" means a thing that is classified as movable, as distinguished from immovable, or property that is classified as personal, as distinguished from real, by the law of the jurisdiction that governs its ownership.

(17) "Principal office" means the office, in or out of this state, so designated in the most recent annual report or, until an annual report is filed, in the articles of incorporation, where the principal executive offices of a domestic or foreign corporation are located.

(17A) "Private organic document" means any document, other than the public organic document, if any, that determines the internal governance of an unincorporated entity. Where a private organic document has been amended or restated, the term means the private organic document as last amended or restated.

(17B) "Public organic document" means the document, if any, that is filed of public record to create an unincorporated entity, to allow it to own immovable property as to third persons, or to protect its shareholders, partners, members, or interest holders against owner liability. Where a public organic document has been amended or restated, the term means the public organic document as last amended or restated.

(18) "Proceeding" includes civil suit and civil, criminal, administrative, and investigatory action.

(18A) "Public corporation" means a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national securities association.

(18B) "Qualified director" is defined in R.S. 12:1-143.

(18C) "Real property" means a thing that is classified as immovable, as distinguished from movable, or property that is classified as real, as distinguished from personal, by the law of the jurisdiction that governs its ownership.

(19) "Record date" means the date established under Part 6 or 7 of this Chapter on which a corporation determines the identity of its shareholders and their shareholdings for purposes of this Chapter. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.

(19A) "Record shareholder" means either of the following:

(a) The person in whose name shares are registered in the records of the corporation.

(b) The person identified as the beneficial owner of shares in a beneficial ownership certificate pursuant to R.S. 12:1-723 on file with the corporation to the extent of the rights granted by such certificate.

(20) "Secretary" means the corporate officer responsible for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.

(21) "Shareholder" means, unless varied for purposes of a specific provision of this Chapter, a record shareholder.

(22) "Shares" means the units into which the proprietary interests in a corporation are divided.

(22A) "Sign" or "signature" means, with present intent to authenticate or adopt a document, either of the following:

(a) To execute or adopt a tangible symbol in a document, and includes any manual, facsimile, or conformed signature.

(b) To attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

(23) "State," when referring to a part of the United States, includes a state and commonwealth, and their agencies and governmental subdivisions, and a territory and insular possession, and their agencies and governmental subdivisions, of the United States.

(24) "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.

(24A) "Tangible property" means a thing that is classified as corporeal, as distinguished from incorporeal, or property that is classified as tangible as distinguished from intangible, by the law of the jurisdiction that governs its ownership.

(24B) "Unincorporated entity" means an organization or juridical person that has a separate juridical personality and that is not any of the following: a domestic or foreign business or nonprofit corporation, an estate, a trust, a state, the United States, a foreign government, or any agency or subdivision of a foreign government. In addition, the term includes a general partnership, limited liability company, limited partnership, partnership in commendam, registered limited liability partnership, business trust, joint stock association, and unincorporated nonprofit association, regardless of whether any of those included forms of organization is treated as a juridical person under the relevant organic law.

(25) "Unanimous governance agreement" is defined in R.S. 12:1-732.

(25A) "United States" includes a district, authority, bureau, commission, department, and any other agency of the United States.

(25B) "Votes entitled to be cast", when used in specifying the proportion of votes required to provide a shareholder quorum or approval of an action, means the number of votes in a voting group that would be cast at a meeting at which all shares in the voting group were present and voting.

(26) "Voting group" means all shares of one or more classes or series that under the articles of incorporation or this Chapter are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or this Chapter to vote generally on the matter are for that purpose a single voting group.

(27) "Voting power" means the current power to vote in the election of directors.

(27A) "Voting trust beneficial owner" means an owner of a beneficial interest in shares of the corporation held in a voting trust established pursuant to R.S. 12:1-730(A). "Unrestricted voting trust beneficial owner" means, with respect to any shareholder rights, a voting trust beneficial owner whose entitlement to exercise the shareholder right in question is not inconsistent with the voting trust agreement.

(28) "Writing" or "written" means any information in the form of a document.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.

§ 12:1-141 Notices and other communications

A. Except as provided in R.S. 12:1-303, notice under this Chapter must be in writing. Unless otherwise agreed between the sender and the recipient, a notice or other communication under this Chapter must be in English.

B. A notice or other communication may be given or sent by any method of delivery, except that electronic transmissions must be in accordance with this Section. If these methods of delivery are impracticable, a notice or other communication may be communicated by a newspaper of general circulation in the area where published.

C. Notice or other communication to a domestic or foreign corporation authorized to transact business in this state may be delivered to its registered agent or to the secretary of the corporation at its principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its application for a certificate of authority.

D. Notice or other communications may be delivered by electronic transmission if consented to by the recipient or if authorized by Subsection J of this Section.

E. Any consent under Subsection D of this Section may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if both of the following conditions are met:

(1) The corporation is unable to deliver two consecutive electronic transmissions given by the corporation in accordance with such consent.

(2) The inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent or other person responsible for the giving of notice or other communications; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

F. Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when all of the following occur:

(1) It enters an information processing system that the recipient has designated or uses for the purposes of receiving electronic transmissions or information of the type sent, and from which the recipient is able to retrieve the electronic transmission.

(2) It is in a form capable of being processed by that system.

G. Receipt of an electronic acknowledgment from an information processing system described in Paragraph (F)(1) of this Section establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

H. An electronic transmission is received under this Section even if no individual is aware of its receipt.

I. Notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:

(1) If in physical form, the earliest of when it is actually received, or when it is left at a place apparently designated for the receipt of mail or other similar communication at the relevant one of the following:

(a) A shareholder's address shown on the corporation's record of shareholders maintained by the corporation under R.S. 12:1-1601(C).

(b) A director's residence or usual place of business.

(c) The corporation's principal place of business.

(2) If mailed postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail.

(3) If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest of the following:

(a) The date when actually received.

(b) If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee.

(c) Five days after it is deposited in the United States mail.

(4) If an electronic transmission, when it is received as provided in Subsection F of this Section.

J. A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if all of the following requirements are met:

(1) The electronic transmission is otherwise retrievable in perceivable form.

(2) The sender and the recipient have consented in writing to the use of such form of electronic transmission.

K. If this Chapter prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this Section or other provisions of this Chapter, those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-142 Number of shareholders

A. For purposes of this Chapter, the following identified as a shareholder in a corporation's current record of shareholders constitutes one shareholder:

(1) Co-owners.

(2) A corporation, partnership or other entity.

(3) A trust or estate or the trustees, guardians, custodians, succession representatives, or other fiduciaries of a single trust, estate, succession, or account.

B. For purposes of this Chapter, shareholdings registered in substantially similar names constitute one shareholder if it is reasonable to believe that the names represent the same person.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-143 Qualified director

A. A "qualified director" is a director who meets the following criteria:

(1) At the time action is to be taken under R.S. 12:1-744, does not have either of the following conflicting interests:

(a) A material interest in the outcome of the proceeding.

(b) A material relationship with a person who has such an interest.

(2) At the time action is to be taken under R.S. 12:1-853 or 1-855, does not have a material relationship with a director described in either Subparagraph (a) or (b) of this Paragraph and is not either of the following:

(a) A party to the proceeding.

(b) A director as to whom a transaction is a director's conflicting interest transaction or who sought a disclaimer of the corporation's interest in a business opportunity under R.S. 12:1-870, which transaction or disclaimer is challenged in the proceeding.

(3) At the time action is to be taken under R.S. 12:1-862, a director who is neither of the following:

(a) A director as to whom the transaction is a director's conflicting interest transaction.

(b) A director who has a material relationship with another director as to whom the transaction is a director's conflicting interest transaction.

(4) At the time action is to be taken under R.S. 12: 1-870, would be a qualified director under Paragraph (A)(3) of this Section if the business opportunity were a director's conflicting interest transaction.

(5) At the time action is to be taken under R.S. 12:1-202(B)(6), a director who is neither of the following:

(a) A director to whom the limitation or elimination of the duty of an officer to offer potential business opportunities to the corporation would apply.

(b) A director who is a related person to another officer to whom the limitation or elimination would apply.

B. For purposes of this Section and R.S. 12:1-860:

(1) "Material interest" means an actual or potential benefit or detriment, other than one that would devolve on the corporation or the shareholders generally, that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

(2) "Material relationship" means a familial, financial, professional, employment or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken.

C. The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director:

(1) Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter, or by any person that has a material relationship with that director, acting alone or participating with others.

(2) Service as a director of another corporation of which a director who is not a qualified director with respect to the matter, or any individual who has a material relationship with that director, is or was also a director.

(3) With respect to action to be taken under R.S. 12:1-744, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1.

§ 12:1-144 Householding

A. A corporation has delivered written notice or any other report or statement under this Chapter, the articles of incorporation, or the bylaws to all shareholders who share a common address if all of the following conditions are met:

(1) The corporation delivers one copy of the notice, report, or statement to the common address.

(2) The corporation addresses the notice, report, or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented.

(3) Each of those shareholders consents to delivery of a single copy of such notice, report or statement to the shareholders' common address. Any such consent shall be revocable by any of the shareholders who deliver written notice of revocation to the corporation. If the written notice of revocation is delivered, the corporation shall begin providing individual notices, reports, or other statements to the revoking shareholder no later than thirty days after delivery of the written notice of revocation.

B. Any shareholder who fails to object by written notice to the corporation, within sixty days of written notice by the corporation of its intention to send single copies of notices, reports or statements to shareholders who share a common address as permitted by Subsection A of this Section, shall be deemed to have consented to receiving such single copy at the common address.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 2 INCORPORATION

§ 12:1-201 Incorporators

One or more persons capable of contracting may act as the incorporator or incorporators of a corporation by delivering to the secretary of state for filing articles of incorporation and the written consent of the registered agent required by R.S. 12:1-202(E).

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-202 Articles of incorporation and signed consent by agent to appointment

A. The articles of incorporation shall set forth all of the following:

(1) A corporate name for the corporation that satisfies the requirements of R.S. 12:1-401.

(2) The number of shares the corporation is authorized to issue.

(3) The street address, not a post office box only, of the corporation's initial registered office, and, if different, the street address, not a post office box only, of the corporation's initial principal office.

(4) The name and street address, not a post office box only, of its initial registered agent.

(5) If the corporation chooses to reject or limit the protection against liability of directors and officers that is provided by R.S. 12:1-832, a statement of the rejection or limitation.

(6) The name and address of each incorporator.

B. The articles of incorporation may set forth any of the following:

(1) The names and street addresses, not a post office address only, of the individuals who are to serve as the initial directors.

(2) Provisions not inconsistent with law regarding any of the following:

(a) The purpose or purposes for which the corporation is organized.

(b) Managing the business and regulating the affairs of the corporation.

(c) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders.

(d) A par value for authorized shares or classes of shares.

(3) Any provision that this Chapter requires or permits to be set forth in the bylaws.

(4) A provision that limits, reduces, qualifies, or conditions the protection against liability of directors and officers provided by R.S. 12:1-832.

(5) A provision permitting or making obligatory indemnification of a director or officer for liability, as defined in R.S. 12:1-850(3), to any person for any action taken, or any failure to take any action, as a director or officer, except liability for any of the following:

(a) A breach of the duty of loyalty owed by the director or officer to the corporation or its shareholders.

(b) An intentional infliction of harm on the corporation or its shareholders.

(c) A violation of R.S. 12:1-833.

(d) An intentional violation of criminal law.

(6) A provision prospectively limiting or eliminating any duty of a director or any other person to offer the corporation the right to participate in any business opportunity or in any class or category of business opportunity. The provision shall not limit or eliminate any duty of an officer or a related person of an officer until qualified directors, acting after the effective date of the provision and in accordance with the procedures set forth in R.S. 12:1-862, approve the application of the provision to that officer or related person. The approval shall have prospective effect only and may allow the provision to apply in full or to apply as limited by the terms of the approval.

(7) A provision that cash, property or share dividends, shares issuable to shareholders in connection with a reclassification of stock, and the redemption price of redeemed shares, that are not claimed by the shareholders entitled thereto within a reasonable time, not less than one year in any event, after the dividend or redemption price became payable or the shares became issuable, despite reasonable efforts by the corporation to pay the dividend or redemption price or deliver the certificates for the shares to such shareholders within such time, shall, at the expiration of such time, revert in full ownership to the corporation, and the corporation's obligation to pay such dividend or redemption price or issue such shares, as the case may be, shall thereupon cease; provided that the board of directors may, at any time, for any reason satisfactory to it, but need not, authorize either of the following:

(a) Payment of the amount of any cash or property dividend or redemption price.

(b) Issuance of any shares, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the person that would be entitled thereto had such reversion not occurred.

C. The articles of incorporation need not set forth any of the corporate powers enumerated in this Act.

D. Provisions of the articles of incorporation may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with R.S. 12:1-120(L).

E. As used in this Section, "related person" has the meaning specified in R.S. 12:1-860(5).

F. A written consent to appointment, signed by the initial registered agent, shall be attached or appended to the articles of incorporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:1-203 Incorporation

A. Except as provided in Subsection C of this Section, the corporate existence begins, and the corporation is duly incorporated, when the articles of incorporation become effective under R.S. 12:1-123.

B. The secretary of state's filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation and that the corporation is duly incorporated, except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

C. When immovable property is acquired by one or more persons acting in any capacity for and in the name of any corporation that is not duly incorporated, and the corporation is subsequently duly incorporated, the corporate existence shall be retroactive to the date of acquisition of an interest in the immovable property, but such retroactive existence shall be without prejudice to rights validly acquired by third persons in the interim between the date of acquisition and the date that the corporation is duly incorporated.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-204 Liability for preincorporation transactions

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-205 Organization of corporation

A. After incorporation, the following shall apply:

(1) If initial directors are named 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 organization of the corporation by appointing officers and carrying on any other business brought before the meeting.

(2) 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 elect a board of directors who shall complete the organization of the corporation.

B. The election by the incorporators of a board of directors may be conducted without a meeting by means of one or more written consents signed by each incorporator.

C. An organizational meeting may be held in or out of this state.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-206 Bylaws

A. The board of directors of a corporation may adopt bylaws for the corporation.

B. The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

C. The bylaws may contain one or both of the following provisions:

(1) A requirement that if the corporation solicits proxies or consents with respect to an election of directors, the corporation include in its proxy statement and any form of its proxy or consent, to the extent and subject to such procedures or conditions as are provided in the bylaws, one or more individuals nominated by a shareholder in addition to individuals nominated by the board of directors.

(2) A requirement that the corporation reimburse the expenses incurred by a shareholder in soliciting proxies or consents in connection with an election of directors, to the extent and subject to such procedures or conditions as are provided in the bylaws, provided that no bylaw so adopted shall apply to elections for which any record date precedes its adoption.

D. Notwithstanding R.S. 12:1-1020(B)(2), the shareholders in amending, repealing, or adopting a bylaw described in Subsection C of this Section may not limit the authority of the board of directors to amend or repeal any condition or procedure set forth in or to add any procedure or condition to such a bylaw in order to provide for a reasonable, practicable, and orderly process.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-207 Emergency bylaws

A. Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in Subsection D of this Section. The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including any of the following:

(1) Procedures for calling a meeting of the board of directors.

(2) Quorum requirements for the meeting.

(3) Designation of additional or substitute directors.

B. All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are effective only during the emergency.

C. Corporate action taken in good faith in accordance with the emergency bylaws binds the corporation and may not be used to impose liability on a corporate director, officer, employee, or agent.

D. An emergency exists for purposes of this Section if a catastrophic event makes it impracticable to attain a quorum of the corporation's directors when and as necessary to carry out the functions of the board of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 3 PURPOSES AND POWERS

§ 12:1-301 Purposes

A. Every corporation incorporated under this Chapter has the purpose of engaging in any lawful business or activity unless a more limited purpose is set forth in the articles of incorporation.

B. A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under this Chapter only if permitted by, and subject to all limitations of, the other statute.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-302 General powers

Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and has the power to do all things necessary or convenient to carry out its business and affairs, including without limitation power to do any of the following:

(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 or affixing it 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 managing the business and regulating the affairs of the corporation.

(4) Purchase, receive, lease, or otherwise acquire and own, hold, improve, use, and otherwise deal with real or personal property, or any interest in property, wherever 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, mortgage, lend, pledge, or otherwise dispose of, and deal in and with shares or other interests in, or obligations of, any other entity.

(7) Make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations, which may be convertible into or include the option to purchase other securities of the corporation, and secure any obligation by mortgage, pledge, or security interests of any kind in any of its property, franchises, or income.

(8) Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment.

(9) Be a promoter, partner, member, associate, or manager of any limited liability company, partnership, joint venture, trust, or other entity.

(10) Conduct its business, locate offices, and exercise the powers granted by this Chapter within or without this state.

(11) Elect directors and appoint officers, employees, and agents of the corporation, define their duties, fix their compensation, and lend them money and credit.

(12) Pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans, and benefit or incentive plans for any or all of the current or former directors, officers, employees, and agents of the corporation and its affiliated entities, and the dependents and families of those individuals.

(13) Make donations for the public welfare or for charitable, scientific, or educational purposes.

(14) Transact any lawful business that will aid governmental policy.

(15) Make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-303 Emergency powers

A. In anticipation of or during an emergency defined in Subsection D of this Section, the board of directors of a corporation may do any of the following:

(1) Modify lines of succession to accommodate the incapacity of any director, officer, employee, or agent.

(2) Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

B. During an emergency defined in Subsection D of this Section, unless emergency bylaws provide otherwise, all of the following provisions shall apply:

(1) Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio.

(2) Any or all directors may participate in a regular or special meeting of the board by, and the meeting may be conducted through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting.

(3) A director participating in a meeting by the means authorized in Paragraph (2) of this Subsection is deemed to be present in person at the meeting.

(4) Unless the application of Paragraphs (2) and (3) of this Subsection is sufficient to attain a quorum of directors, a quorum of directors consists of the number of directors who participate in a meeting if both of the following conditions are met:

(a) Reasonable efforts have been made to provide actual knowledge of the meeting to all directors.

(b) All of the directors who have actual knowledge of the meeting, and who could participate in the meeting lawfully and without undue hardship or risk of injury, do participate in the meeting.

(5) If business is conducted at a meeting of directors at which a quorum would be present only by application of the rule in Paragraph (4) of this Subsection, a quorum of directors under Paragraph (4) of this Subsection is presumed to be present.

C. Corporate action taken in good faith during an emergency under this Section to further the ordinary business affairs of the corporation binds the corporation and may not be used to impose liability on a corporate director, officer, employee, or agent.

D. An emergency exists for purposes of this Section if a catastrophic event makes it impracticable, without applying the rules stated in Subsection B of this Section, to attain a quorum of the corporation's directors when and as necessary to carry out the functions of the board of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-304 Ultra vires

A. Except as provided in Subsection B of this Section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

B. A corporation's power to act may be challenged in any of the following:

(1) A proceeding by a shareholder against the corporation to enjoin the act.

(2) A proceeding by the corporation, directly, derivatively, or through a receiver, trustee, or other legal representative, against a current or former director, officer, employee, or agent of the corporation.

(3) A proceeding by the attorney general under R.S. 12:1-1430.

C. In a shareholder's proceeding under Paragraph (B)(1) of this Section to enjoin an unauthorized corporate act, the court may enjoin or set aside the act if equitable, and may award damages for loss, other than anticipated profits, suffered by the corporation or another party to the proceeding because of enjoining the unauthorized act. If an act to be enjoined in the proceeding is the performance of a duty owed by the corporation under the terms of a contract to which the corporation is a party, the court may enjoin the act only if the other parties to the contract are joined in the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 4 NAME

§ 12:1-401 Corporate name

A.(1) A corporate name may include words in any language but shall be written in English letters or characters.

(2) A corporate name shall contain the word "corporation", "incorporated", "company", or "limited", or the abbreviation, with or without punctuation, "corp.", "inc.", "co.", or "ltd.".

(3) A corporate name shall not contain any of the following:

(a) Any language stating or implying that the corporation is organized for a purpose other than that permitted by R.S. 12:1-301 and its articles of incorporation.

(b) The phrase "doing business as" or any abbreviation of that phrase, such as "d/b/a".

(c) Any words that deceptively or falsely suggest a charitable or nonprofit nature or that imply that the corporation is an administrative agency of this state or any of its political subdivisions or of the United States.

(d) Except as indicated, any of the following quoted words or phrases in any form:

(i) "Casualty", "redevelopment corporation", or "electrical cooperative".

(ii) Except for a bank holding company, "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", or "credit union".

(iii) Except for an independent insurance agency or brokerage corporation, "insurance".

(e) Words or phrases that consist of or comprise immoral, deceptive, or scandalous matter.

(4) A court having jurisdiction may, upon application of the state or of any interested or affected person, enjoin a corporation from doing business under a name that violates any part of R.S. 12:1-401(A)(3)(c) or (d).

B. Except as authorized in Subsections C and D of this Section, a corporate name shall be distinguishable upon the records of the secretary of state from all of the following:

(1) The corporate name of a corporation or nonprofit corporation incorporated in this state.

(2) A corporate name reserved or registered under R.S. 12:1-402 or 1-403.

(3) The name of a foreign corporation or foreign nonprofit corporation, as stated in the certificate of authority to do business in this state issued to that corporation under Chapter 3 of this Title.

(4) The name of a domestic limited liability company or the name of a foreign limited liability company used in the foreign limited liability company's certificate of authority to do business in this state.

(5) The name of a partnership whose contract for partnership is filed for registry with the secretary of state or the name of a duly registered foreign partnership.

(6) A trade name registered with the secretary of state.

C. A corporation may apply to the secretary of state for authorization to use a name in its filings with the secretary of state that is not distinguishable upon the records of the secretary of state from one or more of the names described in Subsection B of this Section. The secretary of state shall authorize the use of the name applied for if either of the following occur:

(1) The other registrant consents to the use in writing and submits the document required by law to change its name to one that is distinguishable upon the records of the secretary of state from the name of the applying corporation, effective no later than the time that the applying corporation will begin to use the registrant's former name.

(2) The applicant delivers to the secretary of state a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant's right to use the name applied for in this state.

D. A corporation may use in its filings with the secretary of state a name that is not distinguishable upon the records of the secretary of state from one or more of the names described in Subsection B of this Section if the registrant of the name is incorporated, organized, or authorized to transact business in this state and the proposed user corporation did any of the following:

(1) Merged with the other registrant.

(2) Came into existence through the reorganization of the other registrant.

(3) Acquired all or substantially all of the assets, including the name, of the other registrant.

E. This Chapter does not control the use of fictitious, assumed, or trade names.

F. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", "credit union", or any other word of similar import, the secretary of state shall not file the articles of incorporation until the secretary of state receives satisfactory evidence that written notice of the proposed use of that name was delivered to the office of financial institutions at least fourteen days prior to the filing made with the secretary of state.

G. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "engineer", "engineering", "surveyor", "surveying", or any derivative thereof, the secretary of state shall not file the articles of incorporation until the secretary of state receives either of the following:

(1) Satisfactory evidence that written notice of the proposed use of that name was delivered to the Louisiana Professional Engineering and Land Surveying Board at least ten days prior to the filing made with the secretary of state.

(2) A written waiver of the ten-day notice requirement prescribed in Paragraph (1) of this Subsection, signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board.

H. If the secretary of state receives for filing articles of incorporation that include in the corporate name the word "architect", "architectural", or "architecture", the secretary of state shall not file the articles of incorporation until the secretary of state receives either of the following:

(1) Satisfactory evidence that written notice of the proposed use of that name was delivered to the Louisiana State Board of Architectural Examiners at least ten days earlier.

(2) A written waiver of the ten-day notice requirement, signed by the executive director or any member of the Louisiana State Board of Architectural Examiners.

I. The assumption or use of a name in violation of this Section does not affect or vitiate the corporate existence.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2017, No. 367, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:1-402 Reserved name

A. A person may reserve the exclusive use of a corporate name in its filings with the secretary of state, 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. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the corporate name applied for is available, the secretary of state shall reserve the name for the applicant's exclusive use for a nonrenewable period of one hundred and twenty days.

B. 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.

C. A terminated corporation's name is reserved by operation of law for five years after the effective date of the corporation's termination.

D. The owner of the corporate name reservation may terminate the reservation by delivering to the secretary of state a signed notice of termination.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 57, §1; Acts 2022, No. 193, §2.

§ 12:1-403 Registered name

A. A foreign corporation may register its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), if the name is distinguishable upon the records of the secretary of state from the corporate names that are not available under R.S. 12:1-401(B).

B. A foreign corporation registers its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), by delivering to the secretary of state for filing an application which does both of the following:

(1) Sets forth its corporate name, or its corporate name with any addition authorized by R.S. 12:303(A)(3), the state or country and date of its incorporation, and a brief description of the nature of the business in which it is engaged.

(2) Is accompanied by a certificate of existence, or a document of similar import, from the state or country of incorporation which is dated within ninety days of receipt by the secretary of state.

C. The name is registered for the applicant's exclusive use upon the effective date of the application.

D. 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 that complies with the requirements of Subsection B of this Section between October first and December thirty-first of the preceding year. The renewal application when filed renews the registration for the following calendar year.

E. A foreign corporation whose registration is effective may thereafter qualify as a foreign corporation under the registered 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 authorized to transact business in this state. The registration terminates when the domestic corporation is incorporated or the foreign corporation qualifies or consents to the qualification of another foreign corporation under the registered name.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 367, §1.

PART 5 OFFICE AND AGENT

§ 12:1-501 Registered office and registered agent

Each corporation shall continuously maintain in this state both of the following:

(1) A registered office that may be, but need not be, the same as any of its places of business.

(2) A registered agent, who may be either of the following:

(a) An individual who resides in this state.

(b) A domestic or foreign corporation or other eligible entity that does all of the following:

(i) Continuously maintains an office in this state and, in the case of a foreign corporation or foreign eligible entity, is authorized to transact business in this state.

(ii) Files with the secretary of state a statement setting forth the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

(iii) Acts as the agent of a corporation for service of process as authorized by its organizational documents

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2020, No. 50, §1, eff. June 5, 2020.

§ 12:1-502 Change of registered office or registered agent

A. A corporation may change its registered office or the identity or address of its registered agent by delivering to the secretary of state for filing a statement of change that sets forth all of the following information:

(1) The name of the corporation.

(2) The street address of its current registered office.

(3) If the current registered office is to be changed, the street address of the new registered office.

(4) The name and street address of its current registered agent.

(5) If the identity of the current registered agent is to be changed, the name of the new registered agent, and the new agent's signed written consent to the appointment, either on the statement or attached to it.

(6) If the street address of the registered agent is to be changed, the new street address of the registered agent.

(7) If the registered agent is a corporation or eligible entity, the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

B. A registered agent may change its street address on the records of the secretary of state for all corporations for which it serves as registered agent by delivering to the secretary of state a statement of change that sets forth all of the following information:

(1) The name of the registered agent.

(2) The name of the corporation for which it is acting as registered agent.

(3) Its current street address to be changed.

(4) Its new street address.

(5) A certification that the registered agent has notified all of the corporations for which it serves as registered agent of the change in its address to the new street address specified in the statement of change.

C. A registered agent may satisfy the requirements of Subsection B of this Section for multiple corporations through the delivery of a single statement of change that complies with Subsection B of this Section, provides the names of all of the corporations for which the statement is to be effective, and certifies that the registered agent has notified all of those corporations of the change in its address to the new street address specified in the statement of change.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

§ 12:1-503 Resignation of registered agent

A. A registered agent may resign the agent's appointment by signing and delivering to the secretary of state for filing the signed original and two exact or conformed copies of a statement of resignation. If the office of the registered agent is also the registered office of the corporation, the statement may include a statement that the registered office is also discontinued.

B. After filing the statement the secretary of state shall mail one copy to the registered office, if not discontinued, and the other copy to the corporation at its principal office.

C. The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-504 Service on corporation

A. 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. If the registered agent is a corporation or eligible entity, service of process may be made on an individual who is identified as authorized to receive service for the registered agent in a statement on file with the secretary of state.

B. 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 requested, addressed to the secretary of the corporation at its principal office. Service is perfected under this Subsection at the earliest of the following:

(1) The date the corporation receives the mail.

(2) The date shown on the return receipt, if signed on behalf of the corporation.

(3) Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.

C. This Section does not prescribe the only means, or necessarily the required means of serving a corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

PART 6 SHARES AND DISTRIBUTIONS

SUBPART A SHARES

§ 12:1-601 Authorized shares

A. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and must describe, prior to the issuance of shares of a class or series, the terms, including the preferences, rights, and limitations, of that class or series. Except to the extent varied as permitted by this Section, all shares of a class or series must have terms, including preferences, rights, and limitations that are identical with those of other shares of the same class or series.

B. The articles of incorporation must authorize both of the following:

(1) One or more classes or series of shares that together have unlimited voting rights.

(2) One or more classes or series of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.

C. The articles of incorporation may authorize one or more classes or series of shares that have any of the following characteristics:

(1) Are entitled to special, conditional, or limited voting rights, or no right to vote, except to the extent otherwise provided by this Chapter.

(2) Are redeemable or convertible as specified in the articles of incorporation, at the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event, for cash, indebtedness, securities, or other property at prices and in amounts specified or determined in accordance with a formula.

(3) Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative, or partially cumulative.

(4) Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.

D. Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with R.S. 12:1-120(L).

E. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.

F. The description of the preferences, rights, and limitations of classes or series of shares in Subsection C of this Section is not exhaustive.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-602 Terms of class or series determined by board of directors

A. If the articles of incorporation so provide, the board of directors is authorized, without shareholder approval, to do any of the following:

(1) Classify any unissued shares into one or more classes or into one or more series within a class.

(2) Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes.

(3) Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.

B. If the board of directors acts pursuant to Subsection A of this Section, it must determine the terms, including the preferences, rights, and limitations, to the same extent permitted under R.S. 12:1-601, of the following:

(1) Any class of shares before the issuance of any shares of that class.

(2) Any series within a class before the issuance of any shares of that series.

C. Before issuing any shares of a class or series created under this Section, the corporation must deliver to the secretary of state for filing articles of amendment setting forth the terms determined under Subsection A of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-603 Issued and outstanding shares

A. A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted, or cancelled.

B. The reacquisition, redemption, or conversion of outstanding shares is subject to the limitations of Subsection C of this Section and to R.S. 12:1-640.

C. At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-604 Fractional shares

A. A corporation may do any of the following:

(1) Issue fractions of a share or pay in money the value of fractions of a share.

(2) Arrange for disposition of fractional shares by the shareholders.

(3) Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.

B. Each certificate representing scrip must be conspicuously labeled "scrip" and must contain the information required by R.S. 12:1-625(B).

C. The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

D. The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including either of the following:

(1) That the scrip will become void if not exchanged for full shares before a specified date.

(2) That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B ISSUANCE OF SHARES

§ 12:1-620 Subscription for shares before incorporation

A. A subscription for shares entered into before incorporation is irrevocable for six months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

B. The board of directors may determine the payment terms of subscription for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

C. Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

D. If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid for more than twenty days after the corporation sends written demand for payment to the subscriber.

E. A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to R.S. 12:1-621.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-621 Issuance of shares

A. The powers granted in this Section to the board of directors may be reserved to the shareholders by the articles of incorporation.

B. The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.

C. Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid, and nonassessable.

D. When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

E. The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid, or the benefits received. If the services are not performed, the note is not paid, or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or part.

F.(1) An issuance of shares or other securities convertible into or rights exercisable for shares, in a transaction or a series of integrated transactions, requires approval of the shareholders, at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the matter exists, if both of the following conditions are satisfied:

(a) The shares, other securities, or rights are issued for consideration other than cash or cash equivalents.

(b) The voting power of shares that are issued and issuable as a result of the transaction or series of integrated transactions will comprise more than twenty percent of the voting power of the shares of the corporation that were outstanding immediately before the transaction.

(2) In this Subsection, both of the following shall apply:

(a) For purposes of determining the voting power of shares issued and issuable as a result of a transaction or series of integrated transactions, the voting power of shares shall be the greater of the following:

(i) The voting power of the shares to be issued.

(ii) The voting power of the shares that would be outstanding after giving effect to the conversion of convertible shares and other securities and the exercise of rights to be issued.

(b) A series of transactions is integrated if consummation of one transaction is made contingent on consummation of one or more of the other transactions.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-622 Liability of shareholders

A. A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued pursuant to R.S. 12:1-621 or specified in the subscription agreement pursuant to R.S. 12:1-620.

B. A shareholder of a corporation is not personally liable for the acts or debts of the corporation.

C. A shareholder who receives a distribution in excess of what may be authorized and made pursuant to R.S. 12:1-640(A) shall be personally liable to the corporation, or to creditors of the corporation, or both, for an amount not exceeding, in the aggregate, the excess amount received by that shareholder.

D. A proceeding to enforce the liability of a shareholder under Subsection C of this Section is subject to a peremptive period of two years measured from the relevant one of the following dates:

(1) The date on which the effect of the distribution was to be measured under R.S. 12:1-640(E) or (G), to the extent that the distribution is alleged to have been unlawful under R.S. 12:1-640(C).

(2) The date as of which the distribution first violated a restriction in the articles of incorporation, to the extent that the distribution is alleged to have been unlawful because it violated a restriction in the articles of incorporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-623 Share dividends

A. Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation's shareholders or to the shareholders of one or more classes or series. An issuance of shares under this Subsection is a share dividend.

B. Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless one of the following conditions is satisfied:

(1) The articles of incorporation so authorize.

(2) A majority of the votes entitled to be cast by the class or series to be issued approve the issue.

(3) There are no outstanding shares of the class or series to be issued.

C. If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-624 Share options

A. A corporation may issue rights, options, or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine the terms upon which the rights, options, or warrants are issued and the terms, including the consideration, for which the shares or other securities are to be issued. The authorization by the board of directors for the corporation to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options, or warrants are exercisable.

B. The terms and conditions of such rights, options or warrants, including those outstanding on the effective date of this Section, may include, without limitation, restrictions or conditions that do any of the following:

(1) Preclude or limit the exercise, transfer or receipt of such rights, options, or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation or by any transferee or transferees of any such person or persons.

(2) Invalidate or void such rights, options, or warrants held by any such person or persons or any such transferee or transferees.

C. The board of directors may authorize one or more officers to designate the recipients of rights, options, warrants, or other equity compensation awards that involve the issuance of shares and to determine, within an amount and subject to any other limitations established by the board and, if applicable, the stockholders, the number of such rights, options, warrants, or other equity compensation awards and the terms thereof to be received by the recipients, provided that an officer may not use such authority to designate himself or herself or any other persons the board of directors may specify as a recipient of such rights, options, warrants, or other equity compensation awards.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-625 Form and content of certificates

A. Shares shall be represented by share certificates unless the issuing corporation is a participant in the Direct Registration System of the Depository Trust & Clearing Corporation or of a similar book-entry system used in the trading of shares of public corporations. If the issuing corporation is a participant in the Direct Registration System or a similar book-entry system, shares may but need not be represented by certificates. Unless this Chapter or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

B. At a minimum each share certificate must state on its face all of the following:

(1) The name of the issuing corporation and that it is organized under the law of this state.

(2) The name of the person to whom issued.

(3) The number and class of shares and the designation of the series, if any, the certificate represents.

C. If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series, and the authority of the board of directors to determine variations for future series, must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.

D. Each share certificate must be signed, either manually or in facsimile, by the president and secretary or by two officers designated in the bylaws or by the board of directors and may bear the corporate seal or its facsimile.

E. If the person who signed, either manually or in facsimile, a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-626 Shares without certificates

A. If a corporation is eligible to issue shares without certificates, the board of directors of the corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates, except to the extent that its articles of incorporation or bylaws provide otherwise. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

B. Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by R.S. 12:1-625(B) and (C), and, if applicable, R.S. 12:1-627.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-627 Restriction on transfer of shares and other securities

A. The articles of incorporation, bylaws, an agreement among shareholders, or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

B. A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this Section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by R.S. 12:1-626(B). Unless so noted or contained, a restriction is not enforceable against a person without knowledge of the restriction.

C. A restriction on the transfer or registration of transfer of shares is authorized for any of the following:

(1) To maintain the corporation's status when it is dependent on the number or identity of its shareholders.

(2) To preserve exemptions under federal or state securities law.

(3) For any other reasonable purpose.

D. A restriction on the transfer or registration of transfer of shares may do any of the following:

(1) Obligate the shareholder first to offer the corporation or other persons, separately, consecutively, or simultaneously, an opportunity to acquire the restricted shares.

(2) Obligate the corporation or other persons, separately, consecutively, or simultaneously, to acquire the restricted shares.

(3) Require the corporation, the holders of any class of its shares, or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable.

(4) Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

E. For purposes of this Section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-628 Expense of issue

A corporation may pay the expenses of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C SUBSEQUENT ACQUISITION OF SHARES BY SHAREHOLDERS AND CORPORATION

§ 12:1-630 Shareholders' preemptive rights

A. The shareholders of a corporation do not have a preemptive right to acquire the corporation's unissued shares except to the extent the articles of incorporation so provide. The articles of incorporation of a corporation that was incorporated before January 1, 1969, shall be deemed to contain a statement that "the corporation elects to have preemptive rights," unless the articles of incorporation contain a specific provision enlarging, limiting, or denying preemptive rights.

B. A statement included in the articles of incorporation that "the corporation elects to have preemptive rights", or words of similar import, means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:

(1) The shareholders of the corporation have a preemptive right, granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation's unissued shares upon the decision of the board of directors to issue them. Shareholders have a fair and reasonable opportunity to exercise the right to acquire shares if they are given at least forty-five days to purchase the shares after notice to them of that right, but shorter periods of time may be fair and reasonable under the circumstances in which the shares are being issued.

(2) A shareholder may waive his preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.

(3) There is no preemptive right with respect to any of the following:

(a) Shares issued as compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates.

(b) Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents, or employees of the corporation, its subsidiaries, or affiliates.

(c) Shares authorized in articles of incorporation that are issued within six months from the effective date of incorporation.

(d) Shares sold otherwise than for money.

(4) Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.

(5) Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.

(6) Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one year is subject to the shareholders' preemptive rights.

C. For purposes of this Section, "shares" includes a security convertible into or carrying a right to subscribe for or acquire shares.

D. On or after January 1, 2016, no action to enforce a preemptive right of a shareholder shall be brought unless filed in a court of competent jurisdiction and proper venue within one year of the date of the issuance of the share to which the shareholder had the preemptive right, or within one year of the date that the issuance of the share is discovered or should have been discovered. Such an action is perempted three years after the date of the issuance of the share.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-631 Corporation's acquisition of its own shares

A. A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares.

B. If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D DISTRIBUTIONS

§ 12:1-640 Distributions to shareholders

A. A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in Subsection C of this Section.

B. If the board of directors does not fix the record date for determining shareholders entitled to a distribution, other than one involving a purchase, redemption, or other acquisition of the corporation's shares, it is the date the board of directors authorizes the distribution.

C. No distribution may be made if, after giving it effect, either of the following conditions would exist:

(1) The corporation would not be able to pay its debts as they become due in the usual course of business.

(2) The corporation's total assets would be less than the sum of its total liabilities plus, unless the articles of incorporation permit otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

D. The board of directors may base a determination that a distribution is not prohibited under Subsection C of this Section either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

E. Except as provided in Subsection G of this Section, the effect of a distribution under Subsection C of this Section is measured by one of the following:

(1) In the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, as of the earlier of the date money or other property is transferred or debt incurred by the corporation or the date the shareholder ceases to be a shareholder with respect to the acquired shares.

(2) In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed.

(3) In all other cases, as of the date the distribution is authorized if the payment occurs within one hundred and twenty days after the date of authorization or the date the payment is made if it occurs more than one hundred and twenty days after the date of authorization.

F. A corporation's indebtedness to a shareholder incurred by reason of a distribution made in accordance with this Section is at parity with the corporation's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

G. Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under Subsection C of this Section if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this Section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

H. This Section shall not apply to distributions in liquidation under Part 14 of this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 7 SHAREHOLDERS

SUBPART A MEETINGS

§ 12:1-701 Annual meeting

A. Unless directors are elected by written consent in lieu of an annual meeting as permitted by R.S. 12:1-704, a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws or, if not so stated or fixed, as stated or fixed in accordance with a resolution of the board of directors. If a corporation's articles of incorporation authorize shareholders to cumulate their votes when electing directors pursuant to R.S. 12:1-728, directors may not be elected by written consent unless the written consent is unanimous.

B. Annual shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws or, if not so stated or fixed, as stated or fixed in accordance with a resolution of the board of directors. If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation's principal office.

C. The failure to hold an annual meeting at the time stated in or fixed in accordance with Subsection A of this Section does not affect the validity of any corporate action.

D. If no annual shareholders' meeting is held for a period of eighteen months, and directors are not elected by written consent in lieu of an annual meeting during that period, any shareholder may by notice to the secretary demand that the secretary call such a meeting, to be held at the corporation's principal office or, if none in this state, at its registered office. The secretary shall call the meeting and shall provide notice of the meeting as required by R.S. 12:1-705 within thirty days after the notice to the secretary of the shareholder's demand for the meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-702 Special meeting

A. A corporation shall hold a special meeting of shareholders upon either of the following:

(1) On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws.

(2) If the shareholders holding at least ten percent of all the votes entitled to be cast on an issue proposed to be considered at the proposed special meeting sign, date, and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held, provided that the articles of incorporation may fix a lower percentage or a higher percentage not exceeding twenty-five percent of all the votes entitled to be cast on any issue proposed to be considered. 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.

B. If not otherwise fixed under R.S. 12:1-703 or 1-707, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.

C. Special shareholders' meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws or, if not so stated or fixed, at the place stated in or fixed in accordance with a resolution of the board of directors. If no place is stated or fixed in accordance with the bylaws or a resolution of the board of directors, special meetings shall be held at the corporation's principal office.

D. Only business within the purpose or purposes described in the meeting notice required by R.S. 12:1-705(C) may be conducted at a special shareholders' meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-703 Court-ordered meeting

A. The district court of the parish where a corporation's principal office or, if none in this state, its registered office, is located may in a summary proceeding order a meeting to be held:

(1) On application of any shareholder of the corporation if an annual meeting was not held or action by written consent in lieu thereof did not become effective within the earlier of six months after the end of the corporation's fiscal year or fifteen months after its last annual meeting.

(2) On application of a shareholder who signed a demand for a special meeting valid under R.S. 12:1-702, if either of the following conditions exist:

(a) Notice of the special meeting was not given within thirty days after the date the demand was delivered to the corporation's secretary.

(b) The special meeting was not held in accordance with the notice.

B. The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date for determining shareholders entitled to notice of and to vote at the meeting, 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 the meeting constitute a quorum for action on those matters, and enter other orders necessary to accomplish the purpose or purposes of the meeting.

C. For purposes of Paragraph (A)(1) of this Section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-704 Action without meeting

A. Action required or permitted by this Chapter to be taken at a shareholders' meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by all the shareholders entitled to vote on the action and delivered to the corporation for inclusion in the minutes or filing with the corporate records.

B. The articles of incorporation may provide that any action required or permitted by this Chapter to be taken at a shareholders' meeting may be taken without a meeting, and without prior notice, if consents in writing setting forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. The written consent shall bear the date of signature of the shareholder who signs the consent and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

C. If an earlier date has not been fixed under R.S. 12:1-707 and if prior board action is not required respecting the action to be taken without a meeting, the record date for determining the shareholders entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the corporation. If not otherwise fixed under R.S. 12:1-707 and if prior board action is required respecting the action to be taken without a meeting, the record date shall be the close of business on the day the resolution of the board taking such prior action is adopted. No written consent shall be effective to take the corporate action referred to therein unless, within sixty days of the earliest date on which a consent delivered to the corporation as required by this Section was signed, written consents signed by sufficient shareholders to take the action have been delivered to the corporation. A written consent may be revoked by a writing to that effect delivered to the corporation before unrevoked written consents sufficient in number to take the corporate action are delivered to the corporation.

D. A consent signed pursuant to the provisions of this Section has the effect of a vote taken at a meeting and may be described as such in any document. Unless the articles of incorporation, bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation of written consents, the action taken by written consent shall be effective when written consents signed by sufficient shareholders to take the action are delivered to the corporation.

E. If this Chapter requires that notice of a proposed action be given to nonvoting shareholders and the action is to be taken by written consent of the voting shareholders, the corporation must give its nonvoting shareholders written notice of the action not more than ten days after written consents sufficient to take the action have been delivered to the corporation, or such later date that tabulation of consents is completed pursuant to an authorization under Subsection D of this Section. The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this Chapter, would have been required to be sent to nonvoting shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action.

F. If action is taken by less than unanimous written consent of the voting shareholders, the corporation must give its nonconsenting voting shareholders written notice of the action not more than ten days after written consents sufficient to take the action have been delivered to the corporation, or such later date that tabulation of consents is completed pursuant to an authorization under Subsection D of this Section. The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under any provision of this Chapter, would have been required to be sent to voting shareholders in a notice of a meeting at which the action would have been submitted to the shareholders for action.

G. The notice requirements in Subsections E and F of this Section shall not delay the effectiveness of actions taken by written consent, and a failure to comply with such notice requirements shall not invalidate actions taken by written consent, provided that this Subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a shareholder adversely affected by a failure to give such notice within the required time period.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-705 Notice of meeting

A. A corporation shall notify shareholders of the date, time, and place of each annual and special shareholders' meeting no fewer than ten nor more than sixty days before the meeting date. Unless this Chapter or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.

B. Unless this Chapter or the articles of incorporation require otherwise, both of the following shall apply:

(1) Notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

(2) If a notice of an annual meeting does include a description of one or more purposes, the meeting is not limited to those purposes.

C. Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.

D. If not otherwise fixed under R.S. 12:1-703 or 1-707, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders' meeting is the day before the first notice to shareholders is effective.

E. Unless the bylaws require otherwise, if an annual or special shareholders' meeting 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 adjourned meeting is or must be fixed under R.S. 12:1-707, however, notice of the adjourned meeting must be given under this Section to persons who are shareholders as of the new record date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-706 Waiver of notice

A. A shareholder may waive any notice required by this Chapter, the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

B. A shareholder's attendance at a meeting does both of the following:

(1) Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.

(2) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

C. A shareholder attends a meeting if the shareholder is present at the meeting in person or by proxy. If a shareholder attends a meeting by proxy, then for purposes of Subsection B of this Section, an objection by the shareholder's proxy has the same effect as an objection by the shareholder.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-707 Record date

A. The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of a shareholders' meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for fixing a record date, the board of directors of the corporation may fix a future date as the record date.

B. A record date fixed under this Section may not be more than seventy days before the meeting or action requiring a determination of shareholders.

C. A determination of shareholders entitled to notice of or to vote at a shareholders' meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred and twenty days after the date fixed for the original meeting.

D. If a court orders a meeting adjourned to a date more than one hundred and twenty days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-708 Conduct of the meeting

A. At each meeting of shareholders, a chair shall preside. The chair shall be appointed as provided in the bylaws or, in the absence of such provision, by the board.

B. The chair, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

C. Any rules adopted for, and the conduct of, the meeting shall be fair to shareholders.

D. The chair of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall be deemed to have closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies, or votes nor any revocations or changes thereto may be accepted.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-709 Remote participation in annual and special meetings

A. Shareholders of any class or series may participate in any meeting of shareholders by means of remote communication to the extent the board of directors authorizes such participation for such class or series. Participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts, and shall be in conformity with Subsection B of this Section.

B. Shareholders participating in a shareholders' meeting by means of remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures to do all of the following:

(1) Verify that each person participating remotely is a shareholder.

(2) Provide such shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate, and to read or hear the proceedings of the meeting, substantially concurrently with such proceedings.

C. Notwithstanding any provision of this Subpart to the contrary, unless the bylaws expressly require the meeting of shareholders to be held at a place, the board of directors may determine that any meeting of shareholders shall be held solely by means of remote communication, in accordance with the provisions of Subsection B of this Section and the guidelines and procedures as the board of directors adopts.

D. Notwithstanding the requirements of R.S. 6:647, 648, or any other provision of law to the contrary, banks, savings banks, savings and loan associations, and credit unions may permit shareholders or members of the financial institution to participate in any meeting of shareholders or members by means of remote communication, or unless the bylaws expressly require the meeting of shareholders or members to be held at a place, hold any meeting solely by means of remote communication. Any such participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts, and shall be in conformity with Subsection B of this Section. Participation by remote communication may include but is not limited to any telephonic or internet form of communication.

Acts 2016, No. 442, §1; Acts 2020, 2^nd Ex. Sess., No. 3, §1, eff. Oct. 16, 2020; Acts 2020, 2^nd Ex. Sess., No. 46, §1, eff. Nov. 5, 2020; Acts 2021, No. 23, §2, eff. June 1, 2021.

NOTE: AS BETWEEN THE CONFLICTING EFFECTIVE DATES OF ACTS 2020, 2^ND EX. SESS., NO. 3 AND NO. 46, ACT NO. 46 IS CERTIFIED AS THE LATEST EXPRESSION.

SUBPART B VOTING

§ 12:1-720 Shareholders' list for meeting

A. After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders' meeting. The list must be arranged by voting group, and within each voting group by class or series of shares, and show the address of and number of shares held by each shareholder.

B. The shareholders' list must be available for inspection by any shareholder, beginning two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the corporation's principal office or at a place identified in the meeting notice in the city where the meeting will be held. A shareholder, or the shareholder's agent or attorney, is entitled on written demand to inspect and, subject to the requirements of R.S. 12:1-1602(C) other than the required percentage and duration of ownership of shares, to copy the list, during regular business hours and at the shareholder's expense, during the period it is available for inspection.

C. The corporation shall make the shareholders' list available at the meeting, and any shareholder, or the shareholder's agent or attorney, is entitled to inspect the list at any time during the meeting or any adjournment.

D. If the corporation refuses to allow a shareholder, or the shareholder's agent or attorney, to inspect the shareholders' list before or at the meeting, or copy the list as permitted by Subsection B of this Section, the district court of the parish where a corporation's principal office or, if none in this state, its registered office, is located, on application of the shareholder, may in a summary proceeding order the inspection or copying at the corporation's expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete.

E. Refusal or failure to prepare or make available the shareholders' list does not affect the validity of action taken at the meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-721 Voting entitlement of shares

A. Except as provided in Subsections B and D of this Section, or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one vote on each matter voted on at a shareholders' meeting. Only shares are entitled to vote.

B. Absent special circumstances, the shares issued by a corporation are not entitled to vote if they are owned, directly or indirectly, by a subsidiary.

C. Subsection B of this Section does not limit the power of a corporation or subsidiary to vote any shares, including its own shares, held by it in a fiduciary capacity.

D. Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company, or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

E. For purposes of Subsections B and C of this Section, the following meanings shall apply:

(1) The term "subsidiary" means a domestic or foreign corporation, limited liability company, partnership, or other juridical person that is subject to at least majority control by the issuer of the shares, but does not include the issuer itself.

(2) "Majority control" means ownership, direct or indirect, of a majority of any of the following:

(a) The shares entitled to vote for the directors of a corporation.

(b) The membership, partnership, or other interests in an unincorporated entity that are entitled either to vote for those who hold the general managerial authority in the unincorporated entity or to exercise that authority directly.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-722 Proxies

A. A shareholder may vote the shareholder's shares in person or by proxy.

B. A shareholder, or the shareholder's agent or attorney-in-fact, may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form, or by an electronic transmission. An electronic transmission must contain or be accompanied by information from which one can determine that the shareholder, the shareholder's agent, or the shareholder's attorney-in-fact authorized the transmission.

C. An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election, the secretary, or other officer or agent of the corporation authorized to tabulate votes. An appointment is valid for eleven months unless a longer period is expressly provided in the appointment form.

D. An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of any of the following:

(1) A pledgee or other person having a security interest in the shares.

(2) A person who purchased or agreed to purchase the shares.

(3) A creditor of the corporation who extended it credit under terms requiring the appointment.

(4) An employee of the corporation whose employment contract requires the appointment.

(5) A party to a voting agreement created under Section 1-731.

E. The revocation of a proxy appointment or the death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the revocation, death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.

F. An appointment made irrevocable under Subsection D of this Section is revoked when the interest with which it is coupled is extinguished.

G. Unless it otherwise provides, an appointment made irrevocable under Subsection D of this Section continues in effect after a transfer of the shares and a transferee takes subject to the appointment, except that a transferee for value of shares subject to an irrevocable appointment may revoke the appointment if the transferee did not know of its existence when acquiring the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

H. Subject to Section 1-724 and to any express limitation on the proxy's authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy's vote or other action as that of the shareholder making the appointment.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-723 Shares held by intermediaries and nominees

A. A corporation's board of directors may establish a procedure under which a person on whose behalf shares are registered in the name of an intermediary or nominee may elect to be treated by the corporation as the record shareholder by filing with the corporation a beneficial ownership certificate. The extent, terms, conditions, and limitations of this treatment shall be specified in the procedure. To the extent such person is treated under such procedure as having rights or privileges that the record shareholder otherwise would have, the record shareholder shall not have those rights or privileges.

B. The procedure shall specify all of the following information:

(1) The types of intermediaries or nominees to which it applies.

(2) The rights or privileges that the corporation recognizes in a person with respect to whom a beneficial ownership certificate is filed.

(3) The manner in which the procedure is selected, which shall include that the beneficial ownership certificate be signed or assented to by or on behalf of the record shareholder and the person or persons on whose behalf the shares are held.

(4) The information that must be provided when the procedure is selected.

(5) The period for which selection of the procedure is effective.

(6) The requirements for notice to the corporation with respect to the arrangement.

(7) The form and contents of the beneficial ownership certificate.

C. The procedure may specify any other aspects of the rights and duties created by the filing of a beneficial ownership certificate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-724 Corporation's acceptance of votes

A. If the name signed on a vote, consent, waiver, or proxy appointment corresponds to the name of a shareholder, 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 shareholder.

B. If the name signed on a vote, consent, waiver, or proxy appointment does not correspond to the name of its shareholder, 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 shareholder if any of the following conditions are met:

(1) The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity.

(2) The name signed purports to be that of an administrator, executor, guardian, conservator, curator, tutor or judicially authorized representative of the shareholder and, if the corporation requests, evidence of fiduciary status and authority acceptable to the corporation has been presented with respect to the vote, consent, waiver, or proxy appointment.

(3) The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder 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.

(4) The name signed purports to be that of a pledgee or other person having a security interest in the shares, a beneficial owner, or an attorney-in-fact or representative through mandate or procuration of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the shareholder has been presented with respect to the vote, consent, waiver, or proxy appointment.

(5) Two or more persons are the shareholder as co-owners, co-tenants, or fiduciaries and the name signed purports to be the name of at least one of them and the person signing appears to be acting on behalf of all of them.

C. The corporation is entitled to reject a vote, consent, waiver, or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the shareholder.

D. 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 or R.S. 12:1-722(B) are not liable in damages to the shareholder for the consequences of the acceptance or rejection.

E. The corporation's acceptance or rejection of a vote, consent, waiver, or proxy appointment under this Section is conclusive unless a shareholder objects timely to the acceptance or rejection of the item and, if the corporation rejects the objection, proves in a summary proceeding, commenced within ten days after the corporation's notice to the shareholder that it has rejected the objection, that the corporation's acceptance or rejection of the item was incorrect. A shareholder's objection is timely under this Subsection only if the objection is made before the end of the shareholders' meeting at which the acceptance or rejection of the item is given effect or, if the item is relevant to an action taken by shareholders without a meeting in accordance with R.S. 12:1-704, before the corporation incurs a legal obligation in good faith reliance on its acceptance or rejection of the item.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-725 Quorum and voting requirements for voting groups

A. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless a provision in the articles of incorporation authorized by R.S. 12:1-727 provides otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

B. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

C. If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless this Chapter or the articles of incorporation require a greater number of affirmative votes.

D. [Reserved.]

E. The election of directors is governed by R.S. 12:1-728.

F. Whenever a provision of this Chapter provides for voting of classes or series as separate voting groups, the rules provided in R.S. 12:1-1004(C) for amendments of articles of incorporation apply to that provision.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-726 Action by single and multiple voting groups

A. If the articles of incorporation or this Chapter provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in R.S. 12:1-725.

B. If the articles of incorporation or this Chapter provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in R.S. 12:1-725. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-727 Greater quorum or voting requirements

A. The articles of incorporation may provide for a greater voting requirement for shareholders, or voting groups of shareholders, than is provided for by this Chapter. The articles of incorporation may make a quorum requirement for shareholders, or for a voting group of shareholders, greater or lesser than that provided by this Chapter, but the requirement may not be lower than shares having twenty-five percent of the votes entitled to be cast on a matter.

B. An amendment to the articles of incorporation that adds, changes, or deletes a quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.

§ 12:1-728 Quorum and voting for directors; cumulative voting

A. Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. If a quorum is not present at an annual meeting or at a special meeting called for the election of directors, the shareholders present at the meeting in person or by proxy may, by a majority of the votes cast on the matter, adjourn the meeting to the next day, at the place and time specified in the approved motion to adjourn. The shareholders present in person or by proxy at the meeting to which the earlier meeting is adjourned shall constitute a quorum for the purpose of electing directors, even if a quorum would not otherwise be present.

B. Shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation so provide.

C. A statement included in the articles of incorporation that shareholders, or a designated group of shareholders, "are entitled to cumulate their votes for directors", or words of similar import, means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two or more candidates.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2017, No. 57, §1.

§ 12:1-729 Inspectors of election

A. A public corporation shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders and make a written report of the inspectors' determinations. Each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability.

B. The inspectors shall do all of the following:

(1) Ascertain the number of shares outstanding and the voting power of each.

(2) Determine the shares represented at a meeting.

(3) Determine the validity of proxies and ballots.

(4) Count all votes.

(5) Determine the result.

C. An inspector may be an officer or employee of the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C VOTING TRUSTS AND AGREEMENTS

§ 12:1-730 Voting trusts

A. One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust, which may include anything consistent with its purpose, and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all voting trust beneficial owners, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation's principal office.

B. A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee's name.

C. Limits, if any, on the duration of a voting trust shall be as set forth in the voting trust. The duration of a voting trust that became effective before January 1, 2015, may not exceed fifteen years, but may stipulate that it may be extended under the same terms and conditions for an additional period not to exceed ten years from the date of the expiration of the initial term. The limitation imposed by this Subsection on the duration of a voting trust that became effective before January 1, 2015, may be modified or eliminated by unanimous agreement of the parties to the voting trust.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-731 Voting agreements

A. Two or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this Section is not subject to the provisions of R.S. 12:1-730.

B. A voting agreement created under this Section is specifically enforceable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-732 Unanimous governance agreements

A. The term "unanimous governance agreement" means any written agreement, other than the articles of incorporation or bylaws, that satisfies all of the following criteria:

(1) Is approved in one or more writings signed by all persons who are shareholders at the time of the agreement.

(2) Governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors, and the corporation, or among any of them.

(3) States that it is a unanimous governance agreement or that it is governed by this Section.

B. A unanimous governance agreement is effective among the shareholders and the corporation, and shall be interpreted and enforced among those persons in accordance with the principle of freedom of contract, subject only to the limitations imposed by public policy. A unanimous governance agreement is enforceable among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this Chapter in that it does any of the following:

(1) Eliminates the board of directors or restricts the discretion or powers of the board of directors.

(2) Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in R.S. 12:1-640.

(3) Establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal.

(4) Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies.

(5) Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer, or employee of the corporation or among any of them.

(6) Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders.

(7) Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency.

(8) Otherwise changes, in a manner not contrary to public policy, the result that would be reached under other provisions of this Chapter.

C.(1) The existence of a unanimous governance agreement shall be noted conspicuously on the front or back of each certificate for outstanding shares. If, at the time of the agreement, the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this Subsection. The failure to note the existence of the agreement on the certificate shall not affect the validity of the agreement or any action taken pursuant to it.

(2) Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate for the shares in compliance with this Subsection.

(3) An action to enforce the right of rescission authorized by this Subsection must be commenced within the earlier of ninety days after discovery of the existence of the agreement or two years after the time of purchase of the shares.

D. The provisions of a unanimous governance agreement shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete any references to it.

E. A unanimous governance agreement that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement. A person who is subjected to liability by this Subsection may be held liable only to the extent that a director vested with the same discretion or powers could be held liable, and is entitled to indemnity under R.S. 12:1-850 through 1-859, and to protection against liability under R.S. 12:1-832, to the same extent as a director vested with the same discretion or powers.

F. The existence or performance of a unanimous governance agreement shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.

G. Incorporators or subscribers for shares may act as shareholders with respect to a unanimous governance agreement if no shares have been issued when the agreement is made.

H. If the shareholders have approved more than one unanimous governance agreement, all of the agreements shall, to the extent reasonable, be construed together as one agreement in which all provisions are given effect. To the extent that conflicting provisions cannot be reconciled through that rule of construction, the more recently-approved provision controls.

I. Except as otherwise provided in the agreement, a unanimous governance agreement shall have all of the following characteristics:

(1) Has an initial term of twenty years.

(2) May be renewed during the initial or any subsequent term for an additional term of up to twenty years after the renewal is approved, by means of one or more written consents to the renewal, signed by all persons who are shareholders at the time of the renewal, and delivered to the corporation in accordance with R.S. 12:1-704(C).

(3) May be amended or terminated during its initial or any subsequent term by means of one or more written consents to the amendment or termination, signed by all persons who are shareholders at the time of the termination or amendment, and delivered to the corporation in accordance with R.S. 12:1-704(C).

(4) Continues in effect even after the expiration of its term, as renewed, until one or more written consents to its termination, signed by the shareholders of at least twenty-five percent of the issued shares of any class are delivered to the corporation in accordance with R.S. 12:1-704(C).

J. The corporation shall send notice of any renewal, amendment, or termination of a unanimous governance agreement to all shareholders within ten days after the effective date of the renewal, amendment, or termination, but the renewal, amendment, or termination is effective even if the notice is not sent.

K. This Section does not affect the enforceability of any agreement among shareholders that is not a unanimous governance agreement as defined in Subsection A of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D DERIVATIVE PROCEEDINGS

§ 12:1-740 Subpart definitions

In this Subpart, the following meanings shall apply:

(1) "Derivative proceeding" means a civil suit in the right of a domestic corporation or, to the extent provided in R.S. 12:1-747, in the right of a foreign corporation.

(2) "Shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-741 Standing

A. A shareholder may not commence or maintain a derivative proceeding unless the shareholder satisfies all of the following conditions:

(1) Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time.

(2) Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

B. A shareholder who meets the requirements of Subsection A of this Section may file a derivative proceeding to enforce a right of the corporation, but only after the shareholder satisfies the requirements of R.S. 12:1-742.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-742 Demand

No shareholder may commence a derivative proceeding until the following conditions are satisfied:

(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 shareholder 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.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-742.1 Petition in derivative proceeding

The petition in a derivative proceeding shall do all of the following:

(1) Allege that the plaintiff meets the standing requirements of R.S. 12:1-741.

(2) Allege either that the plaintiff made demand upon the corporation at least ninety days before the filing of the petition as required by R.S. 12:1-742 or that the plaintiff made the demand and, for reasons alleged in the petition, the filing of the petition before the expiration of the ninety-day period complies with R.S. 12:1-742.

(3) Join as defendants the corporation and the obligor on the obligation sought to be enforced.

(4) Include a prayer for judgment in favor of the corporation and against the obligor on the obligation sought to be enforced.

(5) Be verified by the affidavit of the plaintiff or his counsel.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-742.2 Jurisdiction over a director

A court may exercise personal jurisdiction over a nonresident who is or has been a director of a domestic corporation as to a cause of action arising from a breach by the nonresident of a duty owed to the corporation or its shareholders because of the nonresident's position as a director.

Acts 2017, No. 57, §1.

§ 12:1-742.3 Venue in derivative proceeding

A derivative proceeding shall be brought in the parish where the registered office of the corporation is located.

Acts 2017, No. 57, §1.

§ 12:1-743 Stay of proceedings

If the corporation commences an inquiry into the allegations made in the demand or petition, the court may stay any derivative proceeding for such period as the court deems appropriate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-744 Dismissal

A. A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in Subsection B or Subsection E of this Section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

B. Unless a panel is appointed pursuant to Subsection E of this Section, the determination in Subsection A of this Section shall be made by one of the following:

(1) A majority vote of qualified directors present at a meeting of the board of directors if the qualified directors constitute a quorum.

(2) A majority vote of a committee consisting of two or more qualified directors appointed by majority vote of qualified directors present at a meeting of the board of directors, regardless of whether such qualified directors constitute a quorum.

C. If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the petition shall allege with particularity facts establishing either of the following:

(1) That a majority of the board of directors did not consist of qualified directors at the time the determination was made.

(2) That the requirements of Subsection A of this Section have not been met.

D. If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff shall have the burden of proving that the requirements of Subsection A of this Section have not been met; if not, the corporation shall have the burden of proving that the requirements of Subsection A of this Section have been met.

E. Upon motion by the corporation, the court may appoint a panel of one or more individuals 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 A of this Section have not been met.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-745 Discontinuance or settlement

A. Unless approved unanimously by the shareholders of the corporation, a derivative proceeding may 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 the corporation's shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.

B. This Section does not affect the plaintiff's right under Article 1671 of the Code of Civil Procedure to obtain a judgment of dismissal without prejudice if the application for dismissal is made before any defendant, including the corporation in its capacity as a defendant, makes any appearance of record in the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-746 Payment of expenses

On termination of the derivative proceeding the court may do any of the following:

(1) Order the corporation to pay the plaintiff's expenses 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 expenses incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.

(3) Order a party to pay an opposing party's expenses incurred because of the filing of a pleading, motion, or other paper, if it finds that the pleading, motion, or other paper was not well-grounded in fact, after reasonable inquiry, or warranted by existing law or a good- faith argument for the extension, modification, or reversal of existing law and was interposed for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-747 Applicability to foreign corporations

In any derivative proceeding in the right of a foreign corporation, the matters covered by this Subpart shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for R.S. 12: 1-743, 1-745, and 1-746.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART E PROCEEDING TO APPOINT RECEIVER

§ 12:1-748 Shareholder action to appoint receiver

A. The district court of the parish in which the registered office of the corporation is located may appoint one or more to be receivers, of and for a corporation in a proceeding by a shareholder where it is established that either of the following conditions exist:

(1) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered.

(2) The directors or those in control of the corporation are acting fraudulently and irreparable injury to the corporation is threatened or being suffered.

B.(1) The court may issue injunctions, appoint a temporary receiver with all the powers and duties the court directs, take other action to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing is held.

(2) The court shall hold a full hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver.

(3) The court has jurisdiction over the corporation and all of its property, wherever located.

C. The court may appoint an individual or domestic or foreign corporation, authorized to transact business in this state, as a receiver and may require the receiver to post bond, with or without sureties, in an amount the court directs.

D. The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. Among other powers, a receiver may do any of the following:

(1) Exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the business and affairs of the corporation.

(2) Dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court.

(3) Sue and defend in the receiver's own name as receiver in all courts of this state.

E. [Reserved.]

F. The court from time to time during the receivership may order compensation paid and expense disbursements or reimbursements made to the receiver from the assets of the corporation or proceeds from the sale of its assets.

G. In this Section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 8 DIRECTORS AND OFFICERS

SUBPART A BOARD OF DIRECTORS

§ 12:1-801 Requirement for and functions of board of directors

A. Except as provided in R.S. 12:1-732, each corporation must have a board of directors.

B. All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under R.S. 12:1-732.

C. In the case of a public corporation, the board's oversight responsibilities include attention to all of the following:

(1) Business performance and plans.

(2) Major risks to which the corporation is or may be exposed.

(3) The performance and compensation of senior officers.

(4) Policies and practices to foster the corporation's compliance with law and ethical conduct.

(5) Preparation of the corporation's financial statements.

(6) The effectiveness of the corporation's internal controls.

(7) Arrangements for providing adequate and timely information to directors.

(8) The composition of the board and its committees, taking into account the important role of independent directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-802 Qualifications of directors

A. The articles of incorporation or bylaws may prescribe qualifications for directors or for nominees for director.

B. A requirement that is based on a past, current or prospective action, or expression of an opinion, by a nominee or director that could limit the ability of a nominee or director to discharge his or her duties as a director is not a permissible qualification under this Section. Notwithstanding the foregoing, qualifications may include not being or having been subject to specified criminal, civil or regulatory sanctions or not having been removed as a director by judicial action or for cause.

C. A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so provide.

D. A qualification for nomination for director adopted before a person's nomination shall apply to such person at the time of nomination. A qualification for nomination for director adopted after a person's nomination shall not apply to such person with respect to such nomination.

E. A qualification for director adopted before the start of a director's term may apply only at the time an individual becomes a director or may apply during a director's term. A qualification adopted during a director's term shall not apply to that director before the end of that term.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-803 Number and election of directors

A. A board of directors must consist of one or more individuals. The number of directors shall be fixed by or in accordance with the articles of incorporation or, if not so fixed, shall be the number fixed by or in accordance with the bylaws. If not fixed by or in accordance with the articles or the bylaws, the number of directors shall be the number elected from time to time by the shareholders and, if directors have not been elected by the shareholders, the number of directors shall be the number of directors named as initial directors in the articles of incorporation.

B. The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.

C. Directors are elected at the first annual shareholders' meeting and at each annual meeting thereafter unless their terms are staggered under R.S. 12:1-806.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-804 Election of directors by certain classes of shareholders

If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares. A class, or classes, of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-805 Terms of directors generally

A. The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.

B. The terms of all other directors expire at the next, or if their terms are staggered in accordance with R.S. 12:1-806, at the applicable second or third, annual shareholders' meeting following their election, except to the extent provided in a bylaw authorized by R.S. 12:1-1022 or a shorter term is specified in the articles of incorporation in the event of a director nominee failing to receive a specified vote for election.

C. A decrease in the number of directors does not shorten an incumbent director's term.

D. The term of a director elected to fill a vacancy expires when the term of that director's predecessor in office would have expired had the vacancy not occurred.

E. Except to the extent otherwise provided in the articles of incorporation or a bylaw authorized by R.S. 12:1-1022, despite the expiration of a director's term, the director continues to serve until the director's successor is elected and qualifies or there is a decrease in the number of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-806 Staggered terms for directors

The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two or three groups, with each group containing one-half or one-third of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election. At each annual shareholders' meeting held thereafter, directors shall be chosen for a term of two years or three years, as the case may be, to succeed those whose terms expire.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-807 Resignation of directors

A. A director may resign at any time by delivering a written resignation to the board of directors, or its chair, or to the secretary of the corporation.

B. A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-808 Removal of directors by shareholders

A. The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

B. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.

C. If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove is a majority of the number of votes entitled to be cast in an election of directors.

D. A director may be removed by the shareholders 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 removal of the director.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-809 [Reserved].

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-810 Vacancy on board

A. Unless the articles of incorporation or bylaws provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors, the vacancy may be filled by one of the following methods:

(1) The shareholders may fill the vacancy.

(2) The board of directors may fill the vacancy.

(3) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

B. If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the directors.

C. A vacancy that will occur at a specific later date, by reason of a resignation effective at a later date under R.S. 12:1-807(B) or otherwise, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-811 Compensation of directors

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-812 Director proxies

A. A director may vote by proxy at a meeting of the board of directors or of a committee of the board only if the articles of incorporation so provide.

B. A director may appoint as proxy only another director, and the appointment may be made only by means of a signed writing that is delivered to the person who is presiding at the meeting at which the proxy seeks to cast the absent director's vote. The writing may contain instructions, general or special, concerning the proxy's authority.

C. Except as otherwise provided in the articles of incorporation, a separate appointment of a proxy is required for each meeting, and the proxy's authority under any appointment terminates at the conclusion of the meeting for which the appointment was made.

D. The proxy shall cast the votes of the absent director consistently with any instructions that the proxy receives from the absent director, but otherwise may cast votes on behalf of the absent director in accordance with the proxy's own discretion.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B MEETINGS AND ACTION OF THE BOARD

§ 12:1-820 Meetings

A. The board of directors may hold regular or special meetings in or out of this state.

B. Unless the articles of incorporation or bylaws provide otherwise, the board of directors 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.

C. A meeting of the board of directors may be called as provided in the bylaws, and may also be called by the board chair, by the chief executive officer, regardless of the title used by the corporation to designate that officer, or by a majority of the directors.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-821 Action without meeting

A. Except to the extent that the articles of incorporation or bylaws require that action by the board of directors be taken at a meeting, action required or permitted by this Chapter to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action to be taken and delivers it to the corporation.

B. Action taken under this Section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken thereunder is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by all the directors.

C. A consent signed under this Section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-822 Notice of meeting

A. Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place, or purpose of the meeting.

B. Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least forty-eight hour notice of the date, time, and place of the meeting. Except as otherwise provided in the articles of incorporation or bylaws, the notice shall describe the purpose or purposes of the special meeting.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-823 Waiver of notice

A. A director may waive any notice required by this Subpart, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by Subsection B of this Section, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.

B. A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless one of the following occurs:

(1) The director at the beginning of the meeting, or promptly upon arrival, objects to holding the meeting or transacting business at the meeting.

(2) The objection is to the consideration of an item of business outside the scope of the purposes stated in the notice of the meeting and the director objects to the consideration of that item promptly after the item is first raised for consideration at the meeting.

C. A director who objects in accordance with Subsection B of this Section, but who then participates in the meeting or votes in favor of one or more actions at the meeting, does not waive the objection except with respect to those actions at the meeting that the director votes to approve.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-824 Quorum and voting

A. Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in this Chapter, a quorum of a board of directors consists of a majority of the number of directors determined in accordance with R.S. 12:1-803.

B. The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third of the number of directors determined in accordance with R.S. 12:1-803.

C.(1) If a quorum is present when a vote is taken, the affirmative vote of the required majority of directors is the act of the board of directors. The required majority of directors is a majority of the directors present, or the number of directors whose votes are required by the articles of incorporation or bylaws for the board to take the relevant action, whichever number is greater.

(2) If a quorum is present when a meeting is convened, but the quorum is lost through the withdrawal from the meeting of one or more directors, the affirmative vote of the required majority of directors is the act of the board of directors provided that the number of affirmative votes is not fewer than the number that would have been required had the quorum not been lost.

D. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless one of the following occurs:

(1) The director objects at the beginning of the meeting, or promptly upon arrival, to holding the meeting or transacting business at the meeting.

(2) The dissent or abstention from the action taken is entered in the minutes of the meeting.

(3) The director delivers written notice of the director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-825 Committees

A. Unless this Chapter, the articles of incorporation, or the bylaws provide otherwise, the board of directors may create one or more committees and appoint one or more members of the board of directors to serve on any such committee. If the board of directors appoints a person who is not a director, that person may serve only in an advisory capacity and shall not be a member of the committee for purposes of any reference by this Chapter to a committee or to one or more members of a committee.

B. Unless this Chapter otherwise provides, the creation of a committee and appointment of members to it must be approved by the greater of the following:

(1) A majority of all the directors in office when the action is taken.

(2) The number of directors required by the articles of incorporation or bylaws to take action under R.S. 12:1-824.

C. R.S. 12:1-820 through 1-824 apply both to committees of the board and to their members.

D. To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the powers of the board of directors under R.S. 12:1-801.

E. A committee may not do any of the following:

(1) Authorize or approve distributions, except according to a formula or method, or within limits, prescribed by the board of directors.

(2) Approve or propose to shareholders action that this Chapter requires be approved by shareholders.

(3) Fill vacancies on the board of directors or, subject to Subsection G of this Section, on any of its committees.

(4) Adopt, amend, or repeal bylaws.

F. The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in R.S. 12:1-830.

G. The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member's absence or disqualification. Unless the articles of incorporation or the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-826 Submission of matters for shareholder vote

A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C DIRECTORS

§ 12:1-830 Standards of conduct for directors

A. Each member of the board of directors, when discharging the duties of a director, shall act in good faith and in a manner the director reasonably believes to be in the best interests of the corporation.

B. The members of the board of directors or a committee of the board, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.

C. In discharging board or committee duties a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decision-making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule.

D. 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 specified in Paragraph (F)(1) or Paragraph (F)(3) of this Section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board's functions that are delegable under applicable law.

E. In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in Subsection F of this Section.

F. A director is entitled to rely, in accordance with Subsection D or E of this Section, on any of the following:

(1) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports, or statements provided.

(2) Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters within the particular person's professional or expert competence or as to which the particular person merits confidence.

(3) A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-831 Standards of liability for directors

A. A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes both of the following:

(1) No defense interposed by the director based on R.S. 12:1-832, a provision in the articles of incorporation authorized by R.S. 12:1-202(B)(6), the protection afforded by R.S. 12:1-861 for action taken in compliance with R.S. 12:1-862 or R.S. 12:1-863, or the protection afforded by R.S. 12:1-870, precludes liability.

(2) The challenged conduct consisted or was the result of one of the following:

(a) Action not in good faith.

(b) A decision that the director did not reasonably believe to be in the best interests of the corporation, or as to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances.

(c) A lack of objectivity due to the director's familial, financial, or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct, 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, and 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.

(d) A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation, or a failure to devote timely attention, by making, or causing to be made, appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefore.

(e) 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 shareholders that is actionable under applicable law.

B.(1) The party seeking to hold the director liable for money damages, shall also have the burden of establishing both of the following:

(a) Harm to the corporation or its shareholders has been suffered.

(b) The harm suffered was proximately caused by the director's challenged conduct.

(2) The party seeking to hold the director liable for other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances.

(3) The party seeking to hold the director liable for other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

C. Nothing contained in this Section shall be construed to do any of the following:

(1) In any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under R.S. 12:1-861(B)(3), alter the burden of proving the fact or lack of fairness otherwise applicable.

(2) Alter the fact or lack of liability of a director under another provision of this Chapter, such as the provisions governing the consequences of an unlawful distribution under R.S.12:1-833 or a transactional interest under R.S. 12:1-861.

(3) Affect any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States.

Acts 2014, No. 328, §1, eff. Jan. 1, 2105; Acts 2016, No. 442, §1.

§ 12:1-832 Protection against monetary liability

A. Except to the extent that the articles of incorporation limit or reject the protection against liability provided by this Section, no director or officer shall be liable to the corporation or its shareholders for money damages for any action taken, or any failure to take action, as a director or officer, except for one of the following:

(1) A breach of the director's or officer's duty of loyalty to the corporation or the shareholders.

(2) An intentional infliction of harm on the corporation or the shareholders.

(3) A violation of R.S. 12:1-833.

(4) An intentional violation of criminal law.

B. The liability of a director or officer for conduct described in Paragraphs (A)(1) through (4) of this Section may not be limited or eliminated, but the corporation may purchase insurance against that liability as provided in R.S. 12:1-857.

C. For purposes of this Section, the duty of loyalty does not include any duty to act with any degree of care in the exercise of the director's or officer's responsibilities to the corporation or its shareholders.

D. A provision in a corporation's articles of incorporation that became effective before January 1, 2015, and that purports to protect a director or officer of the corporation against monetary liability to the corporation or its shareholders, shall not operate as a limitation of the protection against liability provided by this Section except to the extent that it provides less protection against liability than was permitted by the law in effect at the time the provision became effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-833 Directors' liability for unlawful distributions

A. A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to R.S. 12:1-640(A) or 1-1409(A) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating R.S. 12:1-640(A) or 1-1409(A) if the party asserting liability establishes that when taking the action the director did not comply with R.S. 12:1-830.

B. A director held liable under Subsection A of this Section for an unlawful distribution is entitled to both of the following:

(1) Contribution from every other director who could be held liable under Subsection A of this Section for the unlawful distribution.

(2) Indemnity from each shareholder, for the pro-rata portion of the amount of the unlawful distribution the shareholder received.

C.(1) A proceeding to enforce the liability of a director under Subsection A of this Section is barred unless it is commenced within two years after the relevant one of the following dates:

(a) The date on which the effect of the distribution was measured under R.S.12:1-640(E) or (G).

(b) The date as of which the violation of R.S. 12:1-640(A) occurred as the consequence of disregard of a restriction in the articles of incorporation.

(c) The date on which the distribution of assets to shareholders under R.S. 12:1-1409(A) was made.

(2) A proceeding to enforce contribution or indemnity under Subsection B of this Section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under Subsection A of this Section.

D. The time limits provided in Subsection C of this Section are peremptive.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

SUBPART D OFFICERS

§ 12:1-840 Officers

A. A corporation shall have a secretary and such other officers as described in its bylaws or appointed by the board of directors in a manner not inconsistent with any bylaws.

B. The board of directors may elect individuals to fill one or more offices of the corporation. An officer may appoint one or more officers if authorized by the bylaws or the board of directors.

C. The secretary shall have the authority and responsibility for preparing the minutes of the directors' and shareholders' meetings and for maintaining and authenticating the records of the corporation required to be kept under R.S. 12:1-1601(A) and 1-1601(E).

D. The same individual may simultaneously hold more than one office in a corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-841 Functions of officers

In addition to the secretary's authority under R.S. 12:1-840, each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with any bylaws, the authority and functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the authority and functions of other officers.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-842 Standards of conduct for officers

A. An officer, when performing in such capacity, has the duty to act in all of the following manners:

(1) In good faith.

(2) With the care that a person in a like position would reasonably exercise under similar circumstances.

(3) In a manner the officer reasonably believes to be in the best interests of the corporation.

B. [Reserved.]

C. In discharging his or her duties, an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on any of the following:

(1) 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.

(2) Information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters within the particular person's professional or expert competence or as to which the particular person merits confidence.

D. An officer shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as an officer, if the duties of the office 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 R.S. 12:1-831 that have relevance.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-843 Resignation and removal of officers

A. An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is effective unless the notice specifies a later effective time. If a resignation is made effective at a later time and the board or the appointing officer accepts the future effective time, the board or the appointing officer may fill the pending vacancy before the effective time if the board or the appointing officer provides that the successor does not take office until the effective time.

B. An officer may be removed at any time with or without cause by any of the following:

(1) The board of directors.

(2) The appointing officer, unless the bylaws or the board of directors provide otherwise.

(3) Any other officer if authorized by the bylaws or the board of directors.

C. In this Section, "appointing officer" means the officer, including any successor to that officer, who appointed the officer resigning or being removed.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-844 Contract rights of officers

A. The appointment of an officer does not itself create contract rights.

B. An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART E INDEMNIFICATION AND ADVANCE FOR EXPENSES

§ 12:1-850 Subpart definitions

In this Subpart, the following meanings shall apply:

(1) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger.

(2) "Director" or "officer" means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, manager, partner, trustee, employee, or agent of another entity or employee benefit plan. A director or officer is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan. "Director" or "officer" includes, unless the context requires otherwise, the estate or personal representative of a director or officer.

(3) "Liability" means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding.

(4) "Official capacity" means, when used with respect to a director, the office of director in a corporation. "Official capacity" means, when used with respect to an officer, as contemplated in R.S. 12: 1-856, the office in a corporation held by the officer. "Official capacity" does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan, or other entity.

(5) "Party" means an individual who was, is, or is threatened to be made, a defendant or respondent in a proceeding.

(6) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, arbitrative, or investigative and whether formal or informal.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-851 Permissible indemnification

A. 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 the requirements of Paragraph (1) or (2) of this Subsection are met:

(1) The director satisfied the requirements of Subparagraphs (a) and (b) and, if applicable, Subparagraph (c) of this Paragraph:

(a) The director conducted himself or herself in good faith.

(b) The director reasonably believed the relevant one of the following:

(i) In the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation.

(ii) In all other cases, that the director's conduct was at least not opposed to the best interests of the corporation.

(c) In the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful.

(2) The director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation, as authorized by R.S. 12:1-202(B)(5), for which liability has been eliminated under R.S. 12:1-832.

B. 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 the beneficiaries of, the plan is conduct that satisfies the requirement of Item (A)(1)(a)(ii) of this Section.

C. The termination of a proceeding by judgment, order, settlement, or 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.

D. Unless ordered by a court under R.S. 12:1-854(A)(3), a corporation may not indemnify a director in connection with either of the following:

(1) A proceeding by or in the right of the corporation, except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under Subsection A of this Section.

(2) Any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which he or she was not entitled, whether or not involving action in the director's official capacity.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-852 Mandatory indemnification

A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he or she was a director of the corporation against expenses incurred by the director in connection with the proceeding.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-853 Advance for expenses

A. A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation both of the following:

(1) A written affirmation of the director's good faith belief that the relevant standard of conduct described in R.S. 12:1-851 has been met by the director or that the proceeding involves conduct for which liability has been eliminated under R.S. 12: 1-832.

(2) A written undertaking of the director to repay any funds advanced if the director is not entitled to mandatory indemnification under R.S. 12:1-852 and it is ultimately determined under R.S. 12:1-854 or 1-855 that the director has not met the relevant standard of conduct described in R.S. 12:1-851.

B. The undertaking required by Paragraph (A)(2) of this Section 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.

C. Authorizations under this Section shall be made by one of the following:

(1) By the board of directors in either of the following manners:

(a) If there are two or more qualified directors, by a majority vote of all the qualified 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 qualified directors appointed by such a vote.

(b) If there are fewer than two qualified directors, by the vote necessary for action by the board in accordance with R.S. 12:1-824(C), in which authorization directors who are not qualified directors may participate.

(2) By the shareholders, except that shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-854 Court-ordered indemnification and advance for expenses

A. A director who is a party to a proceeding because he or she is a director may petition the court conducting the proceeding for indemnification or an advance for expenses or, if the indemnification or advance for expenses is beyond the scope of the proceeding or of the jurisdiction of the court or other forum for the proceeding, may petition another court of competent jurisdiction. After ordering any notice it considers necessary, the court shall hear the petition by summary proceeding and shall, if it makes the required determination, order one of the following:

(1) Indemnification if the court determines that the director is entitled to mandatory indemnification under R.S. 12:1-852.

(2) 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 R.S. 12:1-858(A).

(3) Indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable for the corporation to provide the ordered indemnification or advance for expenses, even though the director did not meet the relevant standard of conduct set forth in R.S. 12:1-851(A), failed to comply with R.S. 12:1-853, or was adjudged liable in a proceeding referred to in R.S. 12:1-851(D)(1) or (D)(2). If the director was adjudged liable in a proceeding referred to in R.S. 12:1-851(D)(1) or (D)(2), indemnification shall be limited to expenses incurred in connection with the proceeding.

B. If the court determines that the director is entitled to indemnification under Paragraph (A)(1) of this Section or to indemnification or advance for expenses under Paragraph (A)(2) of this Section, it shall also order the corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under Paragraph (A)(3) of this Section, it may also order the corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-855 Determination and authorization of indemnification

A. A corporation may not indemnify a director under R.S. 12:1-851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in R.S. 12:1-851.

B. The determination shall be made by one of the following:

(1) If there are two or more qualified directors, by the board of directors by a majority vote of all the qualified 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 qualified directors appointed by such a vote.

(2) By special legal counsel selected using either of the following means:

(a) Selected in the manner prescribed in Paragraph (B)(1) of this Section.

(b) If there are fewer than two qualified directors, selected by the board of directors, in which selection directors who are not qualified directors may participate.

(3) By the shareholders, except that shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.

C. Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible except that if there are fewer than two qualified directors, or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled to select special legal counsel under Subparagraph (B)(2)(b) of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-856 Indemnification of officers

A. A corporation may indemnify and advance expenses under this Subpart to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director and, if he or she 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 except for either of the following:

(1) Liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding.

(2) Liability arising out of conduct that constitutes any of the following:

(a) A breach of the officer's duty of loyalty to the corporation or its shareholders.

(b) An intentional infliction of harm on the corporation or the shareholders.

(c) An intentional violation of criminal law.

B. [Reserved.]

C. An officer of a corporation is entitled to mandatory indemnification under R.S. 12:1-852, and may apply to a court under R.S. 12:1-854 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.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-857 Insurance

A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation, or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee, or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from his or her status as a director or officer, whether or not the individual could be protected against the same liability under R.S. 12:1-832 and whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability under this Subpart.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-858 Variation by corporate action; application of Subpart

A. A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with R.S. 12:1-851 or advance funds to pay for or reimburse expenses in accordance with R.S. 12:1-853. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in R.S. 12:1-853(C) and 1-855(C). Any such provision that obligates the corporation to provide 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 accordance with R.S. 12:1-853 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

B. A right of indemnification or to advances for expenses created by this Subpart or under Subsection A of this Section and in effect at the time of an act or omission shall not be eliminated or impaired with respect to such act or omission by an amendment of the articles of incorporation or bylaws or a resolution of the directors or shareholders, adopted after the occurrence of such act or omission, unless, in the case of a right created under Subsection A of this Section, the provision creating such right and in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such act or omission has occurred.

C. Any provision pursuant to Subsection A of this Section 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 indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders 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 R.S. 12:1-1107(A)(4).

D. 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 Subpart.

E. This Subpart does not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with appearing as a witness in a proceeding at a time when he or she is not a party.

F. This Subpart does not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-859 Exclusivity of Subpart

A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by this Subpart.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART F DIRECTORS' CONFLICTING INTEREST TRANSACTIONS

§ 12:1-860 Subpart definitions

In this Subpart, the following meanings shall apply:

(1) "Control", including the term "controlled by", means either of the following:

(a) Having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise.

(b) Being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.

(2) "Director's conflicting interest transaction" means any of the following:

(a) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, to which, at the relevant time, the director is a party.

(b) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director.

(c) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

(3) "Fair to the corporation" means, for purposes of R.S. 12:1-861(B)(3), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was fair in terms of the director's dealings with the corporation, and comparable to what might have been obtainable in an arm's length transaction, given the consideration paid or received by the corporation.

(4) "Material financial interest" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.

(5) "Related person" means, at the relevant time, any of the following:

(a) The individual's spouse.

(b) A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsibling, half sibling, aunt, uncle, niece or nephew, or spouse of any thereof, of the individual or of the individual's spouse.

(c) A natural person living in the same home as the individual.

(d) An entity, other than the corporation or an entity controlled by the corporation, controlled by the individual or any person specified above in this Paragraph.

(e) A domestic or foreign business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which the individual is a director, a domestic or foreign unincorporated entity of which the individual is a general partner or a member of the governing body, or a domestic or foreign individual, trust, or estate for whom or of which the individual is a trustee, guardian, personal representative, or like fiduciary.

(f) A person that is, or an entity that is controlled by, an employer of the individual.

(g) A person with whom the individual has a material relationship.

(6) "Relevant time" means the time at which directors' action respecting the transaction is taken in compliance with R.S. 12:1-862, or if the transaction is not brought before the board of directors of the corporation or its committee for action under R.S. 12:1-862, at the time the corporation, or an entity controlled by the corporation, becomes legally obligated to consummate the transaction.

(7) "Required disclosure" means disclosure of the existence and nature of the director's conflicting interest, and all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-861 Judicial action

A. A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, may not be the subject of any form of relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if it is not a director's conflicting interest transaction.

B. A director's conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if any of the following conditions are satisfied:

(1) Directors' action respecting the transaction was taken in compliance with R.S. 12:1-862 at any time.

(2) Shareholders' action respecting the transaction was taken in compliance with R.S. 12: 1-863 at any time.

(3) The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-862 Directors' action

A. Directors' action respecting a director's conflicting interest transaction is effective for purposes of R.S. 12:1-861(B)(l) if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two, of the qualified directors who voted on the transaction, after required disclosure by the conflicted director of information not already known by such qualified directors, or after modified disclosure in compliance with Subsection B of this Section, provided that both of the following criteria are satisfied:

(1) The qualified directors have deliberated and voted outside the presence of and without the participation by any other director.

(2) Where the action has been taken by a committee, all members of the committee were qualified directors, and either the committee was composed of all the qualified directors on the board of directors or the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.

B. Notwithstanding Subsection A of this Section, when a transaction is a director's conflicting interest transaction only because a related person described in R.S. 12: 1-860(5)(e), (f), or (g) is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction all of the following:

(1) All information required to be disclosed that is not so violative.

(2) The existence and nature of the director's conflicting interest.

(3) The nature of the conflicted director's duty not to disclose the confidential information.

C. A majority, but no fewer than two, of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this Section.

D. Where directors' action under this Section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-863 Shareholders' action

A. Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of R.S. 12:1-861(B)(2) if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after notice to shareholders describing the action to be taken respecting the transaction, provision to the corporation of the information referred to in Subsection B of this Section, and communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, to the extent the information is not known by them.

B. A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under Subsection C of this Section, and the identity of the holders of those shares.

C.(1) For purposes of this Section, "holder" means and "held by" refers to shares held by a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial shareholder.

(2) For the purposes of this Section, "qualified shares" means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to tabulate votes either knows or, under Subsection B of this Section, is notified are held by a director who has a conflicting interest respecting the transaction or a related person of the director, excluding a person described in R.S. 12:1-860(5)(f).

D. A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this Section. Subject to the provisions of Subsection E of this Section, shareholders' action that otherwise complies with this Section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares.

E. If a shareholders' vote does not comply with Subsection A of this Section solely because of a director's failure to comply with Subsection B of this Section, and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action respecting the transaction and the director, and may give such effect, if any, to the shareholders' vote, as the court considers appropriate in the circumstances.

F. Where shareholders' action under this Section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shares that are not qualified shares may participate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART G BUSINESS OPPORTUNITIES

§ 12:1-870 Business opportunities

A. If a director or officer or related person of either pursues or takes advantage, directly or indirectly, of a business opportunity, that action may not be the subject of any form of relief, or give rise to an award of damages or other sanctions against the director, officer or related person, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if the requirements of Paragraph (1) or (2) of this Subsection are satisfied:

(1) Before the director, officer or related person becomes legally obligated respecting the opportunity, the director or officer brings it to the attention of the corporation and either of the following occurs:

(a) Action by qualified directors disclaiming the corporation's interest in the opportunity is taken in compliance with the same procedures set forth in R.S. 12:1-862.

(b) Shareholders' action disclaiming the corporation's interest in the opportunity is taken in compliance with the procedures set forth in R.S. 12:1-863, as if the decision being made concerned a director's conflicting interest transaction.

(2) The duty to offer the corporation the particular business opportunity has been limited or eliminated pursuant to a provision of the articles of incorporation adopted, and in the case of officers and their related persons made effective by action of qualified directors, in accordance with R.S. 12:1-202(B)(6).

B. In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ the procedure described in Subsection A of this Section before taking advantage of the opportunity shall not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances.

C. For purposes of this Section, the term "required disclosure" as used in R.S. 12:1-862 and R.S. 12:1-863 means prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director or officer.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

PART 9 DOMESTICATION AND CONVERSION

SUBPART A PRELIMINARY PROVISIONS

§ 12:1-901 Excluded transactions

A. This Part may not be used to effect a transaction that causes an eligible entity or domestic or foreign corporation to hold any right, privilege, license, or franchise under the laws of this state that it is ineligible to hold.

B. Property received through a conditional donation, grant, or devise, or held in trust or for charitable purposes pursuant to the laws of this state by a party to a transaction under this Part shall not be diverted by that transaction from the objects for which it was donated, granted, or devised, except to the extent authorized by a court judgment based upon principles of cy pres or approximation.

C. A person who is a member, interest holder, or an affiliate of an eligible entity with a charitable purpose may not receive a direct or indirect financial benefit in connection with a transaction under this Part to which the eligible entity is a party unless the person is itself an eligible entity with a charitable purpose. This Subsection does not apply to the receipt of reasonable compensation for services rendered.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-902 Required approvals

[Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B DOMESTICATION

§ 12:1-920 Domestication

A. A foreign business corporation may become a domestic business corporation only if the domestication is permitted by the organic law of the foreign corporation.

B. A domestic business corporation may become a foreign business corporation if the domestication is permitted by the laws of the foreign jurisdiction. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of domestication, the domestication shall be approved by the adoption by the corporation of a plan of domestication in the manner provided in this Subpart.

C. The plan of domestication must include all of the following:

(1) A statement of the jurisdiction in which the corporation is to be domesticated.

(2) The terms and conditions of the domestication.

(3) The manner and basis of reclassifying the shares of the corporation following its domestication into shares or other securities, obligations, rights to acquire shares or other securities, or into cash, other property, or any combination of the foregoing.

(4) Any desired amendments to the articles of incorporation of the corporation following its domestication.

D. The plan of domestication may also include a provision that the plan may be amended prior to filing the document required by the laws of this state or the other jurisdiction to consummate the domestication, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change any of the following:

(1) The amount or kind of shares or other securities, obligations, rights to acquire shares or other securities, or the cash or other property to be received by the shareholders under the plan.

(2) The articles of incorporation as they will be in effect immediately following the domestication, except for changes permitted by R.S. 12:1-1005 or by comparable provisions of the laws of the other jurisdiction.

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

E. Terms of a plan of domestication may be made dependent upon facts objectively ascertainable outside the plan in accordance with R.S. 12:1-120(L).

F. If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred, or signed by a domestic business corporation before January 1, 2015, contains a provision applying to a merger of the corporation and the document does not refer to a domestication of the corporation, the provision shall be deemed to apply to a domestication of the corporation until such time as the provision is amended subsequent to that date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-921 Action on a plan of domestication

In the case of a domestication of a domestic business corporation in a foreign jurisdiction, all of the following shall apply:

(1) The plan of domestication must be adopted by the board of directors.

(2) After adopting the plan of domestication, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or R.S. 12:1-826 applies. If either the board of director makes such a determination or R.S. 12:1-826 applies, the board of directors must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of domestication to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan of domestication is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the articles of incorporation as they will be in effect immediately after the domestication.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to Paragraph (3) of this Section, requires a greater vote, approval of the plan of domestication requires the approval of at least a majority of the votes entitled to be cast on the plan, and, if any class or series of shares is entitled to vote as a separate group on the plan, the approval of each such separate voting group by at least a majority of the votes entitled to be cast on the domestication by that voting group.

(6) Subject to Paragraph (7) of this Section, separate voting by voting groups is required by each class or series of shares that are any of the following:

(a) To be reclassified under the plan of domestication into other securities, obligations, rights to acquire shares or other securities, or into cash, other property, or any combination of the foregoing.

(b) Entitled to vote as a separate group on a provision of the plan that, if contained in a proposed amendment to articles of incorporation, would require action by separate voting groups under R.S. 12: 1-1004.

(c) Entitled under the articles of incorporation to vote as a voting group to approve an amendment of the articles.

(7) The articles of incorporation may expressly limit or eliminate the separate voting rights provided for in Subparagraph (6)(a) of this Section.

(8) If any provision of the articles of incorporation, bylaws or an agreement to which any of the directors or shareholders are parties, adopted or entered into before January 1, 2015, applies to a merger of the corporation and that document does not refer to a domestication of the corporation, the provision shall be deemed to apply to a domestication of the corporation until such time as the provision is amended subsequent to that date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-922 Articles of domestication

A. After the domestication of a foreign business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of domestication shall be signed by any officer or other duly authorized representative. The articles shall set forth all of the following:

(1) The name of the corporation immediately before the filing of the articles of domestication and, if that name is unavailable for use in this state or the corporation desires to change its name in connection with the domestication, a name that satisfies the requirements of R.S. 12:1-401.

(2) The jurisdiction of incorporation of the corporation immediately before the filing of the articles of domestication and the date the corporation was incorporated in that jurisdiction.

(3) A statement that the domestication of the corporation in this state was duly authorized as required by the laws of the jurisdiction in which the corporation was incorporated immediately before its domestication in this state.

B. The articles of domestication shall either contain all of the provisions that R.S. 12:1-202(A) requires to be set forth in articles of incorporation and any other desired provisions that R.S. 12:1-202(B) permits to be included in articles of incorporation, or shall have attached articles of incorporation. In either case, provisions that would not be required to be included in restated articles of incorporation may be omitted.

C. The articles of domestication shall be delivered to the secretary of state for filing, and shall take effect at the effective time provided in R.S. 12:1-123.

D. If the foreign corporation is authorized to transact business in this state under Chapter 3 of Title 12, its certificate of authority shall be cancelled automatically on the effective date of its domestication.

E. Within thirty days after the date that articles of domestication take effect, a duplicate original or certified copy of the articles shall be filed in the conveyance records of each parish in this state in which the corporation owns immovable property.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-923 Surrender of charter upon domestication

A. Whenever a domestic business corporation has adopted and approved, in the manner required by this Subpart, a plan of domestication providing for the corporation to be domesticated in a foreign jurisdiction, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth all of the following:

(1) The name of the corporation.

(2) A statement that the articles of charter surrender are being filed in connection with the domestication of the corporation in a foreign jurisdiction.

(3) A statement that the domestication was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by this Subpart and the articles of incorporation.

(4) The corporation's new jurisdiction of incorporation.

B. The articles of charter surrender shall be delivered by the corporation to the secretary of state for filing. The articles of charter surrender shall take effect at the effective time provided in R.S. 12:1-123.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-924 Effect of domestication

A. When a domestication becomes effective, all of the following shall apply:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without any transfer, assignment, reversion, or impairment.

(2) The liabilities of the corporation remain the liabilities of the corporation.

(3) An action or proceeding pending against the corporation continues against the corporation as if the domestication had not occurred,

(4) The articles of domestication, or the articles of incorporation attached to the articles of domestication, constitute the articles of incorporation of a foreign corporation domesticating in this state,

(5) The shares of the corporation are reclassified into shares, other securities, obligations, rights to acquire shares or other securities, or into cash or other property in accordance with the terms of the domestication, and the shareholders are entitled only to the rights provided by those terms and to any appraisal rights they may have under the organic law of the domesticating corporation,

(6) The corporation is deemed to be all of the following:

(a) Incorporated under and subject to the organic law of the domesticated corporation for all purposes.

(b) The same corporation without interruption as the domesticating corporation.

(c) Incorporated on the date the domesticating corporation was originally incorporated.

B. When a domestication of a domestic business corporation in a foreign jurisdiction becomes effective, the foreign business corporation remains both of the following:

(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders who exercise appraisal rights in connection with the domestication are entitled under Part 13 of this Chapter.

(2) Subject to the personal jurisdiction of the courts of this state in accordance with R.S. 13:3201, and to service of process in accordance with law.

C. The owner liability of a shareholder in a foreign corporation that is domesticated in this state shall be as follows:

(1) The domestication does not discharge any owner liability under the laws of the foreign jurisdiction to the extent any such owner liability arose before the effective time of the articles of domestication.

(2) The shareholder shall not have owner liability under the laws of the foreign jurisdiction for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of domestication.

(3) The provisions of the laws of the foreign jurisdiction shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (C)(1) of this Section, as if the domestication had not occurred.

(4) The shareholder shall have whatever rights of contribution from other shareholders are provided by the laws of the foreign jurisdiction with respect to any owner liability preserved by Paragraph (C)(1) of this Section, as if the domestication had not occurred.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-925 Abandonment of a domestication

A. Unless otherwise provided in a plan of domestication of a domestic business corporation, after the plan has been adopted and approved as required by this Subpart, and at any time before the domestication has become effective, it may be abandoned by the board of directors without action by the shareholders.

B. If a domestication is abandoned under Subsection A of this Section after articles of charter surrender have been filed with the secretary of state but before the domestication has become effective, a statement that the domestication has been abandoned in accordance with this Section, signed by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing prior to the effective date of the domestication. The statement shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

C. If the domestication of a foreign business corporation in this state is abandoned in accordance with the laws of the foreign jurisdiction after articles of domestication have been filed with the secretary of state, a statement that the domestication has been abandoned, signed by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing. The statement shall take effect upon filing and the domestication shall be deemed abandoned and shall not become effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C NONPROFIT CONVERSION

§ 12:1-930 Nonprofit conversion

A. A domestic business corporation may become a domestic nonprofit corporation pursuant to a plan of nonprofit conversion.

B. A domestic business corporation may become a foreign nonprofit corporation if the nonprofit conversion is permitted by the laws of the foreign jurisdiction. Regardless of whether the laws of the foreign jurisdiction require the adoption of a plan of nonprofit conversion, the foreign nonprofit conversion shall be approved by the adoption by the domestic business corporation of a plan of nonprofit conversion in the manner provided in this Subpart.

C. The plan of nonprofit conversion must include all of the following:

(1) The terms and conditions of the conversion.

(2) The manner and basis of reclassifying the shares of the corporation following its conversion into memberships, if any, or securities, obligations, rights to acquire memberships or securities, or into cash, other property, or any combination of the foregoing.

(3) Any desired amendments to the articles of incorporation of the corporation following its conversion.

(4) If the domestic business corporation is to be converted to a foreign nonprofit corporation, a statement of the jurisdiction in which the corporation will be incorporated after the conversion.

D. The plan of nonprofit conversion may also include a provision that the plan may be amended prior to filing articles of nonprofit conversion, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change any of the following:

(1) The amount or kind of memberships or securities, obligations, rights to acquire memberships or securities, or the cash or other property to be received by the shareholders under the plan.

(2) The articles of incorporation as they will be in effect immediately following the conversion, except for changes permitted by R.S. 12:1-1005.

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

E. Terms of a plan of nonprofit conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with R.S. 12:1-120(L).

F. If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred or signed by a domestic business corporation before January 1, 2015, contains a provision applying to a merger of the corporation and the document does not refer to a nonprofit conversion of the corporation, the provision shall be deemed to apply to a nonprofit conversion of the corporation until such time as the provision is amended subsequent to that date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-931 Action on a plan of nonprofit conversion

In the case of a conversion of a domestic business corporation to a domestic or foreign nonprofit corporation, all of the following shall apply:

(1) The plan of nonprofit conversion must be adopted by the board of directors.

(2) After adopting the plan of nonprofit conversion, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, or R.S. 12:1-826 applies. If the board of directors makes such a determination or R.S. 12:1-826 applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of nonprofit conversion to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder of the meeting of shareholders at which the plan of nonprofit conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the articles of incorporation as they will be in effect immediately after the nonprofit conversion.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to Paragraph (3) of this Section, requires a greater vote, approval of the plan of nonprofit conversion requires the approval of each class or series of shares of the corporation voting as a separate voting group by at least a majority of the votes entitled to be cast on the nonprofit conversion by that voting group.

(6) If any provision of the articles of incorporation, bylaws or an agreement to which any of the directors or shareholders are parties, adopted before January 1, 2015, applies to a merger, other than a provision that limits or eliminates voting or appraisal rights, and the document does not refer to a nonprofit conversion of the corporation, the provision shall be deemed to apply to a nonprofit conversion of the corporation until such time as the provision is amended subsequent to that date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-932 Articles of nonprofit conversion

A. After a plan of nonprofit conversion providing for the conversion of a domestic business corporation to a domestic nonprofit corporation has been adopted and approved as required by this Subpart, articles of nonprofit conversion shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles shall set forth both of the following:

(1) The name of the corporation immediately before the filing of the articles of nonprofit conversion and if that name does not satisfy the requirements of the Nonprofit Corporation Law, or the corporation desires to change its name in connection with the conversion, a name that satisfies the requirements of the Nonprofit Corporation Law.

(2) A statement that the plan of nonprofit conversion was duly approved by the shareholders in the manner required by this Subpart and the articles of incorporation.

B. The articles of nonprofit conversion shall either contain all of the provisions that the Nonprofit Corporation Law requires to be set forth in articles of incorporation of a domestic nonprofit corporation and any other desired provisions permitted by the Nonprofit Corporation Law, or shall have attached articles of incorporation that satisfy the requirements of the Nonprofit Corporation Law. In either case, provisions that would not be required to be included in restated articles of incorporation of a domestic nonprofit corporation may be omitted.

C. The articles of nonprofit conversion shall be delivered to the secretary of state for filing, and shall take effect at the effective time provided in R.S. 12:1-123.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-933 Surrender of charter upon foreign nonprofit conversion

A. Whenever a domestic business corporation has adopted and approved, in the manner required by this Subpart, a plan of nonprofit conversion providing for the corporation to be converted to a foreign nonprofit corporation, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth all of the following:

(1) The name of the corporation.

(2) A statement that the articles of charter surrender are being filed in connection with the conversion of the corporation to a foreign nonprofit corporation.

(3) A statement that the foreign nonprofit conversion was duly approved by the shareholders in the manner required by this Act and the articles of incorporation.

(4) The corporation's new jurisdiction of incorporation.

B. The articles of charter surrender shall be delivered by the corporation to the secretary of state for filing. The articles of charter surrender shall take effect at the effective time provided in R.S. 12:1-123.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-934 Effect of nonprofit conversion

A. When a conversion of a domestic business corporation to a domestic nonprofit corporation becomes effective, all of the following shall apply:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without any transfer, assignment, reversion, or impairment.

(2) The liabilities of the corporation remain the liabilities of the corporation.

(3) An action or proceeding pending against the corporation continues against the corporation as if the conversion had not occurred.

(4) The articles of incorporation of the domestic or foreign nonprofit corporation become effective.

(5) The shares of the corporation are reclassified into memberships, securities, obligations, rights to acquire memberships or securities, or into cash or other property in accordance with the plan of conversion, and the shareholders are entitled only to the rights provided in the plan of nonprofit conversion or to any rights they may have under Part 13 of this Chapter.

(6) The corporation is deemed to be all of the following:

(a) A domestic nonprofit corporation for all purposes.

(b) The same corporation without interruption as the corporation that existed prior to the conversion.

(c) Incorporated on the date that it was originally incorporated as a domestic business corporation.

B. When a conversion of a domestic business corporation to a foreign nonprofit corporation becomes effective, the foreign nonprofit corporation remains both of the following:

(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders who exercise appraisal rights in connection with the conversion are entitled under Part 13 of this Chapter.

(2) Subject to the personal jurisdiction of the courts of this state in accordance with R.S. 13:3201, and to service of process in accordance with law.

C. [Reserved.]

D. A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the nonprofit corporation shall have owner liability only for those debts, obligations, or liabilities of the nonprofit corporation that arise after the effective time of the articles of nonprofit conversion.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-935 Abandonment of a nonprofit conversion

A. Unless otherwise provided in a plan of nonprofit conversion of a domestic business corporation, after the plan has been adopted and approved as required by this Subpart, and at any time before the nonprofit conversion has become effective, it may be abandoned by the board of directors without action by the shareholders.

B. If a nonprofit conversion is abandoned under Subsection A of this Section after articles of nonprofit conversion or articles of charter surrender have been filed with the secretary of state but before the nonprofit conversion has become effective, a statement that the nonprofit conversion has been abandoned in accordance with this Section, signed by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing prior to the effective date of the nonprofit conversion. The statement shall take effect upon filing and the nonprofit conversion shall be deemed abandoned and shall not become effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D FOREIGN NONPROFIT DOMESTICATION AND CONVERSION

§ 12:1-940 Foreign nonprofit domestication and conversion

A foreign nonprofit corporation may become a domestic business corporation if the domestication and conversion is permitted by the organic law of the foreign nonprofit corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-941 Articles of nonprofit domestication and conversion

A. After the conversion of a foreign nonprofit corporation to a domestic business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of nonprofit domestication and conversion shall be signed by any officer or other duly authorized representative. The articles shall set forth all of the following:

(1) The name of the corporation immediately before the filing of the articles of nonprofit domestication and conversion and, if that name is unavailable for use in this state or the corporation desires to change its name in connection with the domestication and conversion, a name that satisfies the requirements of R.S. 12:1-401.

(2) The jurisdiction of incorporation of the corporation immediately before the filing of the articles of nonprofit domestication and conversion and the date the corporation was incorporated in that jurisdiction.

(3) A statement that the domestication and conversion of the corporation in this state was duly authorized as required by the laws of the jurisdiction in which the corporation was incorporated immediately before its domestication and conversion in this state.

B. The articles of nonprofit domestication and conversion shall either contain all of the provisions that R.S. 12:1-202(A) requires to be set forth in articles of incorporation and any other desired provisions that R.S. 12:1-202(B) permits to be included in articles of incorporation, or shall have attached articles of incorporation. In either case, provisions that would not be required to be included in restated articles of incorporation may be omitted.

C. The articles of nonprofit domestication and conversion shall be delivered to the secretary of state for filing, and shall take effect at the effective time provided in R.S. 12:1-123.

D. If the foreign nonprofit corporation is authorized to transact business in this state under Chapter 3 of this Title, its certificate of authority shall be cancelled automatically on the effective date of its domestication and conversion.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-942 Effect of foreign nonprofit domestication and conversion

A. When a domestication and conversion of a foreign nonprofit corporation to a domestic business corporation becomes effective, all of the following shall apply:

(1) The title to all real and personal property, both tangible and intangible, of the corporation remains in the corporation without any transfer, assignment, reversion or impairment.

(2) The liabilities of the corporation remain the liabilities of the corporation.

(3) An action or proceeding pending against the corporation continues against the corporation as if the domestication and conversion had not occurred.

(4) The articles of nonprofit domestication and conversion, or the articles of incorporation attached to the articles of nonprofit domestication and conversion, constitute the articles of incorporation of the corporation.

(5) Shares, other securities, obligations, rights to acquire shares or other securities of the corporation, or cash or other property shall be issued or paid as provided pursuant to the laws of the foreign jurisdiction, so long as at least one share is outstanding immediately after the effective time.

(6) The corporation is deemed to be all of the following:

(a) A domestic corporation for all purposes.

(b) The same corporation without interruption as the foreign nonprofit corporation.

(c) Incorporated on the date the foreign nonprofit corporation was originally incorporated.

B. The owner liability of a member of a foreign nonprofit corporation that domesticates and converts to a domestic business corporation shall be as follows:

(1) The domestication and conversion does not discharge any owner liability under the laws of the foreign jurisdiction to the extent any such owner liability arose before the effective time of the articles of nonprofit domestication and conversion.

(2) The member shall not have owner liability under the laws of the foreign jurisdiction for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of nonprofit domestication and conversion.

(3) The provisions of the laws of the foreign jurisdiction shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (B)(1) of this Section, as if the domestication and conversion had not occurred.

(4) The member shall have whatever rights of contribution from other members are provided by the laws of the foreign jurisdiction with respect to any owner liability preserved by Paragraph (B)(1) of this Section, as if the domestication and conversion had not occurred.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-943 Abandonment of a foreign nonprofit domestication and conversion

If the domestication and conversion of a foreign nonprofit corporation to a domestic business corporation is abandoned in accordance with the laws of the foreign jurisdiction after articles of nonprofit domestication and conversion have been filed with the secretary of state, a statement that the domestication and conversion has been abandoned, signed by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing. The statement shall take effect upon filing and the domestication and conversion shall be deemed abandoned and shall not become effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART E ENTITY CONVERSION

§ 12:1-950 Entity conversion authorized; definitions

A. A domestic business corporation may become a domestic unincorporated entity pursuant to a plan of entity conversion.

B. A domestic business corporation may become a foreign unincorporated entity if the entity conversion is permitted by the laws of the foreign jurisdiction.

C. A domestic unincorporated entity may become a domestic business corporation or another form of domestic unincorporated entity. If the organic law of a domestic unincorporated entity does not provide procedures for the approval of an entity conversion, the conversion shall be adopted and approved, and the entity conversion effectuated, in the same manner as a merger of the unincorporated entity.

D. A foreign unincorporated entity may become a domestic business corporation if the organic law of the foreign unincorporated entity authorizes it to become a corporation in another jurisdiction.

E. If any debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, or a contract of any kind, issued, incurred, or signed by a domestic business corporation before January 1, 2015, applies to a merger of the corporation and the document does not refer to an entity conversion of the corporation, the provision shall be deemed to apply to an entity conversion of the corporation until such time as the provision is amended subsequent to that date.

F. As used in this Subpart:

(1) "Converting entity" means the domestic business corporation or domestic unincorporated entity that adopts a plan of entity conversion or the foreign unincorporated entity converting to a domestic business corporation.

(2) "Surviving entity" means the corporation or unincorporated entity that is in existence immediately after consummation of an entity conversion pursuant to this Subpart.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-951 Plan of entity conversion

A. A plan of entity conversion must include all of the following:

(1) A statement of the type of entity the surviving entity will be and, if it will be a foreign entity, its jurisdiction of organization.

(2) The terms and conditions of the conversion.

(3) If the converting entity is a domestic business corporation, the manner and basis of converting the shares of the corporation following its conversion into interests or other securities, obligations, rights to acquire interests or other securities, or into cash, other property, or any combination of the foregoing.

(4) If the converting entity is an unincorporated entity, the manner and basis of converting the interests in the entity into shares, interests, or other securities, obligations, rights to acquire shares, interests, or other securities, or into cash, other property, or any combination of the foregoing.

(5) The full text, as they will be in effect immediately after consummation of the conversion, of the organic documents of the surviving entity.

B. The plan of entity conversion may also include a provision that the plan may be amended prior to filing articles of entity conversion, except that subsequent to approval of the plan by the shareholders the plan may not be amended to change any of the following:

(1) The amount or kind of shares or other securities, interests, obligations, rights to acquire shares, other securities or interests, or the cash or other property to be received under the plan by the shareholders.

(2) The organic documents that will be in effect immediately following the conversion, except for changes permitted by a provision of the organic law of the surviving entity comparable to R.S. 12:1-1005.

(3) Any of the other terms or conditions of the plan if the change would adversely affect any of the shareholders in any material respect.

C. Terms of a plan of entity conversion may be made dependent upon facts objectively ascertainable outside the plan in accordance with R.S. 12:1-120(L).

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-952 Action on a plan of entity conversion

In the case of an entity conversion of a domestic business corporation to a domestic or foreign unincorporated entity, all of the following shall apply:

(1) The plan of entity conversion must be adopted by the board of directors.

(2) After adopting the plan of entity conversion, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or R.S. 12:1-826 applies. If the board of directors makes such a determination or R.S. 12:1-826 applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of entity conversion to the shareholders on any basis.

(4) If the approval of the shareholders is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan of entity conversion is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. The notice shall include or be accompanied by a copy of the organic documents as they will be in effect immediately after the entity conversion.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to Paragraph (3) of this Section, requires a greater vote, approval of the plan of entity conversion requires the approval of each class or series of shares of the corporation voting as a separate voting group by at least a majority of the votes entitled to be cast on the conversion by that voting group.

(6) If any provision of the articles of incorporation, bylaws, or an agreement to which any of the directors or shareholders are parties, adopted, or entered into before January 1, 2015, applies to a merger of the corporation, other than a provision that limits or eliminates voting or appraisal rights, and the document does not refer to an entity conversion of the corporation, the provision shall be deemed to apply to an entity conversion of the corporation until such time as the provision is subsequently amended.

(7) If as a result of the conversion one or more shareholders of the corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of conversion shall require the signing, by each such shareholder, of a separate written consent to become subject to such owner liability.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-953 Articles of entity conversion

A. After the conversion of a domestic business corporation to a domestic unincorporated entity has been adopted and approved as required by this Subpart, articles of entity conversion shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles shall do all of the following:

(1) Set forth the name of the corporation immediately before the filing of the articles of entity conversion and the name to which the name of the corporation is to be changed, which shall be a name that satisfies the organic law of the surviving entity.

(2) State the type of unincorporated entity that the surviving entity will be.

(3) Set forth a statement that the plan of entity conversion was duly approved by the shareholders in the manner required by this Subpart and the articles of incorporation.

(4) If the surviving entity is a filing entity, either contain all of the provisions required to be set forth in its public organic document and any other desired provisions that are permitted, or have attached such a public organic document; except that, in either case, provisions that would not be required to be included in a restated public organic document may be omitted.

B. After the conversion of a domestic unincorporated entity to a domestic business corporation or to another form of domestic unincorporated entity has been adopted and approved as required by the organic law of the converting entity, articles of entity conversion shall be signed on behalf of the converting entity by an officer or other duly authorized partner, member, manager or other representative. The articles shall do all of the following:

(1) Set forth the name of the converting entity immediately before the filing of the articles of entity conversion and the name to which the name of the converting entity is to be changed, which shall be a name that satisfies the requirements of the organic law of the surviving entity.

(2) Set forth a statement that the plan of entity conversion was duly approved in accordance with the organic law of the converting entity.

(3) Satisfy one of the following requirements concerning the provisions required by law to be included in the organic document of the surviving entity and, if required, in its initial report, do either of the following:

(a) If the surviving entity is a domestic business corporation, the articles of entity conversion shall either contain all of the provisions that R.S. 12:1-202(A) requires to be set forth in articles of incorporation and any other desired provisions that R.S. 12:1-202(B) permits to be included in articles of incorporation, or have attached articles of incorporation; except that, in either case, provisions that would not be required to be included in restated articles of incorporation of a domestic business corporation may be omitted.

(b) If the surviving entity is a domestic filing entity, either contain all of the provisions required to be set forth in its public organic document and any other desired provisions that are permitted, or have attached such a public organic document; except that, in either case, provisions that would not be required to be included in a restated public organic document may be omitted.

C. After the conversion of a foreign unincorporated entity to a domestic business corporation has been authorized as required by the laws of the foreign jurisdiction, articles of entity conversion shall be signed on behalf of the foreign unincorporated entity by any officer or other duly authorized representative. The articles shall do all of the following:

(1) Set forth the name of the unincorporated entity immediately before the filing of the articles of entity conversion and the name to which the name of the unincorporated entity is to be changed, which shall be a name that satisfies the requirements of R.S. 12:1-401.

(2) Set forth the jurisdiction under the laws of which the unincorporated entity was organized immediately before the filing of the articles of entity conversion and the date on which the unincorporated entity was organized in that jurisdiction.

(3) Set forth a statement that the conversion of the unincorporated entity was duly approved in the manner required by its organic law.

(4) Either contain all of the provisions that R.S. 12:1-202(A) requires to be set forth in articles of incorporation and any other desired provisions that R.S. 12:1-202(B) permits to be included in articles of incorporation, or have attached articles of incorporation; except that, in either case, provisions that would not be required to be included in restated articles of incorporation of a domestic business corporation may be omitted.

D. The articles of entity conversion shall be delivered to the secretary of state for filing, and shall take effect at the effective time provided in R.S. 12:1-123. Articles of entity conversion under Subsection A or B of this Section may be combined with any required conversion filing under the organic law of the domestic unincorporated entity if the combined filing satisfies the requirements of both this Section and the other organic law.

E. If the converting entity is a foreign unincorporated entity that is authorized to transact business in this state under a provision of law similar to Chapter 3 of this Title, its certificate of authority or other type of foreign qualification shall be cancelled automatically on the effective date of its conversion.

F. Within thirty days after the date that the articles of entity conversion are delivered for filing to the secretary of state, a duplicate original of the articles shall be filed in the conveyance records of each parish in this state in which the converting entity owns immovable property.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-954 Surrender of charter upon conversion

A. Whenever a domestic business corporation has adopted and approved, in the manner required by this Subpart, a plan of entity conversion providing for the corporation to be converted to a foreign unincorporated entity, articles of charter surrender shall be signed on behalf of the corporation by any officer or other duly authorized representative. The articles of charter surrender shall set forth all of the following:

(1) The name of the corporation.

(2) A statement that the articles of charter surrender are being filed in connection with the conversion of the corporation to a foreign unincorporated entity.

(3) A statement that the conversion was duly approved by the shareholders in the manner required by this Subpart and the articles of incorporation.

(4) The jurisdiction under the laws of which the surviving entity will be organized.

(5) If the surviving entity will be a nonfiling entity, the address of its executive office immediately after the conversion.

B. The articles of charter surrender shall be delivered by the corporation to the secretary of state for filing. The articles of charter surrender shall take effect on the effective time provided in R.S. 12:1-123.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-955 Effect of entity conversion

A. When a conversion under this Subpart becomes effective, all of the following shall apply:

(1) The title to all real and personal property, both tangible and intangible, of the converting entity remains in the surviving entity without transfer, assignment, reversion or impairment.

(2) The liabilities of the converting entity remain the liabilities of the surviving entity.

(3) A pending action or proceeding by or against the converting entity continues by or against the surviving entity as if the conversion had not occurred without any need for substitution of parties.

(4) The provisions included in or attached to the articles of entity conversion in accordance with R.S. 12:1-953(B)(3) become effective as the articles of incorporation, articles of organization, initial report, registered contract of partnership, or registered application for registry of a registered limited liability partnership, as appropriate for the surviving entity.

(5) In the case of a surviving entity that is a nonfiling entity, its private organic document becomes effective.

(6) The shares or interests of the converting entity are reclassified into shares, interests, other securities, obligations, rights to acquire shares, interests, or other securities, or into cash or other property in accordance with the plan of conversion; and the shareholders or interest holders of the converting entity are entitled only to the rights provided to them under the terms of the conversion and to any appraisal rights they may have under the organic law of the converting entity.

(7) The surviving entity is deemed to be all of the following:

(a) Incorporated or organized under and subject to the organic law of the surviving entity for all purposes.

(b) The same corporation or unincorporated entity without interruption as the converting entity.

(c) Incorporated or otherwise organized on the date that the converting entity was originally incorporated or organized.

B. When a conversion of a domestic business corporation to a foreign unincorporated entity becomes effective, the surviving entity remains both of the following:

(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders who exercise appraisal rights in connection with the conversion are entitled under Part 13 of this Chapter.

(2) Subject to the personal jurisdiction of the courts of this state in accordance with R.S. 13:3201, and to service of process in accordance with law.

C. A shareholder who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of the surviving entity shall be personally liable only for those debts, obligations, or liabilities of the surviving entity that arise after the effective time of the articles of entity conversion.

D. The owner liability of an interest holder in an unincorporated entity that converts to another form of domestic unincorporated entity or to a domestic business corporation shall be as follows:

(1) The conversion does not discharge any owner liability under the organic law of the converting entity to the extent any such owner liability arose before the effective time of the articles of entity conversion.

(2) The interest holder shall not have owner liability under the organic law of the converting entity for any debt, obligation, or liability of the corporation that arises after the effective time of the articles of entity conversion.

(3) The provisions of the organic law of the converting entity shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (D)(1) of this Section, as if the conversion had not occurred.

(4) The interest holder shall have whatever rights of contribution from other interest holders are provided by the organic law of the converting entity with respect to any owner liability preserved by Paragraph (D)(1) of this Section, as if the conversion had not occurred.

E. The provisions of R.S. 12:1603 and 12:1604, concerning tax filing requirements and professional licenses, apply in either of the following cases of an entity conversion:

(1) By a domestic business corporation to a domestic unincorporated entity.

(2) By a domestic unincorporated entity to a domestic business corporation or to another form of domestic unincorporated entity.

F. For purposes of service of process under Paragraph (B)(2) of this Section, a foreign eligible entity that is a survivor of a merger may be served in accordance with the rules applicable to service of process on a foreign corporation, as if both of the following conditions existed:

(1) The survivor were a foreign corporation.

(2) Each of the following persons were a director of that corporation:

(a) A general partner if the survivor is a partnership of any kind.

(b) A member if the survivor is a member-managed limited liability company.

(c) A manager if the survivor is a manager-managed limited liability company.

(d) A person holding managerial authority in the survivor, regardless of the form of the surviving entity, that is similar to that of an officer or director of a domestic business corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-956 Abandonment of an entity conversion

A. Unless otherwise provided in a plan of entity conversion of a domestic business corporation, after the plan has been adopted and approved as required by this Subpart, and at any time before the entity conversion has become effective, it may be abandoned by the board of directors without action by the shareholders.

B. If an entity conversion is abandoned after articles of entity conversion or articles of charter surrender have been filed with the secretary of state but before the entity conversion has become effective, a statement that the entity conversion has been abandoned in accordance with this Section, signed by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing prior to the effective date of the entity conversion. Upon filing, the statement shall take effect and the entity conversion shall be deemed abandoned and shall not become effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 10 AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

SUBPART A AMENDMENT OF ARTICLES OF INCORPORATION

§ 12:1-1001 Authority to amend

A. A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the articles of incorporation.

B. A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement, or purpose or duration of the corporation.

C. An amendment that extends the duration of a corporation may be adopted even after that duration expires unless one of the following conditions exist:

(1) Articles of termination or a certificate of termination has been filed and the existence of the corporation has not been reinstated.

(2) Articles of dissolution have been delivered to the secretary of state and have not been revoked.

(3) A judgment ordering dissolution has become final.

D. If the duration of a corporation has expired and the adoption of an amendment extending that duration is permissible under Subsection C of this Section, then the following shall apply:

(1) The amendment may be adopted in the same manner as if the corporation's duration had not expired.

(2) The amendment has the same effect as if it had been adopted before the duration expired.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1002 Amendment before issuance of shares

If a corporation has not yet issued shares, its board of directors, or its incorporators if it has no board of directors, may adopt one or more amendments to the corporation's articles of incorporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1003 Amendment by board of directors and shareholders

A. If a corporation has issued shares, but is not a public corporation, an amendment to the articles of incorporation shall be adopted in the following manner:

(1) Except as provided in R.S. 12:1-1005, 1-1007, and 1-1008, the amendment must be approved by the shareholders.

(2) If the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment. If Paragraph (A)(3) of this Section requires the approval of one or more separate voting groups, in addition to the approval of all shareholders entitled to vote on the amendment, the notice must also identify each class or series of shares that the corporation plans to treat as part of each separate voting group.

(3) Unless the articles of incorporation require a greater vote, approval of the amendment by the shareholders requires the approval of at least a majority of the votes entitled to be cast on the amendment, and, if any class or series of shares is entitled to vote as a separate group on the amendment, except as provided in R.S. 12:1-1004(C), the approval of at least a majority of the votes entitled to be cast on the amendment by each such separate voting group.

B. An amendment to the articles of incorporation of a public corporation shall be adopted in the following manner:

(1) The proposed amendment must be adopted by the board of directors.

(2) Except as provided in R.S. 12:1-1005, 1-1007, and 1-1008, after adopting the proposed amendment the board of directors must submit the amendment to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the amendment, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to the shareholders the basis for that determination.

(3) The board of directors may condition its submission of the amendment to the shareholders on any basis.

(4) If the amendment is required to be approved by the shareholders, and the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment. If Paragraph (B)(5) of this Section requires the approval of one or more separate voting groups, in addition to the approval of all shareholders entitled to vote on the amendment, the notice must also identify each class or series of shares that the corporation plans to treat as part of each separate voting group.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to Paragraph (B)(3) of this Section, requires a greater vote, approval of the amendment by the shareholders requires the approval of at least a majority of the votes entitled to be cast on the amendment, and, if any class or series of shares is entitled to vote as a separate group on the amendment, except as provided in R.S. 12:1-1004(C), the approval of at least a majority of the votes entitled to be cast on the amendment by each such separate voting group.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1004 Voting on amendments by voting groups

A. If a corporation has more than one class of shares outstanding, the holders of the outstanding shares of a class are entitled to vote as a separate voting group, if shareholder voting is otherwise required by this Subpart, on a proposed amendment to the articles of incorporation if the amendment would do any of the following:

(1) Effect an exchange or reclassification of all or part of the shares of the class into shares of another class.

(2) Effect an exchange or reclassification, or create the right of exchange, of all or part of the shares of another class into shares of the class.

(3) Change the rights, preferences, or limitations of all or part of the shares of the class.

(4) Change the shares of all or part of the class into a different number of shares of the same class.

(5) Create a new class of shares having rights or preferences with respect to distributions that are prior or superior to the shares of the class.

(6) Increase the rights, preferences, or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions that are prior or superior to the shares of the class.

(7) Limit or deny an existing preemptive right of all or part of the shares of the class.

(8) Cancel or otherwise affect rights to distributions that have accumulated but not yet been authorized on all or part of the shares of the class.

B. If a proposed amendment would affect a series of a class of shares in one or more of the ways described in Subsection A of this Section, the holders of shares of that series are entitled to vote as a separate voting group on the proposed amendment.

C. If a proposed amendment that entitles the holders of two or more classes or series of shares to vote as separate voting groups under this Section would affect those two or more classes or series in the same or a substantially similar way, the holders of shares of all the classes or series so affected must vote together as a single voting group on the proposed amendment, unless otherwise provided in the articles of incorporation or required by the board of directors.

D. A class or series of shares is entitled to the voting rights granted by this Section although the articles of incorporation provide that the shares are nonvoting shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1005 Amendment by board of directors

Unless the articles of incorporation provide otherwise, a corporation's board of directors may adopt amendments to the corporation's articles of incorporation without shareholder approval to do any of the following:

(1) Extend the duration of the corporation if it was incorporated at a time when limited duration was required by law.

(2) Delete the names and addresses of the initial directors.

(3) Delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the secretary of state, or to delete the address of the initial principal office if the corporation has provided the address of its principal office in an annual report on file with the secretary of state.

(4) If the corporation has only one class of shares outstanding, then to do either of the following:

(a) Change each issued and unissued authorized share of the class into a greater number of whole shares of that class.

(b) Increase the number of authorized shares of the class to the extent necessary to permit the issuance of shares as a share dividend.

(5) Change the corporate name.

(6) Reflect a reduction in authorized shares, as a result of the operation of R.S. 12:1-631(B), when the corporation has acquired its own shares and the articles of incorporation prohibit the reissue of the acquired shares.

(7) Delete a class of shares from the articles of incorporation, as a result of the operation of R.S. 12:1-631(B), when there are no remaining shares of the class because the corporation has acquired all shares of the class and the articles of incorporation prohibit the reissue of the acquired shares.

(8) To make any change expressly permitted by R.S. 12:1-602(A) or (B) to be made without shareholder approval.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2020, 2nd Ex. Sess., No. 3, §1, eff. Oct. 16, 2020.

§ 12:1-1006 Articles of amendment

After an amendment to the articles of incorporation has been adopted and approved in the manner required by this Subpart and by the articles of incorporation, the corporation shall deliver to the secretary of state, for filing, articles of amendment, which shall set forth all of the following:

(1) The name of the corporation.

(2) The text of each amendment adopted, or the information required by R.S. 12:1-120(L)(5).

(3) If an amendment provides for an exchange, reclassification, or cancellation of issued shares, provisions for implementing the amendment if not contained in the amendment itself, which may be made dependent upon facts objectively ascertainable outside the articles of amendment in accordance with R.S. 12:1-120(L)(5).

(4) The date of each amendment's adoption.

(5)(a) If an amendment was adopted by the incorporators or board of directors without shareholder approval, a statement that the amendment was duly approved by the incorporators or by the board of directors, as the case may be, and that shareholder approval was not required.

(b) If an amendment required approval by the shareholders, a statement that the amendment was duly approved by the shareholders in the manner required by this Act and by the articles of incorporation.

(c) If an amendment is being filed pursuant to R.S. 12:1-120(L)(5), a statement to that effect.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1007 Restated articles of incorporation

A. A corporation's board of directors may restate its articles of incorporation at any time, with or without shareholder approval, to consolidate the articles of incorporation and all amendments into a single document.

B. If the restated articles include one or more new amendments that require shareholder approval, the amendments must be adopted and approved as provided in R.S. 12:1-1003.

C. A corporation that restates its articles of incorporation shall deliver to the secretary of state for filing articles of restatement setting forth the name of the corporation and the entire text of the articles as amended by all amendments, together with a certificate which states that the restated articles consolidate the articles of incorporation and all amendments into a single document and, if a new amendment is included in the restated articles, which also includes the statements required under R.S. 12:1-1006.

D. Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments thereto.

E. The secretary of state may certify restated articles of incorporation as the articles of incorporation currently in effect, without including the certificate information required by Subsection C of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 107, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1-1008 Amendment pursuant to reorganization

A. A corporation's articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under the authority of a law of the United States.

B. The individual or individuals designated by the court shall deliver to the secretary of state for filing articles of amendment setting forth all of the following:

(1) The name of the corporation.

(2) The text of each amendment approved by the court.

(3) The date of the court's order or decree approving the articles of amendment.

(4) The title of the reorganization proceeding in which the order or decree was entered.

(5) A statement that the court had jurisdiction of the proceeding under federal statute.

C. 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.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1009 Effect of amendment

An amendment to the 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, or the existing rights of persons other than shareholders 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.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B AMENDMENT OF BYLAWS

§ 12:1-1020 Amendment by board of directors or shareholders

A. A corporation's shareholders may amend or repeal the corporation's bylaws.

B. A corporation's board of directors may adopt, amend, or repeal the corporation's bylaws, unless either of the following conditions exist:

(1) The articles of incorporation, R.S. 12:1-1021 or, if applicable, R.S. 12:1-1022 reserve that power exclusively to the shareholders in whole or part.

(2) The shareholders in amending, repealing, or adopting a bylaw expressly provide that the board of directors may not amend, repeal, or reinstate that bylaw.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1021 Bylaw increasing quorum or voting requirement for directors

A. A bylaw that increases a quorum or voting requirement for the board of directors may be amended or repealed under either of the following circumstances:

(1) If originally adopted by the shareholders, only by the shareholders, unless the bylaw otherwise provides.

(2) If adopted by the board of directors, either by the shareholders or by the board of directors.

B. A bylaw adopted or amended by the shareholders that increases a quorum or voting requirement for the board of directors may provide that it can be amended or repealed only by a specified vote of either the shareholders or the board of directors.

C. Action by the board of directors under Subsection A of this Section to amend or repeal a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1022 Public corporation bylaw provisions relating to the election of directors

A. Unless the articles of incorporation specifically prohibit the adoption of a bylaw pursuant to this Section, alter the vote specified in R.S. 12:1-728(A), or provide for cumulative voting, a public corporation may elect in its bylaws to provide a means for a shareholder to vote against the election of an individual to serve as a director and, notwithstanding a director's election by plurality vote, to limit the term or require the resignation of any director who receives more votes against than for his or her election.

B. The expiration of a limited term, or the resignation of a director, pursuant to a bylaw authorized by this Section creates a vacancy that is governed by R.S. 12:1-810.

C. A bylaw authorized by this Section may be repealed by either of the following:

(1) If originally adopted by the shareholders, only by the shareholders, unless the bylaw otherwise provides.

(2) If adopted by the board of directors, by the board of directors or the shareholders.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

PART 11 MERGERS AND SHARE EXCHANGES

§ 12:1-1101 Definitions

As used in this Part, the following meanings shall apply:

A. "Merger" means a business combination pursuant to R.S. 12:1-1102.

B. "Party to a merger" or "party to a share exchange" means any domestic or foreign corporation or eligible entity that will do any of the following:

(1) Merge under a plan of merger.

(2) Acquire shares or eligible interests of another corporation or an eligible entity in a share exchange.

(3) Have all of its shares or eligible interests or all of one or more classes or series of its shares or eligible interests acquired in a share exchange.

C. "Share exchange" means a business combination pursuant to R.S. 12:1-1103.

D. "Survivor" in a merger means the corporation or eligible entity into which one or more other corporations or eligible entities are merged. A survivor of a merger may preexist the merger or be created by the merger.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1102 Merger

A. One or more domestic business corporations may merge with one or more domestic or foreign business corporations or eligible entities pursuant to a plan of merger, or two or more eligible entities or foreign business corporations may merge into a new domestic business corporation to be created in the merger in the manner provided in this Part.

B. A foreign business corporation, or a foreign eligible entity, may be a party to a merger with a domestic business corporation, or may be created by the terms of the plan of merger, only if the merger is permitted by the organic law governing the foreign business corporation or foreign eligible entity, and only if the requirements of that law concerning the merger have been satisfied. A domestic eligible entity must approve the merger in accordance with the organic law applicable to it.

C. The plan of merger must include all of the following:

(1) The name of each domestic or foreign business corporation or eligible entity that will merge and the name of the domestic or foreign business corporation or eligible entity that will be the survivor of the merger.

(2) The terms and conditions of the merger.

(3) The manner and basis of converting the shares of each merging domestic or foreign business corporation and eligible interests of each merging eligible entity into shares or other securities, eligible interests, obligations, rights to acquire shares other securities or eligible interests, or into cash, other property, or any combination of the foregoing.

(4) The articles of incorporation of any domestic or foreign business or nonprofit corporation, or the organic documents of any domestic or foreign unincorporated entity, to be created by the merger, or if a new domestic or foreign business or nonprofit corporation or unincorporated entity is not to be created by the merger, any amendments to the survivor's articles of incorporation or organic documents.

(5) Any other provisions required by the laws under which any party to the merger is organized or by which it is governed, or by the articles of incorporation or organic document of any such party.

D. Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with R.S. 12:1-120(L).

E. The plan of merger may also include a provision that the plan may be amended prior to filing articles of merger, but if the shareholders of a domestic corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to change any of the following:

(1) The amount or kind of shares or other securities; eligible interests; obligations; rights to acquire shares, other securities or eligible interests; or the cash or other property to be received under the plan by the shareholders of or owners of eligible interests in any party to the merger.

(2) The articles of incorporation of any corporation, or the organic documents of any unincorporated entity, that will survive or be created as a result of the merger, except for changes permitted by R.S. 12:1-1005 or by comparable provisions of the organic laws of any such foreign corporation or domestic or foreign unincorporated entity.

(3) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

F. Property received through a conditional donation, grant, or devise, or held in trust or for charitable purposes under the laws of this state by an eligible entity shall not be diverted by a merger from the object for which it was donated, granted, or devised, except to the extent authorized by a court judgment based upon principles of cy pres or approximation.

G. A person who is a member, interest holder, or an affiliate of an eligible entity with a charitable purpose shall not receive a direct or indirect financial benefit in connection with a merger to which the eligible entity is a party unless the person is itself a charitable corporation or unincorporated entity with a charitable purpose. This Subsection does not apply to the receipt of reasonable compensation for services rendered.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1103 Share exchange

A. Through a share exchange, either of the following may occur:

(1) A domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic or foreign corporation, or all of the interests of one or more classes or series of interests of an eligible entity, in exchange for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities, or for cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange.

(2) All of the shares of one or more classes or series of shares of a domestic corporation may be acquired by another domestic or foreign corporation or eligible entity, in exchange for shares or other securities, eligible interests, obligations, rights to acquire shares or other securities, or for cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange.

B. A foreign corporation or foreign eligible entity may be a party to a share exchange only if the share exchange is permitted by the organic law governing the foreign corporation or foreign eligible entity and only if the requirements of that law concerning the share exchange have been satisfied.

C. The plan of share exchange must include all of the following:

(1) The name of each corporation or eligible entity whose shares or interests will be acquired and the name of the corporation or eligible entity that will acquire those shares or interests.

(2) The terms and conditions of the share exchange.

(3) The manner and basis of exchanging shares of a corporation or interests in an eligible entity whose shares or interests will be acquired under the share exchange into shares or other securities, eligible interests, obligations, rights to acquire shares or other securities, or into cash, other property, or any combination of the foregoing.

(4) Any other provisions required by the laws under which any party to the share exchange is organized or by the articles of incorporation or organic document of any such party.

D. Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with R.S. 12:1-120(L).

E. The plan of share exchange may also include a provision that the plan may be amended prior to filing articles of share exchange, but if the shareholders of a domestic corporation that is a party to the share exchange are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to change either of the following:

(1) The amount or kind of shares or other securities, interests, obligations, rights to acquire shares, other securities, or interests, or the cash or other property, to be issued by the corporation or to be received under the plan by the shareholders of or owners of interests in any party to the share exchange.

(2) Any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

F. This Section does not limit the power of any person to acquire shares of another corporation or interests in an eligible entity in a transaction other than a share exchange.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1104 Action on a plan of merger or share exchange

In the case of a domestic corporation that is a party to a merger or share exchange, all of the following shall apply:

(1) The plan of merger or share exchange must be adopted by the board of directors.

(2) Except as provided in Paragraph (8) of this Section and in R.S. 12:1-1105, after adopting the plan of merger or share exchange, the board of directors must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation or R.S. 12:1-826 applies. If the board of directors makes such a determination or R.S. 12:1-826 applies, the board must transmit to the shareholders the basis for so proceeding.

(3) The board of directors may condition its submission of the plan of merger or share exchange to the shareholders on any basis.

(4) If the plan of merger or share exchange is required to be approved by the shareholders, and if the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation or eligible entity, the notice shall also include or be accompanied by a copy or summary of the articles of incorporation or organizational documents of that corporation or eligible entity. If the corporation is to be merged into a corporation or eligible entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the articles of incorporation or organizational documents of the new corporation or eligible entity.

(5) Unless the articles of incorporation, or the board of directors acting pursuant to Paragraph (3) of this Section, requires a greater vote, approval of the plan of merger or share exchange requires the approval of at least a majority of the votes entitled to be cast on the plan, and, if any class or series of shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of each such separate voting group at a meeting by at least a majority of the votes entitled to be cast on the merger or share exchange by that voting group.

(6) Subject to Paragraph (7) of this Section, separate voting by voting groups is required on all of the following:

(a) A plan of merger, by each class or series of shares that is either of the following:

(i) To be converted under the plan of merger into other securities, interests, obligations, rights to acquire shares, other securities, or interests, or into cash, other property, or any combination of the foregoing.

(ii) Entitled to vote as a separate group on a provision in the plan that constitutes a proposed amendment to articles of incorporation of a surviving corporation and that requires action by separate voting groups under R.S. 12:1-1004.

(b) A plan of share exchange, by each class or series of shares included in the exchange, with each class or series constituting a separate voting group.

(c) A plan of merger or share exchange, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger or share exchange.

(7) The articles of incorporation may expressly limit or eliminate the separate voting rights provided in Item (6)(a)(i) and Subparagraph (6)(b) of this Section as to any class or series of shares, except for a transaction that includes what is or would be, if the corporation were the surviving corporation, an amendment subject to Item (6)(a)(ii) of this Section, and that will effect no significant change in the assets of the resulting entity, including all parents and subsidiaries on a consolidated basis.

(8) Unless the articles of incorporation otherwise provide, approval by the corporation's shareholders of a plan of merger or share exchange is not required if all of the following criteria are satisfied:

(a) The corporation will survive the merger or is the acquiring corporation in a share exchange.

(b) Except for amendments permitted by R.S. 12:1-1005, its articles of incorporation will not be changed.

(c) Each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger or share exchange will hold the same number of shares, with identical preferences, limitations, and relative rights, immediately after the effective date of change.

(d) The issuance in the merger or share exchange of shares or other securities convertible into or rights exercisable for shares does not require a vote under R.S. 12:1-621(F).

(9) If as a result of a merger or share exchange one or more shareholders of a domestic corporation would become subject to owner liability for the debts, obligations, or liabilities of any other person or entity, approval of the plan of merger or share exchange shall require the execution, by each such shareholder, of a separate written consent to become subject to such owner liability.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1105 Merger between parent and subsidiary or between subsidiaries

A. Unless the articles of incorporation of any of the corporations otherwise provide, or unless, in the case of a foreign subsidiary, approval by the subsidiary's board of directors or shareholders is required by the laws under which the subsidiary is organized, a domestic parent corporation that owns shares of a domestic or foreign subsidiary corporation that carry at least ninety percent of the voting power of each class and series of the outstanding shares of the subsidiary that have voting power may do either of the following:

(1) Merge the subsidiary into itself or into another such subsidiary without the approval of the shareholders of the parent corporation or board of directors or shareholders of the subsidiary.

(2) Merge itself into the subsidiary, without the approval of the board of directors or shareholders of the subsidiary.

B. If under Subsection A of this Section approval of a merger by the subsidiary's shareholders is not required, the parent corporation shall, within ten days after the effective date of the merger, notify each of the subsidiary's shareholders that the merger has become effective.

C. As a result of a merger pursuant to this Section, the articles of incorporation of the parent corporation may be amended only as provided in R.S. 12:1-1005.

D. Except as provided in Subsections A, B, and C of this Section, a merger between a parent and a subsidiary shall be governed by the provisions of this Part applicable to mergers generally.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2020, 2nd Ex. Sess., No. 3, §1, eff. Oct. 16, 2020.

§ 12:1-1106 Articles of merger or share exchange

A. After a plan of merger or share exchange has been adopted and approved as required by this Part, articles of merger or share exchange shall be signed on behalf of each party to the merger or share exchange by any officer or other duly authorized representative. Articles of merger need not be signed on behalf of any subsidiary that is a party to a merger authorized without the approval of the subsidiary's board of directors or shareholders as permitted by R.S. 12:1-1105(A). The articles shall set forth all of the following:

(1) The names of the parties to the merger or share exchange. In the case of a merger, the name of the surviving entity. In the case of a share exchange, the name of the corporation whose shares will be acquired and the name of the acquiring corporation.

(2) If the articles of incorporation of the survivor of a merger are amended, or if a new corporation is created as a result of a merger, the amendments to the survivor's articles of incorporation or the articles of incorporation of the new corporation.

(3) If the plan of merger or share exchange required approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement that the plan was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by this Subpart and the articles of incorporation.

(4) If the plan of merger or share exchange did not require approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement to that effect.

(5) As to each eligible entity or foreign corporation that was a party to the merger or share exchange, a statement that the participation of the eligible entity or foreign corporation was duly authorized as required by the organic law of the eligible entity or corporation.

B. Articles of merger or share exchange shall be delivered to the secretary of state for filing by the survivor of the merger or the acquiring corporation in a share exchange, and shall take effect at the effective time provided in R.S. 12:1-123. Articles of merger or share exchange filed under this Section may be combined with any filing required under the organic law of any domestic eligible entity involved in the transaction if the combined filing satisfies the requirements of both this Section and the other organic law.

C. Within thirty days of the date that articles of merger take effect, a duplicate original or certified copy of the articles shall be filed in the conveyance records of each parish in this state in which any of the parties to the merger has immovable property.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2022, No. 193, §2.

§ 12:1-1107 Effect of merger or share exchange

A. When the merger becomes effective, all of the following shall apply:

(1) The corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be.

(2) The separate existence of every corporation or eligible entity that is merged into the survivor ceases.

(3) All property owned by, and every contract right possessed by, each corporation or eligible entity that merges into the survivor is vested in the survivor without any transfer, assignment, reversion or impairment.

(4) All liabilities of each corporation or eligible entity that is merged into the survivor are vested in the survivor.

(5) The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger.

(6) The articles of incorporation or organic documents of the survivor are amended to the extent provided in the plan of merger.

(7) The articles of incorporation or organic documents of a survivor that is created by the merger become effective.

(8) The shares of each corporation that is a party to the merger, and the interests in an eligible entity that is a party to a merger, that are to be converted under the plan of merger into shares, eligible interests, obligations, rights to acquire securities, other securities, or eligible interests, or into cash, other property, or any combination of the foregoing, are converted, and the former holders of such shares or eligible interests are entitled only to the rights provided to them in the plan of merger or to any rights they may have under Part 13 of this Chapter or the organic law of the eligible entity.

(9) The survivor possesses all the rights, licenses, privileges, and franchises possessed by each of the parties to the merger, except that the survivor does not possess any right, license, privilege, or franchise that the survivor is ineligible to possess or to exercise or that does not survive a merger because of a provision to that effect in the law or administrative rules under which the right, license, privilege, or franchise is held at the time of the merger.

B. When a share exchange becomes effective, the shares of each domestic corporation that are to be exchanged for shares or other securities, eligible interests, obligations, rights to acquire shares, other securities or eligible interests, or for cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under Part 13 of this Chapter.

C. A person who becomes subject to owner liability for some or all of the debts, obligations, or liabilities of any entity as a result of a merger or share exchange shall have owner liability only to the extent provided in the organic law of the entity and only for those debts, obligations, and liabilities that arise after the effective time of the articles of merger or share exchange.

D. Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger remains both of the following:

(1) Obligated under the laws of this state to pay promptly the amount, if any, to which shareholders of each domestic corporation who exercise appraisal rights are entitled under Part 13 of this Chapter.

(2) Subject to the personal jurisdiction of the courts of this state in accordance with R.S. 13:3201, and to service of process in accordance with law.

E. The effect of a merger or share exchange on the owner liability of a person who had owner liability for some or all of the debts, obligations, or liabilities of a party to the merger or share exchange shall be as follows:

(1) The merger or share exchange does not discharge any owner liability under the organic law of the entity in which the person was a shareholder or interest holder to the extent any such owner liability arose before the effective time of the articles of merger or share exchange.

(2) The person shall not have owner liability under the organic law of the entity in which the person was a shareholder or interest holder prior to the merger or share exchange for any debt, obligation, or liability that arises after the effective time of the articles of merger or share exchange.

(3) The provisions of the organic law of any entity for which the person had owner liability before the merger or share exchange shall continue to apply to the collection or discharge of any owner liability preserved by Paragraph (E)(1) of this Section, as if the merger or share exchange had not occurred.

(4) The person shall have whatever rights of contribution from other persons are provided by the organic law of the entity for which the person had owner liability with respect to any owner liability preserved by Paragraph (E)(1) of this Section, as if the merger or share exchange had not occurred.

F. For purposes of service of process under Paragraph (D)(2) of this Section, a foreign eligible entity that is a survivor of a merger may be served in accordance with the rules applicable to service of process on a foreign corporation, as if both of the following conditions existed:

(1) The survivor were a foreign corporation.

(2) Each of the following persons were a director of that corporation:

(a) A general partner if the survivor is a partnership of any kind.

(b) A member if the survivor is a member-managed limited liability company.

(c) A manager if the survivor is a manager-managed limited liability company.

(d) A person holding managerial authority in the survivor, regardless of the form of the surviving entity, that is similar to that of an officer or director of a domestic business corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-1108 Abandonment of a merger or share exchange

A. Unless otherwise provided in a plan of merger or share exchange or in the laws under which an eligible entity or foreign business corporation that is a party to a merger or a share exchange is organized or by which it is governed, after the plan has been adopted and approved as required by this Part, and at any time before the merger or share exchange has become effective, it may be abandoned by a domestic business corporation that is a party thereto without action by its shareholders in accordance with any procedures set forth in the plan of merger or share exchange or, if no such procedures are set forth in the plan, in the manner determined by the board of directors, subject to any contractual rights of other parties to the merger or share exchange.

B. If a merger or share exchange is abandoned under Subsection A of this Section after articles of merger or share exchange have been filed with the secretary of state but before the merger or share exchange has become effective, a statement that the merger or share exchange has been abandoned in accordance with this Section, signed on behalf of a party to the merger or share exchange by an officer or other duly authorized representative, shall be delivered to the secretary of state for filing prior to the effective date of the merger or share exchange. Upon filing, the statement shall take effect and the merger or share exchange shall be deemed abandoned and shall not become effective.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 12 DISPOSITION OF ASSETS

§ 12:1-1201 Disposition of assets not requiring shareholder approval

No approval of the shareholders of a corporation is required for any of the following actions, unless the articles of incorporation otherwise provide:

(1) To sell, lease, exchange, or otherwise dispose of any or all of the corporation's assets in the usual and regular course of business.

(2) To mortgage, pledge, dedicate to the repayment of indebtedness, whether with or without recourse, or otherwise encumber any or all of the corporation's assets, whether or not in the usual and regular course of business.

(3) To transfer any or all of the corporation's assets to one or more corporations or other entities all of the shares or interests of which are owned by the corporation.

(4) To distribute assets pro rata to the holders of one or more classes or series of the corporation's shares, provided that the distribution does not violate the rights of any class or series of shares.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1202 Shareholder approval of certain dispositions

A. A sale, lease, exchange, or other disposition of assets, other than a disposition described in R.S. 12:1-1201, requires approval of the corporation's shareholders if the disposition would leave the corporation without a significant continuing business activity. If a corporation retains a business activity that represented at least twenty-five percent of total assets at the end of the most recently completed fiscal year, and twenty-five percent of either income from continuing operations before taxes or revenues from continuing operations for that fiscal year, in each case of the corporation and its subsidiaries on a consolidated basis, the corporation will conclusively be deemed to have retained a significant continuing business activity.

B. A disposition that requires approval of the shareholders under Subsection A of this Section shall be initiated by a resolution by the board of directors authorizing the disposition. After adoption of such a resolution, the board of directors shall submit the proposed disposition to the shareholders for their approval. The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, or R.S. 12:1-826 applies. If the board of directors makes such a determination or R.S. 12:1-826 applies, the board of directors shall transmit to the shareholders the basis for so proceeding.

C. The board of directors may condition its submission of a disposition to the shareholders under Subsection B of this Section on any basis.

D. If a disposition is required to be approved by the shareholders under Subsection A of this Section, and if the approval is to be given at a meeting, the corporation shall notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the disposition is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the disposition and shall contain a description of the disposition, including the terms and conditions thereof and the consideration to be received by the corporation.

E. Unless the articles of incorporation or the board of directors acting pursuant to Subsection C of this Section requires a greater vote, the approval of a disposition by the shareholders shall require the approval of at least a majority of the votes entitled to be cast on the disposition.

F. After a disposition has been approved by the shareholders under Subsection B of this Section, and at any time before the disposition has been consummated, it may be abandoned by the corporation without action by the shareholders, subject to any contractual rights of other parties to the disposition.

G. A disposition of assets in the course of dissolution under Part 14 of this Chapter is not governed by this Section.

H. The assets of a direct or indirect consolidated subsidiary shall be deemed the assets of the parent corporation for the purposes of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 13 APPRAISAL RIGHTS

SUBPART A RIGHT TO APPRAISAL AND PAYMENT FOR SHARES

§ 12:1-1301 Definitions

In this Part, the following meanings shall apply:

(1) "Affiliate" means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person or is a senior executive thereof. For purposes of R.S. 12:1-1302(B)(4), an entity is deemed to be an affiliate of its senior executives.

(2) "Beneficial owner" means any person who, directly or indirectly, through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote, or to direct the voting of, shares; except that a member of a national securities exchange is not deemed to be a beneficial owner of securities held directly or indirectly by it on behalf of another person solely because the member is the record holder of the securities if the member is precluded by the rules of the exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted. When two or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed thereby is deemed to have acquired beneficial ownership, as of the date of the agreement, of all voting shares of the corporation beneficially owned by any member of the group.

(3) "Corporation" means the issuer of the shares held by a shareholder demanding appraisal and, for matters covered in R.S. 12:1-1322 through 1-1331, includes the surviving entity in a merger.

(3.1) "Excluded shares" means shares acquired pursuant to an offer for all shares having voting power if the offer was made within one year prior to the corporate action for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action.

(4) "Fair value" means the value of the corporation's shares determined immediately before the effectuation of the corporate action to which the shareholder objects, using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal, and without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles pursuant to R.S. 12:1-1302(A)(5).

(5) "Interest" means interest from the effective date of the corporate action until the date of payment, at the rate of judicial interest.

(5.1) "Interested person" means a person, or an affiliate of a person, who at any time during the one-year period immediately preceding approval by the board of directors of the corporate action, satisfies any of the following criteria:

(a) Was the beneficial owner of twenty percent or more of the voting power of the corporation, other than as owner of excluded shares.

(b) Had the power, contractually or otherwise, other than as owner of excluded shares, to cause the appointment or election of twenty-five percent or more of the directors to the board of directors of the corporation.

(c) Was a senior executive or director of the corporation or a senior executive of any affiliate thereof, and that senior executive or director will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders as such, other than any of the following:

(i) Employment, consulting, retirement, or similar benefits established separately and not as part of or in contemplation of the corporate action.

(ii) Employment, consulting, retirement, or similar benefits established in contemplation of, or as part of, the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in R.S. 12:1-862.

(iii) In the case of a director of the corporation who will, in the corporate action, become a director of the acquiring entity in the corporate action or one of its affiliates, rights and benefits as a director that are provided on the same basis as those afforded by the acquiring entity generally to other directors of such entity or such affiliate.

(5.2) "Interested transaction" means a corporate action described in R.S. 12:1-1302(A) involving an interested person in which any of the shares or assets of the corporation are being acquired or converted.

(6) "Preferred shares" means a class or series of shares whose holders have preference over any other class or series with respect to distributions.

(7) [Reserved.]

(8) "Senior executive" means the chief executive officer, chief operating officer, chief financial officer, and anyone in charge of a principal business unit or function.

(9) "Shareholder" means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-1302 Right to appraisal

A. A shareholder is entitled to appraisal rights and to obtain payment of the fair value of that shareholder's shares, in the event of any of the following corporate actions:

(1) Consummation of a merger to which the corporation is a party if either of the following apply:

(a) Shareholder approval is required for the merger by R.S. 12:1-1104, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger.

(b) The corporation is a subsidiary and the merger is governed by R.S. 12:1-1105.

(2) Consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired, except that appraisal rights shall not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not exchanged.

(3) Consummation of a disposition of assets pursuant to R.S. 12:1-1202, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series if, under the terms of the corporate action approved by the shareholders, there is to be distributed to shareholders in cash its net assets in excess of a reasonable amount reserved to meet claims of the type described in R.S. 12:1-1406 and 1-1407, within one year after the shareholders' approval of the action and in accordance with their respective interests determined at the time of distribution, and the disposition of assets is not an interested transaction.

(4) An amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created.

(5) Any other amendment to the articles of incorporation, merger, share exchange, or disposition of assets to the extent provided by the articles of incorporation, bylaws, or a resolution of the board of directors.

(6) Consummation of a domestication if the shareholder does not receive shares in the foreign corporation resulting from the domestication that have terms as favorable to the shareholder in all material respects, and represent at least the same percentage interest of the total voting rights of the outstanding shares of the corporation, as the shares held by the shareholder before the domestication.

(7) Consummation of a conversion of the corporation to nonprofit status pursuant to Subpart C of Part 9 of this Chapter.

(8) Consummation of a conversion of the corporation to an unincorporated entity pursuant to Subpart E of Part 9 of this Chapter.

B. Notwithstanding Subsection A of this Section, the availability of appraisal rights under Paragraphs (A)(1), (2), (3), (4), (6), and (8) of this Section shall be limited in accordance with the following provisions:

(1) Appraisal rights shall not be available for the holders of shares of any class or series of shares which is one of the following:

(a) A covered security under Section 18(b)(1)(A) or (B) of the Securities Act of 1933, as amended.

(b) Traded in an organized market and has at least two thousand shareholders and a market value of at least twenty million dollars, exclusive of the value of such shares held by the corporation's subsidiaries, senior executives, and directors and by beneficial shareholders and voting trust beneficial owners owning more than ten percent of such shares.

(c) Issued by an open end management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and may be redeemed at the option of the holder at net asset value.

(2) The applicability of Paragraph (B)(1) of this Section shall be determined as of either of the following:

(a) The record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to act upon the corporate action requiring appraisal rights.

(b) The day before the effective date of such corporate action if there is no meeting of shareholders.

(3) Paragraph (B)(1) of this Section shall not be applicable and appraisal rights shall be available pursuant to Subsection A of this Section for the holders of any class or series of shares who are required by the terms of the corporate action requiring appraisal rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in Paragraph (B)(1) of this Section at the time the corporate action becomes effective or, in the case of the consummation of a disposition of assets pursuant to R.S. 12:1-1202, unless such cash, shares, or proprietary interests are, under the terms of the corporate action approved by the shareholders, to be distributed to the shareholders as part of a distribution to shareholders of the net assets of the corporation in excess of a reasonable amount to meet claims of the type described in R.S. 12:1-1406 and 1-1407, within one year after the shareholders' approval of the action and in accordance with their respective interests determined at the time of the distribution.

(4) Paragraph (B)(1) of this Section shall not be applicable and appraisal rights shall be available pursuant to Subsection A of this Section for the holders of any class or series of shares where the corporate action is an interested transaction.

C. Notwithstanding any other provision of this Section, the articles of incorporation as originally filed or any amendment thereto may limit or eliminate appraisal rights for any class or series of preferred shares, except for both of the following:

(1) No such limitation or elimination shall be effective if the class or series does not have the right to vote separately as a voting group, alone or as part of a group, on the action or if the action is a nonprofit conversion under Subpart C of Part 9 of this Chapter or a conversion to an unincorporated entity under Subpart E of Part 9 of this Chapter, or a merger having a similar effect.

(2) Any such limitation or elimination contained in an amendment to the articles of incorporation that limits or eliminates appraisal rights for any of such shares that are outstanding immediately prior to the effective date of such amendment, or that the corporation is or may be required to issue or sell thereafter pursuant to any conversion, exchange, or other right existing immediately before the effective date of such amendment shall not apply to any corporate action that becomes effective within one year of that date if such action would otherwise afford appraisal rights.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1303 Assertion of rights by nominees and beneficial shareholders

A. A record shareholder may assert appraisal rights as to fewer than all the shares registered in the record shareholder's name but owned by a beneficial shareholder or a voting trust beneficial owner only if the record shareholder objects with respect to all shares of the class or series owned by the beneficial shareholder or the voting trust beneficial owner and notifies the corporation in writing of the name and address of each beneficial shareholder or voting trust beneficial owner on whose behalf appraisal rights are being asserted. The rights of a record shareholder who asserts appraisal rights for only part of the shares held of record in the record shareholder's name under this Subsection shall be determined as if the shares as to which the record shareholder objects and the record shareholder's other shares were registered in the names of different record shareholders.

B. A beneficial shareholder and voting trust beneficial owner may assert appraisal rights as to shares of any class or series held on behalf of the shareholder only if such shareholder submits to the corporation the record shareholder's written consent to the assertion of such rights no later than the date referred to in R.S. 12:1-1322(B)(2)(b), and does so with respect to all shares of the class or series that are beneficially owned by the beneficial shareholder or voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B PROCEDURE FOR EXERCISE OF APPRAISAL RIGHTS

§ 12:1-1320 Notice of appraisal rights

A. Where any corporate action specified in R.S. 12:1-1302(A) is to be submitted to a vote at a shareholders' meeting, the meeting notice must state that the corporation has concluded that the shareholders are, are not, or may be entitled to assert appraisal rights under this Part. If the corporation concludes that appraisal rights are or may be available, one of the following statements shall be included in the meeting notice sent to those record shareholders entitled to exercise appraisal rights:

(1) If the corporation wishes for shareholders to be subject to the requirements of R.S. 12:1-1321(A)(1):

"Appraisal rights allow a shareholder to avoid the effects of the proposed corporate action described in this notice by selling the shareholder's shares to the corporation at their fair value, paid in cash. To retain the right to assert appraisal rights, a shareholder is required by law: (1) to deliver to the corporation, before the vote is taken on the action described in this notice, a written notice of the shareholder's intent to demand appraisal if the corporate action proposed in this notice takes effect, and (2) not to vote, or cause or permit to be voted, in favor of the proposed corporate action any shares of the class or series for which the shareholder intends to assert appraisal rights. If a shareholder complies with those requirements, and the action proposed in this notice takes effect, the law requires the corporation to send to the shareholder an appraisal form that the shareholder must complete and return, and a copy of Part 13 of the Business Corporation Act, governing appraisal rights."

(2) If the corporation is waiving the requirements of R.S. 12:1-1321(A)(1):

"Appraisal rights allow a shareholder to avoid the effects of the proposed corporate action described in this notice by selling the shareholder's shares to the corporation at their fair value, paid in cash. To retain the right to assert appraisal rights, a shareholder is required by law not to vote, or cause or permit to be voted, in favor of the proposed corporation action any shares of the class or series for which the shareholder intends to assert appraisal rights. If a shareholder complies with the requirement, and the action proposed in this notice take effect, the law requires the corporation to send to the shareholder an appraisal form that the shareholder must complete and return, a copy of Part 13 of the Business Corporation Act, governing appraisal rights."

B. In a merger pursuant to R.S. 12:1-1105, the parent corporation must notify in writing all record shareholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective. Such notice must be sent within ten days after the corporate action became effective and include the materials described in R.S. 12:1-1322.

C. Where any corporate action specified in R.S. 12:1-1302(A) is to be approved by written consent of the shareholders pursuant to R.S. 12:1-704.

(1) Written notice that appraisal rights are, are not, or may be available must be sent to each record shareholder from whom a consent is solicited at the time consent of such shareholder is first solicited and, if the corporation has concluded that appraisal rights are or may be available, the following statement must be included in the notice:

"Appraisal rights allow a shareholder to avoid the effects of the proposed corporate action described in this notice by selling the shareholder's shares to the corporation at their fair value, paid in cash. To retain the right to assert appraisal rights, a shareholder is required by law not to sign any consent in favor of the proposed corporate action with respect to any shares of the class or series for which the shareholder intends to assert appraisal rights. If a shareholder complies with this requirement, and the corporate action proposed in this notice takes effect, the law requires the corporation to send to the shareholder an appraisal form that the shareholder must complete and return, and a copy of Part 13 of the Business Corporation Act, governing appraisal rights."

(2) Written notice that appraisal rights are, are not, or may be available must be delivered together with the notice to nonconsenting and nonvoting shareholders required by R.S. 12:1-704(E) and (F), may include the materials described in R.S. 12:1-1322 and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of this Part and the following statement:

"Appraisal rights allow a shareholder to avoid the effects of the corporate action described in this notice by selling the shareholder's shares to the corporation at their fair value, paid in cash. A shareholder may obtain appraisal rights only by completing and returning an appraisal form that the law requires the corporation to send to the shareholder, and by complying with all other requirements of Part 13 of the Business Corporation Act, a copy of which is enclosed."

D. Where corporate action described in R.S. 12:1-1302(A) is proposed, or a merger pursuant to R.S. 12:1-1105 is effected, the notice referred to in Subsection A or C of this Section, if the corporation concludes that appraisal rights are or may be available, and in Subsection B of this Section shall be accompanied by both of the following:

(1) The annual financial statements specified in R.S. 12:1-1620(B) of the corporation that issued the shares that may be subject to appraisal, which shall be as of a date ending not more than sixteen months before the date of the notice and shall comply with R.S. 12: 1-1620(B); provided that, if such annual financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information.

(2) The latest available quarterly financial statements of such corporation, if any.

E. The right to receive the information described in Subsection D of this Section may be waived in writing by a shareholder before or after the corporate action. If the information described in Subsection D of this Section is not publicly available, the shareholder who receives it owes a duty to the corporation to use and disclose the information only for purposes of deciding whether to exercise appraisal rights and for other proper purposes.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1321 Notice of intent to demand appraisal and consequences of voting or consenting

A. If a corporate action specified in R.S. 12:1-1302(A) is submitted to a vote at a shareholders' meeting, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares must do both of the following:

(1) Deliver to the corporation, before the vote is taken, written notice of the shareholder's intent to demand appraisal if the proposed action is effectuated.

(2) Not vote, or cause or permit to be voted, any shares of such class or series in favor of the proposed action.

B. If a corporate action specified in R.S. 12:1-1302(A) is to be approved by written consent, a shareholder may assert appraisal rights with respect to a class or series of shares only if the shareholder does not sign a consent in favor of the proposed action with respect to that class or series of shares.

C. A shareholder who fails to satisfy the requirements of Subsection A or B of this Section is not entitled to appraisal under this Part.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1322 Appraisal notice and form

A. If a corporate action requiring appraisal rights under R.S. 12:1-1302(A) becomes effective, the corporation must send a written appraisal notice and the form required by Paragraph (B)(1) of this Section to all shareholders who satisfy the requirements of R.S. 12:1-1321(A) or R.S. 12:1-1321(B). In the case of a merger under R.S. 12:1-1105, the parent must deliver an appraisal notice and form to all record shareholders who may be entitled to assert appraisal rights.

B. The appraisal notice must be delivered no earlier than the date the corporate action specified in R.S. 12:1-1302(A) became effective, and no later than ten days after such date, and must do all of the following:

(1) Supply a form that requires the shareholder asserting appraisal rights to certify that such shareholder did not vote for or consent to the transaction.

(2) State all of the following:

(a) Where the form must be sent and where certificates for certificated shares must be deposited and the date by which those certificates must be deposited, which date may not be earlier than the date for receiving the required form under Subparagraph (B)(2)(b) of this Section.

(b) A date by which the corporation must receive the form, which date may not be fewer than forty nor more than sixty days after the date the appraisal notice is sent pursuant to Subsection A of this Section, and state that the shareholder shall have waived the right to demand appraisal with respect to the shares unless the form is received by the corporation by such specified date.

(c) The corporation's estimate of the fair value of the shares.

(d) That, if requested in writing, the corporation will provide, to the shareholder so requesting, within ten days after the date specified in Subparagraph (B)(2)(b) of this Section the number of shareholders who return the forms by the specified date and the total number of shares owned by them.

(e) The date by which the notice to withdraw under R.S. 12:1-1323 must be received, which date must be at least twenty days after the date specified in Subparagraph (B)(2)(b) of this Section.

(3) Be accompanied by a copy of this Part.

C. A corporation may elect to withhold payment as permitted by R.S. 12:1-1325 only if the form required by Subsection B of this Section does both of the following:

(1) Specifies the first date of any announcement to shareholders made prior to the date the corporate action became effective of the principal terms of the proposed corporate action.

(2) If such announcement was made, requires the shareholder asserting appraisal rights to certify whether beneficial ownership of those shares for which appraisal rights are asserted was acquired before that date.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1323 Perfection of rights and right to withdraw

A. A shareholder who receives notice pursuant to R.S. 12:1-1322 and who wishes to exercise appraisal rights must sign and return the form sent by the corporation and, in the case of certificated shares, deposit the shareholder's certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to R.S. 12:1-1322(B)(2)(b). In addition, if applicable, the shareholder must certify on the form whether the beneficial owner of such shares acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to R.S. 12:1-1322(B)(1). If a shareholder fails to make this certification, the corporation may elect to treat the shareholder's shares as after-acquired shares under R.S. 12:1-1325. Once a shareholder deposits that shareholder's certificates or, in the case of uncertificated shares, returns the signed forms, that shareholder loses all rights as a shareholder, unless the shareholder withdraws pursuant to Subsection B of this Section.

B. A shareholder who has complied with Subsection A of this Section may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by so notifying the corporation in writing by the date set forth in the appraisal notice pursuant to R.S. 12:1-1322(B)(2)(e). A shareholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the corporation's written consent.

C. A shareholder who does not sign and return the form and, in the case of certificated shares, deposit that shareholder's share certificates where required, each by the date set forth in the notice described in R.S. 12:1-1322(B), shall not be entitled to payment under this Part.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1324 Payment

A. Except as provided in R.S. 12:1-1325, within thirty days after the form required by R.S. 12:1-1322(B)(2)(b) is due, the corporation shall pay in cash to those shareholders who complied with R.S. 12:1-1323(A) the amount the corporation estimates to be the fair value of their shares, plus interest.

B. Except as provided in Subsection C of this Section, the payment to each shareholder pursuant to Subsection A of this Section must be accompanied by all of the following:

(1)(a) The annual financial statements specified in R.S. 12:1-1620(B) of the corporation that issued the shares to be appraised, which shall be of a date ending not more than sixteen months before the date of payment and shall comply with R.S. 12:1-1620(B); provided that, if such annual financial statements are not reasonably available, the corporation shall provide reasonably equivalent financial information.

(b) The latest available quarterly financial statements of such corporation, if any.

(2) A statement of the corporation's estimate of the fair value of the shares, which estimate must equal or exceed the corporation's estimate given pursuant to R.S. 12:1-1322(B)(2)(c).

(3) A statement that shareholders described in Subsection A of this Section have the right to demand further payment under R.S. 12:1-1326 and that if any such shareholder does not do so within the time period specified therein, such shareholder shall be deemed to have accepted such payment in full satisfaction of the corporation's obligations under this Part.

C. The financial information described in Paragraph (B)(1) of this Section need not accompany the corporation's payment under Subsection A of this Section if the corporation has earlier delivered to the shareholder financial information that meets the requirements of Paragraph (B)(1) of this Section as of the time of the payment.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1325 After-acquired shares

A. A corporation may elect to withhold payment required by R.S. 12:1-1324 from any shareholder who was required to, but did not, certify that beneficial ownership of all of the shareholder's shares for which appraisal rights are asserted was acquired before the date specified in the appraisal notice sent in accordance with R.S. 12:1-1322(B)(1) and R.S. 12:1-1322(C).

B. If the corporation elects to withhold payment under Subsection A of this Section, it must, within thirty days after the form required by R.S. 12:1-1322(B)(2)(b) is due, notify all shareholders who are described in Subsection A of this Section of all of the following:

(1) The information required by R.S. 12:1-1324(B)(1).

(2) The corporation's estimate of fair value pursuant to R.S. 12:1-1324(B)(2).

(3) That they may accept the corporation's estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under R.S. 12:1-1326.

(4) That those shareholders who wish to accept such offer must so notify the corporation of their acceptance of the corporation's offer within thirty days after receiving the offer.

(5) That those shareholders who do not satisfy the requirements for demanding appraisal under R.S. 12:1-1326 shall be deemed to have accepted the corporation's offer.

C. Within ten days after receiving the shareholder's acceptance pursuant to Subsection B of this Section, the corporation must pay in cash the amount it offered under Paragraph (B)(2) of this Section to each shareholder who agreed to accept the corporation's offer in full satisfaction of the shareholder's demand.

D. Within forty days after sending the notice described in Subsection B of this Section, the corporation must pay in cash the amount it offered to pay under Paragraph (B)(2) of this Section to each shareholder described in Paragraph (B)(5) of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1326 Procedure if shareholder dissatisfied with payment or offer

A. A shareholder paid pursuant to R.S. 12:1-1324 who is dissatisfied with the amount of the payment must notify the corporation in writing of that shareholder's estimate of the fair value of the shares and demand payment of that estimate plus interest, less any payment under R.S. 12:1-1324. A shareholder offered payment under R.S. 12:1-1325 who is dissatisfied with that offer must reject the offer and demand payment of the shareholder's stated estimate of the fair value of the shares plus interest.

B. A shareholder who fails to notify the corporation in writing of that shareholder's demand to be paid the shareholder's stated estimate of the fair value plus interest under Subsection A of this Section within thirty days after receiving the corporation's payment or offer of payment under R.S. 12:1-1324 or 1-1325, respectively, waives the right to demand payment under this Section and shall be entitled only to the payment made or offered pursuant to those respective Sections.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C JUDICIAL APPRAISAL OF SHARES

§ 12:1-1330 Court action

A. If a shareholder makes demand for payment under R.S. 12:1-1326 which remains unsettled, the corporation shall commence a summary proceeding within sixty days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the sixty-day period, it shall pay in cash to each shareholder the amount the shareholder demanded pursuant to R.S. 12:1-1326, plus interest, within ten days after the expiration of the sixty-day period.

B. The corporation shall commence the proceeding in the district court of the parish where the corporation's principal office or, if none, its registered office in this state is located. If the corporation is a foreign corporation without a registered office in this state, it shall commence the proceeding in the parish in this state where the principal office or registered office of the domestic corporation merged with the foreign corporation was located at the time of the transaction.

C. The corporation shall make all shareholders, whether or not residents of this state, whose demands remain unsettled parties to the proceeding, and all parties must be served with a copy of the petition. Nonresidents may be served as provided by law.

D. The jurisdiction of the court in which the proceeding is commenced under Subsection B of this Section is exclusive. The court may appoint an appraiser to file a written report with the court on the question of fair value. The appraiser shall have the powers described in the appointing order, or in any amendment to it. The shareholders demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. If the court appoints an appraiser, the appraiser's written report shall be treated as the report of an expert witness, and the corporation and shareholders demanding appraisal shall be entitled to depose and to examine and cross-examine the appraiser as an expert witness.

E. Each shareholder made a party to the proceeding is entitled to judgment for either of the following:

(1) The amount, if any, by which the court finds the fair value of the shareholder's shares, plus interest, exceeds the amount paid by the corporation to the shareholder for such shares.

(2) The fair value, plus interest, of the shareholder's shares for which the corporation elected to withhold payment under R.S. 12:1-1325.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1331 Court costs and expenses

A. The court in an appraisal proceeding commenced under R.S. 12:1-1330 shall determine all court costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the court costs against the corporation, except that the court may assess court costs against all or some of the shareholders demanding appraisal, in amounts which the court finds equitable, to the extent the court finds such shareholders acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this Part.

B. The court in an appraisal proceeding may also assess the expenses of the respective parties in amounts the court finds equitable against either of the following:

(1) The corporation and in favor of any or all shareholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of R.S. 12:1-1320, 1-1322, 1-1324, or 1-1325.

(2) Either the corporation or a shareholder demanding appraisal, in favor of any other party, if the court finds the party against whom expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this Part.

C. If the court in an appraisal proceeding finds that the expenses incurred by any shareholder were of substantial benefit to other shareholders similarly situated and that such expenses should not be assessed against the corporation, the court may direct that such expenses be paid out of the amounts awarded the shareholders who were benefitted.

D. To the extent the corporation fails to make a required payment pursuant to R.S. 12:1-1324, 1-1325, 1-1326, or 1-1330(A), the shareholder may sue directly for the amount owed, and to the extent successful, shall be entitled to recover from the corporation all expenses of the suit. The shareholder's right to enforce the corporation's payment obligation under this Subsection is perempted five years after the date that the payment by the corporation becomes due under the relevant provision.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D OTHER REMEDIES

§ 12:1-1340 Other remedies limited

A. The legality of a proposed or completed corporate action described in R.S. 12:1-1302(A) may not be contested, nor may the corporate action be enjoined, set aside or rescinded, in any proceeding commenced by a shareholder after the shareholders have approved the corporate action.

B. The appraisal rights provided by this Part are the exclusive remedy of a shareholder in connection with a corporate action for which R.S. 12:1-1302 makes appraisal rights available if either of the following conditions is satisfied:

(1) The shareholder is not subject to the requirements of R.S. 12:1-1321(A)(1) concerning the delivery of a written notice of the shareholder's intent to assert appraisal rights.

(2) The corporation waives the requirements of R.S. 12:1-1321(A)(1).

C. If Subsection B of this Section makes appraisal rights the exclusive remedy of a shareholder, then the shareholder shall not have any other cause of action for damages or for any other form of relief against the corporation, or any director, officer, employee, agent, or controlling person of the corporation, in connection with the corporate action for which R.S. 12:1-1302 makes appraisal rights available.

D. If the corporation waives the requirements of R.S. 12:1-1321(A)(1), a shareholder may assert appraisal rights without complying with those requirements. A corporation waives the requirements of R.S. 12:1-1321(A)(1) by sending shareholders the notice specified in R.S. 12:1-1320(A)(2).

E. Subsections A, B, and C of this Section do not apply to a corporate action that is any of the following:

(1) Not authorized and approved in accordance with the applicable provisions of any of the following:

(a) Part 9, 10, 11, or 12 of this Chapter.

(b) The articles of incorporation or bylaws.

(c) The resolution of the board of directors authorizing the corporate action.

(2) [Reserved.]

(3) [Reserved.]

(4) Approved by less than unanimous consent of the voting shareholders pursuant to R.S. 12:1-704 if both of the following requirements are met:

(a) The challenge to the corporate action is brought by a shareholder who did not consent and as to whom notice of the approval of the corporate action was not effective at least ten days before the corporate action was effected.

(b) The proceeding challenging the corporate action is commenced within ten days after notice of the approval of the corporate action is effective as to the shareholder bringing the proceeding.

F. Subsections B and C of this Section do not affect any right of a shareholder that is provided by the terms of the corporate action itself if the shareholder does not assert, or loses the right to enforce, appraisal rights under this Part.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 14 DISSOLUTION

SUBPART A VOLUNTARY DISSOLUTION

§ 12:1-1401 [Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1402 Dissolution by board of directors and shareholders

A. A corporation's board of directors may propose dissolution for submission to the shareholders.

B. For a proposal to dissolve to be adopted, both of the following requirements must be met:

(1) The board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders.

(2) The shareholders entitled to vote must approve the proposal to dissolve as provided in Subsection E of this Section.

C. The board of directors may condition its submission of the proposal for dissolution on any basis.

D. The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

E. Unless the articles of incorporation or the board of directors acting pursuant to Subsection C of this Section require a greater vote or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of at least a majority of the votes entitled to be cast.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1403 Articles of dissolution

A. At any time after dissolution is authorized, the corporation may dissolve by delivering to the secretary of state for filing articles of dissolution setting forth all of the following:

(1) The name of the corporation.

(2) The date dissolution was authorized.

(3) If dissolution was approved by the shareholders, a statement that the proposal to dissolve was duly approved by the shareholders in the manner required by this Act and by the articles of incorporation.

B. A corporation is dissolved upon the effective date of its articles of dissolution.

C. For purposes of this Subpart, "dissolved corporation" means a corporation whose articles of dissolution have become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation.

D. The secretary of state shall deliver a notice of the filing of the articles of dissolution to all of the following:

(1) The secretary of the Department of Revenue.

(2) The secretary of the Department of Environmental Quality.

(3) The administrator of the Louisiana Employment Security Law.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1404 Revocation of dissolution

A. A corporation that is not terminated may revoke its dissolution within one hundred and twenty days of its effective date.

B. Revocation of dissolution must be authorized in the same manner 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 shareholder action.

C. After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the secretary of state for filing articles of revocation of dissolution that set forth all of the following:

(1) The name of the corporation.

(2) The effective date of the dissolution that was revoked.

(3) The date that the revocation of dissolution was authorized.

(4) If the corporation's board of directors, or incorporators, revoked the dissolution, a statement to that effect.

(5) If the corporation's board of directors revoked a dissolution authorized by the shareholders, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization.

(6) If shareholder action was required to revoke the dissolution, the information required by R.S. 12:1-1403(A)(3).

D. Revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution.

E. 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 business as if dissolution had never occurred.

F. A dissolution under R.S. 12:1-1438 is not revocable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1405 Effect of dissolution

A. A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including any of the following:

(1) Collecting its assets.

(2) Disposing of its properties that will not be distributed in kind to its shareholders.

(3) Discharging or making reasonable provision for discharging its liabilities.

(4) Distributing its remaining property among its shareholders according to their interests.

(5) Doing every other act necessary to wind up and liquidate its business and affairs.

B. Dissolution of a corporation does not do any of the following:

(1) Transfer title to the corporation's property.

(2) Prevent transfer of its shares or securities, although the authorization to dissolve may provide for closing the corporation's share transfer records.

(3) Subject its directors or officers to standards of conduct different from those prescribed in Part 8 of this Chapter.

(4) Change quorum or voting requirements for its board of directors or shareholders; change provisions for selection, resignation, or removal of its directors or officers or both; or change provisions for amending its bylaws.

(5) Prevent commencement of a proceeding by or against the corporation in its corporate name.

(6) Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution.

(7) Terminate the authority of the registered agent of the corporation.

C. The limitation imposed by Subsection A of this Section on the business to be conducted by a dissolved corporation does not do either of the following:

(1) Require the corporation to discontinue operations in any part of its business that the corporation plans to sell as a going concern in connection with the winding up and liquidation of the corporation's affairs.

(2) Affect any right acquired by a third person before the third person knows or has reason to know that the corporation is dissolved.

D. The filing of articles of dissolution by a corporation does not by itself give a third person knowledge or reason to know that the corporation is dissolved.

E. The provisions of Code of Civil Procedure Articles 692 and 740 do not apply to a dissolved corporation that has not been terminated. A dissolved and unterminated corporation continues to be the proper party plaintiff under Code of Civil Procedure Article 690 and the proper party defendant under Code of Civil Procedure Article 739. An action by or against a terminated corporation is governed by R.S. 12:1-1443.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1406 Known claims against dissolved corporation

A. A dissolved corporation may dispose of the known claims against it by notifying its known claimants in writing of the dissolution at any time after its effective date.

B. The written notice must do all of the following:

(1) Describe information that must be included in a claim.

(2) Provide a mailing address where a claim may be sent.

(3) State the deadline, which may not be fewer than one hundred and twenty days from the effective date of the written notice, by which the dissolved corporation must receive the claim.

(4) State that the claim will be extinguished by peremption if not received by the deadline.

C. A claim against the dissolved corporation is perempted by either of the following:

(1) If a claimant who was given written notice under Subsection B of this Section does not deliver the claim to the dissolved corporation by the deadline.

(2) If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim by the deadline stated in the rejection notice for the commencement of an enforcement proceeding, which may not be fewer than ninety days after the effective date of the rejection notice.

D. 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.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1407 Other claims against dissolved corporation

A. A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the dissolved corporation present them in accordance with the notice.

B. The notice must do all of the following:

(1) Be published one time in a newspaper of general circulation in the parish where the dissolved corporation's principal office or, if none in this state, its registered office, is or was last located.

(2) Describe the information that must be included in a claim and provide a mailing address where the claim may be sent.

(3) State that a claim against the dissolved corporation will be extinguished by peremption unless a proceeding to enforce the claim is commenced within three years after the publication of the notice.

C. If the dissolved corporation publishes a newspaper notice in accordance with Subsection B of this Section, any claim not earlier perempted by R.S. 12:1-1406(C) is perempted unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within three years after the publication date of the newspaper notice.

D. A claim that is not perempted by R.S. 12:1-1406(C) or 1-1407(C) may be enforced against either of the following:

(1) The dissolved corporation, to the extent of its undistributed assets.

(2) Except as provided in R.S. 12:1-1408(D), if the assets have been distributed in liquidation, a shareholder of the dissolved corporation to the extent of the shareholder's pro rata share of the claim or the corporate assets distributed to the shareholder in liquidation, whichever is less, but a shareholder's total liability for all claims under this Section may not exceed the total amount of assets distributed to the shareholder.

E. A proceeding to enforce the liability of a shareholder under Paragraph (D)(2) of this Section is perempted unless it is commenced within two years after the date that the assets were distributed to the shareholder.

F. For purposes of this Section, the term "claim" includes a claim of any kind, including a contingent liability and a claim based on an event occurring after the effective date of dissolution.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1408 Court proceedings

A. A dissolved corporation that has published a notice under R.S. 12:1-1407 may file an application with the district court of the parish where the dissolved corporation's principal office or, if none in this state, its registered office is located for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved corporation or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under R.S. 12:1-1407(C).

B. Within ten days after the filing of the application, notice of the proceeding shall be given by the dissolved corporation to each claimant holding a contingent claim whose contingent claim is shown on the records of the dissolved corporation.

C. The court shall appoint an attorney at law to represent all claimants whose identities or whereabouts are unknown in any proceeding brought under this Section, as if those claimants were absentee defendants under Code of Civil Procedure Article 5091. The reasonable fees and expenses of the appointed attorney, including all reasonable expert witness fees, shall be paid by the dissolved corporation.

D. Provision by the dissolved corporation for security in the amount and the form ordered by the court under Subsection A of this Section shall satisfy the dissolved corporation's obligations with respect to claims that are contingent, have not been made known to the dissolved corporation, or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a shareholder who received assets in liquidation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1409 Responsibility of the board of directors

A. The board of directors of a dissolved corporation is responsible for winding up and liquidating the business and affairs of the corporation as contemplated by R.S. 12:1-1405 (A). The board of directors may authorize a distribution to shareholders only after the corporation pays, or makes reasonable provision to pay, all obligations owed by the corporation as contemplated by R.S. 12:1-1405(A).

B. Directors of a dissolved corporation which has disposed of claims under R.S. 12:1-1406, 1-1407, or 1-1408 shall not be liable for breach of Subsection A of this Section with respect to claims against the dissolved corporation that are barred or satisfied under R.S. 12:1-1406, 1-1407, or 1-1408.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1410 Certain sections in Subpart A applicable to all dissolved corporations

R.S. 12:1-1405 through 1-1409 apply to a dissolved corporation regardless of whether the dissolution is voluntary or judicial.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B ADMINISTRATIVE DISSOLUTION

§ 12:1-1411 - 1-1429 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1412 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1413 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1414 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1415 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1416 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1417 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1418 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1419 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1420 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1421 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1422 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1423 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1424 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1425 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1426 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1427 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1428 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1429 [Reserved]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART C JUDICIAL DISSOLUTION

§ 12:1-1430 Grounds for judicial dissolution

A. A district court may dissolve a corporation in any of the following:

(1) A proceeding by the attorney general if either of the following is established:

(a) The corporation obtained its articles of incorporation through fraud.

(b) The corporation has continued to exceed or abuse the authority conferred upon it by law.

(2) A proceeding by a shareholder if any of the following is established:

(a) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock.

(b) [Reserved.]

(c) The shareholders 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 expired.

(d) [Reserved.]

(3) A proceeding by a creditor if either of the following is established:

(a) The creditor's claim has been reduced to judgment, the execution on the judgment returned unsatisfied, and the corporation is insolvent.

(b) The corporation is insolvent and has admitted in writing that the creditor's claim is due and owing.

(4) A proceeding by the corporation, or by shareholders of shares with at least twenty-five percent of the voting power in the corporation, to have its voluntary dissolution continued under court supervision.

(5) A proceeding by a shareholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and dissolve.

B. Paragraph (2) of Subsection A of this Section shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has shares that are covered securities under Section 18(b)(1)(A) or (B) of the Securities Act of 1933, as amended.

C. In Subsection A of this Section, "shareholder" means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1431 Procedure for judicial dissolution

A. Venue for a proceeding by the attorney general to dissolve a corporation lies in East Baton Rouge Parish. Venue for a proceeding brought by any other party named in R.S. 12:1-1430(A) lies in the parish where the corporation's principal office or, if none in this state, its registered office is or was last located.

B. It is not necessary to make shareholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually.

C. A court in a proceeding brought to dissolve a corporation or to continue a dissolution under court supervision may issue injunctions, appoint a receiver or liquidator with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.

D. Within ten days of the commencement of a proceeding to dissolve a corporation under R.S. 12:1-1430(A)(2), the corporation must send to all shareholders, other than the petitioner, a notice stating that the shareholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner's shares under R.S. 12:1-1434 and accompanied by a copy of R.S. 12:1-1434.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1432 Appointment of receiver or liquidator

A. Unless an election to purchase has been filed under R.S. 12:1-1434, a court in a judicial proceeding brought to dissolve a corporation or to continue a dissolution under court supervision may appoint one or more liquidators to wind up and liquidate, or one or more receivers to manage, the business and 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 appointing a receiver or liquidator. The court appointing a receiver or liquidator has jurisdiction over the corporation and all of its property wherever located.

B. The court may appoint an individual or a domestic or foreign corporation, authorized to transact business in this state, as a receiver or liquidator. The court may require the receiver or liquidator to post bond, with or without sureties, in an amount the court directs.

C. The court shall describe the powers and duties of the receiver or liquidator in its appointing order, which may be amended from time to time and may require the receiver or liquidator to file interim and final reports with the court as the court considers appropriate. Except as limited by the court, the following powers may be exercised:

(1) The liquidator may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to wind up the business and affairs of the corporation as contemplated by R.S. 12:1-1405.

(2) The receiver may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors.

D. The court may redesignate the receiver a liquidator, and may redesignate the liquidator a receiver, if doing so is in the best interests of the corporation, its shareholders, and creditors.

E. The court from time to time may order compensation paid and expenses paid or reimbursed to the receiver or liquidator from the assets of the corporation or proceeds from the sale of the assets.

F. If a court appoints a receiver or liquidator under this Section, then during the period of the appointment the receiver or liquidator assumes the responsibility and authority of the board of directors, except to the extent the appointing order provides otherwise, and the board of directors is relieved of that responsibility and authority. The receiver or liquidator is liable for a breach of duty as receiver or liquidator to the same extent that a director holding the same authority and responsibility would be liable.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-1433 Judgment of dissolution

A. If after a hearing the court determines that one or more grounds for judicial dissolution described in R.S. 12:1-1430 exist, it may enter a judgment dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the judgment to the secretary of state, who shall file it.

B. After entering the judgment of dissolution, the court shall direct the winding up and liquidation of the corporation's business and affairs in accordance with R.S. 12:1-1405 and the notification of claimants in accordance with R.S. 12:1-1406 and 1-1407.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1434 Election to purchase in lieu of dissolution

A. In a proceeding under R.S. 12:1-1430(A)(2) to dissolve a corporation, the corporation may elect or, if it fails to elect, one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares. An election pursuant to this Section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.

B.(1) An election to purchase pursuant to this Section may be filed with the court at any time within ninety days after the filing of the petition under R.S. 12:1-1430(A)(2) or at such later time as the court in its discretion may allow or as all shareholders of the corporation may agree.

(2) If the election to purchase is filed by one or more shareholders, the corporation shall, within ten days thereafter, give written notice to all shareholders, other than the petitioner. The notice must state the name and number of shares owned by the petitioner and the name and number of shares owned by each electing shareholder and must advise the recipients of their right to join in the election to purchase shares in accordance with this Section.

(3) Shareholders who wish to participate must file notice of their intention to join in the purchase no later than thirty days after the effective date of the notice to them. All shareholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of shares as of the date the first election was filed, unless they otherwise agree or the court otherwise directs.

(4) After an election has been filed by the corporation or one or more shareholders, the proceeding under R.S. 12:1-1430(A)(2) may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of his or her shares, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioner, to permit such discontinuance, settlement, sale, or other disposition.

(5) If an election to purchase is filed by the corporation within ninety days after the filing of the petition under R.S. 12:1-1430(A)(2), the corporation's election shall be given precedence over any shareholder election filed within the same period, even if the shareholder's election is filed before that of the corporation.

(6) If the court allows both the corporation and one or more shareholders to file an election after the expiration of the ninety-day period, the court shall direct how the purchase of shares is to be allocated among the electing parties.

C. If, within sixty days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner's shares, the court shall enter an order directing the purchase of petitioner's shares upon the terms and conditions agreed to by the parties.

D. If the parties are unable to reach an agreement as provided for in Subsection C of this Section, the court, upon application of any party, shall stay the R.S. 12:1-1430(A)(2) proceedings and determine the fair value of the petitioner's shares as of the day before the date on which the petition under R.S. 12:1-1430(A)(2) was filed or as of such other date as the court deems appropriate under the circumstances.

E. Upon determining the fair value of the shares, the court shall enter an order directing the purchase upon such terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional expenses as may have been awarded, and, if the shares are to be purchased by shareholders, the allocation of shares among them. In allocating petitioner's shares among holders of different classes of shares, the court shall attempt to preserve the existing distribution of voting rights among holders of different classes insofar as practicable and may direct that holders of a specific class or classes shall not participate in the purchase. Interest may be allowed at the rate and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed.

F. Upon entry of an order under Subsections C or E of this Section, the court shall dismiss the petition to dissolve the corporation under R.S. 12:1-1430(A)(2), and the petitioning shareholder shall no longer have any rights or status as a shareholder of the corporation, except the right to receive the amounts awarded by the order of the court which shall be enforceable in the same manner as any other judgment.

G. The purchase ordered pursuant to Subsection E of this Section shall be made within ten days after the date the order becomes final unless before that time the corporation files with the court a notice of its intention to adopt articles of dissolution pursuant to R.S. 12:1-1402 and 1-1403, which articles must then be adopted and filed within fifty days thereafter. Upon filing of such articles of dissolution, the corporation shall be dissolved in accordance with the provisions of R.S. 12:1-1405 through 1-1407, and the order entered pursuant to Subsection E of this Section shall no longer be of any force or effect, except that the petitioner may continue to pursue any claims previously asserted on behalf of the corporation.

H. Any payment by the corporation pursuant to an order under Subsections C or E of this Section is subject to the provisions of R.S. 12:1-640.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1435 Oppressed shareholder's right to withdraw

A. If a corporation engages in oppression of a shareholder, the shareholder may withdraw from the corporation and require the corporation to buy all of the shareholder's shares at their fair value.

B. A corporation engages in oppression of a shareholder if the corporation's distribution, compensation, governance, and other practices, considered as a whole over an appropriate period of time, are plainly incompatible with a genuine effort on the part of the corporation to deal fairly and in good faith with the shareholder. Conduct that is consistent with the good faith performance of an agreement among all shareholders is presumed not to be oppressive. The following factors are relevant in assessing the fairness and good faith of the corporation's practices:

(1) The conduct of the shareholder alleging oppression.

(2) The treatment that a reasonable shareholder would consider fair under the circumstances, considering the reasonable expectations of all shareholders in the corporation.

C.(1) The term "fair value" has the same meaning in this Section and in R.S. 12:1-1436 as it does in R.S. 12:1-1301(4) concerning appraisal rights, except that the value of a withdrawing shareholder's shares is to be determined as of the effective date of the notice of withdrawal pursuant to Subsection D of this Section.

(2) The context of the transaction requiring appraisal, as described in R.S. 12:1-1301(4), is a sale of the entire corporation in an arm's-length transaction by a person who owns all of the shares in the corporation.

D. A shareholder may assert a right to withdraw under this Section by giving written notice to the corporation that the shareholder is withdrawing from the corporation on grounds of oppression. When the notice becomes effective it operates as an offer by the shareholder, irrevocable for sixty days, to sell to the corporation at fair value the entirety of the shareholder's shares in the corporation. The notice need not specify the price that the withdrawing shareholder proposes as the fair value of the shares, but if the notice does specify a price, the price shall be part of the offer to sell made by the shareholder.

E. The corporation may accept the offer to sell made in the shareholder's notice of withdrawal by giving the withdrawing shareholder written notice of its acceptance during the sixty days that the offer is irrevocable. If the shareholder's notice of withdrawal specifies a price for the shares, the corporation's notice of acceptance operates as an acceptance of both the offer to sell and the proposed price unless the notice states that the corporation is accepting the offer to sell, but not the price; in that case the notice of acceptance operates only as an acceptance of the shareholder's offer to sell the shares at their fair value. The corporation's acceptance of the shareholder's offer does not operate as an admission or as evidence that the corporation has engaged in oppression of the shareholder.

F. A notice of acceptance that operates as an acceptance of both the shareholder's offer to sell and the shareholder's proposed price forms a contract of sale of the shares at that price, payable in cash. The contract includes the warranties of a seller of investment securities under the Uniform Commercial Code and imposes a duty on the selling shareholder to deliver any certificates issued by the corporation for the withdrawing shareholder's shares or, if a certificate has been lost, stolen, destroyed, or previously delivered to the corporation, an affidavit to that effect. Either party may file an action to enforce the contract at the specified price if the contract is not fully performed within thirty days after the effective date of the notice of acceptance. If a withdrawing shareholder fails to deliver the certificate for a share purchased by the corporation under a contract formed under this Subsection, the shareholder owes the same indemnity obligation as a shareholder who sells shares as described in R.S. 12:1-1436(F).

G. If the corporation does not accept the withdrawing shareholder's offer as provided in Subsection E of this Section, the shareholder may file an ordinary proceeding against the corporation in district court to enforce the shareholder's right to withdraw. A judgment in the action that recognizes the right of the shareholder to withdraw on grounds of oppression is a partial judgment under Code of Civil Procedure Article 1915(B). The trial on the valuation of the shares is governed by R.S. 12:1-1436.

H. Venue for an action filed under Subsection F or G of this Section lies in the district court of the parish where the corporation's principal office or, if none in this state, where its registered office is located.

I. A corporation's obligation to purchase a withdrawing shareholder's shares as provided in this Section or R.S. 12:1-1436 is subject to any limitation or requirement respecting a corporation's acquisition of its own shares as imposed by R.S. 12:1-631, R.S. 12:1-640, R.S. 6:518, or any other provision of state or federal law applicable to the corporation, including any order, plan, directive, or enforcement action issued by an administrative or regulatory agency pursuant to state or federal law.

J.(1) The shareholders of a corporation may waive the right to withdraw under this Section by unanimous written consent, provided in accordance with R.S. 12:1-704, stating that the shareholders are waiving the right provided by law to withdraw from the corporation on grounds of oppression. The waiver takes effect when the last consent required to make the consent effective under R.S. 12:1-704 is delivered to the corporation, and the corporation shall send written notice to the shareholders of that date promptly after it is known. The waiver remains in effect for fifteen years from the date that it becomes effective, or for any shorter period stated in the waiver to which the shareholders consent.

(2) The existence of the waiver shall be noted on each share certificate in the same way that the existence of a unanimous governance agreement is required to be noted under R.S. 12:1-732(C), and the failure to note the existence of the waiver on a share certificate has the same effect with respect to the waiver as a failure to note a unanimous governance agreement has with respect to that agreement. Except as stated in this Subsection and in Subsection K of this Section, the right of an oppressed shareholder to withdraw from a corporation under this Section may not be diminished.

K. This Section shall not apply in the case of a corporation that, on the effective date of the withdrawal notice under Subsection C of this Section, has shares that are covered securities under Section 18(b)(1)(A) or (B) of the Securities Act of 1933, as amended.

L. Without limiting any remedy available on other grounds, the right to withdraw in accordance with this Section and R.S. 12: 1-1436 is the exclusive remedy for oppression. An allegation of oppression, as such, does not provide an independent or additional basis for an action by a shareholder to recover damages from the corporation or its directors, officers, employees, agents, or controlling persons.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1; Acts 2022, No. 261, §2.

§ 12:1-1436 Judicial determination of fair value and payment terms for withdrawing shareholder's shares

A.(1) If a shareholder's right to withdraw from a corporation is recognized by means of a notice of acceptance under R.S. 12:1-1435(E), but the notice does not create a contract under R.S. 12:1-1435(F), the corporation and shareholder shall have sixty days from the effective date of the notice of acceptance to negotiate the fair value of the shareholder's shares and the terms under which the corporation is to purchase the shares. Within one year after the expiration of the sixty-day period, either party may file an action against the other to determine the fair value of the shares and the terms for the purchase of the shares. Venue for the action lies in the district court of the parish where the corporation's principal office or, if none in this state, where its registered office is located.

(2) If neither party files an action to establish the fair value of the shares within the time period provided in this Subsection, then subject to the terms of any settlement reached between the parties, the effects of the earlier notices of withdrawal and acceptance under R.S. 12:1-1435 are terminated. The termination of the effects of the earlier notices does not affect the right of the shareholder to reassert the shareholder's right to withdraw through the filing of a new notice of withdrawal in accordance with R.S. 12:1-1435(D).

B. If a shareholder's right to withdraw from a corporation is recognized by a judgment in an action under R.S. 12:1-1435(G), the court shall stay the proceeding for a period of at least sixty days from the date that the judgment is rendered to allow the corporation and shareholder to negotiate the fair value and purchase terms for the withdrawing shareholder's shares, or other terms for the settlement of their dispute. After the stay expires or is lifted, either party may file a motion to have the court determine the fair value and terms for the purchase of the shares.

C. The court shall conduct the trial of the action under Subsection A of this Section or the motion under Subsection B of this Section by summary proceeding.

D. Except as provided in Subsection E of this Section, at the conclusion of the trial the court shall render final judgment as described in Paragraphs (1) and (2) of this Subsection:

(1) In favor of the shareholder and against the corporation for the fair value of the shareholder's shares.

(2) In favor of the corporation and against the shareholder that does both of the following:

(a) Terminates the shareholder's ownership of shares in the corporation.

(b) Orders the shareholder to deliver to the corporation within thirty days of the date of the judgment any certificate issued by the corporation for the shares or an affidavit by the shareholder that the certificate has been lost, stolen, destroyed, or previously delivered to the corporation.

E. If at the conclusion of the trial the court finds that the corporation has proved that its payment of the judgment rendered in accordance with Subsection D of this Section would violate a limitation or requirement as described in R.S. 12:1-1435(I) or cause undue harm to the corporation or its creditors, the court shall render a final judgment that, by itself or in conjunction with earlier orders or partial judgments of the court, provides relief as close in value and effect as feasible to that contemplated by Subsection D of this Section, but adjusted as necessary to avoid the relevant violation or undue harm.

F. If a withdrawing shareholder fails to deliver the certificate for a share covered by a judgment rendered as provided in Subsection D or E of this Section, and a third person presents the certificate to the corporation after the shareholder's ownership of the share is terminated by the judgment, the shareholder shall indemnify the corporation for any dilution in value imposed on other shareholders as a result of the corporation's obligation to recognize the person presenting the certificate as the owner of the shares represented by the certificate.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1.

§ 12:1-1437 Stay of duplicative proceedings

A. On motion by the corporation, a court shall stay a duplicative proceeding by a shareholder who has given a notice of withdrawal to the corporation as provided in R.S. 12:1-1435(D). The court shall lift the stay on motion by the shareholder when a judgment denying the shareholder's right to withdraw becomes final and definitive.

B. For purposes of this Section, a "duplicative proceeding" is any proceeding in which a shareholder, on his own behalf or as a representative of the corporation, alleges a cause of action against the corporation, or against a director, officer, agent, employee, or controlling person of the corporation, on grounds of a breach of duty owed by that person to the corporation or to the shareholder in the shareholder's capacity as shareholder.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1438 Conversion of oppression proceeding into court-supervised dissolution

A. A corporation may by contradictory motion convert a withdrawal or valuation proceeding under R.S. 12:1-1435 or 1-1436 into a proceeding for a court-supervised dissolution of the corporation if the dissolution is approved as provided in R.S. 12:1-1402. If the court finds after the hearing on the conversion motion that the dissolution was approved as provided in R.S. 12:1-1402, it shall do all of the following:

(1) Render a judgment dissolving the corporation as provided in R.S. 12:1-1433.

(2) Dismiss the withdrawal or valuation cause of action.

(3) Make the complaining shareholder in the dismissed cause of action a party to the court-supervised dissolution proceeding.

(4) Appoint a liquidator in accordance with R.S. 12:1-1432, or order the corporation to submit to the court for its approval a plan of liquidation and such interim and final reports on the liquidation as the court may consider necessary to protect the interests of the complaining shareholder.

B. A motion under Subsection A of this Section may be filed at any time before final judgment.

C. If a corporation dissolves or terminates while a withdrawal or valuation proceeding under R.S. 12:1-1435 or 1-1436 is pending, but does not file a motion to convert the proceeding as provided in Subsection A of this Section, the complaining shareholder in the proceeding may by contradictory motion seek to convert the proceeding into one for a court-supervised dissolution of the corporation. If the court finds that the conversion is necessary to protect the interests of the shareholder, it shall grant the motion and take the actions contemplated by Subsection A of this Section for the conversion of a proceeding to a court-supervised dissolution.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART D TERMINATION AND REINSTATEMENT

§ 12:1-1440 Articles of termination

A. When the board of directors, or the liquidator acting during the liquidator's appointment, determines that the corporation has completed the winding up and liquidation of its business and affairs, the board of directors or liquidator may cause the corporation to deliver to the secretary of state for filing articles of termination.

B. The articles of termination shall state all of the following:

(1) The name of the corporation.

(2) The date of its dissolution.

(3) Whether its dissolution was voluntary or judicial.

(4) That the corporation has paid or made reasonable provision for the payment of all of its liabilities.

(5) That the net assets of the corporation remaining after winding up have been distributed to the shareholders.

C. If the articles of termination are signed by a liquidator, the secretary of state shall not file the articles unless the articles have attached or appended to them a certified copy of the court order that authorizes the liquidator to wind up the affairs of the corporation.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1441 Simplified termination procedure for certain corporations

A. The existence of a corporation may be terminated as provided in this Section if the corporation satisfies all of the following conditions:

(1) Does not owe any debts.

(2) Does not own any immovable property.

(3) Has not issued shares or is not doing business.

B. If the corporation has not issued shares, a termination under this Section may be authorized by a majority of the initial directors or, if no initial directors are named in the articles of incorporation, by a majority of the incorporators. If the corporation has issued shares, the termination may be authorized as provided in R.S. 12:1-1402 or by the unanimous written consent of the shareholders.

C. After the termination is authorized, the corporation may deliver to the secretary of state for filing articles of termination that set forth all of the following:

(1) The name of the corporation.

(2) That no debt of the corporation remains unpaid.

(3) That the corporation owns no immovable property.

(4) That the corporation has not issued shares or is not doing business.

(5) That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued.

(6) That the termination was authorized as required by Subsection B of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1442 Administrative termination

A. Subject to Subsection B of this Section, the secretary of state shall terminate the existence of a corporation if, according to the records of the secretary of state, the corporation has failed for ninety consecutive days to do either of the following:

(1) Comply with the requirements imposed by R.S. 12:1-501 concerning the continuous maintenance in this state of a registered office and registered agent.

(2) File an annual report as required by R.S. 12:1-1621.

B. The secretary of state shall give the corporation at least thirty days' written notice of the secretary's intention to terminate the corporation's existence under Subsection A of this Section. If the corporation eliminates the grounds for its termination before the end of the thirty-day notice period, the secretary of state shall not terminate the existence of the corporation.

C. The secretary of state terminates the existence of a corporation under this Section by filing a certificate of termination that states the grounds for termination.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2015, No. 356, §1.

§ 12:1-1443 Effective date and effects of termination

A. The filing by the secretary of state of a corporation's articles of termination under R.S. 12:1-1440 or 1-1441 or a certificate of termination under R.S. 12:1-1442 causes the existence of the corporation to terminate on the effective date of the articles or certificate of termination. The effects of the filing of the articles or certificate of termination are not affected by any error in the articles or certificate, but the error may justify reinstatement of the corporation as provided in R.S. 12:1-1444 or the appointment of a liquidator as provided in R.S. 12:1-1445.

B. When the existence of the corporation terminates, the corporation's juridical personality ends except for purposes of any of the following:

(1) Reserving the corporation's name as provided in R.S. 12:1-402(C).

(2) Concluding any proceeding to which the corporation is a party at the time of the termination.

(3) Continuing to own any undistributed corporate assets and to owe any undischarged corporate obligations or liabilities.

(4) Disposing of immovable property owned by the corporation pursuant to a resolution of the board of directors.

C. The termination does not do any of the following:

(1) Extinguish any claim against the corporation.

(2) Abate any proceeding to which the corporation is a party.

(3) Cause any obligation or liability owed by the corporation to become the obligation or liability of any of the corporation's current or former shareholders, directors, officers, employees, or agents.

(4) Cause any undistributed asset of the corporation to become the property of any of the corporation's current or former shareholders, directors, officers, employees, or agents.

D. A terminated corporation's juridical personality, and the authority of a person acting on the corporation's behalf as its legal counsel or managerial representative, continues for purposes of Paragraph (B)(2) of this Section as if the termination had not occurred, but subject to the power of an authorized representative of a reinstated corporation, or of a liquidator appointed in accordance with R.S. 12:1-1445, to change the identity or authority of the legal counsel or managerial representative.

E. The existence of a terminated corporation may be reinstated as provided in R.S. 12:1-1444, and a liquidator may be appointed as provided in R.S. 12:1-1445 for any proper purpose. Unless a terminated corporation is reinstated, any action that is commenced by or against the corporation after the effective date of its termination shall be brought by or against a liquidator that is appointed in accordance with R.S. 12:1-1445.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 89, §1.

§ 12:1-1444 Reinstatement of terminated corporation

A. A terminated corporation may be reinstated if the corporation satisfies both of the following conditions:

(1) It was not dissolved by a judgment of dissolution.

(2) It requests reinstatement in accordance with this Section no later than five years after the effective date of its articles or certificate of termination.

B. If the corporation was terminated administratively under R.S. 12:1-1442, the articles of reinstatement shall be approved by either of the following:

(1) A director or officer listed in the corporation's last annual report before its termination.

(2) A director of the corporation elected by the shareholders of the corporation after the last annual report, regardless of whether the director was elected before or after the administrative termination.

C. If the corporation was terminated after its dissolution or termination was authorized by a vote of shareholders, then all of the following actions are required:

(1) The reinstatement of the corporation shall be approved by the same vote that was required to approve the dissolution or termination, by the persons who were shareholders at the time that the dissolution or termination was approved by the shareholders.

(2) The persons entitled to vote on the reinstatement shall elect a board of directors for the reinstated corporation.

(3) The board of directors elected in accordance with Paragraph (C)(2) of this Section shall elect officers for the reinstated corporation.

D. A corporation may request reinstatement by delivering to the secretary of state for filing articles of reinstatement and an annual report. The articles of reinstatement and the annual report shall be signed by an officer or director of the corporation who is entitled to approve the articles under Subsection B of this Section or, in the case of a reinstatement authorized in accordance with Subsection C of this Section, by a director or officer elected in accordance with that Subsection. The annual report shall be accompanied by a written consent to appointment signed by the registered agent named in the annual report.

E. The articles of reinstatement shall state all of the following:

(1) The name of the corporation.

(2) That the reinstatement was approved in accordance with either of the following:

(a) R.S. 12:1-1444(B).

(b) R.S. 12:1-1444(C), and that the directors and officers listed in the annual report accompanying the articles of reinstatement were elected in accordance with that Subsection. If the annual report is not yet due, the report to be made in compliance with this Subsection shall be provided in a separate written statement.

(3) That the corporation is reinstated, effective retroactively as if the corporation had never been terminated.

F. The secretary of state shall file the articles of reinstatement only if both of the following conditions are satisfied:

(1) The articles are delivered for filing to the secretary of state within five years after the effective date of the articles or certificate of termination for the corporation.

(2) The fee is paid for the filing of an annual report for each year between the corporation's last annual report and the year in which corporation is reinstated.

G. In addition to the reinstatement authorized by Subsections A through F of this Section, if the administrative termination of a corporation occurred because of an error in the records of the secretary of state not caused by the corporation, the secretary of state shall file a certificate of reinstatement that states that the certificate of termination was filed in error, and that the corporation is reinstated, with retroactive effect as if the termination had never occurred.

H. When the secretary of state files a certificate or articles of reinstatement, the existence of the terminated corporation is reinstated retroactively, and the corporation continues to exist as if the termination had never occurred.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1; Acts 2017, No. 57, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:1-1445 Appointment of liquidator for terminated corporation

On application of any interested party, a district court may, ex parte or on such notice as the court may order, appoint a liquidator to act on behalf of a terminated corporation with respect to any of its undistributed assets or undischarged claims or interests. The court's appointment of a liquidator under this Section is governed by the provisions of R.S. 12:1-1432, as if the liquidator were being appointed to conduct a dissolution of the corporation under court supervision. The costs and expenses of the liquidator and of the appointment of the liquidator under this Section shall be paid by the party seeking the appointment, subject to reimbursement from any undistributed assets of the corporation or the proceeds of their disposition.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 15 FOREIGN CORPORATIONS

§ 12:1-1446 - 1-1600 [Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 16 RECORDS AND REPORTS

SUBPART A RECORDS

§ 12:1-1601 Corporate records

A. A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

B. A corporation shall maintain appropriate accounting records.

C. A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.

D. A corporation shall maintain its records in the form of a document, including an electronic record, or in another form capable of conversion into paper form within a reasonable time.

E. A corporation shall keep a copy of all of the following records at its principal office:

(1) Its articles or restated articles of incorporation, all amendments to them currently in effect, and any notices to shareholders referred to in R.S. 12:1-120(L)(5) regarding facts on which a filed document is dependent.

(2) Its bylaws or restated bylaws and all amendments to them currently in effect.

(3) Resolutions adopted by its board of directors creating one or more classes or series of shares, and fixing their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding.

(4) The minutes of all shareholders' meetings, and records of all action taken by shareholders without a meeting, for the past three years.

(5) All written communications to shareholders generally within the past three years, including the financial statements furnished for the past three years under R.S. 12:1-1620.

(6) A list of the names and business addresses of its current directors and officers.

(7) Its most recent annual report delivered to the secretary of state under R.S. 12:1-1621.

(8) Any unanimous governance agreement, as defined in R.S. 12:1-732, then in effect.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1602 Inspection of records by shareholders

A. A shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in R.S. 12:1-1601(E) if the shareholder gives the corporation a signed written notice of the shareholder's demand at least five business days before the date on which the shareholder wishes to inspect and copy.

B. For any meeting of shareholders for which the record date for determining shareholders entitled to vote at the meeting is different than the record date for notice of the meeting, any person who becomes a shareholder subsequent to the record date for notice of the meeting and is entitled to vote at the meeting is entitled to obtain from the corporation, upon request, the notice and any other information provided by the corporation to shareholders in connection with the meeting, unless the corporation has made such information generally available to shareholders by posting it on its website or by other generally recognized means. Failure of a corporation to provide such information does not affect the validity of action taken at the meeting.

C. A shareholder of at least five percent of any class of the issued shares of a corporation for at least the preceding six months is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any and all of the records of the corporation if the shareholder meets the requirements of Subsection D of this Section and gives the corporation a signed written notice of the shareholder's demand at least five business days before the date on which the shareholder wishes to inspect and copy the records. A shareholder of less than five percent of a corporation's issued shares may exercise the rights provided in this Subsection if the shareholder delivers to the corporation, either before or along with the written notice of demand, written consents to the demand by other shareholders who, in the aggregate with the shareholder making the demand, own the required percentage of shares for the required period.

D. A shareholder may inspect and copy the records described in Subsection C of this Section only if the following conditions are satisfied:

(1) The shareholder's demand is made in good faith and for a proper purpose.

(2) The shareholder describes with reasonable particularity the shareholder's purpose and the records the shareholder desires to inspect.

(3) The records are directly connected with the shareholder's purpose.

E. The right of inspection granted by this Section may not be abolished or limited by a corporation's articles of incorporation, bylaws, unanimous governance agreement, or any other agreement.

F. This Section does not affect any of the following:

(1) The right of a shareholder to inspect records under R.S. 12:1-720 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant.

(2) The power of a court to deny the right of inspection as to confidential matters, or to place restrictions on the use or distribution of records as provided in R.S. 12:1-1604(D).

G. For purposes of this Section, "shareholder" means a record shareholder, a beneficial shareholder, and an unrestricted voting trust beneficial owner.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 442, §1.

§ 12:1-1603 Scope of inspection right

A. A shareholder's agent or attorney has the same inspection and copying rights as the shareholder represented.

B. The right to copy records under R.S. 12:1-1602 includes, if reasonable, the right to receive copies by xerographic or other means, including copies through an electronic transmission if electronic transmission is available and requested by the shareholder.

C. The corporation may comply at its expense with a shareholder's demand to inspect the record of shareholders by providing the shareholder with a list of shareholders that was compiled no earlier than the date of the shareholder's demand.

D. The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents requested by the shareholder. The charge may not exceed the estimated cost of production, reproduction, or transmission of the records.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1604 Court-ordered inspection

A. If a corporation does not within a reasonable time allow a shareholder who complies with the applicable provisions of R.S. 12:1-1602 to inspect and copy any records required by that Section to be available for inspection, the district court of the parish where the corporation's principal office or, if none in this state, its registered office is located may by summary proceeding order inspection and copying of the records demanded. If the court determines that the shareholder was entitled to inspect and copy the demanded records under R.S. 12:1-1602(A), then the court shall order the corporation to provide copies of the demanded records at the corporation's expense.

B. [Reserved.]

C. If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder's expenses 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 shareholder to inspect the records demanded.

D. If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding shareholder.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1605 Inspection of records by directors

A. A director of a corporation is entitled to inspect and copy the books, records, and documents of the corporation at any reasonable time to the extent reasonably related to the performance 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.

B. The district court of the parish 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 petition of a director who has been refused such inspection rights, unless the corporation establishes that the director is not entitled to such inspection rights. The court shall dispose of a petition under this Subsection by summary proceeding.

C. 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 expenses incurred in connection with the proceeding under Subsection B of this Section. In addition to a director's rights under this Section, a director is also entitled to the corporation's payment of expenses, and to the corporation's provision of copies at the corporation's expense, on the same basis as a shareholder under R.S. 12:1-1604, regardless of whether the director is a shareholder or holds the percentage of shares specified in R.S. 12:1-1602.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1606 Exception to notice requirement

A. Whenever notice would otherwise be required to be given under any provision of this Chapter to a shareholder, such notice need not be given if either of the following conditions are met:

(1) Notices to the shareholders of two consecutive annual meetings, and all notices of meetings during the period between such two consecutive annual meetings, have been sent to such shareholder at such shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered.

(2) All, but not less than two, payments of dividends on securities during a twelve-month period, or two consecutive payments of dividends on securities during a period of more than twelve months, have been sent to such shareholder at such shareholder's address as shown on the records of the corporation and have been returned undeliverable or could not be delivered.

B. If any such shareholder shall deliver to the corporation a written notice setting forth such shareholder's then-current address, the requirement that notice be given to such shareholder shall be reinstated.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

SUBPART B REPORTS

§ 12:1-1620 Financial statements for shareholders

A. Once each calendar year a shareholder may obtain a report of financial information from the corporation. To obtain the report, a shareholder shall give a written notice of the request for the report to the corporation. The notice shall specify a postal mailing address, and if desired an electronic mailing address, to which the report should be delivered. Promptly after receiving the shareholder's notice, the corporation shall deliver to the shareholder, at one of the specified addresses, a report that complies with the requirements of Subsections B and C of this Section.

B. A report of financial information shall contain all of the following financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, for the last fiscal year ended at least four months before the effective date of the shareholder's notice:

(1) A balance sheet.

(2) An income statement.

(3) A statement of changes in shareholders' equity unless that information appears elsewhere in the financial statements provided.

(4) If ordinarily prepared by the corporation, a statement of cash flows.

C. If the corporation's financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the statements in the report of financial information listed in Subsection B of this Section must also be prepared on that basis. If those statements are reported upon by a public accountant, the accountant's report shall be delivered as part of the report of financial information described in Subsection B of this Section.

D. A public corporation may fulfill its responsibilities under this Section by delivering the financial statements listed in Subsection B of this Section, or otherwise making them available, in any manner permitted by the applicable rules and regulations of the United States Securities and Exchange Commission. A corporation that complies with this Subsection is not required to deliver a report of financial information as provided in Subsection A of this Section.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1621 Annual report for secretary of state

A. Each corporation shall deliver to the secretary of state for filing an annual report that sets forth all of the following information:

(1) The name of the corporation.

(2) The address of its registered office.

(3) The name and address of its registered agent.

(4) The address of its principal office.

(5) Names and business addresses of its directors and principal officers.

(6) The total number of issued shares, itemized by class and series, if any, within each class.

B. Information in the annual report must be current as of the date the annual report is signed on behalf of the corporation.

C. A corporation's annual report shall be delivered to the secretary of state each year on or before the anniversary of the date that the corporation was incorporated.

D. If an annual report does not contain the information required by this Section, the secretary of state shall promptly notify the corporation in writing and return the report to it for correction.

E. A dissolved corporation shall continue to file annual reports under this Section until the existence of the corporation is terminated.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 107, §1.

§ 12:1-1622 Reporting obligation of corporation that contracts with the state

A. A corporation that contracts with the state shall deliver for filing to the secretary of state a statement that acknowledges the contract. The statement shall include the names and addresses of all persons or entities who hold an ownership interest of five percent or more in the corporation or who hold by proxy the voting power of five percent or more in the corporation and, if anyone holds stock in his own name that actually belongs to another, the name of the person for whom held, including stock held pursuant to a counterletter.

B. This Subsection does not apply to any of the following:

(1) Any agreement entered between the state and a corporation for electric or gas service.

(2) Publicly traded corporations.

(3) State-chartered banks.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

PART 17 TRANSITION PROVISIONS

§ 12:1-1701 Application to existing domestic corporations

This Chapter applies to all domestic corporations in existence on its effective date that were incorporated under the laws of this state for a purpose or purposes for which a corporation might be formed under this Chapter.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1702 Limited applicability to foreign corporations

Except where express reference is made to foreign corporations, this Chapter does not apply to foreign corporations.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1703 Saving provisions

A. Except as provided in Subsection B of this Section, the repeal of a statute by this Chapter does not affect any of the following:

(1) The operation of the statute or any action taken under it, before its repeal.

(2) Any ratification, right, remedy, privilege, obligation, or liability acquired, accrued, or incurred under the statute, before its repeal.

(3) Any violation of the statute, or any penalty, forfeiture, or punishment incurred because of the violation, before its repeal.

(4) 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.

B. If a penalty or punishment imposed for violation of a statute repealed by this Chapter is reduced by this Chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this Chapter.

C. In the event that any provisions of this Chapter are deemed to modify, limit, or supersede the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001 et seq., the provisions of this Chapter shall control to the maximum extent permitted by Section 102(a)(2) of that federal act.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1704 [Reserved.]

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1-1705 Transition rule for reinstatement of a corporation with a revoked charter

A. A corporation whose charter was revoked before January 1, 2015, may be reinstated as provided in R.S. 12:1-1444 for a corporation that was terminated administratively. Subject to the time limitation stated in Subsection F of this Section, a corporation whose charter was revoked before January 1, 2015, may also be reinstated as provided in Subsections B through E of this Section.

B. A corporation whose charter was revoked before January 1, 2015, may request reinstatement by delivering to the secretary of state for filing articles of charter-revocation reinstatement and the current annual report. The articles of charter-revocation reinstatement and the annual report shall be signed by an officer or director of the corporation who is entitled to approve articles of reinstatement under R.S. 12:1-1444(B). The annual report shall be accompanied by a written consent to appointment signed by the registered agent named in the annual report.

C. The articles of charter-revocation reinstatement shall state all of the following:

(1) The name of the corporation.

(2) That the charter of the corporation was revoked before January 1, 2015.

(3) That the reinstatement was approved by an officer or director who is entitled to approve articles of reinstatement pursuant to R.S. 12:1-1444(B).

(4) That the corporation is reinstated, effective retroactively as if the corporation had never been terminated.

D. If the corporation's name is no longer available for use, the secretary of state shall file the articles of charter-revocation reinstatement only if the corporation also delivers for filing articles of amendment that change the name of the corporation to a name that meets the requirements of R.S. 12:1-401.

E. When the secretary of state files articles of charter-revocation reinstatement, the existence of the corporation is reinstated retroactively, and the corporation continues to exist as if the termination had never occurred.

F. A corporation may be reinstated pursuant to Subsections B through E of this Section only if the documents required by those Subsections, and entitled to filing pursuant to R.S. 12:1-120, are delivered for filing to the secretary of state before January 1, 2019.

Acts 2016, No. 442, §1.

§ 12:2 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1999, No. 342, §5; Acts 2001, No. 1032, §4; Acts 2006, No. 256, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:2.1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2012, No. 835, §1, eff. Jan. 1, 2013; Acts 2014, No. 328, §5, eff. Jan. 1, 2015, Acts 2014, No. 162, §1, eff. May 22, 2014.

§ 12:2.2 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2012, No. 835, §1, eff. Jan. 1, 2013; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART II INCORPORATION

§ 12:21 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:22 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:23 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts No. 1968, No. 105, §1. Amended by Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 1997, No. 296, §§1, 2; Acts 1997, No. 362, §1; Acts 1999, No. 342, §5; Acts 1999, No. 860, §2, eff. July 2, 1999; Acts 2001, No. 631, §1; Acts 2003, No. 279, §2; Acts 2008, No. 913, §2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:24 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1970, No. 50, §1, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1987, No. 261, §1, eff. July 3, 1987; Acts 1990, No. 745, §2; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:25 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1976, No. 580, §1. Acts 1983, No. 88, §1; Acts 1991, No. 334, §1; Acts 1991, No. 944, §2; Acts 1999, No. 342, §5; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:25.1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 280, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

{{NOTE: ACTS 1987, NO.280, §2, PROVIDES THAT R.S. 12:25.1 IS REMEDIAL AND HAS LIMITED RETROACTIVITY.}}

§ 12:26 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:27 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:28 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:29 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART III AMENDMENT AND RESTATEMENT OF ARTICLES

§ 12:31 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1970, No. 50, §2, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:32 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1977, No. 408, §1; Acts 1999, No. 342, §5; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:33 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1989, No. 612, §1, eff. July 6, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2014.

§ 12:34 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2014.

§ 12:35 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Added by Acts 1982, No. 442, §1, eff. July 21, 1982. Acts 1989, No. 612, §1, eff. July 6, 1989; Acts 1999, No. 342, §5; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART IV CORPORATE POWERS

§ 12:41 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1984, No. 841, §1, eff. July 13, 1984; Acts 1990, No. 848, §1; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:42 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART V SHARES

§ 12:51 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1987, No. 62, §2, eff. June 11, 1987; Acts 1988, No. 173, §2, eff. June 29, 1988; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:52 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1974, No. 436, §1; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:53 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:54 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:55 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1989, No. 175, §§1 and 2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:56 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:57 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2005, No. 97, §2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:58 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:59 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2005, No. 97, §2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART VI CAPITAL, SURPLUS, DIVIDENDS

§ 12:61 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Added by Acts 1970, No. 50, §3, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:62 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Acts 1984, No. 841, §1, eff. July 13, 1984; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:63 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART VII SHAREHOLDERS

§ 12:71 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:72 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1991, No. 44, §1, eff. June 23, 1991; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:73 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:74 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:75 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §4, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1987, No. 62, §3, eff. June 11, 1987; Acts 1988, No. 173, §3, eff. June 29, 1988; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:76 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:77 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 326, §5, eff. Jan. 1, 2015.

§ 12:78 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:79 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART VIII DIRECTORS AND OFFICERS

§ 12:81 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1979, No. 53, §1; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 1997, No. 914, §1; Acts 2004, No. 523, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:82 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1989, No. 102, §1.

§ 12:83 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §5, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1986, No. 561, §1, eff. July 2, 1986; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:84 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART IX LIABILITY OF DIRECTORS, OFFICERS, SHAREHOLDERS AND SUBSCRIBERS

§ 12:91 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1999, No. 1253, §1, eff. July 12, 1999; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:92 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1984, No. 841, §1, eff. July 13, 1984; Acts 1987, No. 463, §1; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 1989, No. 612, §1, eff. July 6, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:93 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:94 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:95 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:96 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1997, No. 1101, §1, eff. July 14, 1997; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART X REPORTS, RECORDS, REGISTERED OFFICE AND AGENTS

§ 12:101 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1976, No. 459, §1; Acts 2014, No. 328, §5, eff. Jan. 1. 2015.

§ 12:102 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1970, No. 50, §6, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1972, No. 383, §1; Acts 1976, No. 459, §2; Acts 1981, No. 494, §1; Acts 1990, No. 745, §2; Acts 1992, No.103, §1, eff. June 5, 1992; Acts 2001, No. 1187, §1; Acts 2003, No. 365, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:103 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Acts 1984, No. 841, §1, eff. July 13, 1984; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:104 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1976, No. 460, §1; Acts 1978, No. 232, §1; Acts 1987, No. 769, §1; Acts 1988, No. 99, §1; Acts 1991, No. 334, §1; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XI MERGERS, CONSOLIDATIONS, AND SHARE EXCHANGES

§ 12:111 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:112 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1970, No. 50, §§7-9, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 1989, No. 612, §1, eff. July 6, 1989; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:113 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:114 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 1997, No. 914, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:115 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:116 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:117 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XII TRANSFERS OF CORPORATE ASSETS

§ 12:121 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1970, No. 50, §§10, 11, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2014.

PART XIII DISSENTING SHAREHOLDERS' RIGHTS, FAIR PRICE PROTECTION, AND CONTROL SHARE ACQUISITION

§ 12:130 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1991, No. 914, §1, eff. July 23, 1991; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:130.1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1991, No. 914, §1, eff. July 23, 199; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:130.2 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1991, No. 914, §1, eff. July 23, 1991; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:131 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §12, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1975, No. 433, §1; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 1997, No. 914, §1; Acts 2010, No. 7, §2, eff. May 19, 2010; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:132 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1984, No. 841, §2, eff. July 13, 1984; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

*15 U.S.C. §77B ET SEQ.

§ 12:133 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1984, No. 841, §2, eff. July 13, 1984; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:134 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1984, No. 841, §2, eff. July 13, 1984; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:135 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 1990, No. 613, §1; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:136 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:137 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 1991, No. 914, §1, eff. July 23, 1991.

§ 12:138 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 1988, No. 455, §1, eff. July 10, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:139 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.2 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1987, No. 62, §1, eff. June 11, 1987; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.3 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2001, No. 1186, §2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XIII-A FOREIGN CORPORATIONS

§ 12:140.11 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.12 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.13 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.14 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.15 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.16 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:140.17 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1988, No. 173, §1, eff. June 29, 1988; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XIV DISSOLUTION

§ 12:141 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:142 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1979, No. 773, §1, eff. July 20, 1979; Acts 1984, No. 487, §1; Acts 1990, No. 849, §1, eff. for taxable years after Dec. 31, 1989; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:142.1 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Added by Acts 1982, No. 526, §1, eff. Aug. 11, 1982. Acts 1989, No. 142, §1; Acts 2006, No. 170, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:143 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §13, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1976, No. 587, §1, eff. Aug. 4, 1976; Acts 1982, No. 871, §1; Acts 1984, No. 406, §1; Acts 1985, No. 269, §1, eff. July 6, 1985; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:144 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:145 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1974, No. 610, §1; Acts 1976, No. 312, §1; Acts 2000, 1st Ex. Sess., No. 135, §3, eff. July 1, 2000; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:146 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:147 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:148 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Acts 1984, No. 715, §1, eff. July 12, 1984; Acts 1992, No. 447, §4; Acts 1997, No. 293, §1; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:149 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XV RECEIVERS

§ 12:151 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:152 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XVI OTHER PROCEEDINGS

§ 12:161 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:162 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:163 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1972, No. 601, §1; Acts 1976, No. 631, §1; Acts 1980, No. 824, §1, eff. Aug. 1, 1980; Acts 1981, No. 582, §1, eff. July 20, 1981; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1983, No. 88, §1; Acts 1984, No. 714, §1, eff. July 12, 1984; Acts 1997, No. 298, §1; Acts 1999, No. 342, §5; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

{{NOTE: SEE ACTS 1984, NO.714, §2.}}

¹As appears in enrolled bill.

§ 12:164 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1983, No. 466, §1; Acts 2001, No. 1187, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:165 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1986, No. 642, §1; Acts 1999, No. 342, §5; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

PART XVII GENERAL PROVISIONS

§ 12:171 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 632, §1; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1983, No. 235, §1, eff. July 1, 1983; Acts 1983, 2nd Ex. Sess., No. 4, §1, eff. Jan. 1, 1984; Acts 1984, No. 741, §1, eff. July 13, 1984; Acts 2008, No. 913, §2; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:172 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:173 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 1989, No. 182, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:174 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:175 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:176 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:177 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:178 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 1968, No. 105, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

CHAPTER 2 NONPROFIT CORPORATION LAW

§ 12:201 Terms defined

As used in this Chapter, unless the context requires otherwise,

(1) "Address" means street and municipal number, or other definite and ascertainable physical location if street and municipal number are not available; and, if a building not wholly occupied by the addressee, the location in the building.

(2) "Allocated value" means (1) the par value of par-value shares, plus any amounts in excess of par value transferred from surplus to stated capital in respect of such shares, less any part of such amounts transferred from stated capital to capital surplus as permitted by this Chapter, and (2) the amount allocated to stated capital upon issuance of shares without par value, plus any amounts thereafter transferred from surplus to stated capital in respect of such shares, less any part of such amounts transferred from stated capital to capital surplus as permitted by this Chapter.

(3) "Articles" means the original articles of incorporation, and all amendments thereto including those contained in merger agreements, or if restated, the latest restatement thereof, except in those instances in which the context expressly refers to the original articles of incorporation only.

(4) "Assets" means all of a corporation's property and rights of every kind. Treasury shares are not assets.

(5) "Business corporation" means a corporation for profit formed under the laws of this state.

(6) "Capital surplus" means the aggregate of:

(a) The amount of the consideration received on issuance of issued shares in excess of the aggregate allocated value thereof; and

(b) Amounts transferred to capital surplus as permitted by this Chapter; and

(c) Surplus arising from revaluation to reflect unrealized appreciation in value of assets; less

(d) Transfers from, or other reductions in, capital surplus required or permitted by this Chapter.

(7) "Corporation" or "nonprofit corporation" means a corporation formed under this Chapter, as well as a corporation formed under the laws of this state before January 1, 1969 but of a class of corporations that might be formed under this Chapter.

(8) "Court" means any court of competent jurisdiction where the registered office of the corporation is located.

(9) "Directors" means persons designated in the articles as such, and persons designated, elected or appointed by any other name or title to act as directors, and their successors. The term, when used in relation to any power or duty requiring collective action, means "board of directors".

(10) "Earned surplus" means the excess of surplus over capital surplus.

(11) "Fiduciary" means any person, firm, partnership, association or corporation, including a usufructuary, who or which occupies a position of peculiar confidence toward any person, firm, association, partnership, trust or estate.

(12) "Foreign corporation" means a corporation formed under the laws of any jurisdiction other than this state.

(13) "Incorporator" means one of the signers of the original articles of incorporation.

(14) "Insolvency" means the inability of a corporation to pay its debts as they become due in the usual course of business.

(15) "Issued shares" means outstanding shares and treasury shares.

(16) "Member" means each natural or artificial person admitted to membership in a corporation, and, unless the context indicates otherwise, includes shareholders.

(17) "Membership" means an interest in a corporation entitling the holder thereof to participate in the control of the corporation or to a pro rata share of its net assets upon dissolution.

(18) "Net assets" means the excess of assets over liabilities.

(19) "Reclassification of stock" means amendment of the articles to change the authorized number of shares of an existing class or series; to authorize shares of a new class or series; to change the designation, par value (including change of par-value shares to shares without par value or vice versa), preferences, limitations or relative rights, including cancellation or modification of the right to receive accumulated dividends which have not been declared, or variations in relative rights, of the issued, and authorized but unissued, shares of any existing class or series; or to change the issued shares of any existing class or series into a greater or smaller number of shares of the same class or series (subject to such changes as the reclassification may make in the designation, par value, preferences, limitations or relative rights, or variations in relative rights, thereof) or of another class or series, and to cancel any issued shares in connection with a reduction in the number thereof.

(20) "Registered office" means that office maintained by the corporation in this state, the address of which is kept on file in the office of the Secretary of State in the manner required by this Chapter.

(21) "Share" means an interest in a corporation, represented by a stock certificate issued after payment for the shares represented thereby, entitling the holder thereof to participate in the control of the corporation or to a pro rata share of its net assets upon dissolution.

(22) "Shareholder" means a natural or artificial person who is the owner of a property interest in a corporation represented by a certificate for shares of stock.

(23) "Stated capital" means the aggregate amount of:

(a) The aggregate allocated value of the issued shares; and

(b) Any other amounts transferred from surplus to stated capital; less

(c) Transfers from, or other reductions in, stated capital required or permitted by this Chapter.

(24) "Subscriber" means one who subscribes for shares in a corporation, whether before or after incorporation.

(25) "Surplus" means the excess of assets over liabilities plus stated capital.

(26) "Total voting power" means the entirety of the voting power.

(27) "Treasury shares" means issued shares which have been acquired by and belong to the corporation, if not required by the articles to be cancelled, or if not cancelled by order of the board of directors.

(28) "Trust instrument" includes any lawful act, agreement, donation, testament or other document, by which the donor, settlor or testator transfers any property in trust, for any charitable, religious, benevolent, educational, scientific or literary purpose, or public benefaction of whatever name or nature.

(29) "Voting member" means a person entitled to vote in accordance with the articles or by-laws.

(30) "Voting member present" means a person who is a voting member, and who is present or represented, and entitled to vote on a particular question or matter, at a meeting of members.

(31) "Voting power" means the right vested, by law or by the articles or the by-laws, in the members, or in one or more classes of members, to vote in the determination of any particular question or matter coming before meetings of the members.

Acts 1968, No. 105, §1.

§ 12:202 Incorporation

One or more natural or artificial persons capable of contracting may form a nonprofit corporation under this Chapter.

Acts 1968, No. 105, §1.

§ 12:202.1 Limitation on formation; exceptions

A. Notwithstanding any other provisions of this Chapter or of any other law, no state board, commission, or department, nor any other persons, acting on behalf of such state board, commission, or department, shall incorporate or cause to be incorporated any nonprofit corporation that has for its purpose any public or quasi-public function or any function for the benefit of or in connection with any public agency, purpose or function, if in the exercise of any part of the functions of the corporation any bonds or other evidences of indebtedness of the corporation are or may be issued, unless the purpose for which the corporation is to be created; the amount of bonds to be issued; the method of financing said bonds, including but not restricted to the term of the bonds, the interest and other charges to be paid with respect to the bonds, and the purposes for which the bonds are to be issued shall have been first submitted to and approved by the legislature.

B. The provisions of this section shall not apply to or affect the validity of such entities formed and approved or ratified prior to July 31, 1968, and shall not affect R.S. 44:8.

C. Repealed by Acts 2005, No. 463, §2, eff. Jan. 1, 2006.

D. The prohibition of this Section shall have no application to local political subdivisions of the state with a population in excess of one hundred fifty thousand or Plaquemines Parish, nor to their respective boards, commissions, and departments. Any provision of this Section or other provision of law notwithstanding, a quasi-public nonprofit corporation may be created by any such political subdivision of the state or Plaquemines Parish under the general nonprofit corporation law of Louisiana with all powers pertaining thereto, including the right to issue negotiable revenue bonds not to exceed fifteen million dollars with interest thereon not to exceed eight percent per annum which shall be exempted from taxation and which bonds shall constitute negotiable instruments within the meaning of the negotiable instruments law of the state of Louisiana; all properties and assets of whatever nature and description owned or operated by said nonprofit corporation shall be exempted from state and local taxation, including ad valorem taxation; and the governing authority of such quasi-public nonprofit corporation shall be subject to the requirements and provisions of the public contract law, the Open Meetings Law, and the Public Records Law of the state of Louisiana.

E. The provisions of this Section shall not apply to the Louisiana Citizens Property Insurance Corporation which was created and is governed by Chapter 15 of Title 22 of the Louisiana Revised Statutes of 1950.

F. The provisions of this Section shall not apply to the Louisiana Utilities Restoration Corporation which was created and is governed by Part VIII of Chapter 9 of Title 45 of the Louisiana Revised Statutes of 1950.

Added by Acts 1968, No. 326, §§1, 2. Amended by Acts 1970, No. 557, §1; Acts 1978, No. 203, §1, eff. June 29, 1978; Acts 1979, No. 122, §1, eff. June 29, 1979; Acts 2004, No. 581, §1, eff. July 1, 2004; Acts 2005, No. 463, §2, eff. Jan. 1, 2006; Acts 2006, 1st Ex. Sess., No. 13, §1, eff. Feb. 23, 2006; Acts 2007, No. 55, §1, eff. June 18, 2007; Acts 2008, No. 415, §2, eff. Jan. 1, 2009; Acts 2010, No. 861, §5; Acts 2025, No. 331, §1.

§ 12:203 Articles of incorporation

A. The articles shall be written in the English language, and shall be signed by each incorporator, or by an agent of each incorporator duly authorized by a document attached to the articles. The articles shall be acknowledged by one of the persons who signed the articles, or may instead be executed by authentic act.

B. The articles shall set forth:

(1) The name of the corporation.

(2) In general terms, the purpose or purposes for which the corporation is to be formed, or that its purpose is to engage in any lawful activity for which corporations may be formed under this Chapter.

(3) The duration of the corporation, if other than perpetual.

(4) That it is a nonprofit corporation.

(5) The location and address of its registered office, not a post office box only.

(6) The full name and address of each registered agent, not a post office box only.

(7) The full name and address of each incorporator.

(8) The names, addresses, and terms of office of the initial directors, not a post office box only.

(9) Whether the corporation is to be organized on a stock basis or a non-stock basis, or both.

(10) If organized in whole or in part on a stock basis.

(a) The aggregate number of shares which the corporation shall have authority to issue.

(b) If the shares are to consist of one class only, the par value of each share, or a statement that all of the shares are without par value.

(c) If the shares are to be divided into classes or series, the number of shares of each class or series; the par value of the shares of each class or series, or a statement that such shares are without par value; the designation of each class or series; and a statement of the preferences, limitations and relative rights of the shares of each class, and of the variations therein as between series.

(11) If organized in whole or in part on a non-stock basis:

(a) The qualifications of its members.

(b) The different classes of membership, if any.

(c) The designations, voting powers, and other rights or privileges, restrictions or limitations, granted to or imposed upon the members of each class.

(12) The taxpayer identification number of the corporation. The failure to include the taxpayer identification number of the corporation shall not invalidate nor cause the secretary of state to reject the articles.

C. The articles may also contain any of the following:

(1) Provisions dealing generally with the authorized number and qualifications of the shareholders and members, the property rights, basis of voting and other rights and privileges of the shareholders and members, the liability of the shareholders and members for dues or assessments and the methods of collection thereof, and any other lawful provision desired for the regulation of the affairs of the corporation.

(2) A provision eliminating or limiting the personal liability of a director or officer to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director or officer, provided that such provision does not eliminate or limit the liability of a director or officer for any of the following:

(a) Any breach of the director's or officer's duty of loyalty to the corporation or its shareholders.

(b) Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law.

(c) Liability pursuant to the provisions of R.S. 12:226(D).

(d) Any transaction from which the director or officer derived an improper personal benefit.

(3) Provisions regarding any of the following:

(a) Managing the business and regulating the affairs of the corporation.

(b) Defining, limiting, and regulating the powers of the corporation, its board of directors, and shareholders.

(4) Any provision for which this Chapter requires or permits to be set forth in the bylaws.

(5)(a) A provision that cash, property or share dividends, shares issuable to shareholders in connection with a reclassification of stock, and the redemption price of redeemed shares that are not claimed by the entitled shareholders within a reasonable time after the dividend or redemption price became payable or the shares became issuable, despite reasonable efforts by the corporation to pay the dividend or redemption price, or provide delivery of the certificates for the shares to such shareholders, shall revert in full ownership to the corporation, and the corporation's obligation to pay such dividend or redemption price or issue such shares, as the case may be, shall therefor cease, provided that the board of directors may, at any time, for any reason satisfactory to it, but need not, authorize either of the following:

(i) Payment of the amount of any cash or property dividend or redemption price.

(ii) Issuance of any shares, ownership of which has reverted to the corporation pursuant to a provision of the articles authorized by this Section, to the person that would be entitled had such reversion not occurred.

(b) The "reasonable time" as stated in Subparagraph (a) of this Paragraph means a period of time not less than one year.

D. The articles of every corporation heretofore formed, unless they contain a provision enlarging, limiting or denying the preemptive right of shareholders, shall be deemed to provide that "Shareholders shall have preemptive rights".

Acts 1968, No. 105, §1; Acts 1970, No. 50, §14, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1990, No. 745, §2; Acts 1997, No. 291, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:204 Corporate name

A. The corporate name may be in any language, but expressed in English letters or characters. The corporate name shall not imply that the corporation is an administrative agency of this state, or any of its political subdivisions, or of the United States. It shall not contain words or phrases that consist of or comprise immoral, deceptive, or scandalous matter. It shall not contain the words "bank", "banking", "banker", "savings", "trust", "deposit", "insurance", "mutual", "assurance", "indemnity", "casualty", "fiduciary", "homestead", "building and loan", "surety", "security", "guarantee", "cooperative", "state", "parish", "redevelopment corporation", "electric cooperative", or "credit union". It shall not contain the phrase "doing business as" or any abbreviation of that phrase, such as "d/b/a".

B. As used in this Subsection, the term "corporation" includes nonprofit corporations, business corporations, foreign corporations, and partnerships. The corporate name shall be distinguishable from a name reserved pursuant to R.S. 12:1-402(A) and shall be distinguishable upon the records of the secretary of state from the name of any other corporation, limited liability company, partnership, or trade name registered with the secretary of state unless any of the following Paragraphs apply:

(1) The other registrant consents to the use of the name in writing and submits the document required by law to change its name to one that is distinguishable upon the records of the secretary of state from the name of the applying corporation, effective no later than the time that the applying corporation will begin to use the registrant's former name.

(2) The other corporation has theretofore been authorized to do business in this state for more than two years, and has never actively engaged in business in this state. The failure of a business or foreign corporation to file a Louisiana corporate franchise tax return for two consecutive years shall constitute prima facie evidence that it has not actively engaged in business in this state for such period.

(3) The other corporation has failed to pay the corporate franchise tax or taxes due by it to the state for the preceding five consecutive years.

(4) The other corporation, if a foreign corporation, is not authorized to do business in this state.

(5) The other corporation or limited liability company filed for dissolution or withdrawal prior to the preceding five years and has not received the tax clearances required for final dissolution or withdrawal.

C. Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practices, nor derogate from the principles of law or the statutes of this state or of the United States, with respect to the right to acquire and to protect trade names.

D. The assumption of a name in violation of this Section shall not affect or vitiate the corporate existence. The court having jurisdiction may, upon the application of the state, or any affected or interested person or association, enjoin such corporation from doing business under a name assumed in violation of this Section.

E.(1) A corporation shall have the exclusive use of its name and emblem. No person, corporation, or organization may use a name or emblem nondistinguishable from one adopted by a corporation.

(2) If two nonprofit corporations or organizations have adopted names or emblems substantially similar, the organization which was first incorporated, whether in this state or elsewhere, shall have prior and exclusive use of the name or emblem adopted by it. If any organization or the members thereof are infringing or about to infringe upon the name or emblem of a nonprofit corporation, such corporation may obtain injunctive relief in the court of proper jurisdiction.

(3) If the name or emblem used by an organization or its members is nondistinguishable from a name or emblem the exclusive use of which is reserved to a nonprofit corporation, injunctive relief shall be granted without necessity of proof that any person in fact has been misled or deceived.

F. If the corporation seeking the issuance of a certificate of incorporation in this state includes in its name the word "engineer", "engineering", "surveyor", "surveying", or any derivative thereof, the secretary of state shall require, prior to the issuance of the certificate of incorporation, evidence satisfactory to him that written notice of such application for a certificate of incorporation has been delivered to the Louisiana Professional Engineering and Land Surveying Board in writing not less than ten days prior to the date of issuance of the certificate of incorporation. If the applicant corporation files with its application to the secretary of state a written waiver signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board waiving the requirement of ten days written notice to said board, as set forth in the preceding sentence, the secretary of state shall be authorized to proceed immediately with the processing of such application.

G.(1) A person may reserve a specified name for a nonprofit corporation by filing a signed application with the secretary of state.

(2) If the secretary of state finds that the name is available for use by a nonprofit corporation, he shall reserve the name for the exclusive use of the applicant for a nonrenewable period of one hundred twenty days.

(3) The exclusive right to use a reserved name may be transferred to another person or nonprofit corporation by filing with the secretary of state a notice of the transfer that specifies the name and address of the transferee and is signed by the applicant for whom the name was reserved.

(4) The owner of the reserved name may terminate the reservation by delivering to the secretary of state a signed notice of termination.

Acts 1968, No. 105, §1. Amended by Acts 1975, No. 650, §2. Acts 1983, No. 88, §1; Acts 1989, No. 654, §1, eff. July 7, 1989; Acts 1997, No. 296, §1; Acts 2001, No. 631, §1; Acts 2003, No. 279, §2; Acts 2015, No. 398, §2, eff. Oct. 5, 2015; Acts 2017, No. 367, §1; Acts 2018, No. 560, §2, eff. May 28, 2018; Acts 2022, No. 193, §2.

§ 12:204.1 Corporate name restrictions

A. Except as provided in this Section, the corporate name of a nonprofit corporation or organization shall not contain the name of any public park, playground, or other public facility together with the word "benefit", "benevolent", "endowment", "philanthropic", "foundation", or "fund". Nor shall a nonprofit corporation or organization deceptively or falsely imply or otherwise suggest that the corporation or organization is organized for the financial benefit of a park, playground, or other public facility unless the articles of incorporation provide that the revenues of such corporation or organization are dedicated to the exclusive or sole benefit of such park, playground, or other public facility and the governing authority of the governmental entity that owns or operates the park, playground, or public facility, by written consent, agrees to the corporate use of the name of the park, playground, or public facility.

B.(1) If use of the name of a park, playground, or other public facility is consented to by the appropriate governmental entity, such written consent shall be in the form of a contract for a fixed term of ten years. At the expiration of such contract, the corporation shall have one hundred eighty days within which to either amend its corporate name or obtain another renewal of the contract authorizing the continued use of the name.

(2) Any corporation existing on July 10, 1997, whose corporate name contains the name of a park, playground, or other public facility together with the word "benefit", "benevolent", "endowment", "philanthropic", "foundation", or "fund" shall have one hundred eighty days within which to either obtain consent of the governing authority that owns or operates such park, playground, or public facility or amend its articles of incorporation to provide that the revenues of such corporation or organization are dedicated to the exclusive or sole benefit of such park, playground, or public facility.

C. In addition to the remedies otherwise provided by law, any governmental entity may enforce the provisions of this Section by a civil suit, including a suit to enjoin any violation hereof. Upon finding that a person, corporation, or organization has knowingly violated this Section, a court may award damages, including an award of all profits derived from the said violation, and may order the destruction of all items bearing the name, symbol, or other descriptive inscription in violation of this Section.

Acts 1997, No. 819, §1, eff. July 10, 1997.

§ 12:204.2 Naming of certain nonprofit corporations

Notwithstanding R.S. 12:204 or any other law to the contrary, a nonprofit corporation, incorporated under the laws of the state of Louisiana, may include the word "parish" in its name if the corporation meets all of the following criteria:

(1) The nonprofit corporation was created before 1925 to improve parish government.

(2) Membership in the nonprofit corporation is held by each police juror and all secretaries, treasurers, clerks and parish engineers employed by any parish in Louisiana.

(3) The full-time staff of the nonprofit corporation is charged with the responsibility of keeping state and national public officials informed of the activities and needs of the parish governing authorities.

(4) The provisions of this Section shall become null and void and have no effect on and after July 1, 2006.

Acts 2005, No. 275, §1, eff. July 1, 2005.

§ 12:205 Filing and recording articles; issuance and effect of certificate of incorporation; commencement of corporate existence

A. The articles shall be filed with the secretary of state. The secretary of state may prescribe and furnish forms for filing the articles of incorporation. The articles may be delivered to the secretary of state in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery.

B. If the secretary of state finds that the articles are in compliance with the provisions of this Chapter and after all fees have been paid, the secretary of state shall record the articles in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and issue a certificate of incorporation which shall show the date and, if endorsed on the articles, the hour of filing of the articles with him. The certificate of incorporation shall be conclusive evidence of the fact that the corporation has been duly incorporated, except that in any proceeding brought by the state to annul, forfeit, or vacate a corporation's franchise, the certificate of incorporation shall be only prima facie evidence of due incorporation.

C. Upon the issuance of the certificate of incorporation, the corporation shall be duly incorporated, and the corporate existence shall begin, as of the time when the articles were filed with the secretary of state, except that, if the articles were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the corporation shall be duly incorporated, and the corporate existence shall begin, as of the time of such acknowledgment or execution.

D. A multiple original of the articles, or a copy certified by the secretary of state, with a copy of the certificate of incorporation, shall within thirty days after filing of the articles with the secretary of state, be filed for record in the office of the recorder of mortgages of the parish in which the registered office of the corporation is located.

E.(1) If the corporation contracts with the state, a statement acknowledging such contract shall be filed with the secretary of state, and shall include the names and addresses of the board of directors, officers, and all persons or corporate entities who hold an ownership interest of five percent or more in the corporation or who hold by proxy the voting power of five percent or more in the corporation and, if anyone is holding stock in his own name that actually belongs to another, the name of the person for whom held, including stock held pursuant to a counterletter. The statement acknowledging a state contract and ownership and voting interest shall be duly acknowledged, or executed by authentic act. The secretary of state may prescribe and furnish forms for filing such statement.

(2) The provisions of this Subsection shall not apply to any charitable or religious nonprofit corporation which is organized and existing on a "nonstock basis".

Acts 1968, No. 105, §1. Amended by Acts 1977, No. 408, §1; Acts 1983, No. 88, §1; Acts 1991, No. 944, §2; Acts 1999, No. 342, §5; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:205.1 Annual report to secretary of state

A. On or before the anniversary date each year of the corporation, an officer or director of each corporation shall make and sign in its name a report to the secretary of state, stating:

(1) The post office address and the municipal address or location, which shall not be a post office box only, of its registered office.

(2) The name and post office address and municipal address or location, which shall not be a post office box only, of each registered agent.

(3) The names and municipal address, which shall not be a post office box only, of all of its directors and officers, and when the term of each expires.

(4) The taxpayer identification number of the corporation. The failure to include the taxpayer identification number of the corporation shall not invalidate nor cause the secretary of state to reject the report.

B. The secretary of state may prescribe and furnish forms for filing the annual report.

C. Each corporation, except a church, shall pay a filing fee as provided in R.S. 49:222 at the time of filing such report. No church shall be required to pay the fee.

D.(1) A church which is a member of and in good standing with a statewide church association may file such report through the association. The association shall then furnish the required information to the secretary of state. In lieu of submitting the information on a form supplied by the secretary of state, the association may submit a roster of information, provided that the roster contains the required information.

(2) A church which is a member of and in good standing with a statewide church association shall not be subject to the penalties otherwise applicable to corporations pursuant to this Title for failure to file annual reports.

Acts 1988, No. 95, §1; Acts 1989, No. 410, §1; Acts 1990, No. 22, §1; Acts 1990, No. 745, §2; Acts 2001, No. 1187, §1; Acts 2008, No. 913, §2; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:206 Effect of filing or recording papers

The filing and recording of articles and other documents pursuant to this Chapter are required for the purpose of affording all persons the opportunity of acquiring knowledge of the contents thereof, but no person dealing with a corporation shall be charged with constructive notice of the contents of the articles or such other documents by reason of the filing or recording.

Acts 1968, No. 105, §1.

§ 12:207 General powers

A. A corporation shall have the power to perform any acts which are necessary or proper to accomplish its purposes as expressed or implied in the articles, or which may be incidental thereto.

B. Without limiting the grant of power contained in subsection A of this section, it is hereby specifically provided that every corporation shall, subject to the provisions of subsection D of this section, have authority:

(1) To have a corporate seal which may be altered at pleasure, and to use the same by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced; but failure to affix a seal shall not affect the validity of any instrument;

(2) To have perpetual existence, unless a limited period of duration is stated in its articles of incorporation;

(3) To sue and be sued in its corporate name;

(4) In any legal manner to acquire, hold, use and alienate or encumber property of any kind, including monies and its own shares, subject to special provisions and limitations prescribed by law or the articles;

(5) In any legal manner to acquire, hold, vote and use, alienate and encumber, and to deal in and with, shares, memberships, or other interests in, or obligations of, other nonprofit, business or foreign corporations, associations, partnerships, joint ventures, individuals or governmental entities;

(6) To make contracts, to incur liabilities, to borrow money, to issue notes, bonds and other obligations, and to secure any of its obligations by hypothecation of any kind of property;

(7) To lend money for its corporate purposes and invest and reinvest its funds, and to take and hold property or rights of any kind as security for loans or investments;

(8) To exercise its powers in this state and elsewhere as may be permitted by law;

(9) To elect or appoint officers and agents, to define their duties, and to fix their compensation; and to pay pensions and establish pension plans, pension trusts, profit-sharing plans and other incentive and benefit plans for any or all of its employees;

(10) To make and alter by-laws, not inconsistent with the laws of this state or with the articles, for the administration and regulation of the affairs of the corporation;

(11) To provide indemnity and insurance pursuant to R.S. 12:227;

(12) To make donations for the public welfare, or for charitable, scientific, educational, religious or civic purposes;

(13) Subject to any limitations contained in this Chapter or in the trust instrument, to hold property in trust for the purpose or purposes set forth in its articles;

(14) Unless otherwise provided in the articles or otherwise specifically directed in the trust instrument, to invest funds received in trust, or the proceeds of any property thus received, in any investment which, in the exercise of the judgment of the directors, they may, after investigation and due deliberation, determine to be safe and proper investments, and to retain any investments heretofore so made, whether or not those investments are legal investments for trustees;

(15) In time of war or other national emergency, to do any lawful business in aid thereof, at the request or direction of any apparently authorized governmental authority.

C. Whenever any property has been acquired by one or more persons acting as trustees, or in any other capacity, for and in the name of any unincorporated association for religious, charitable or educational purposes, upon the incorporation of said association as a nonprofit corporation, a transfer to the corporation, made by the persons so acquiring the property or their survivors, shall vest the title and ownership of the property in the corporation as fully as if the transfer had been made by all of these persons, free of any claims of the heirs of any of these persons who may have died prior to the transfer. In the event of the death of all of the trustees or other persons so acquiring the property before a formal transfer has been made to the corporation, the title and ownership of the property shall be vested in the corporation, provided that the corporation has had possession of the property as owner, during the lifetime of the trustees or subsequently, for a period of ten years.

D. Except as otherwise provided in the articles or by-laws, a corporation may borrow money, purchase immovable property, or sell, lease, encumber or otherwise alienate any of its immovable property, only if a resolution so authorizing has been approved by the voting members at a regular or special meeting, convened after notice of its purpose. A resolution authorizing the borrowing of money need not specify the particular amounts, rates of interest or times of maturity of the loans, but these and similar provisions may be authorized by the directors.

Acts 1968, No. 105, §1.

§ 12:208 Defense of ultra vires

A. Invalidity of an act of a corporation, or of a conveyance or transfer of movable or immovable property to or by a corporation, by reason of the fact that the corporation was without capacity or power to perform such act or to make or receive such conveyance or transfer, may be asserted only:

(1) In an action by a member of the corporation to set aside such act, conveyance or transfer, brought within one year after the act was done or the conveyance or transfer was consummated, which time limit shall not be subject to suspension on any ground or interruption on any ground other than timely suit;

(2) In an action by a member against the corporation to enjoin the performance of any act or the transfer of movable or immovable property by or to the corporation. If the unauthorized act, conveyance or transfer sought to be enjoined is being, or is to be, performed or made pursuant to any contract to which the corporation is a party, the court may--if all of the parties to the contract are parties to the action, if the corporation is without capacity or power to perform the act or make or receive the transfer sought to be enjoined, and if the court considers such relief to be equitable--enjoin the performance of such contract, and in so doing may allow to the corporation, or to the other parties to the contract, compensation for any loss or damage sustained by any of them which may result from the action of the court in enjoining the performance of such contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as loss or damage sustained;

(3) In an action in damages by the corporation or by its receiver, trustee or other legal representative, or by its members, in a derivative or representative suit, against the incumbent or former officers or directors of the corporation;

(4) In an action by the state to dissolve the corporation, or to enjoin the corporation from the transaction of unauthorized business.

B. In any action brought pursuant to subsection A(1) or (2) of this section, the plaintiff shall sustain the burden of proof that he has not at any time prior thereto assented to the act, conveyance or transfer in question, and that in bringing the action he is not acting in collusion with officials of the corporation.

Acts 1968, No. 105, §1.

§ 12:209 Corporations not required to be non-stock corporations

A corporation which is not permitted to distribute its net assets to its members upon dissolution may be organized either on a stock basis or on a non-stock basis.

Acts 1968, No. 105, §1; Acts 1987, No. 294, §1, eff. July 5, 1987.

§ 12:210 Members, shareholders and certificates

Except as provided in R.S. 12:209:

A. A corporation may be organized on either a stock basis or a non-stock basis or both, as set forth in its articles.

B. The shares of corporations organized in whole or in part on a stock basis shall be of such classes, series and par values (or without par value) as the articles shall provide, and shall be represented by share certificates. A corporation may, but need not, issue certificates for fractional shares. Unless otherwise provided in the articles, the holder of a fractional-share certificate shall have all rights of a shareholder except voting rights.

C. A corporation organized solely on a non-stock basis shall not issue shares of stock. Non-shareholding membership may be evidenced by certificates of membership.

D. Each stock or membership certificate shall be signed by the president and secretary, or by such other officer or officers of the corporation as the articles or by-laws may provide. No certificate shall be invalid by reason of the fact that any officer, whose real or facsimile signature appears thereon, ceased to be an officer of the corporation before the certificate was issued. A certificate for shares having no par value shall not state any par value, nor any value thereof in money, except as to liquidation preference or redemption price. If fractional shares represented by a certificate are subject to any limitations or restrictions other than on voting rights, these restrictions or limitations shall appear on the certificate. No by-law or other restrictions upon the transfer of shares, no provision for compulsory offer of shares for purchase by or sale to the corporation, and no lien or privilege in favor of a corporation on shares of its own stock, shall be recognized or enforced unless such restriction or provision, or the right of the corporation to such privilege, is set forth or summarized, or a reference thereto and information as to where the same may be inspected is contained in the certificate. Every certificate shall state:

(1) The name of the corporation;

(2) That the corporation is a nonprofit corporation incorporated under the laws of this state;

(3) The name of the registered holder of the shares or membership represented thereby;

(4) The number and class, and designation or series, if any, of shares represented thereby;

(5) The par value of the shares represented thereby, or a statement that such shares have no par value;

(6) The class of membership represented thereby;

(7) If the shares or membership represented thereby are assessable or subject to the levy of dues, a statement to that effect, which shall constitute notice of the corporation's rights and remedies under any provision included in its articles or by-laws pursuant to R.S. 12:218(C); and

(8) If issued by a corporation which is authorized to issue shares, or has memberships, of more than one class, either (a) a summary of the designations, relative rights, preferences and limitations of the shares of each class authorized to be issued and, if the corporation is authorized to issue any class of preferred or special shares in series, the designations, relative rights, preferences and limitations of each such series, or a summary of the designations, relative rights, preferences and limitations of each class of membership, as the case may be, or (b) that the corporation will furnish such a summary to any member upon request and without charge.

E. Except as otherwise provided by law or by the articles or by-laws, each share shall entitle the holder to one vote and to equal participation with every other share in the net assets upon dissolution, and each non-shareholding member shall be entitled to one vote and to equal participation with every other such member in the net assets upon dissolution.

F. No dividends or other similar pecuniary remuneration shall be paid on any shares or membership, nor shall the members be entitled, during the existence of the corporation, to any portion of the earnings of the corporation derived through increment of value on its property, or otherwise incidentally made.

G. Shares shall be transferable by assignment or sale, or by inheritance or testament, upon the death of the owner, unless the articles provide otherwise. Membership shall not be transferable or heritable unless the articles otherwise provide. The transfer of shares and memberships may be regulated by by-laws not inconsistent with the provisions of the articles or Part II of Chapter 6 of this Title.

H. A corporation shall have the power to exclude from further membership, any member who fails to comply with the reasonable and lawful requirements of the rules and regulations made by the corporation for the government of its members.

I. Except as otherwise provided in the articles or by-laws, a corporation, and its directors, officers and agents, may recognize and treat a person registered on its records as a member or as the owner of shares, as such member or as the owner of such shares in fact for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to such membership or the ownership of such shares, notwithstanding any actual or constructive notice which the corporation, or any of its directors, officers or agents, may have to the contrary.

Acts 1968, No. 105, §1.

§ 12:211 Subscriptions for shares

A. Subscriptions for shares, whether made before or after the formation of a corporation, shall be in writing. Subscriptions for shares may be revoked at any time by either party upon such ground as exists for the rescission of any contract.

B. Unless otherwise provided in the writing, or unless all of the subscribers consent to revocation, a subscription for shares of a corporation to be formed shall be irrevocable for a period of one year from the date of signing; but no subscription shall be revocable (except as provided in subsection A of this section) after the corporate existence has begun.

C. After the corporate existence has begun, subscriptions for shares, unless revoked as provided in this section, may be enforced by the corporation in its own name according to the subscription terms.

D. When no provision as to time of payment is made in the contract of subscription, shares shall be paid for on the call of the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class, or as to all shares of the same series, as the case may be.

E. In case of default by a subscriber in any payment due under a contract of subscription, the corporation may at its option (in addition to its right to collect the unpaid amount as provided in subsection C of this section, and in addition to any other remedies provided by law), unless the contract provides otherwise, either (1) cancel the subscription if payment of the full price has not been made before the expiration of fifteen days after demand therefor addressed to the subscriber's last known address by registered mail, in which case the shares shall be considered as unsubscribed, and need no longer be reserved for issuance, or (2) sell the shares of the subscriber at public auction as provided in subsection F of this section.

F. In order to exercise its right of sale under subsection E of this section:

(1) The corporation shall give notice of his default to the subscriber, by registered mail addressed to him at his last known post office address, which notice shall state the time and place of the proposed sale of his shares. Fifteen days after mailing this notice to the subscriber, the corporation may sell the shares at public auction.

(2) Notice of the time and place of the sale, and a brief description of the shares to be sold, shall be published at least three times during the ten days prior to the date of the sale in a newspaper published in the parish in which the registered office of the corporation is located. However, if no newspaper is published in the parish with sufficient frequency so to publish this notice, one publication shall be sufficient if notice is also posted for ten days at the parish courthouse door.

(3) At any sale hereunder, no bid for an amount less than the balance due to the corporation by the shareholder on his shares, plus the costs of the sale, shall be accepted.

(4) If no bid is made for a sufficient amount as above provided, the corporation may forthwith forfeit to itself, as liquidated damages, the entire interest or equity of the shareholder in the shares, including all amounts paid to the corporation on account thereof, and the shares shall be considered as unsubscribed and need no longer be reserved for issuance.

G. In the event of sale of shares pursuant to subsections E and F of this section, any excess of proceeds realized over the amount due and unpaid on such shares, shall be credited to the delinquent subscriber or his legal representative, to the extent of the subscription price.

Acts 1968, No. 105, §1.

§ 12:212 Shareholders' preemptive rights

Shareholders shall have only such preemptive rights as may be provided in the articles. If the articles simply provide that "Shareholders shall have preemptive rights", then:

A. Each holder of shares having voting rights shall, upon issuance for cash of shares having voting rights, have a preemptive right, during a reasonable period to be fixed by the board of directors (which need not exceed fifteen days after the giving or mailing of written notice to him of the terms and conditions on which such right is exercisable), to subscribe, at such price and upon such terms as may be fixed in the manner provided in R.S. 12:213, for such proportion of the shares to be issued, as the number of shares having voting rights held by him bears to the total number of shares having voting rights then outstanding.

B. A shareholder shall have no preemptive right to subscribe for shares:

(1) Which are to be issued for consideration other than cash; or

(2) Which are to be issued to satisfy conversion or option rights; or

(3) Which are treasury shares.

C. Shares which have been offered to shareholders having a preemptive right at a price or upon terms duly fixed, and which have not been subscribed for by them within the period fixed by the board of directors, may thereafter, for one year following the end of such period, be issued or sold to any other person or persons at a price not less than that at which they were offered to such shareholders.

Acts 1968, No. 105, §1.

§ 12:213 Issuance of shares; consideration

A. Par-value shares may be issued initially for such consideration expressed in dollars, not less than the par value thereof, as shall be fixed by the board of directors. Shares without par value may be issued initially for such consideration expressed in dollars as may be fixed by the board of directors, or by the members by vote of a majority in interest of the voting members present, if the articles reserve to the members the right to fix the consideration. Treasury shares may be disposed of by the corporation for such consideration as may be fixed from time to time by the board of directors.

B. Shares issued (1) pursuant to exercise of conversion rights, (2) in exchange for, or in respect of, outstanding shares pursuant to a reclassification of stock, or (3) in a merger or consolidation as provided in the merger or consolidation agreement, shall be considered as fully paid when so issued.

C. The consideration for shares shall be paid in cash or in corporeal or incorporeal property, or services actually rendered to the corporation, the fair value of which is not less than the dollar amount of the consideration fixed for the shares, before the shares are issued. Upon payment of the consideration fixed therefor, such shares shall be considered as fully paid. Cash consideration for shares may not be paid by the purchaser's note, secured or unsecured, or uncertified check; and in case of delivery of such a note or check in payment for shares, the shares shall not be issued until the note or check has been paid in full.

D. Solely for the purpose of determining whether shares have been paid for fully, the valuation placed by the directors or members, as the case may be, upon the consideration other than cash paid therefor shall be conclusive.

Acts 1968, No. 105, §1.

§ 12:214 Reservation of shares

A. A corporation shall reserve from its authorized but unissued shares, or its treasury shares, sufficient shares to meet its issuance obligations under subscription rights, warrants, options and conversion privileges.

B. Shares issuable pursuant to any such rights, warrants, options or privileges, grant or issuance of which was approved by such vote of the members as would have been required to amend the articles to increase the authorized number of the class of shares involved, shall, to the extent not available in the corporation's treasury, be issued notwithstanding the fact that the articles do not by their terms authorize such issuance.

Acts 1968, No. 105, §1.

§ 12:215 Convertible securities and stock-purchase rights

A. Unless the articles provide otherwise, a corporation shall have authority, whether or not in connection with the issuance and sale of any of its shares or other securities, to create and issue rights and options in any form, granting to the holders thereof:

(1) The right to convert, upon such terms and conditions as the corporation may deem expedient, shares or obligations into shares of any class; or

(2) The right or option to purchase, upon such terms and conditions as it may deem expedient, shares of any class.

B. Unless the articles provide otherwise, such authority shall be exercised by vote of the board of directors. However, no shares shall be issued pursuant to exercise of option rights created independently of issuance and sale of shares or other securities, unless the creation of such rights shall have been either (1) authorized or approved by the members, or (2) if the optionee is neither a director nor the holder, directly or indirectly, of record or beneficially or both, of more than ten per cent of the total voting power, authorized by vote of at least two-thirds of the directors in office.

C. If the shares (other than treasury shares) in respect of which such option or debt conversion rights are granted, have a par value and are authorized but unissued shares, then such conversion or option rights shall be exercisable at not less than the par value of such shares.

D. If the shares in respect of which such option or debt conversion rights are granted, are without par value or are treasury shares, such conversion or option rights shall be exercisable at such price as determined by the board of directors.

E. Shares shall not be converted into par-value shares (other than treasury shares) having a greater aggregate par value than the aggregate allocated value, at the time of conversion, of the shares to be converted.

F. Converted shares shall be cancelled.

Acts 1968, No. 105, §1.

§ 12:216 Redemption, purchase and cancellation of shares

A. A corporation shall not purchase or redeem its shares when it is insolvent; or when such purchase or redemption would render it insolvent or would reduce its net assets below the aggregate amount payable on liquidation upon any issued shares, which have a preferential right to participate in the assets in event of liquidation, remaining after the purchase or redemption and cancellation of any shares in connection therewith; or at a price, in the case of shares subject to redemption, exceeding the redemption price thereof; or, except when authorized by the articles, unless a purchase of its shares has been authorized by affirmative vote of two-thirds in interest of the members of each class, regardless of limitations or restrictions on the voting power of any of such classes. Subject to the provisions of this subsection, a corporation may purchase its own shares, or redeem its shares subject to redemption, as provided in the following subsections of this section.

B. Subject to the provisions of R.S. 12:221(F), a corporation may purchase its own shares, or redeem its shares subject to redemption, out of surplus; provided that a corporation which is not permitted to distribute net assets to its members or shareholders on dissolution shall not pay any premium in connection with the redemption or purchase of its own shares, but shall pay not more than the consideration received by it upon issuance of each share redeemed or purchased.

C. To the extent that there is no surplus available for the purpose, a corporation may apply, to the redemption of its shares subject to redemption, such amount out of stated capital as will not reduce stated capital below the aggregate allocated value of the issued shares remaining after the redemption and cancellation of any shares in connection therewith.

D. To the extent that there is no surplus available for the purpose, a corporation may purchase its own shares out of stated capital for the purpose of paying dissenting shareholders entitled to payment for their shares under the provisions of this Chapter. Shares so purchased out of stated capital shall be cancelled.

E. To the extent that there is no surplus available for the purpose, a corporation may apply to the purchase of its shares:

(1) For the purpose of eliminating fractions of shares; or

(2) For the purpose of collecting or compromising indebtedness to the corporation;

such amount out of stated capital as will not reduce stated capital below the aggregate allocated value of the issued shares remaining after the purchase and cancellation of any shares in connection therewith.

F. Shares which are cancelled are thereby restored to the status of authorized and unissued shares, unless the articles provide otherwise.

Acts 1968, No. 105, §1.

§ 12:217 Classes and qualifications of membership

A. Membership shall be of the classes, and shall be governed by the rules of admission, retention, suspension and expulsion, which the articles or by-laws prescribe; provided that all rules shall be reasonable, germane to the purpose of the corporation, and equally enforced as to all members of the same class.

B. Unless otherwise provided by the articles or by-laws, there shall be one class of members.

C. If neither the articles nor the by-laws provide for members or shareholders, or if a corporation has, in fact, no shareholders, and no members other than the persons constituting its board of directors, the persons for the time being constituting the board shall, for all intents and purposes, be taken to be the members of the corporation, and shall exercise all of the rights and powers of the members.

Acts 1968, No. 105, §1.

§ 12:218 Membership dues; assessments

A. Corporations may levy dues or assessments, or both, upon their members, but only in accordance with authority conferred either by the articles or the by-laws.

B. Dues or assessments, or both, may be levied upon shares and non-shareholding members of all classes and series alike, or in different amounts or proportions, or upon a different basis, upon shares or non-shareholding members of different classes or series, but shall be uniform as to all shares or all non-shareholding members of the same class or series. Members of one or more classes may be made exempt from either dues or assessments, or both, in the manner and to the extent provided either in the articles or by-laws. The amount of the levy and the method of collection of dues or assessments, or both, may be fixed in the articles or by-laws, or the articles or by-laws may authorize the board of directors to fix the amount thereof from time to time, and make them payable at the time and by the method of collection which the directors prescribe.

C. The articles or by-laws may include provisions for the cancellation of membership, and for the forfeiture of shares, upon reasonable notice, for nonpayment of dues or assessments, and for the reinstatement of membership or shareholder status.

Acts 1968, No. 105, §1.

§ 12:219 Liability of subscribers and members

A. A member of a corporation shall not be liable personally for any obligation of the corporation.

B. If property or services taken in payment for shares are grossly overvalued contrary to the provisions of this Chapter, the members who knowingly, or without the exercise of reasonable care and inquiry, consented thereto or voted in favor thereof shall be liable in solido to the corporation for the benefit of creditors or members, as their respective and relative interests may appear, for any loss or damage arising therefrom.

C. Every member who receives any unlawful distribution of assets shall be liable to the corporation or to creditors of the corporation, or to both, in an amount not exceeding the amount so received by him. An action to enforce this liability must be brought within two years from the date on which the unlawful distribution was received, and this time limit shall not be subject to suspension on any ground, nor to interruption except by timely suit.

D. When the directors are held liable solely because of having negligently consented to or participated in any unlawful distribution, payment or return of assets, the directors shall have, to the extent of the payments made by them, a cause and right of action for indemnity against each of the members for the proportionate amount of the unlawful distribution received by such member. This action must be brought within two years from the date of payment by the directors on account of the liability imposed by R.S. 12:226(D), and this time limit shall not be subject to suspension on any ground, nor to interruption except by timely suit.

E. A member shall not be liable for the commission of a prohibited act if he was absent from the meeting of members at which the action was authorized, or if he was present or represented at such meeting, and his dissent therefrom was either noted in the minutes of the meeting or filed promptly thereafter in the registered office of the corporation.

Acts 1968, No. 105, §1.

§ 12:220 Reduction of membership below stated number

Whenever the membership of a corporation having a stated number of members is reduced below that number, the corporation shall not on that account be dissolved. It shall be lawful for the surviving or continuing members to continue the corporate existence, unless otherwise provided in the articles or by-laws.

Acts 1968, No. 105, §1.

§ 12:221 Capital, surplus, allocation thereto, and increases and reductions thereof

A. Upon initial issuance of par-value shares, that part of the consideration received therefor which is equal to the par value thereof, plus such additional part of such consideration as the board of directors or the members may fix, shall be allocated to stated capital, and the remainder shall be allocated to capital surplus. Upon initial issuance of shares without par value, the consideration received therefor shall be allocated to stated capital, except to the extent of such part of the consideration as may be allocated to capital surplus by the board of directors or the members. If such shares without par value have a preferential right to participate in the corporation's assets in event of liquidation, only the excess of the consideration over the aggregate amount payable to the holders thereof upon liquidation may be allocated to capital surplus.

B. The board of directors may at any time transfer any amount from earned surplus or capital surplus to stated capital in respect of any issued shares or otherwise.

C. The board may at any time transfer from stated capital to capital surplus any amount of net assets in excess of (1) the aggregate par value of the issued shares having no preferential right to participate in the corporation's assets in event of liquidation, plus (2) the greater of the aggregate par value of, or the aggregate amount payable in liquidation on, any issued shares which have a preferential right to participate in the assets in event of liquidation; provided that only the members may transfer from stated capital any amount allocated by them to stated capital.

D. Upon cancellation of shares, stated capital shall be reduced by an amount equal to (1) the aggregate par value of such shares having par value, and the aggregate allocated value of such shares without par value, plus (2) to the extent of the price paid on purchase or redemption of such par-value shares in excess of the par value thereof, any excess of the allocated value over the par value thereof.

E. If there is no earned surplus, the board of directors may apply capital surplus to the reduction or elimination of any deficit resulting from losses.

F. The board of directors may create and abolish reserves out of earned surplus for any proper purposes. Earned surplus so reserved shall not be available for purchase or redemption of shares, or transfer to capital surplus or stated capital.

G. Stated capital, capital surplus and earned surplus shall respectively be reduced by amounts applied therefrom to purchase or redemption of shares, and by amounts transferred therefrom.

H. Following a merger into, or creation by consolidation of, a corporation, such corporation's earned surplus shall not exceed the sum of the earned surpluses of the merging or consolidating corporations, business corporations and foreign corporations, as reduced by any distributions or transfers therefrom in connection with the merger or consolidation.

I. Upon disposition of treasury shares acquired in whole or in part by application of earned surplus, the amount so applied may be restored to earned surplus to the extent of the consideration received upon such disposition.

Acts 1968, No. 105, §1.

§ 12:222 Bylaws

A. The members or the directors of a corporation may make, amend and repeal the bylaws of the corporation, subject always to the power of the members to change the action of the directors. Unless the articles or bylaws provide otherwise, the powers hereby conferred shall be exercised by a majority vote of the directors or the voting members of the corporation, as the case may be, present or represented at any regular or special meeting convened after notice of the purpose thereof; provided, however, that no greater proportion of the voting members shall be required by bylaw, article, or otherwise to make, amend, or repeal bylaws than that proportion of directors which is required to make, amend, or repeal bylaws.

B. The bylaws of a corporation shall operate merely as regulations among the shareholders or the members, and shall not affect contracts or other dealings with other persons, unless those persons have actual knowledge of the bylaws.

C. Subject to the provisions of this Chapter, the bylaws may include any provision for the regulation and management of the affairs of the corporation, its rights or powers, the rights, powers or duties of its members, directors or officers, or the directors' qualifications, classification, number or term of office, or fixing their compensation, not inconsistent with law or the articles.

Acts 1968, No. 105, §1. Amended by Acts 1977, No. 139, §1.

§ 12:223 Corporate records and reports

A. Every corporation shall keep at its registered office (1) records of the meetings of its members and directors, and of committees of the board, share and membership records giving the names and addresses of the members in alphabetical order by classes and series and the number of shares held by each, and records of its assets, liabilities, receipts, disbursements, gains, losses, capital and surplus; and (2) separate records of all trust funds held by it. Whenever membership is terminated, this fact shall be recorded in the share or membership record together with the date on which the membership ceased, and transfers of shares shall similarly be recorded.

B. The records listed in subsection A of this section may be in written form or in any other form capable of being converted into written form within a reasonable time.

C. Every shareholder and voting member may examine in person, or by agent or attorney, at any reasonable time, the records of the corporation listed in subsection A of this section.

D. If the articles or the trust instrument so provide, every corporation shall, within ninety days after the close of each fiscal year, mail an annual report, signed by the treasurer, to its members concerning any trust funds held by it, and the use made of such funds and the income thereof during such fiscal year.

Acts 1968, No. 105, §1.

§ 12:224 Board of directors

A. The directors may be given any title deemed appropriate, but shall be subject to all the provisions relating to directors.

B. Subject to any limitations, restrictions, or reservations in the articles, the bylaws, or this Chapter, the affairs of the corporation shall be managed by a board of directors of not less than three natural persons, except that if there are fewer than three members, there need be only as many directors as there are members. The number of directors shall be fixed by or in the manner provided in the articles of incorporation or if not so fixed shall be the number fixed by, or in the manner provided in the bylaws. If not so fixed by or in the manner provided in the articles or the bylaws, the number of directors shall be the number of directors elected from time to time by the members. No amendment to the articles or the bylaws reducing the number of directors shall have the effect of shortening the term of any incumbent director. Unless the articles or the bylaws provide otherwise, the directors shall hold office for one year and until their successors are chosen and have qualified. No director shall be elected for a longer single term than five years. The directors need not be residents of this state or members of the corporation unless the articles or the bylaws so require.

C. Each director shall hold office for the term for which he was named or elected, and until his successor is elected and qualified. Directors, other than those constituting the first board, shall be elected by the voting members, unless some other method is expressly provided in the articles and except as hereinafter provided in the case of vacancies.

D. A corporation may allow reasonable compensation to its directors for their services, and a director may also be a salaried officer of the corporation.

E. The number, classification, qualifications, compensation, terms of office, manner of election, time and place of meeting, and powers and duties of the directors, may, subject to the provisions of this Chapter, be prescribed by the articles or the bylaws. Except as otherwise prescribed in the articles or bylaws:

(1) The office of a director shall become vacant if he dies or resigns;

(2) The board of directors may declare vacant the office of a director:

(a) If he is interdicted or adjudicated an incompetent;

(b) If he is adjudicated a bankrupt;

(c) If he becomes incapacitated by illness or other infirmity to perform his duties for a period of six months or longer;

(d) If he ceases at any time to have the qualifications required by the articles or by-laws;

(e) If, within sixty days, or such other time as the articles or by-laws may specify, after notice of his election, he does not accept office either in writing or by attending a meeting of the board of directors, or if he fails to fulfill any other requirement or qualifications which the articles or the by-laws specify.

(3) The remaining directors, even though not constituting a quorum, may, by a majority vote, fill any vacancy on the board (including any vacancy resulting from an increase in the authorized number of directors, or from failure of the members to elect the full number of authorized directors) for an unexpired term, provided that the members shall have the right to fill the vacancy at any special meeting called for the purpose prior to such action by the board.

(4) The members, by vote of a majority in interest of all of the voting members, may, at any special meeting called for the purpose, remove from office any one or more of the directors, notwithstanding that his or their terms of office may not have expired, and may forthwith at such meeting proceed to elect a successor for the unexpired term. Whenever the members of any class or series are entitled to elect one or more directors, the provisions of this subsection shall apply, in respect of the removal of a director or directors so elected, and the election of a successor or successors, to the vote of the members of that class or series, and not to the vote of all of the members. If a director has been elected by the exercise of the privilege of cumulative voting, such director may not be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there be classes of directors, at an election of the class of directors of which he is a part;

(5) The meetings of the board of directors may be held at such place, whether in this state or elsewhere, as a majority of the directors may from time to time appoint, or as may be fixed in the call of the meeting;

(6) Such notice of meetings of the board shall be given as provided in the by-laws. Directors present at a meeting shall be deemed to have received due, or to have waived, notice thereof. Notice of a meeting may be waived in writing at any time and the waiver need not specify the purpose of or the business to be transacted at the meeting. Notice need not be given to any director, or member of a committee of the board of directors, with whom communication is made unlawful by any law of the United States of America, or by any rule, regulation, proclamation or executive order issued under any such law, and any action or meeting taken or held without notice to any such director or committee member shall have the same force and effect as if notice had been given to him as otherwise required;

(7) A majority of the board of directors shall be necessary to constitute a quorum for the transaction of business, and the acts of a majority of the directors present at a meeting at which a quorum is present shall be the acts of the board of directors. If a quorum is present when the meeting is convened, the directors present may continue to do business, taking action by vote of a majority of a quorum as fixed above, until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum as fixed above, or the refusal of any director present to vote;

(8) The board of directors may designate one or more committees, each committee to consist of two or more of the directors (and one or more directors may be named as alternate members to replace any absent or disqualified regular members) which, to the extent provided by resolution of the board or in the articles or by-laws, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation to be affixed to documents. Such committee or committees shall have such name or names as may be stated in the articles or by-laws, or as may be determined, from time to time, by the board of directors. Any vacancy occurring in any such committee shall be filled by the board of directors but the president may designate another director to serve on the committee pending action by the board. Each such committee shall hold office during the term of the board constituting it, unless otherwise ordered by the board. The designation of and delegation of authority to a committee shall not relieve the directors of any responsibility imposed on them by law;

(9) Any action which may be taken at a meeting of the board of directors, or of any committee thereof, may be taken by a consent in writing signed by all of the directors or by all members of the committee, as the case may be, and filed with the records of proceedings of the board or committee.

(10) The board of directors, or any committee of the board, may hold a meeting by means of conference telephone, facsimile, or similar communications equipment provided that all persons participating in the meeting can communicate with each other. Participation in a meeting pursuant to this Paragraph shall constitute presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. The provisions of this Paragraph shall not apply to any public body or any other entity provided for in R.S. 42:13.

F. The articles may provide that a particular class or series of members may elect all or a certain number or proportion of the directors, or the directors of a certain class.

G. The articles may provide that any director absent from a meeting of the board or any committee thereof, may be represented by any other director or member, who may cast the vote of the absent director according to the written instructions, general or special, of the absent director. In the absence of such a provision in the articles, no director shall have the right to vote by proxy.

H. Unless the articles or by-laws provide otherwise, the court may, at the suit of five or more voting members, remove from office any director in case of fraudulent or dishonest acts, or gross abuse of authority or discretion, with reference to the corporation. The court may bar from reelection any director so removed, for a period prescribed by the court. The corporation shall be made a party to such action.

Acts 1968, No. 105, §1; Acts 1997, No. 947, §1; Acts 2004, No. 523, §1.

§ 12:225 Officers and agents

A.(1) The board of directors shall elect a president, a secretary and a treasurer, and may elect one or more vice presidents. Unless otherwise provided in the articles, none of said officers need be a director, and any two of these offices may be combined in one person; provided that no person holding more than one office may sign, in more than one capacity, any certificate or other instrument required by law to be signed by two officers. The treasurer may be a corporation.

(2) If the officers are listed in the articles or in an amendment thereto, a municipal address, which shall not be a post office box only, shall be indicated for each such officer.

B. Such other officers and agents as may be necessary for the business of the corporation may be appointed by the board of directors or in the manner provided in the by-laws.

C. Election or appointment of an officer shall not of itself create contract rights.

D. Officers and agents shall have such authority and perform such duties in the management of the property and affairs of the corporation as may be prescribed in the by-laws or by the board.

E. Any officer or agent may be removed by the board of directors with or without cause at any time, without prejudice, however, to the contract rights of the person so removed.

F. The articles may provide that only the members, or only a particular class or classes of directors, or only directors elected by the vote of a particular class or series of members, may elect certain or all of the officers, in which event officers so elected may be removed without cause only by the members or directors empowered to elect their successors.

G. Except as otherwise provided in the articles or by-laws, or by resolution of the board of directors, the president or vice-president of any corporation shall have power in the name and behalf of the corporation to authorize the institution, prosecution or defense of any suit and other legal proceedings, and no exception of want of authority shall lie on the part of any other party. Such persons shall have authority in the corporation's name and behalf to direct the issuance of conservatory writs and to bond property in custodia legis, to execute bonds in connection with any legal proceedings, and to make any affidavit required by law or the rules of the court. Such acts shall have the same force and effect as the act of the corporation itself, and be binding upon it.

Acts 1968, No. 105, §1; Acts 1989, No. 102, §1.

§ 12:226 Relation of directors and officers to corporation and members; liability of officers and directors

A. Officers and directors shall be deemed to stand in a fiduciary relation to the corporation and its members and shall discharge the duties of their respective positions in good faith and with that diligence, care, judgment, and skill which ordinarily prudent men would exercise under similar circumstances in like positions.

B. Any officers or directors who knowingly, or without the exercise of reasonable care and inquiry, consent to the issuance of shares in violation of the provisions of this Chapter shall be liable jointly and severally to the corporation and any person who suffers any loss or damage as a result thereof.

C. If property or services taken in payment for shares are grossly overvalued contrary to the provisions of this Chapter, the officers or directors who knowingly, or without the exercise of reasonable care and inquiry, consented thereto, or voted in favor thereof, shall be liable jointly and severally to the corporation for the benefit of creditors or members, as their respective and relative interests may appear, for any loss or damage arising therefrom.

D. If any unlawful distribution, payment, or return of assets be made to the members, or if the corporation purchase or redeem any of its own shares in violation of this Chapter, the directors who knowingly, or without the exercise of reasonable care and inquiry, voted in favor thereof shall be liable jointly and severally to the corporation, or to creditors of the corporation, or to both, in an amount equal to the amount of the unlawful distribution. An action to enforce such liability must be brought within two years from the date on which the distribution was made, and this time limit shall not be subject to suspension on any ground, nor to interruption except by timely suit.

E. A director acting in reliance, in good faith, on a report made to the board of directors, or to any committee thereof, by an official of the corporation or by an appraiser selected by the board or by any committee thereof with reasonable care, or on financial statements or other records of the corporation represented as accurate by the president or other officer in charge of the corporation's books of account or of such records, or stated in a written report by independent or certified public accountants fairly to reflect the corporation's financial condition, shall not be held liable under the provisions of this Section.

F. Nothing contained in this Section shall derogate from any indemnity authorized by R.S. 12:227.

G. A director shall not be liable for the commission of a prohibited act if he was absent from the meeting of directors at which the action was authorized, or if he was present or represented at such meeting, and his dissent therefrom was either noted in the minutes of the meeting or filed promptly thereafter in the registered office of the corporation.

Acts 1968, No. 105, §1.

§ 12:227 Indemnification of officers, directors, employees and agents; insurance

A. A corporation may indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (including any action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another nonprofit, business or foreign corporation, partnership, joint venture or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided that in case of actions by or in the right of the corporation, the indemnity shall be limited to expenses (including attorneys' fees, and amounts paid in settlement not exceeding, in the judgment of the board of directors, the estimated expense of litigating the action to conclusion) actually and reasonably incurred in connection with the defense or settlement of such action and no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the court shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

B. To the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any such action, suit or proceeding, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

C. Any indemnification under subsection A of this section (unless ordered by the court) shall be made by the corporation only as authorized in a specific case upon a determination that the applicable standard of conduct has been met. Such determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable or a quorum of disinterested directors so directs, by independent legal counsel, or (3) by the members.

D. Expenses incurred in defending such an action, suit or proceeding may be paid by the corporation in advance of the final disposition thereof if authorized by the board of directors in the manner provided in subsection C of this section, upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this section.

E. The indemnification provided by this section shall not be deemed exclusive of any other rights to which the person indemnified may be entitled under any by-law, agreement, authorization of members or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his heirs and legal representative.

F. A corporation shall have power to procure insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another nonprofit, business or foreign corporation, partnership, joint venture or other enterprise against any liability asserted against or incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of this section.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §15, emerg. eff. June 18, 1970, at 5:05 P.M.

§ 12:228 Interested directors; quorum

A. No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other nonprofit, business or foreign corporation, partnership, or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the common or interested director or officer was present at or participated in the meeting of the board or committee thereof which authorized the contract or transaction, or solely because his or their votes were counted for such purpose, if:

(1) The material facts as to his interest and as to the contract or transaction were disclosed or known to the board of directors or the committee, and the board or committee in good faith authorized the contract or transaction by a vote sufficient for such purpose without counting the vote of the interested director or directors; or

(2) The material facts as to his interest and as to the contract or transaction were disclosed or known to the members entitled to vote thereon, and the contract or transaction was approved in good faith by vote of the members; or

(3) The contract or transaction was fair as to the corporation as of the time it was authorized, approved or ratified by the board of directors, committee, or members.

B. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or of a committee which authorized the contract or transaction.

Acts 1968, No. 105, §1.

§ 12:229 Meetings of members

A. Meetings of members may be held at any place, within or without this state, which is provided in the articles or by-laws or specified in the notice of the meeting. Unless otherwise provided or specified, all meetings of the members shall be held in this state at the registered office of the corporation.

B. The articles or by-laws may provide for the number and time of meetings of members, but at least one meeting of the members shall be held in each calendar year for the election of directors, the time for which shall be fixed in the articles or by-laws. Failure to hold the annual meeting at the designated time shall not work any forfeiture or dissolution of the corporation. If the annual meeting has not been called and held within six months after the designated time, the meeting may be called by any ten members, or by any member or members holding five per cent or more of the voting power.

C. Special meetings of the members may be called at any time by the president, the board of directors or any person so authorized in the articles or by-laws. At any time, upon written request of any person entitled to call a special meeting, the secretary shall call a special meeting of the members to be held at the time which the secretary fixes, not less than ten or more than sixty days after the receipt of the request. If the secretary neglects or refuses to issue the call, the person making the request may do so.

D. At any meeting of members, a list of members entitled to vote, arranged alphabetically and certified by the secretary, showing the number and class of shares held by each shareholder, and the class of membership held by each other member, on the record date for the meeting, shall be produced on the request of any member. This list shall be prima facie evidence of its contents, and of the right of the members listed therein to vote.

Acts 1968, No. 105, §1.

§ 12:230 Notice of meetings of members

A. Unless otherwise provided in the articles or by-laws, and except as otherwise provided in this Chapter, the authorized person or persons calling a members' meeting shall cause written notice of the time, place and purpose of the meeting to be given to all members entitled to vote at such meeting, at least ten days and not more than sixty days prior to the day fixed for the meeting. Notice of the annual meeting need not state the purpose thereof, except as otherwise provided in this Chapter if a specified action is to be taken at the meeting. If such written notice is placed in the United States mail, postage prepaid, and addressed to a member at his last known address, notice shall be deemed to have been given him. Notice of any meeting may be waived in writing by any member at any time; the written waiver need not specify the purpose of or the business to be transacted at the meeting; and such notice shall be deemed to have been given to, or waived by, all members present or represented at any such meeting except any member who, at the beginning of the meeting, objects to the transaction of any business because the meeting is not lawfully called or convened. Notice need not be given to any member with whom communication is made unlawful by any law of the United States of America, or by any rule, regulation, proclamation or executive order issued under any such law; and any action or meeting taken or held without notice to any such member shall have the same force and effect as if notice had been given to him as otherwise required.

B. Adjournments of any annual or special meeting of members may be taken without new notice being given, unless a new record date is fixed for the adjourned meeting, but any meeting at which directors are to be elected shall be adjourned only from day to day until such directors have been elected.

C. In the event there occurs the accidental destruction or accidental loss of corporate records, or other similar exigency, if the corporation is unable to give notice of a meeting to its members at their last known addresses, notice shall be given by advertisement at least thirty days prior to the meeting and again twice within thirty days of the meeting, in a daily paper published in the parish in which the corporation is domiciled, if there exists such a paper, or published for four consecutive weeks prior to the meeting in a weekly paper published in the parish in which the corporation is domiciled. In the absence of a daily or weekly paper, notice shall be given by the posting of the notice in the principal meeting place of the corporation, or at the parish courthouse door in the absence of such a meeting place.

Acts 1968, No. 105, §1; Acts 1995, No. 465, §1.

§ 12:231 Quorum of members

A members' meeting properly called on due notice, if notice is required, may be organized for the transaction of business whenever a quorum is present. Unless otherwise provided in this Chapter or in the articles or by-laws, the following rules shall apply:

(1) The presence in person or by proxy of a majority of the voting members shall constitute a quorum.

(2) The voting members present at a duly organized meeting shall constitute a quorum, and may continue to do business until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum as fixed in Paragraph (1) of this Section, or in the articles or by-laws, or the refusal of any member present to vote.

(3) If a meeting cannot be organized for lack of a quorum, those present may, except as otherwise provided in this Chapter, adjourn the meeting to the time and place which they determine. Notice of the second meeting shall again be attempted pursuant to R.S. 12:230. However, in the case of any meeting called for the election of directors, those who attend the second of such adjourned meetings, although less than a quorum as fixed in Paragraph (1) of this Section, or in the articles or by-laws, shall nevertheless constitute a quorum for the purpose of electing directors. In the case of a second such meeting called after the lack of a quorum for a purpose other than or in addition to the election of directors, including amendment of the articles of incorporation or dissolution of the corporation, any number of members present shall constitute a quorum, notwithstanding any other provision of law to the contrary.

Acts 1968, No. 105, §1; Acts 1995, No. 465, §1.

§ 12:232 Voting of members

A. Unless otherwise provided in the articles or by-laws, every member of a corporation shall be entitled to one vote, or if a shareholding member, one vote for each share standing in his name on the books of the corporation; provided that on and after the date on which written notice of redemption of redeemable shares has been mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with a bank or trust company with irrevocable instruction and authority to pay the redemption price to the holders thereof upon surrender of certificates therefor, such shares shall not be entitled to vote on any matter and shall not be deemed to be outstanding shares. The manner of voting may be by ballot, mail or any other reasonable means provided in the articles or by-laws.

B. The articles or by-laws may provide that in the election of directors each voting member shall have the right to multiply his vote or votes by the number of directors to be elected, and to cast all of these votes for one candidate, or to distribute them among two or more candidates.

C.(1) A member shall have the right to cast his vote either in person or, unless the articles or by-laws specifically prohibit voting by proxy, by proxy duly authorized in writing, signed by the member and filed with the secretary at or before the meeting.

(2) The authority of the holder of a proxy to act shall not be revoked by the death of the member who executed the proxy unless, before the authority is exercised, written notice of such death is received by the corporate officer responsible for maintaining the list of members.

(3) A proxy shall be revocable at will, unless otherwise validly provided by agreement or by any provision of the proxy. The validity of every unrevoked proxy shall cease eleven months after the date of its execution, unless some other definite period of validity shall expressly be provided therein; but in no case shall an outstanding proxy be valid for longer than three years. The revocation of a proxy (if revocable) shall not be effective until written notice thereof has been given to the secretary of the corporation, or unless a proxy of later date is filed with the secretary at or before the meeting.

(4) A proxy regular on its face, and signed in the name of a member entitled to vote at the meeting, shall be deemed valid unless challenged before it is voted, and the burden of proving invalidity shall be on the challenger.

(5) When shares are registered in the names of two or more persons (other than fiduciaries), a proxy signed by any one or more of them shall be deemed valid, unless the corporation receives written notice to the contrary from a non-signing registered holder before the proxy is voted.

D. A person whose shares are pledged shall be entitled to vote thereon, unless and until such shares have been transferred on the books of the corporation to the pledgee; and thereafter the pledgee shall be entitled to vote thereon.

E. Any person in whose name shares are registered in a fiduciary capacity, may, so far as concerns the corporation, vote the same in person or by proxy for all purposes, and without the necessity of any authorization by a court, or of any judicial or other proceeding provided in particular laws. A legal representative, other than a receiver or trustee, may vote shares held by him, either in person or by proxy, without transfer of the shares into his name. When shares are registered in the names of three or more fiduciaries, voting thereof shall be in accordance with the will of the majority of the fiduciaries, unless the instrument or order appointing the fiduciaries directs that the shares shall be voted in some other way. When, in any case, the fiduciaries are equally divided as to the manner of voting the shares registered jointly in their names, any court of competent jurisdiction may, upon petition filed by any of the fiduciaries or by any beneficiary, appoint an additional person to act with the fiduciaries in determining the manner in which the shares shall be voted on the particular questions as to which the fiduciaries are divided.

F. A corporate member may vote by its president, any vice-president, secretary or treasurer, or by proxy appointed in writing by any of such officers, unless some other person appointed by bylaw or resolution of the board of directors to cast the corporate member's vote, shall produce a certified copy of such bylaw or resolution, in which case the other person shall be entitled to cast the vote.

G. Except as otherwise provided in the articles or by-laws, or in other provisions of this Chapter, a majority of votes actually cast shall decide any matter properly brought before a members' meeting organized for the transaction of business, except that directors shall be elected by plurality vote.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §16, emerg. eff. June 18, 1970, at 5:05 P.M.

§ 12:233 Unanimous consent

A. Whenever by any provision of law, the articles or the by-laws, the affirmative vote of members is required to authorize or constitute corporate action, the consent in writing to such corporate action signed by all of the members having voting power on the particular question, shall be sufficient for the purpose, without necessity for a meeting of members.

B. This consent, together with a certificate by the secretary of the corporation to the effect that the subscribers to the consent constitute all of the members entitled to vote on the particular question, shall be filed with the records of proceedings of the members.

Acts 1968, No. 105, §1.

§ 12:234 Fixing record date

A. For the purpose of determining members entitled to notice of, and to vote at, a meeting, or in order to make a determination of members for any other proper purpose, the board of directors may fix in advance a record date for determination of members for such purpose, such date to be not more than sixty days (or such shorter period as the by-laws may prescribe) and, if fixed for the purpose of determining members entitled to notice of, and to vote at, a meeting, not less than ten days, prior to the date on which the action requiring the determination of members is to be taken.

B. Except as otherwise provided by the board, if no record date is fixed for the purpose of determining members entitled to notice of, and to vote at, a meeting, the close of business on the day before the notice of the meeting is mailed (or, if notice is waived, on the day before the meeting) shall be the record date for such purpose.

C. A determination of members entitled to notice of, and to vote at, a meeting shall apply to any adjournment thereof, unless otherwise ordered by the board of directors.

Acts 1968, No. 105, §1.

§ 12:235 Voting trusts

A. Two or more shareholders of a corporation may, pursuant to an agreement in writing, transfer their shares to any one or more persons or corporations having authority to act as trustees, for the purpose of vesting in the transferees, as trustees, for a period not exceeding fifteen years and upon the terms and conditions stated in the agreement, all voting or other rights pertaining to such shares. The voting trust agreement may stipulate that the term of the agreement may be extended under the same terms and conditions for an additional period, not to exceed ten years from the date of expiration of the original agreement. When the original agreement contains such a stipulation, it shall provide for the manner, method, time and place for a meeting of all of the depositing shareholders to vote on the extension. At least a majority in interest of all depositing shareholders, and a larger percentage if stipulated, must vote for extension if the original agreement is to remain effective beyond its original expiration date.

B. Unless the agreement provides otherwise, any other shareholder may at any time transfer his shares to the same trustee or trustees upon the terms and conditions stated in the agreement, and thereupon shall be bound by, and shall have the benefits of, all of the provisions of the voting trust agreement.

C. The certificates of shares transferred to a trustee or trustees shall be surrendered and cancelled, and new certificates therefor issued in the name of the trustee or trustees. In the new certificates it shall appear that they are issued pursuant to the voting trust agreement. In the entry of transfer on the records of the corporation, it shall be noted that the transfer is made pursuant to the agreement.

D. The trustee or trustees shall execute and deliver voting trust certificates to the transferors. Such voting trust certificates shall be transferable in the same manner and with the same effect as certificates of stock under the provisions of Part II of Chapter 6 of this Title.

E. The trustee or trustees shall possess all voting and other rights pertaining to the shares so transferred and registered in his or their names, subject to the terms and conditions of, and for the period specified in, the agreement.

F. Unless otherwise provided in the agreement:

(1) The trustee or trustees may vote in person or by proxy;

(2) If there are two or more trustees, the manner of voting shall be determined as provided in R.S. 12:232(E);

(3) Vacancies among the trustees shall be filled by the remaining trustee or trustees;

(4) A trustee shall incur no responsibility as trustee except for his individual neglect or malfeasance.

G. The trustee or trustees shall keep at a place available to holders of voting trust certificates, correct and complete books and records of account relating to the trust, and a record containing the names and addresses of all persons who are holders of voting trust certificates, the number and class of shares represented by each certificate held by them, and the dates when they became the owners thereof. The record may be in written form or in any other form capable of being converted into written form within a reasonable time.

H. A duplicate of every voting trust agreement shall be filed in the office of the corporation, and it and the record of voting trust certificate holders shall be subject to the same right of inspection by a shareholder of record, or a holder of a voting trust certificate, in person or by agent or attorney, as are the records of the corporation under R.S. 12:223.

Acts 1968, No. 105, §1.

§ 12:236 Registered office and agent

A. Every corporation shall continuously maintain an office in this state, to be known as its registered office. The location and post office address of the original registered office shall be stated in the articles, as provided in R.S. 12:203.

B. After incorporation, a change in the location of the registered office may be authorized at any time by the board of directors. Within thirty days after the change is made, notice of the change, and of the address of the new registered office, shall be filed with the secretary of state and with the recorder of mortgages of the parish in which the new office is located. If the registered office should be vacated by the corporation, a new registered office shall be designated by the board, and notice of the change and of the post office address of the new office shall be filed with the secretary of state and with the recorder of mortgages of the parish in which the new office is located, within thirty days. The designation of a registered office shall remain effective until a change is made therein, and notice of the change is filed in the manner hereinabove provided; except that if no notice of change is filed within thirty days after the registered office has been vacated, the office of the secretary of state may thereafter be treated as the registered office by any person other than the corporation itself. If the registered office is changed from one parish to another, the notice of change shall be filed with the recorder of mortgages of both the parish from which, and that to which, the registered office is removed. The registered office shall be considered the domicile of the corporation for all purposes.

C.(1)(a) Every corporation shall continuously maintain in this state at least one registered agent, which agent may be any of the following:

(i) An individual who is a resident of this state.

(ii) A partnership which is authorized to practice law in this state.

(iii) A business corporation, limited liability company, foreign corporation, or foreign limited liability company authorized to transact business in this state, which is authorized by its articles or certificate of incorporation or organization to act as the agent of a corporation for service of process, and which has on file with the secretary of state a certificate or amended certificate setting forth the names of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

(b) Legal process and other notices or demands may be served on the corporation by service upon this agent and if the agent is a partnership, upon any partner.

(2) The full name and address of the agent shall be stated in the articles, as provided in R.S. 12:203, and a notarized affidavit of acknowledgement and acceptance signed by each such agent shall be attached thereto. The failure to attach a notarized affidavit of acknowledgement and acceptance as required by this Subsection shall not be a defense to proper service of process on the corporation. The address of the registered agent in this state may be changed by filing with the secretary of state, by either the corporation or the agent, of written notice of such change, a copy of which shall also be filed with the recorder of mortgages of the parish of the corporation's domicile. Notice of change of the name of a corporate or partnership registered agent shall be filed in like manner within thirty days after the change.

(3) A registered agent may resign, but such resignation shall be effective only when written notice thereof has been given to the corporation, the secretary of state, and the recorder of mortgages of the parish in which the registered office is located. If the registered agent resigns, or if for any other reason the corporation ceases to maintain a registered agent, a successor agent shall be appointed by the board of directors within thirty days after the resignation or other event which terminated the tenure of the former agent. The full name and municipal street address of the successor agent shall be certified in writing signed in the name of the corporation by an officer of the corporation, and shall be filed with the secretary of state and the recorder of mortgages. Upon compliance with the foregoing provisions, including the requirement of a notarized affidavit of acceptance, the successor agent shall be vested with the powers of the agent succeeded.

D. The secretary of state and each recorder of mortgages shall keep in their respective offices, for public inspection, a permanent record of registered offices and agents, showing all changes therein and the date of each change.

E. In addition to the procedures contained in Subsections B and C of this Section, a corporation may change the name of its registered agent or the location of its registered office by including such change in the annual report required by R.S. 12:205.1. When a change in address or location is made pursuant to this Subsection, the corporation shall cause notice of such change to be recorded in the office of the recorder of mortgages of the parish in which the new registered office is located, as well as in the office of the recorder of mortgages of the parish from which the registered office was changed.

F. The secretary of state may prescribe and furnish forms for filing the notice of change and agent resignation.

Acts 1968, No. 105, §1; Amended by Acts 1987, No. 769, §1; Acts 1988, No. 99, §1; Acts 1991, No. 333, §1; Acts 2001, No. 1187, §1; Acts 2017, No. 367, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:237 Amendment of articles generally

A. A corporation may amend its articles in compliance with any method stipulated in its articles.

B. If the articles do not stipulate a method of amendment, or do not stipulate in detail the procedure for amendment thereof, an amendment altering the articles may be adopted by two-thirds in interest of the voting members present, at any annual or special meeting of members the notice of which set forth the proposed amendment or a summary of the changes to be made thereby. For purposes of this Subsection, a majority of the members shall constitute a quorum and a quorum must be present at the meeting at which the amendment to the articles is to be considered. The notice of such meeting must be transmitted to the members not less than thirty days prior to the meeting.

C. If an amendment would adversely affect the rights of the members of any class or series, then in addition to the vote required by Subsection B of this Section, the members of each class or series so affected by the amendment shall be entitled to vote as a class upon such amendment, whether or not by the terms of the articles members of such class or series are entitled to vote; and the vote of two-thirds in interest (or such larger or smaller proportion, not less than a majority in interest, as the articles may require) of the members of each class or series so affected by the amendment, present or represented at the meeting, shall be necessary to the adoption thereof. Except as otherwise provided in the articles, the rights of a member shall not be considered adversely affected unless the amendment (otherwise than as permitted by the articles) (a) alters or abolishes any of his preferential rights, (b) creates, alters, or abolishes any right in respect of redemption of his shares, (c) alters or abolishes any preemptive right in respect of his shares, (d) creates or alters (other than to abolish) any restriction on transfer applicable to his shares or membership, or (e) excludes or limits his right as a member to vote on a matter, except as such right may be limited by voting rights given to new shares then being authorized of an existing or new class, or to members of a new class.

D. In the event that the duration of a corporation as fixed in the articles may heretofore have expired, or may hereafter expire, without any action having been taken with reference thereto, and without proceedings having been undertaken or instituted to dissolve and wind up the corporation, the articles may be so amended as to extend the duration of the corporation as specified in the articles, in the same manner and with the same force and effect as if the articles had been amended prior to the expiration of the duration of the corporation as set forth in the articles, except that if the corporation's name is no longer available for use by it, its name shall be changed appropriately. The declaration in the minutes of the meeting of the members at which the articles are amended by extending the duration of the corporation, that prior to the expiration of the duration of the corporation no action had been taken with reference thereto, and that no proceedings had been undertaken or instituted to dissolve and wind up the corporation, shall constitute prima facie evidence of those facts.

E. A corporation, whether or not the articles stipulate a method of amendment, may utilize the procedure established in this subsection if it has been unable to amend its articles either because sufficient voting members are not available to comply with the method of amendment stipulated in its articles, or because two-thirds of the voting members, as required by Subsection B of this Section, are not available for a meeting for this purpose. The amendment may include ratification of amendments previously attempted, and ratification of acts done pursuant thereto, but no amendment adopted pursuant to this Subsection may impair rights, privileges, or tenure of corporate existence.

(1) The board of directors or the de facto governing board may call a special meeting of the members to amend the articles. If twenty percent in interest of the voting members petition for a meeting to amend the articles, the board of directors or de facto governing body shall call a meeting for this purpose.

(2) When a meeting to amend the articles is called, the members shall be given thirty days' written notice thereof. This notice shall describe the amendments proposed and may be mailed to the members at their last addresses on the records of the corporation. Notice of the meeting shall be given also by advertisement, within thirty days before the meeting, in a daily paper published in the parish in which the corporation is domiciled, if there is such a paper. If no daily paper is published in the parish, notice shall be given by posting the same for thirty days in the principal meeting place of the corporation, if it has such a meeting place, or at the parish courthouse door otherwise.

(3) At the meeting, the articles may be amended by vote of two-thirds in interest of the voting members present.

F. In lieu of the procedures for amendment of articles of incorporation hereinabove provided in this Section, corporations organized or operating under this Chapter for religious purposes only may amend their articles at a meeting of members of which thirty days' written notice has been given to all of the members at their last addresses on the records of the corporation. This notice shall contain a fair summary of the proposed amendment and shall designate the place and time of the meeting. At the meeting, the articles may be amended by vote of two-thirds of the voting members present.

G. No amendment shall be made by any method which changes the corporation from one which is not permitted to distribute its net assets to its members on dissolution to one which is permitted to distribute its net assets to its members on dissolution.

H. Notwithstanding any other provision of this Section or Chapter to the contrary, the members of a corporation present at any meeting for which notice is given pursuant to R.S. 12:230(C) and at which a quorum is established pursuant to R.S. 12:231(3) shall have full authority to amend the articles of the corporation and transact any business of the corporation, including authorizing and initiating a dissolution of the corporation pursuant to R.S. 12:249 through 250.1.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §17, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1989, No. 163, §1; Acts 1995, No. 465, §1.

§ 12:237.1 Amendment of articles; special provision

A. Notwithstanding any provision in this Section or in the articles of incorporation to the contrary (except as provided in Subsection B of this Section), the articles of incorporation of each corporation that is a private foundation described in Section 509 of the Internal Revenue Code of 1954¹ shall be deemed to contain the following provisions: The corporation shall make distributions at such time and in such manner as not to subject it to tax under Section 4942 of the Code;² the corporation shall not engage in any act of self-dealing that would subject it to tax under Section 4941 of the Code;³ the corporation shall not retain any excess business holdings that would subject it to tax under Section 4943 of the Code;⁴ the corporation shall not make any investments that would subject it to tax under Section 4944 of the Code;⁵ and the corporation shall not make any taxable expenditures that would subject it to tax under Section 4945 of the Code.⁶ With respect to any such corporation organized prior to January 1, 1970, this Subsection shall apply only for its taxable years beginning on or after January 1, 1972.

B. The articles of incorporation of any corporation described in Subsection A of this Section may be amended to expressly exclude the application of Subsection A of this Section, and in the event of such amendment, Subsection A of this Section shall not apply to such corporation.

C. All references in this Section to the "Code" are to the Internal Revenue Code of 1954, and all references in this Section to specific sections of the Code include corresponding provisions of any subsequent federal tax laws.

Added by Acts 1971, No. 154, §2.

¹26 U.S.C.A. (I.R.C.1954) §509.

²26 U.S.C.A. (I.R.C.1954) §4942.

³26 U.S.C.A. (I.R.C.1954) §4941.

⁴26 U.S.C.A. (I.R.C.1954) §4943.

⁵26 U.S.C.A. (I.R.C.1954) §4944.

⁶26 U.S.C.A. (I.R.C.1954) §4945.

§ 12:238 Articles of amendment; contents; filing

A. After an amendment has been duly adopted, as provided in R.S. 12:237, articles of amendment setting forth the amendment, the date and manner of adoption thereof, and the number of votes cast for and against the amendment by members of each class or series, and containing such recitals as may be required by R.S. 12:240, shall be executed in the corporation's name by an officer of the corporation. The articles of amendment shall be acknowledged by the officer who signed them, or may instead be in the form of an authentic act.

B. The articles of amendment shall be filed with the secretary of state. The secretary of state may prescribe and furnish forms for filing the amendment. Articles of amendment may be delivered to the secretary of state for filing, as of any specified date, and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. When all fees and charges have been paid as required by law, the secretary of state shall record the articles of amendment in his office, and endorse thereon the date and, if requested, the hour of the filing thereof with him. Thereupon, the amendment shall be effective as of the date and, if endorsed on the articles of amendment, the hour of filing with the secretary of state, except that, if the articles of amendment were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the amendment shall be effective as of the time of such acknowledgment or execution.

C. A multiple original of the articles of amendment, or a copy certified by the Secretary of State, shall thereafter be filed for record in the office of the recorder of mortgages of the parish in which the registered office of the corporation is located.

Acts 1968, No. 105, §1. Amended by Acts 1977, No. 408, §1; Acts 1999, No. 342, §5; Acts 2001, No. 1187, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:239 Special amendment provisions

A. The articles shall be deemed amended to increase the authorized number of shares of the class involved, as required to permit issuance of shares, to the extent not available in the corporation's treasury, issuable pursuant to subscription rights, warrants, options or conversion privileges, grant or issuance of which was approved by such vote of the members as would have been required to amend the articles to effect such increase.

B. If the articles provide that any shares purchased by the corporation and cancelled may not be reissued, the articles shall, upon cancellation of such shares, be deemed amended to reduce the authorized capital stock by the number of shares so cancelled.

C. A merger agreement which complies with the provisions of R.S. 12:243(1) may prescribe changes to be effected by the merger in the articles of the surviving business corporation.

D. In case of an amendment pursuant to Subsection A or B of this Section, appropriate articles of amendment, reciting the relevant facts and that the articles have been amended as provided in this section, shall forthwith be executed, acknowledged and filed by the proper officers of the corporation in the manner provided in R.S. 12:238 and 240, but omission to file such articles of amendment shall not derogate from the effectiveness of the amendment.

Acts 1968, No. 105, §1.

§ 12:239.1 Certificate of correction

A. Whenever a document filed with the secretary of state under any provision of this Chapter is an inaccurate record of the corporate action therein referred to, or is defectively or erroneously executed or acknowledged, such instrument may be corrected by filing with the secretary of state a certificate of correction which shall be executed, acknowledged, filed, and recorded in accordance with this Section. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth the portion of the instrument in corrected form. The secretary of state may prescribe and furnish forms for filing the certificate of correction.

B.(1) The certificate of correction shall be executed in the name of the corporation by an officer of the corporation.

(2) When the corporation has no officers, directors, or shareholders, each incorporator or his agent shall sign the certificate of correction, and the certificate shall recite that the corporation has no officers, directors, or shareholders.

(3) The certificate of correction shall be acknowledged by the officer who signed it or may be in the form of an authentic act.

C.(1) The certificate of correction shall be filed with the secretary of state. After all taxes, fees, and charges have been paid as required by law, the secretary of state shall record the certificate of correction in his office and endorse thereon the date and, if requested, the hour of the filing thereof with him.

(2) The certificate of correction shall be effective as of the date the original instrument is filed, except as to those persons who are substantially and adversely affected by the correction, and as to those persons the corrected certificate shall be effective from the filing date.

D. A multiple original of the certificate of correction, or a copy certified by the secretary of state, shall be filed for record in the office of the recorder of mortgages of the parish in which the registered office of the corporation is located.

E. All certificates of correction filed prior to the effective date of this Section are hereby validated.

Acts 1984, No. 424, §1, eff. July 6, 1984; Acts 1999, No. 342, §5; Acts 2001, No. 1187, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:240 Reclassification of stock

A. In case of a reclassification of stock, the articles of amendment shall state:

(1) The number of shares that have a par value and the par value thereof, and the number of shares that have no par value;

(2) If the shares are divided into classes, a description of the classes, a statement of the number of shares in each class, the designation of each class, and a statement of the preferences, limitations and relative rights of the shares of each class; and

(3) If shares are divided into series, the designation of each series and a statement of the variations in the relative rights and preferences.

B. Following a reclassification of stock, the aggregate allocated value of the issued shares shall not exceed stated capital.

Acts 1968, No. 105, §1.

§ 12:241 Restatement of articles

A. On authorization of the board of directors, a corporation may execute and file restated articles. Such restated articles shall contain the entire text of the original articles as amended by all amendments thereto, except that names and addresses of incorporators and directors may be omitted; may contain new amendments adopted by a method prescribed in R.S. 12:237 or 239; and shall recite:

(1) That the restatement accurately copies the articles and all amendments thereto in effect at the date of the restatement, without substantive change except as made by any new amendment or amendments contained in the restatement, and indicate any such changes.

(2) That each amendment has been effected in conformity with law.

(3) The date of incorporation and the date of the restatement.

(4) Such other information as may be required by R.S. 12:237, 239 and 240, if the restatement contains any new amendment.

B. The secretary of state may prescribe and furnish forms for filing the restated articles.

C. The restated articles shall be executed, filed and recorded in the manner provided for articles of amendment in R.S. 12:238, and shall be effective, when recorded by the secretary of state, as of the date and, if endorsed on the restated articles, the hour of filing with him.

D. Upon effectiveness of the restated articles, the original articles and all amendments thereto shall be superseded, and the restated articles shall be deemed to be the articles of incorporation of the corporation.

Acts 1968, No. 105, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:242 Authorization for mergers and consolidations

A. Subject to the provisions of subsection B of this section any two or more nonprofit corporations, and any one or more nonprofit corporations and any one or more business and foreign corporations, may (subject to authorization thereto by the laws under which the foreign corporation or corporations were formed) be:

(1) Merged into one of the nonprofit, business or foreign corporations, or

(2) Consolidated into a new corporation to be formed under this Chapter, under Chapter 1 of this Title, or under the laws under which one of the foreign corporations was formed.

B. For all purposes of this Part, the term "foreign corporation" shall include any association of the kind commonly known as joint-stock association or joint-stock company and any unincorporated association, trust or enterprise having outstanding shares of stock or other evidences of financial or beneficial interest therein, whether formed by agreement or under statutory authority or otherwise; the term "shareholder" or "member" shall include members of such an association, trust or enterprise and holders of shares therein; the term "shares" shall include shares of stock or other financial or beneficial interests in such an association, trust or enterprise; and the term "laws under which any foreign corporation or corporations involved were formed" shall include the agreement under which any such association, trust or enterprise was formed.

C. A corporation which is not permitted to distribute its net assets to its members upon dissolution may be merged with or consolidated into only another such corporation.

Acts 1968, No. 105, §1.

§ 12:243 Merger or consolidation procedure

Merger or consolidation may be effected only as a result of a joint agreement entered into, approved and filed as follows:

(1) The board of directors of each of the nonprofit, business and foreign corporations which desire to merge or consolidate may enter into a joint agreement signed by a majority of the directors of each, prescribing the terms and conditions of merger or consolidation and the mode of carrying the same into effect, and containing such other provisions as are deemed necessary. If the surviving corporation is a nonprofit corporation and the merger agreement prescribes changes to be effected by the merger in its articles, the agreement shall comply with the requirements of R.S. 12:240(A) to the extent applicable.

(2) The agreement must be approved by the shareholders or members of any foreign corporation or corporations involved, in the manner provided by the laws under which they were formed, and by the shareholders of any business corporation or corporations involved, in the manner provided in Chapter 1 of this Title.

(3) The agreement shall be submitted to the members of each of the merging or consolidating nonprofit corporations at an annual or special meeting. Written notice shall be given by each such corporation to each member entitled to vote at the meeting, in the manner provided in R.S. 12:230(A). A copy or a summary of the agreement shall be included in, or enclosed with, such notice, and if the corporation has no nonshareholding members, the notice shall include the statement: "Dissenting shareholders who comply with the procedural requirements of the Nonprofit Corporation Law of Louisiana will be entitled to receive payment of the fair cash value of their shares if the merger or consolidation is effected upon approval by less than two-thirds of the corporation's total voting power." The agreement must be approved by the members of each nonprofit corporation by vote of at least two-thirds in interest (or such smaller proportion, not less than a majority, as the articles may provide) of the voting members present. In addition, if the agreement is a merger agreement, and expressly prescribes a change in the articles of the surviving nonprofit corporation which, if contained in a proposed amendment to such corporation's articles, would entitle any class or series of shares of such corporation to vote as a class thereon, the merger agreement must also be approved by such affirmative vote of the holders of the shares of such class or series as would be required for the adoption of such an amendment to the articles.

(4) The fact that the agreement has been approved by the shareholders or members of each party thereto as hereinabove provided shall be certified on the agreement by the respective secretaries or assistant secretaries, and the agreement, so approved and certified, shall be signed and acknowledged by the president or vice-president of each of the corporate parties thereto.

(5) The shareholders or members of each nonprofit, business and foreign corporation shall have the right, exercisable by the vote required for approval of the agreement, to propose amendments to the agreement, and if such amendments be concurred in by the shareholders and members of all of the other nonprofit, business and foreign corporations, in each case by the vote required for approval of the agreement, the agreement so amended, when certified, signed and acknowledged as provided in this section, shall be considered the merger or consolidation agreement.

(6)(a) The secretary of state may prescribe and furnish forms for filing the merger agreement. The agreement, so adopted, certified and acknowledged, shall be filed with the secretary of state, who, after all incorporation taxes, fees and charges have been paid as required by law, shall record the same in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and issue a certificate of merger or consolidation which shall recite the names of all of the merging and consolidating corporations, the name of the state or country under the laws of which each was formed, whether a merger or consolidation is involved, the name of the surviving or consolidated corporation, the name of the state or country under the laws of which the consolidated corporation is formed, the date and, if endorsed on the agreement, the hour of filing of the agreement with him, and the effective time of the merger or consolidation, if stated in the agreement.

(b) The agreement may be delivered to the secretary of state in advance, for filing as of any specified date (and, if specified upon such delivery, as of any given time on such date) within thirty days after the date of delivery. A duplicate original of the certificate of merger or consolidation, issued by the secretary of state, shall, within thirty days after issuance of the certificate, be filed for record in the office of the recorder of mortgages in each parish in this state in which any of the corporate parties to the agreement has its registered office, and in the conveyance records of each parish in this state in which any of the corporate parties to the agreement has immovable property, title to which will be transferred as a result of the merger or consolidation.

(7)(a) If a nonprofit, business or foreign corporation owns at least ninety percent of the outstanding shares of each class of one or more nonprofit, business or foreign corporations, none of the subsidiary nonprofit corporations has any nonshareholding members, and the laws under which each foreign corporation involved was formed permit merger by the procedure prescribed in this Subsection, the parent may:

(i) Merge into itself one or more subsidiaries by delivering to the secretary of state, who shall record it after all fees and charges have been paid as required by law, a certificate, signed and acknowledged by its president or a vice-president and its secretary or an assistant secretary, setting forth a copy of the resolution of its board of directors effecting such merger and the date of adoption thereof, or

(ii) Merge itself, or itself and one or more of such subsidiaries, into one of such subsidiaries, by filing with the secretary of state, who shall record it after all fees and charges have been paid as required by law, a certificate, signed and acknowledged by its president or a vice-president, and its secretary or an assistant secretary, setting forth a copy of a resolution of its board of directors effecting such merger and the date of adoption thereof, and stating if the parent is a nonprofit corporation, that the resolution has been approved by the parent's members in the manner and by the vote prescribed in Subsection C of this Section for approval of merger or consolidation agreements.

(b) If the parent owns less than all of the outstanding shares of any subsidiary merged into itself, the resolution of the board of directors shall also state the terms and conditions of the merger, including the shares, secured or unsecured obligations, cash or other consideration to be delivered to the other shareholders of such subsidiary. If the parent is merged into a subsidiary, the resolution of the board of directors shall also state the shares, secured or unsecured obligations, cash or other consideration to be delivered to the shareholders or members of the parent and any merged subsidiaries.

(c) A duplicate original of the certificate, issued by the secretary of state, shall be filed for record with the recorder of mortgages of each parish in this state in which each nonprofit corporation involved has its registered office, and with the recorder of conveyances of each parish in this state in which any nonprofit, business or foreign corporation involved owns immovable property, title to which will be transferred as a result of the merger. A copy of the certificate shall, within twenty days after filing thereof with the secretary of state, be mailed to each minority shareholder of each subsidiary involved in the merger, at his last known address.

(d) If the surviving corporation is a nonprofit corporation, its name may be changed, effective upon effectiveness of the merger, by inclusion of a provision to that effect in the resolution of the parent corporation's board of directors.

(e) The secretary of state may prescribe and furnish forms for filing the certificate of merger.

(8)(a) Notwithstanding approval by the members, and at any time prior to the effectiveness of the merger or consolidation, the merger or consolidation may be abandoned pursuant to a provision for such abandonment, if any, contained in the agreement of merger or consolidation.

(b) The secretary of state may prescribe and furnish forms for abandoning the merger or consolidation.

(9) An agreement of merger or consolidation or a certificate of merger may provide that any consideration to be delivered to shareholders or members of any party to the merger or consolidation may consist of shares or secured or unsecured obligations of any business, nonprofit or foreign corporation, whether or not a party to the consolidation or merger, or cash or other consideration.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §§18, 19, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1988, No. 101, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:244 Consolidation; articles of incorporation

A. If the joint agreement is for a consolidation into a new corporation to be formed under this Chapter, articles for the new corporation shall be prepared in the manner and form prescribed in R.S. 12:203, except that:

(1) The nonprofit, business and foreign corporations consolidating shall be named as the incorporators of the new corporation;

(2) The articles shall be signed by the president or vice-president and secretary or assistant secretary of each of said corporations, and the articles shall be acknowledged by the officers so signing the articles;

(3) The articles shall also state the manner of converting the shares or memberships of each of the consolidating nonprofit, business and foreign corporations into shares, memberships or obligations of the new corporation.

B. The articles shall be filed and recorded, and a certificate of incorporation issued, as provided in R.S. 12:205.

Acts 1968, No. 105, §1.

§ 12:245 When merger or consolidation effective

A. A merger shall be effective when the joint agreement or certificate has been recorded by the Secretary of State, and when compliance has been had with the requirements for effectiveness of the laws under which any foreign corporations involved were formed, as of the time of filing of the agreement or certificate with the Secretary of State, or as of any later effective time, not more than thirty days after the date of such filing, stated in the agreement or certificate.

B. A consolidation shall be effective, when the joint agreement and the articles have been recorded in the office of the Secretary of State, and when compliance has been had with the requirements for effectiveness of the laws under which any foreign corporations involved were formed, as of the time of filing of the agreement and articles with the Secretary of State, or as of any later effective time, not more than thirty days after the date of such filing, stated in the agreement.

Acts 1968, No. 105, §1.

§ 12:246 Effect of merger or consolidation

Upon the effectiveness of the merger or consolidation, the effect thereof shall be that:

A. The several parties to the joint agreement shall be one nonprofit, business or foreign corporation, which shall be

(1) In the case of merger, that one of the constituent nonprofit, business or foreign corporations into which it has been agreed that the others shall be merged, and which shall survive the merger for that purpose, or

(2) In the case of consolidation, the new nonprofit, business or foreign corporation into which it has been agreed that the others shall be consolidated.

B. The separate existence of the constituent nonprofit, business and foreign corporations shall cease, except that of the surviving nonprofit, business or foreign corporation in the case of merger.

C. The surviving or new nonprofit, business or foreign corporation shall possess all the rights, privileges and franchises possessed by each of the former nonprofit, business and foreign corporations so merged or consolidated, except that a surviving or new nonprofit corporation shall not thereby acquire authority to engage in any business or exercise any right, or to engage in or to exercise any function or object for which a corporation may not be formed under this Chapter.

D. All of the property and assets of whatsoever kind or description of each of the constituent nonprofit, business or foreign corporations, all donations and grants in trust or otherwise to them, and all debts due on whatever account to any of them, including subscriptions for shares and other choses in action belonging to any of them, shall be taken and be deemed to be transferred to, and vested in, the surviving or new nonprofit, business or foreign corporation without further act or deed.

E. The surviving or new nonprofit, business or foreign corporation shall be responsible for all of the liabilities and obligations of each of the nonprofit, business and foreign corporations merged or consolidated, in the same manner as if such surviving or new corporation had itself incurred such liabilities or obligations; but the liabilities of such constituent corporations or of their members, shareholders, directors or officers shall not be affected, nor shall the rights of the creditors thereof, or of any person dealing with such corporations, be impaired by such merger or consolidation; and any claim existing, or action or proceeding pending, by or against any of such constituent corporations may be prosecuted to judgment as if such merger or consolidation had not taken place, or the surviving or new corporation may be proceeded against, or substituted, in place of such constituent corporation.

F. In the case of a merger, the articles of the surviving nonprofit corporation shall be deemed amended to the extent of any changes therein stated in the merger agreement.

G. Any personal liability of members of any joint-stock or other unincorporated association shall remain personal to such members and shall not become the liability of any subsequent transferee of shares, or of any other member, of the surviving or new nonprofit corporation.

Acts 1968, No. 105, §1.

§ 12:247 Voluntary transfer of assets

A. A voluntary sale, lease, exchange or other disposition of all or substantially all of the assets of a corporation, including its good will, franchise or other rights, may be authorized by it, in the manner prescribed in this section, upon such terms and conditions as it deems expedient, including an exchange for shares or obligations of another nonprofit, business or foreign corporation.

B. If the corporation is not insolvent, such authorization may be given only by the members, by vote of two-thirds (or such lesser proportion, not less than a majority, as the articles may provide) in interest of the voting members present. The notice of the meeting of members at which such authorization is considered shall state such consideration as a purpose of the meeting, and if the corporation has no non-shareholding members, the notice shall also contain, if applicable, the following statement: "Dissenting shareholders who comply with the procedural requirements of the Nonprofit Corporation Law of Louisiana will be entitled to receive payment of the fair cash value of their shares if the transaction to be considered is effected upon approval by less than two-thirds of the corporation's total voting power." If the corporation is insolvent, such authorization may be given by vote of two-thirds of the entire board of directors, approved by the voting members as required by R.S. 12:207(D) if immovable property is involved.

C. After such authorization or approval by a vote of members, the board of directors may nevertheless, in its discretion, abandon such sale, lease, exchange or other disposition of assets, subject to the rights of third parties under any contracts relating thereto, without action or approval by the members.

D. This section shall not be construed to authorize a conveyance or exchange of assets in fraud of corporate creditors or minority members, or members without voting rights, or in violation of the Bulk Sales Law.

E. Nothing in this section is intended to restrict the power of any corporation, without authorization or approval thereof by the members, to sell, lease, exchange or otherwise dispose of any of its movable property if the entire corporate business is not ended thereby, or if some portion of the proceeds of such property are appropriated to the conduct or development of its remaining activities.

F. An action or suit to enjoin or set aside a conveyance by a corporation, on the ground that there has not been compliance with the provisions of this section relating to the sale, lease, exchange or other disposition of all or substantially all of the assets of the corporation, must be brought within ninety days after the corporate action purporting to authorize such disposition was taken, and this time limit shall not be subject to suspension on any ground, or to interruption on any ground other than timely suit.

G. This section does not apply to mortgages, pledges or other security transactions, which may be authorized by action of the board of directors taken as provided in R.S. 12:224 whether the corporation is solvent or insolvent and whether or not all or substantially all of the assets of the corporation are affected thereby.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §§20, 21, emerg. eff. June 18, 1970, at 5:05 P.M.

§ 12:247.1 Change of jurisdiction of incorporation

A. Any nonprofit corporation may change its state of incorporation from this state to, and any foreign nonprofit corporation may change its jurisdiction of incorporation to this state from, any other jurisdiction the laws of which authorize such a change.

B.(1) Such a change may be made by a Louisiana nonprofit corporation only pursuant to authorization thereof by a majority of the voting power present, or by such larger vote as the articles may require, at an annual or special meeting of the members or shareholders, the notice of which sets forth consideration of such action as a purpose of the meeting.

(2) There shall be filed with the secretary of state a certificate as to such authorization by the members or shareholders, signed by an officer of the corporation and acknowledged by the officer who signed it. The secretary of state may prescribe and furnish forms for the certificate. The certificate may be delivered to the secretary of state for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery.

(3) When all taxes, fees, and charges have been paid as required by law, the secretary of state shall record the certificate in his office, endorse thereon the date and, if requested, the hour of the filing thereof with him, and issue to the corporation a certificate reciting that it has taken all action required under the laws of this state to change its state of incorporation to such other jurisdiction.

(4) A multiple original of the certificate issued by the secretary of state, or a copy certified by the secretary of state, shall thereafter be filed for record in the office of the recorder of mortgages of the parish in which the registered office of the corporation is located.

(5) The corporation shall be deemed, when compliance has been had with the applicable requirements of the laws of such other jurisdiction, to be incorporated solely under the laws of such other jurisdiction and no longer under the laws of this state.

(6) Officially certified copies of the certificate of incorporation or other official certificate evidencing the corporation's incorporation under the laws of such other jurisdiction shall be filed with the secretary of state and in the office of the recorder of mortgages of the parish in which the registered office of the corporation was last located.

C.(1) Such a change may be made by a foreign nonprofit corporation by filing with the secretary of state:

(a) A copy of its original or restated articles or certificate of incorporation and all amendments thereto subsequent to the latest restatement, which articles or certificate as amended or restated shall comply in substance with the provisions of R.S. 12:202 through 204.

(b) An application for incorporation under this Chapter, signed by an officer of the corporation and acknowledged by the officer who signed it, setting forth the jurisdiction under the laws of which it is incorporated and the number of issued shares of each class of its authorized stock, if any, or its number of members. The secretary of state may prescribe and furnish forms for the application of incorporation.

(c) A certificate by the secretary of state or other proper officer of the jurisdiction in which the corporation is incorporated, reciting that the corporation has taken all action required under the laws of such jurisdiction to become a nonprofit corporation incorporated under the laws of this state.

(2) These documents may be delivered to the secretary of state for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. When all taxes, fees, and charges have been paid as required by law, the secretary of state shall record such documents in his office, endorse on each the date and, if requested, the hour of filing thereof with him, and issue a certificate of incorporation to the corporation under the laws of this state, which shall show the date and, if endorsed on such documents, the hour of filing of such documents with him.

(3) The certificate of incorporation shall be conclusive evidence of the fact that the corporation has been duly incorporated under the laws of this state, except that in any proceeding brought by the state pursuant to R.S. 12:262, the certificate of incorporation shall be only prima facie evidence of due incorporation.

(4) Effective as of the time of filing such documents with the secretary of state, the corporation shall be deemed to be incorporated solely under the laws of this state and no longer under the laws of such other jurisdiction.

(5) Multiple originals, or copies certified by the secretary of state, of such documents filed with the secretary of state, with a copy of the certificate of incorporation, shall thereafter be filed for record in the office of the recorder of mortgages of the parish in which the registered office of the corporation is located. A copy of the certificate of incorporation, certified by the secretary of state, shall be filed as required by the laws of such other jurisdiction.

Acts 1993, No. 680, §1; Acts 2001, No. 1187, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:248 Rights of a shareholder dissenting from certain corporate actions

A. Except as provided in Subsection B of this Section, if a corporation having only shareholding members has, by vote of its shareholders, authorized a sale, lease, or exchange of all of its assets, or has, in accordance with the provisions of R.S. 12:243, become a party to a merger or consolidation, then, unless such authorization or action shall have been given or approved by at least two-thirds of the total voting power, a shareholder who voted against such corporate action shall have the right to dissent. If a corporation has become a party to a merger pursuant to R.S. 12:243(7), the shareholders of any subsidiary corporations party to the merger shall have the right to dissent without regard to the proportion of the voting power which approved the merger.

B. The right to dissent provided by this Section shall not exist in the case of:

(1) Shareholders of a parent merged with one or more subsidiaries pursuant to R.S. 12:243(7).

(2) A sale pursuant to an order of a court having jurisdiction in the premises.

(3) A sale for cash on terms requiring distribution of all or substantially all of the net proceeds to the shareholders in accordance with their respective interests within one year after the date of the sale.

C. Except as provided in the last sentence of this Subsection, any shareholder electing to exercise such right of dissent shall file with the corporation, prior to, or at, the meeting of shareholders at which such proposed corporate action is submitted to a vote, a written objection to such proposed corporate action and shall vote his shares against such action. If such proposed corporate action be taken by the required vote, but by less than two-thirds of the total voting power, and the merger, consolidation, or sale, lease, or exchange of assets authorized thereby be effected, the corporation shall promptly thereafter give written notice thereof, by registered mail, to each shareholder who filed such written objection to, and voted his shares against, such action, at such shareholder's last address on the corporation's records. Each such shareholder may, within twenty days after the mailing of such notice to him, but not thereafter, file with the corporation a demand in writing for the fair cash value of his shares as of the day before such vote was taken; provided that he state in such demand the value demanded, and a post office address to which the reply of the corporation may be sent, and at the same time deposit in escrow in a chartered bank or trust company located in the parish of the registered office of the corporation, the certificates representing his shares, duly endorsed and transferred to the corporation upon the sole condition that said certificates shall be delivered to the corporation upon payment of the value of the shares determined in accordance with the provisions of this Section. With his demand, the shareholder shall deliver to the corporation the written acknowledgment of such bank or trust company that it so holds his certificates of stock. Unless the objection, demand, and acknowledgment aforesaid be made and delivered by the shareholder within the period above limited, he shall conclusively be presumed to have acquiesced in the corporate action proposed or taken. In the case of a merger pursuant to R.S. 12:243(7), the dissenting shareholder need not file an objection with the corporation nor vote against the merger, but need only file with the corporation, within twenty days after a copy of the merger certificate was mailed to him, a demand in writing for the cash value of his shares as of the day before the certificate was filed with the secretary of state, state in such demand the value demanded and a post office address to which the corporation's reply may be sent, deposit the certificates representing his shares in escrow as hereinabove provided, and deliver to the corporation with his demand the acknowledgment of the escrow bank or trust company as hereinabove prescribed.

D. If the corporation does not agree to the value so stated and demanded, or does not agree that a payment is due, it shall, within twenty days after receipt of such demand and acknowledgment, notify in writing the shareholder, at the designated post office address, of its disagreement, and shall state in such notice the value it will agree to pay if any payment should be held to be due; otherwise it shall be liable for, and shall pay to the dissatisfied shareholder, the value demanded by him for his shares.

E. In case of disagreement as to such fair cash value, or as to whether any payment is due, after compliance by the parties with the provisions of Subsections C and D of this Section, the dissatisfied shareholder, within sixty days after receipt of notice in writing of the corporation's disagreement, but not thereafter, may file suit against the corporation, or the merged or consolidated corporation, as the case may be, in the district court of the parish in which the corporation or the merged or consolidated corporation, as the case may be, has its registered office, praying the court to fix and decree the fair cash value of the dissatisfied shareholder's shares as of the day before such corporate action complained of was taken, and the court shall, on such evidence as may be adduced in relation thereto, determine summarily whether any payment is due, and, if so, such cash value, and render judgment accordingly. Any shareholder entitled to file such suit may, within such sixty-day period but not thereafter, intervene as a plaintiff in such suit filed by another shareholder, and recover therein judgment against the corporation for the fair cash value of his shares. No order or decree shall be made by the court staying the proposed corporate action, and any such corporate action may be carried to completion notwithstanding any such suit. Failure of the shareholder to bring suit, or to intervene in such a suit, within sixty days after receipt of notice of disagreement by the corporation shall conclusively bind the shareholder (1) by the corporation's statement that no payment is due, or (2) if the corporation does not contend that no payment is due, to accept the value of his shares as fixed by the corporation in its notice of disagreement.

F. When the fair value of the shares has been agreed upon between the shareholder and the corporation, or when the corporation has become liable for the value demanded by the shareholder because of failure to give notice of disagreement and of the value it will pay, or when the shareholder has become bound to accept the value the corporation agrees is due because of his failure to bring suit within sixty days after receipt of notice of the corporation's disagreement, the action of the shareholder to recover such value must be brought within five years from the date the value was agreed upon, or the liability of the corporation became fixed.

G. If the corporation or the merged or consolidated corporation, as the case may be, shall, in its notice of disagreement, have offered to pay to the dissatisfied shareholder on demand an amount in cash deemed by it to be the fair cash value of his shares, and if, on the institution of a suit by the dissatisfied shareholder claiming an amount in excess of the amount so offered, the corporation, or the merged or consolidated corporation, as the case may be, shall deposit in the registry of the court, there to remain until the final determination of the cause, the amount so offered, then, if the amount finally awarded such shareholder, exclusive of interest and costs, be more than the amount offered and deposited as aforesaid, the costs of the proceeding shall be taxed against the corporation, or the merged or consolidated corporation, as the case may be; otherwise the costs of the proceeding shall be taxed against such shareholders.

H. Upon filing a demand for the value of his shares, the shareholder shall cease to have any of the rights of a shareholder except the rights accorded by this Section. Such a demand may be withdrawn by the shareholder at any time before the corporation gives notice of disagreement, as provided in Subsection D of this Section. After such notice of disagreement is given, withdrawal of a notice of election shall require the written consent of the corporation. If a notice of election is withdrawn, or the proposed corporate action is abandoned or rescinded, or a court shall determine that the shareholder is not entitled to receive payment for his shares, or the shareholder shall otherwise lose his dissenter's rights, he shall not have the right to receive payment for his shares, his share certificates shall be returned to him (and, on his request, new certificates shall be issued to him in exchange for the old ones endorsed to the corporation), and he shall be reinstated to all his rights as a shareholder as of the filing of his demand for value, including any intervening preemptive rights, and the right to payment of any intervening dividend or other distribution, or, if any such rights have expired or any such dividend or distribution other than in cash has been completed, in lieu thereof, at the election of the corporation, the fair value thereof in cash as determined by the board as of the time of such expiration or completion, but without prejudice otherwise to any corporate proceedings that may have been taken in the interim.

Acts 1968, No. 105, §1.

§ 12:249 Dissolution voluntary or involuntary, out of court or under judicial supervision; effect of proceeding for dissolution

A. A corporation may be dissolved and liquidated either voluntarily or involuntarily. If the proceedings are voluntary, they may be conducted either out of court or subject to supervision by the court. If the proceedings are involuntary, they shall be subject to supervision by the court.

B. If the corporation to be dissolved is a corporation other than a religious or charitable corporation or a corporation for the execution of a trust, the net assets may be distributed to the members as their respective interests appear on the books of the corporation. If the corporation is a religious or charitable corporation or a corporation for the execution of a trust, the net assets shall be transferred to a public or private corporation, association or agency having similar purposes, unless the original articles of the corporation, as initially filed with the secretary of state, expressly authorize some other disposition of its net assets upon dissolution.

C. A proceeding for dissolution takes effect:

(1) When the appointment of a liquidator appointed by the members becomes operative as provided in R.S. 12:250(C), if the proceeding, when commenced, is not subject to supervision by the court; or

(2) When the court has appointed, pursuant to R.S. 12:250(E) or 251(E), a judicial liquidator or a temporary liquidator, if the proceeding, when commenced, is subject to the supervision of the court.

D. When the proceeding takes effect, all the rights, powers and duties of the officers and board of directors, except as otherwise provided by law, shall be vested in the liquidator appointed by the members or the court, as the case may be, and the authority and duties of the officers and directors of the corporation shall cease, except insofar as may be necessary, in the opinion of the liquidator, to preserve the corporate assets, or insofar as they may be continued by the liquidator, or as may be necessary for termination of the proceeding for dissolution.

Acts 1968, No. 105, §1.

§ 12:250 Voluntary proceedings for dissolution; authorization; appointment of liquidators

A. A voluntary proceeding for dissolution may be commenced upon authorization by the members, or, if there are no members, by all of the incorporators. Such authorization by the members may be given only by two-thirds in interest of the voting members present, or by such larger vote (including the approval of members of other classes or series) as the articles may require, at an annual or special meeting the notice of which set forth consideration of the proposed dissolution as a purpose of the meeting.

B. If the corporation is not permitted to distribute its net assets to its members, the resolution authorizing dissolution must provide for the disposition of any net assets.

C. The members or incorporators authorizing the dissolution may authorize liquidation of the affairs of the corporation out of court, by appointment of one or more liquidators to conduct the liquidation, but the appointment shall not be operative until:

(1) Notice of authorization of the dissolution, stating that the corporation is to be liquidated out of court and giving the name and post office address of each liquidator, has been published at least once in a newspaper of general circulation in the parish in which the corporation's registered office is located, and a copy of such notice, with the affidavit of the publisher of the newspaper to the fact of such publication attached, has been filed with the secretary of state; and

(2) A certificate that the dissolution has been authorized in accordance with this Section, setting forth the manner of such authorization, has been signed by an officer of the corporation, acknowledged by the officer who signed it, and filed with the secretary of state, who, after all fees and charges have been paid as required by law, shall record the same in his office and endorse thereon the date of filing thereof with him. The secretary of state may prescribe and furnish forms for the certificate.

D. A copy of the certificate to which reference is made in Paragraph (C)(2) of this Section, certified by the secretary of state, shall be filed for record in the office of the recorder of mortgages of the parish in which the corporation has its registered office.

E. If the members or incorporators do not authorize conduct of the liquidation out of court, the corporation shall file a petition with the court, praying that the corporation be liquidated and dissolved under the supervision of the court, whereupon the court shall appoint a liquidator or liquidators, upon such conditions as to bond and compensation as it may deem proper. Thereafter the liquidation proceedings shall be conducted under the supervision and orders of the court.

F. When a corporation is being liquidated out of court, the liquidator appointed by the members may at any stage of the proceeding apply to the court to have the proceeding conducted under its supervision. On application by members holding not less than twenty-five per cent of the total voting power, the court may in its discretion order the proceeding conducted under its supervision. Upon such application by the liquidator, or the entry of such order, the court shall confirm the appointment of the liquidator, and thereafter the proceeding shall continue as if originally instituted subject to the supervision of the court; but in such event the court shall require such bond of the liquidator as may have been required by the members, or upon the application of any creditor or of members holding not less than twenty-five per cent of the total voting power, the court may require the liquidator to furnish bond in such sum as the court may direct.

G. Nothing contained in this Section shall interfere with a compromise arrangement or reorganization pursuant to R.S. 12:260.

H. Notwithstanding any other provision of this Chapter to the contrary, a voluntary proceeding for dissolution may be commenced upon authorization of a majority vote of members meeting and acting pursuant to R.S. 12:230(C), 231(3), and 237(H). The authorization for dissolution shall then proceed pursuant to the subsequent procedural steps provided for in this Section which are not in conflict herewith.

Acts 1968, No. 105, §1; Acts 1995, No. 465, §1; Acts 2001, No. 1187, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:250.1 Dissolution by affidavit

A.(1) In addition to all other methods of dissolution, if the corporation is not doing business and owes no debts, it may be dissolved by filing an affidavit with the secretary of state executed by the shareholders or by the incorporator if no shares have been issued, attesting to such facts and requesting that the corporation be dissolved. Thereafter, the shareholders or the incorporator if no shares have been issued shall be personally liable for any debts or claims, if any, against the corporation in proportion to their ownership in the shares of the corporation.

(2) The secretary of state may prescribe and furnish forms for the affidavit.

B. The secretary of state shall reinstate a corporation which has been dissolved pursuant to this Section only upon receipt of a court order directing him to so reinstate the corporation.

C. Notwithstanding any other provision of this Chapter to the contrary, a voluntary proceeding for dissolution by affidavit pursuant to Subsection A of this Section may be commenced upon authorization of a majority vote of members meeting and acting pursuant to R.S. 12:230(C), 231(3), and 237(H). The authorization for dissolution by affidavit shall then proceed pursuant to the subsequent procedural steps provided for in this Section which are not in conflict herewith.

Acts 1984, No. 391, §1, eff. July 6, 1984; Acts 1989, No. 142, §1; Acts 1995, No. 465, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:251 Involuntary proceedings for dissolution; grounds; institution; appointment of liquidator

A. The court may entertain a proceeding for involuntary dissolution under its supervision when it is made to appear that:

(1) The corporate assets are insufficient to pay all just demands for which the corporation is liable, or to afford reasonable security to those who may deal with it; or

(2) The objects of the corporation have wholly failed, or are entirely abandoned, or their accomplishment is impracticable; or

(3) It is beneficial to the interests of the members that the corporation should be liquidated and dissolved; or

(4) The directors are deadlocked in the management of the corporate affairs, and the members are unable to break the deadlock; or

(5) The members are deadlocked in voting power, and have failed, for a period which includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired or would have expired upon the election of their successors; or

(6) The corporation has been guilty of gross and persistent ultra vires acts; or

(7) Judgment has been entered annulling, vacating or forfeiting the corporation's articles and franchise in accordance with the provisions of R.S. 12:262; or

(8)(a) A receiver has been appointed to take charge of the corporation's property, and either (b) there is no reasonable prospect of return of control of the corporation to its members within a reasonable time or (c) the corporation is operating at a loss and there is no reasonable prospect of restoring it to profitable operation within a reasonable time.

B. An involuntary proceeding for dissolution may be instituted against a corporation by either a member; or a creditor whose claim has been reduced to judgment, on which execution has been issued and returned "nulla bona"; or a receiver appointed to take charge of the corporation's property.

C. If a corporation having only two shareholders, each of which owns half of the outstanding shares of each class, is engaged in the prosecution of a joint venture between the shareholders, either shareholder may, unless the articles expressly prohibit dissolution pursuant to this subsection, file a petition stating that it desires to discontinue such joint venture and to dispose of the assets used therein in accordance with a plan to be agreed upon by both shareholders. Such petition, to which shall be attached a copy of the proposed plan of discontinuance and distribution, shall be served on the corporation and on the other shareholder. Unless both shareholders file with the court (1) within three months of the date of last service of such petition, a certificate that they have agreed on such plan, or a modification thereof, and (2) within one year from the date of last service of such petition, a certificate that the distribution provided by such plan has been completed, the court may proceed with involuntary dissolution of such corporation.

D. The commencement of a proceeding for dissolution out of court shall not affect the right of any person to institute an involuntary proceeding for dissolution.

E. The court may, after trial, appoint a judicial liquidator, and may, ex parte pending trial, appoint a temporary liquidator whose authority shall cease upon appointment of a judicial liquidator, upon dismissal of the petition, or upon appointment of a receiver.

F. Unless the corporation's articles and franchise have been annulled, vacated or forfeited, the court may, on motion of any interested party at any stage of the proceeding, appoint a receiver to take charge of the corporation's property pursuant to R.S. 12:258, if the corporation is affected with the public interest, or if there is a reasonable prospect that a receiver could return control of the corporation to its shareholders as a going concern within a reasonable time.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §22, emerg. eff. June 18, 1970, at 5:05 P.M.

§ 12:252 Qualifications of liquidator; filling vacancies in the office of liquidator

A. A liquidator may, but need not, be a member, director or officer of the corporation. In no case shall a liquidator appointed by the court be (1) a relative, employer, employee, partner or other business associate of any judge, or of the spouse of any judge, of the court, or (2) a person who is, or within twelve months next preceding such appointment has been, with regard to the court, a district attorney, assistant district attorney, clerk of court, deputy clerk of court, sheriff, deputy sheriff, bailiff, crier, minute clerk, reporter, stenographer or other court attache or other employee.

B. Unless otherwise provided by the members or incorporators, a vacancy occurring by death, resignation or otherwise in the office of liquidator, when the proceeding is not subject to the supervision of the court, may be filled by the members or incorporators. At any meeting of members called for this purpose, those present or represented by proxy thereat shall constitute a quorum. In case of a proceeding under the supervision of the court, the vacancy shall be filled by the court.

Acts 1968, No. 105, §1.

§ 12:253 Dissolution proceedings out of court; procedure; powers of liquidator

A. Once dissolution has been authorized, all other actions of members in connection therewith, including, without limitation of the generality of this provision, determination whether the corporation is to be liquidated out of court, appointment of liquidators, and fixing the bond, compensation, duties and powers of, and prescribing the manner of filling vacancies among, the liquidators, may be taken by vote of a majority in interest of the voting members present.

B. If the liquidation is to be out of court, the members or incorporators authorizing the dissolution may, and if demanded by twenty-five per cent or more of the total voting power shall, require bond to be given by the liquidator for the faithful performance of his duties. The members or incorporators may also fix the compensation, if any, to be paid to the liquidator, prescribe the manner of filling any vacancy in the office of liquidator, and generally define and regulate the rights, duties and actions of the liquidator in the liquidation of the corporation.

C. Except as may otherwise be provided by the members or incorporators authorizing the dissolution, the liquidator shall be vested with full authority:

(1) To demand, collect, sue for and recover, in the name of the corporation, the debts and property of the corporation, and he may be sued in the same manner;

(2) To compromise, compound and settle claims of or against, and to grant acquittance for claims of, the corporation, on such terms and conditions as to the liquidator shall seem best;

(3) To sell and convey, either in whole or in part, at public or private sale, the property of the corporation, movable or immovable, on such terms and conditions as to the liquidator shall seem best, either for cash or for securities to be distributed to the shareholders;

(4) To make leases (including mineral leases) of the corporation's property for such terms and consideration and with such other provisions as to the liquidator shall seem best;

(5) To collect the whole, or so much as may be necessary and just, of any amounts remaining unpaid on subscriptions to shares;

(6) To continue temporarily the activities of the corporation, when it is necessary for the purpose of properly and economically liquidating the affairs of the corporation;

(7) To pay all debts and liabilities of the corporation according to their respective priorities;

(8) To open and close bank accounts;

(9) To vote shares of stock, and transfer securities;

(10) To retain counsel and auditors;

(11) To fix advance record dates, as provided in R.S. 12:234;

(12) To file federal, state and local tax and information returns;

(13) To make arrangements for separation of employees;

(14) To procure insurance of any kind;

(15) To examine on oath, to be administered by him, any person concerning any matter pertaining to or affecting the liquidation; and

(16) In general, to do any and all things which may be necessary, proper or convenient for the purpose of liquidating the corporation.

D. The liquidator shall have no power or right to have an inventory of the corporation's assets made by a notary public.

E. Any net assets remaining, after paying all debts and liabilities of the corporation, including all costs and expenses of the liquidation, shall be distributed by the liquidator either to the members according to their respective rights and preferences, if the corporation is permitted to distribute assets to its members, or otherwise, pursuant to the certificate or order of dissolution. The share of any member who cannot be found shall be delivered to the administrator of the Uniform Unclaimed Property Act of 1997.

F. In the performance of his duties, each liquidator shall be bound to exercise that care and prudence in the listing, custody, possession, control and disposition of the property and moneys of the corporation coming into his hands, and in the proper accounting therefor, and distribution thereof, as by law is imposed upon fiduciaries.

G. Nothing contained in this section shall be construed to interfere with a compromise, arrangement or reorganization pursuant to R.S. 12:260.

Acts 1968, No. 105, §1; Acts 2000, 1st Ex. Sess., No. 135, §3, eff. July 1, 2000.

§ 12:254 Dissolution proceedings under judicial supervision; procedure; powers of liquidator

A. Dissolution under supervision by the court is a summary proceeding.

B. Each judicial liquidator confirmed or appointed as provided in R.S. 12:250(E), 250(F) or 251(E), after giving such bond as the court may require for the faithful performance of his duties, shall proceed with the liquidation of the affairs of the corporation under the supervision of the court.

C. A judicial liquidator in dissolution proceedings shall have full authority to retain counsel and auditors, and to prosecute and defend actions; shall have authority to compromise, compound and settle claims by or against the corporation upon such terms as he deems best, subject to supervision by the court; and shall have such other powers as the court may in its discretion grant, which, without limiting the scope of the court's discretion, may include any or all powers enumerated in R.S. 12:253(C). A judicial liquidator shall have no power or right to have an inventory of the corporation's assets made by a notary public.

D. The court may enter such injunctive and other orders, ex parte or on such notice as the court may prescribe, as it may deem appropriate, except that the court shall not order or permit the making of an inventory of the corporation's assets by a notary public.

Acts 1968, No. 105, §1.

§ 12:255 Claims against corporation in liquidation; peremption

A. A corporation in liquidation may have the benefit of Subsections C, D, and E of this Section by following the procedure set forth in Subsection B of this Section.

B. After the proceeding for dissolution has taken effect, notice thereof shall be (1) given by registered or certified mail to all known creditors of, to all persons believed to have valid and subsisting claims (excluding prescribed and time-barred claims) against, and to all persons having unfulfilled contracts with, the corporation, and (2) published once a week for two successive weeks in a newspaper of general circulation in the parish in which the corporation's registered office is located. Such notice shall call on the addressees to present their claims in writing and in detail, at a specified place and by a specified date, not less than six months after the notice was mailed. The giving and publication of such notice shall not be deemed an acknowledgment of the validity of any claim against the corporation, waiver of any defense or setoff to any such claim, interruption of prescription on, or tolling of any statute of limitation applicable to, such claim, or revival of any claim which has been barred by any prescription, peremption, or statute of limitations.

C. If any addressee of such notice shall not present his claim or claims as prescribed in the notice, such of his claims as would be enforceable against the corporation except for the provisions of this Subsection shall, unless suit has been entered thereon in a court of competent jurisdiction before the final date prescribed for presentment thereof, be perpetually and peremptorily barred, except to the extent, if any, that the court may allow them against any remaining undistributed assets of the corporation on a finding that the claimant had some valid excuse for his failure so to present his claim.

D. All claims which would be enforceable by suit against the corporation except for the provisions of this Subsection, on which suit has not been filed in a court of competent jurisdiction before the expiration of three years after the proceeding for dissolution takes effect (or, if the notice prescribed in Subsection B of this Section was not given and publication thereof commenced within one month after the proceeding takes effect, before the expiration of three years after the giving or completion of publication of the notice, whichever is later), shall be barred perpetually and peremptorily.

E. The time limits provided in Subsections C and D of this Section shall not be subject to suspension on any ground, or to interruption except by timely presentation of the claim as to Subsection C of this Section or timely suit as to Subsection E of this Section.

F. The provisions of Subsections C and D of this Section shall not preclude the enforcement at any time, without regard to whether a claim has been presented or a suit filed timely as prescribed in said Subsections, of any valid and subsisting lien securing any claim against, or indebtedness of, the corporation.

Acts 1968, No. 105, §1.

§ 12:256 Certificate of dissolution; assets omitted from liquidation; post-dissolution proceedings

A. When a corporation has been liquidated completely:

(1) If the proceeding is subject to the supervision of the court, the court shall make an order declaring the corporation to be dissolved.

(2) If the proceeding is out of court, the liquidator shall sign and acknowledge a certificate stating that the corporation has been liquidated and is dissolved. The secretary of state may prescribe and furnish forms for the certificate.

(3) If the corporation is not permitted to distribute its net assets to its members, the certificate or order shall state the disposition of any net assets. The certificate or order shall be in accordance with the provisions of the resolution or written consent of dissolution, if the dissolution proceedings are voluntary. If the dissolution proceedings are involuntary, the certificate or order shall comply with the order of court.

B. The order or the certificate of the liquidator shall be filed with the secretary of state, who, after all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law and evidenced by certificates of the secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law, shall record the same in his office and shall issue a certificate of dissolution of the corporation effective as of the date, which shall be stated therein, of filing of the order or of the certificate of the liquidator. A copy of the certificate of dissolution, certified by the secretary of state, shall be filed for record in the office of the recorder of mortgages in the parish in which the corporation had its last registered office.

C. Upon issuance of the certificate of dissolution, the corporate existence shall cease as of the effective date stated in the certificate, except for the sole purpose of any action or suit commenced theretofore by, or commenced timely against, the corporation.

D. Any movable or immovable property inadvertently or otherwise omitted from the liquidation shall vest in the liquidator, for the benefit of the persons entitled thereto, and shall be distributed accordingly.

E. Following cessation of the corporate existence, the liquidator shall still have power to take all action required to preserve the interests of the corporation, its creditors and members; and the court shall have power, on application by any interested party, to appoint, ex parte or on such notice as the court may order, a new liquidator for any proper purpose in case of the death, disability or unwillingness to serve of the last previous liquidator.

Acts 1968, No. 105, §1; Acts 1992, No. 447, §4; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:257 Termination of proceedings for dissolution

A. The court may dismiss a proceeding for dissolution under its supervision, at any time before the corporate existence ceases, upon a showing that cause for dissolution no longer exists, or on motion by the party or parties who instituted the proceeding, and shall dismiss a voluntary proceeding upon termination thereof by the members as permitted by Subsection B of this Section.

B.(1) At any time before the corporate existence ceases, a voluntary proceeding for dissolution may be terminated by such affirmative vote of the members as was required to commence the proceeding, given at a special meeting called by the liquidator or the board of directors, the notice of which set forth consideration of termination of the proceeding as a purpose of the meeting. Certificates of such action shall be signed by an officer of the corporation and acknowledged by the officer who signed them.

(2) The secretary of state may prescribe and furnish forms for the certificate.

(3) One certificate shall be filed with the secretary of state, who, after all fees and charges have been paid as required by law, shall file the same in his office and endorse thereon the date of filing thereof with him. One certificate shall be filed for record in the office of the recorder of mortgages of the parish in which the corporation's registered office is located, and one certificate shall be filed with the court, if the dissolution is under the supervision of the court.

C. Termination of an involuntary proceeding shall be effective upon dismissal thereof by the court. Termination of a voluntary proceeding shall be effective when the certificate is filed with the secretary of state. Upon termination, the liquidator shall be divested of his powers, which shall revert to the directors, officers and members.

D. Notice of termination of the dissolution shall be published at least once in a newspaper of general circulation in the parish in which the corporation's principal office is located.

Acts 1968, No. 105, §1; Acts 2001, No. 1187, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:258 Appointment of receiver

A. The court may, after trial, appoint a receiver to take charge of the corporation's property when it is made to appear, in a proceeding instituted against the corporation:

(1) By any member or creditor, that the directors or officers of the corporation are jeopardizing the rights of its members or creditors by grossly mismanaging the corporation, or by committing gross and persistent ultra vires acts, or by wasting, misusing or misapplying the assets of the corporation; or

(2) By any member or creditor, that the corporation's property has been abandoned, or that, by failure of the members to elect directors, or the failure of the directors or officers to serve, there is no one authorized to take charge of or conduct its affairs; or

(3) By any creditor, that the corporation is insolvent, or such creditor's claim has been reduced to judgment, on which execution has been issued and returned "nulla bona"; or

(4) By any creditor, that property of the corporation has been seized under judicial process by fraud or collusion between the corporation, its directors, officers or members, and any creditor; or

(5) By any member, that a majority of the members are violating the rights of minority members and endangering their interests; or

(6) By a member or members, severally or jointly, who have been registered holders for a period of not less than six months of not less than twenty per cent of the total voting power, that either of the grounds for involuntary dissolution set forth in R.S. 12:251(A)(4) and (5) exists.

B. The qualifications of the receiver shall be the same as those of a liquidator set forth in R.S. 12:252.

C. The court may, ex parte, pending trial, (1) appoint a temporary receiver whose authority shall cease upon appointment of a receiver after trial or upon dismissal of the proceeding, (2) on the applicant furnishing security in the amount fixed by the court, enjoin the corporation and its directors, officers, agents and members from disposing of its property or changing the status of its affairs to the injury of the applicant, and (3) stay proceedings by other persons against the corporation's property.

D. If a receiver is appointed, after trial, on application by a member or members, the court shall make a reasonable allowance for the fees of the applicants' counsel, which, together with their other costs, shall be taxed as costs and paid out of the corporate assets. The corporation or the receiver shall have the right to recover the amount of such costs from any directors, officers or members whose conduct was the cause of the proceeding under Paragraph (A)(1) or (5) of this Subsection. If an application by a member or members is dismissed, and the court determines that the application was made in bad faith, the applicants shall be condemned to pay reasonable counsel fees and other expenses incurred by the corporation, or by the directors, officers or members on whose conduct the application was based under Paragraph (A)(1) or (5) of this Subsection. In case of an application under Paragraph (A)(1) or (5) of this Subsection, the court may require the applicant or applicants to post reasonable bond to cover their liability, if any, under this subsection.

Acts 1968, No. 105, §1.

§ 12:259 Receivership procedure; powers of receiver

A. The provisions of R.S. 12:254 shall, mutatis mutandis , govern procedure in proceedings under R.S. 12:258 and this Section.

B. The receiver shall have the powers of a judicial liquidator set forth in R.S. 12:254(C). The court may authorize the receiver to borrow or obtain money, for the purpose of carrying on the activities of the corporation, on interest-bearing certificates of indebtedness to be taxed as costs of court. The holders of such certificates shall have a privilege on all movable and immovable property and all income of the corporation to secure the payment thereof, and shall be paid by preference and priority over all other indebtedness except indebtedness secured by mortgages on immovable property and vendor's privileges antedating issuance of such certificates.

C. The receiver shall file with the court, quarterly, or oftener if required by the court, an accurate statement showing the condition of the corporation's affairs, and shall file, within ninety days after the close of the corporation's fiscal year, a balance sheet as of the last day of, and a combined statement of income and earned surplus for, such year. The annual financial statements shall be audited by an independent certified public accountant if required by the court.

Acts 1968, No. 105, §1.

§ 12:260 Compromise arrangements; reorganizations; approval and effect

A. Unless the articles provide otherwise, a corporation may have the benefit of the provisions of this section.

B. When, in a proceeding for voluntary or involuntary dissolution subject to the supervision of the court, or when the property and affairs of the corporation are being administered by a liquidator or receiver appointed by the court, a compromise or arrangement or plan of reorganization is proposed between the corporation and its creditors, or any class of them, or between the corporation and its members, or any class of them, the court, upon application of the corporation or of any creditor or members, or of the liquidator or receiver, may order in a summary way a meeting of the creditors, or class of creditors, or the members, or class of members, as the case may be, to be summoned and held in such manner as the court may direct.

C. If a majority in number, representing also three-fourths in interest of the creditors, or class of creditors, or three-fourths of the voting power of all members, or class of members, as the case may be, agree to any compromise or arrangement or plan of reorganization of the corporation as a consequence of the proposed compromise or arrangement or plan of reorganization, the compromise or arrangement or plan of reorganization, if sanctioned by the court, shall be binding on all the creditors, or class of creditors, or on all the members, or class of members, as the case may be, and also on the corporation, liquidator or receiver. All corporate action, and all matters and things necessary or proper to be done to carry into effect the compromise or arrangement or plan of reorganization, shall be had and done under the supervision, control and decree of the court.

Acts 1968, No. 105, §1.

§ 12:261 Reorganization under Act of Congress

A. Whenever a plan of reorganization of a corporation has been confirmed by a decree or order of a court in proceedings under any applicable Act of Congress relating to reorganization of corporations, the corporation shall have authority, without action of its members or directors, to put into effect and carry out the plan, and decrees and orders of the court relative thereto, and to take any proceeding or action for which provision is made in any law governing the corporation or for which provision is or might be made in its articles or by-laws and which is provided for in such plan or directed by any such decree or order.

B. Such authority may be exercised, and such proceedings and actions may be taken, as may be directed by any such decree or order, by the trustee or trustees of the corporation appointed in the reorganization proceeding, or if none is acting, by any person or persons designated or appointed for the purpose by any such decree or order, with like effect as if exercised and taken by unanimous action of the directors and members of the corporation.

C. Any certificate, required or permitted by law to be filed or recorded to accomplish any corporate purpose, shall be signed, and verified or acknowledged, under any such decree or order, by such trustee or trustees or the person or persons to whom reference is made in subsection B, and shall state (1) that provision for such certificate is contained in the plan of reorganization or in a decree or order of court relative thereto, (2) that the plan has been confirmed as provided in an applicable Act of Congress specified in the certificate, (3) the title and venue of the proceeding, and (4) the date when the decree or order confirming the plan was made.

D. Notwithstanding the provisions of R.S. 12:248, shareholders shall have no right to receive payment for their shares by virtue of any action taken pursuant to this section, and shall have only such rights, if any, as are provided in the plan of organization.

E. Notwithstanding the provisions of R.S. 12:213 and 215, the corporation may, after confirmation of such a plan, issue its shares for the consideration specified in the plan of reorganization, and may issue obligations, rights or options for purchase or conversion of or into shares upon such terms and conditions as may be set forth in such plan.

F. If, in any proceeding under any applicable Act of Congress relating to reorganization of corporations, a decree or order provides for the formation of a new corporation to do business in this state under a name the same as or similar to that of the corporation being reorganized, the articles of the new corporation shall set forth that they are executed pursuant to such decree or order and shall be endorsed with the consent of the court having jurisdiction of the proceeding. After such articles have been filed, the corporation being reorganized shall not continue the use of its name except in connection with the reorganization proceeding and as may be necessary to adjust and wind up its affairs, and thirty days after such filing, the reorganized corporation shall be automatically placed in liquidation. To the extent that the liquidation of such corporation is not accomplished as a part of the proceeding or prescribed by the decree or order of such court, it shall proceed in accordance with the provisions of this Chapter.

Acts 1968, No. 105, §1.

§ 12:262 Action by the state to annul, vacate, or forfeit corporate franchise; suspension

A. Except as otherwise provided in this Title or as otherwise provided by law, the secretary of state may bring an action against any corporation to procure a judgment annulling, vacating, or forfeiting its articles and franchise upon the ground that:

(1) The corporate franchise was procured through fraud practiced upon the state; or

(2) The corporation has continued to abuse authority conferred upon it; or

(3) The corporation should not have been formed under this Chapter, or has been formed thereunder without a substantial compliance with the conditions precedent to incorporation prescribed by this Chapter; or

(4) The corporation has failed to designate and maintain a registered office, or to designate and maintain a registered agent, under the conditions, and in the manner, prescribed in this Chapter.

B. If the cause of action is grounded on an act which the corporation has done or omitted to do which can be corrected by amendment of the articles or by other corporate action, then such action shall not be instituted or maintained unless, not less than sixty days prior to the institution of the action, the corporation has been given notice in writing of the act done or omitted to be done, which will be urged as the ground for the action, and demand for the correction thereof, and the corporation has failed, neglected or refused to correct the same within such sixty-day period.

C. In any such action, which shall be a summary proceeding, the court may grant the relief asked for, or such other or partial relief as to it seems just and expedient. If judgment is rendered annulling, vacating or forfeiting the articles and franchise, such judgment may be set aside at any time within the time allowed for taking an appeal therefrom, upon a showing that the grounds for the judgment have been cured.

D.(1) In addition to the other remedies provided by this section, the secretary of state is authorized to suspend the corporate franchise and the articles of incorporation of any corporation which has failed to comply, according to the records of his office, with Paragraph (A)(4) of this Section and to revoke such suspension where such failure to comply with said paragraph has been remedied by compliance.

(2) Before the corporate franchise or articles of incorporation are suspended under the provisions of this Subsection, any corporation having failed to comply with such paragraph, according to the records of the office of the secretary of state, shall be notified in writing, certified mail, return receipt requested, at its last known address, of such noncompliance, and such notice shall afford any such corporation fifteen days from the receipt of such written notice, to comply with said paragraph or to show cause why said written notice should not have been given.

(3) The secretary of state is authorized to hold hearings and take evidence where the corporation undertakes to show cause why its franchise and articles of incorporation should not be suspended and to make an order suspending the franchise and articles of incorporation in the light of such evidence where such order is justified according to same. Such order shall be recorded in the archives of his office.

(4) Where notice of noncompliance has been furnished as provided in this Subsection and no showing or reply has been made within the fifteen day period herein allowed, it shall be presumed that the corporation has failed to comply with Paragraph (A)(4) of this Section and the secretary of state may suspend the franchise and articles of incorporation of any such corporation. In the event any such corporation thereafter complies with the requirements of said paragraph, or shows that it was already in compliance with same, the secretary of state is authorized to revoke any suspension issued by him in respect to said corporation and to restore same to good standing and record same in the archives of his office.

(5) Where any order of suspension is made under this Subsection, the secretary of state shall forward a certified copy thereof to the corporation's last known address, certified mail, return receipt requested. Similar notice shall be furnished in the event of revocation of such suspension.

Acts 1968, No. 105, §1. Amended by Acts 1972, No. 601, §1.

§ 12:262.1 Failure to file annual reports; revocation and reinstatement of articles; limitation on authority to do business with the state

A. Where a corporation has failed to designate and maintain a registered office and to designate and maintain a registered agent pursuant to the provisions of R.S. 12:236, for a period of one hundred eighty consecutive days, or where a corporation has failed to file an annual report for three consecutive years, according to the records of the secretary of state, the secretary of state shall revoke the articles of incorporation and franchise of such corporation.

B. Nothing contained in this Section shall be construed to prevent the state, through the office of the attorney general, from asserting a cause of action to revoke the articles of incorporation and franchise of a corporation on any of the following grounds:

(1) The corporate franchise was procured through fraud practiced upon the state.

(2) The corporation has continued to abuse authority conferred upon it.

(3) The corporation should not have been formed under this Chapter, or has been formed thereunder without a substantial compliance with the conditions precedent to incorporation prescribed by this Chapter.

C. The corporation shall not be revoked if the corporation places itself in good standing.

D. At least thirty days prior to revoking the articles of incorporation and the corporate franchise, as authorized by Subsection A of this Section, the secretary of state shall give notice to the affected corporation of his intention to revoke the articles of incorporation and the corporate franchise by directing notice of such intention to the last designated registered agent of such corporation, as shown on the records of his office. Such notice shall be in writing and sent to the registered agent by United States mail at the agent's last known address. If there is no registered agent of record, the notice shall be directed to the corporation at its registered office.

E.(1) The certificate of incorporation and articles of incorporation shall be reinstated upon the filing, with the secretary of state and within three years from the effective date of the revocation, of an application of reinstatement, signed and acknowledged by an officer of the corporation, accompanied by a reinstatement fee and a current annual report. The secretary of state may prescribe and furnish forms for the reinstatement and annual report. However, if a suit for liquidation or receivership has been filed at the time the reinstatement is applied for, then the unanimous written consent to the reinstatement by the shareholders, certified by the corporation's secretary to contain the signatures of all of the shareholders, shall also be filed with the application for reinstatement.

(2) The secretary of state shall furnish the certificate of reinstatement in duplicate, one copy of which shall be filed by the corporation with the clerk of court or, in Orleans Parish, with the recorder of mortgages and register of conveyances. Upon filing the current annual report and payment of the reinstatement fee and upon filing the unanimous written consent of the shareholders to the reinstatement, certified by the corporation's secretary if a suit for liquidation or receivership has been filed, the certificate of reinstatement of such charter and articles of incorporation shall be retroactive and the charter and articles of incorporation shall continue in existence as though the revocation had never occurred.

(3) After revocation of the charter or articles of incorporation, the corporate name shall not be available to any other corporation for a three-year period. After three years have expired, if the corporate name is still available, the corporation can be reinstated by following the same procedures and by satisfying the same provisions and requirements as set forth herein. If the name is not available, an amendment changing the original name must be filed in the same manner as provided for in R.S. 12:238.

F.(1) As used in this Subsection, the phrase "not in good standing" means any corporation which is more than twelve months delinquent in filing an annual report.

(2) Each corporation, domestic and foreign, which is not in good standing is prohibited from engaging in commercial business operations with the state or its boards, agencies, departments, or commissions. Any contract between a corporation, which is not in good standing, and the state or its boards, agencies, departments, or commissions is subject to be declared null and void, by said board, agency, department, or commission or by the division of administration.

G. Any revocation of a corporation's articles of incorporation and franchise under the provisions of this Section shall not affect any cause of action against such corporation or the right to proceed against any property owned by the corporation, nor shall such revocation prohibit a corporation from selling property belonging to the corporation in the same manner as if the revocation had not occurred.

H. A church which is a member of and in good standing with a statewide church association shall not be subject to the revocation otherwise applicable to corporations pursuant to this Section.

Acts 1995, No. 309, §1; Acts 1997, No. 298, §1; Acts 2019, No. 19, §2, eff. May 28, 2019; Acts 2020, No. 50, §1, eff. June 5, 2020.

§ 12:263 Fees

A. A fee as provided in R.S. 49:222 shall be paid in advance to the secretary of state, for the use and benefit of the state, by every corporation:

(1) For filing and recording articles of incorporation.

(2) For filing and recording amended articles of incorporation.

(3) For filing and recording dissolution proceedings.

(4) For filing and recording reinstatement proceedings.

(5) For filing and recording merger proceedings.

B.(1) This fee shall include all certificates and certified copies which are required for filing with the clerks of court. Additional copies, certified or otherwise, of documents or a certificate shall be furnished upon request for a fee as provided in R.S. 49:222, which shall be paid in advance.

(2) The secretary of state is authorized to charge a fee as provided in R.S. 49:222 for making, issuing, and sealing any other certificates required or permitted by this Chapter, for resignation of a registered agent or officer, appointment of a registered agent, change of a registered office, and appointment of officers and directors.

Acts 1968, No. 105, §1. Amended by Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1983, No. 235, §1, eff. July 1, 1983; Acts 1983, 2nd Ex. Sess., No. 4, §1, eff. Jan. 1, 1984; Acts 1984, No. 741, §1, eff. July 13, 1984; Acts 2008, No. 913, §2.

§ 12:264 Penalties

A. If any corporation, or officer, director or agent of a corporation, should violate any of the provisions of subsection D of R.S. 12:205 or subsection A or D of R.S. 12:223, it or he shall be fined not more than one hundred dollars for each violation, recoverable in an action brought by the District Attorney of the parish in which the corporation's registered office is located.

B. Any corporation, or any officer or agent thereof, which or who shall in bad faith refuse to permit the exercise of inspection rights pursuant to R.S. 12:223(C), shall be liable to the member or members seeking to exercise such rights to the extent of the costs and expenses of any proceeding necessary to enforce such inspection rights, and for any other damages actually sustained by such member or members.

C. Any corporation, or officer, director or member thereof, which or who attempts to exercise any corporate power, privilege or franchise after annulment, vacation or forfeiture of the corporation's articles and franchise pursuant to the provisions of R.S. 12:262, shall pay for each such attempt a penalty of not less than one hundred dollars nor more than one thousand dollars, recoverable in a civil action by the Secretary of State.

Acts 1968, No. 105, §1.

§ 12:265 Application to existing corporations

Except as otherwise expressly provided in this Chapter, all of the provisions of this Chapter shall be applicable to every existing corporation on January 1, 1969 formed under the laws of this state for a purpose or purposes for which a corporation might be formed under this Chapter; provided that this Chapter shall not affect or impair any right of any existing corporation which is guaranteed or protected by the Constitution of this state or of the United States, except that the corporation shall not hereafter operate in any manner for the purpose of making a pecuniary profit or gain for its members; and provided further that this Chapter shall not be construed to impair or affect any act done, offense committed or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred, prior to January 1, 1969, but the same may be enjoyed, asserted and enforced, prosecuted or inflicted as fully, and to the same extent, as if this Chapter had not been enacted.

Acts 1968, No. 105, §1.

§ 12:266 Scope of Chapter

This Chapter does not apply to:

(1) Any corporation organized for any purpose involving pecuniary profit or gain to its shareholders or members, or which pays dividends or similar pecuniary remuneration;

(2) Co-operative marketing or credit associations or corporations organized under the provisions of Title 3;

(3) Any corporation transacting any type of insurance business; or

(4) Foreign corporations, whether business or nonprofit, except where reference is made to such corporations.

Acts 1968, No. 105, §1.

§ 12:267 Effect of invalidity of part of Chapter; severability

If any provision of this Chapter, or application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this Chapter which can be given effect without the invalid provision or application, and to this end the provisions of this Chapter are declared severable.

Acts 1968, No. 105, §1.

§ 12:268 Reservation of power

The Legislature of Louisiana shall at all times have power to prescribe such regulations, provisions and limitations as it may deem advisable, which regulations, provisions and limitations shall be binding upon any and all corporations subject to the provisions of this Chapter, and the Legislature of Louisiana shall have power to amend, repeal or modify this Chapter at pleasure.

Acts 1968, No. 105, §1.

§ 12:269 Short title

This Chapter shall be known, and reference may be made thereto, as the "Nonprofit Corporation Law".

Acts 1968, No. 105, §1.

CHAPTER 3 FOREIGN CORPORATION LAW

§ 12:301 Condition precedent to transacting business

No foreign corporation or association, except one which has before January 1, 1969, been granted a certificate of authority to do business in this state which is still valid, shall have the right to transact business in this state until it shall have procured a certificate of authority to do so from the secretary of state. No foreign corporation shall be entitled to procure such a certificate of authority to transact in this state any business which a corporation organized under Chapter 1 or 2 of this Title is not permitted to transact. A foreign corporation shall not be denied a certificate of authority by reason of the fact that the laws of the state or country under which such corporation is organized, governing its organization and internal affairs, differ from the laws of this state.

Acts 1968, No. 105, §1; Acts 1999, No. 342, §5.

§ 12:302 Acts not considered transacting business

Without excluding other activities which may not constitute transacting business in this state, a foreign corporation or a business association shall not be considered to be transacting business in this state, for the purpose of being required to procure a certificate of authority pursuant to R.S. 12:301, by reason of carrying on in this state any one or more of the following activities:

A. Maintaining or defending any action or suit, or any administrative or arbitration proceeding, or affecting the settlement thereof or the settlement of claims or disputes.

B. Holding meetings of its directors or shareholders, or carrying on other activities concerning its internal affairs.

C. Maintaining bank accounts.

D. Maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities.

E. Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, if such orders require acceptance outside this state before becoming binding contracts, including all preliminary incidents thereto.

F. Creating evidences of debt, mortgages or liens.

G. Securing or collecting debts or enforcing any rights in property securing the same.

H. Transacting any business in interstate or foreign commerce.

I. Conducting an isolated transaction completed within a period of thirty days, and not in the course of repeated transactions of like nature.

J. Acquiring and disposing of property or a property interest, not as a part of any regular business activity.

K. If the foreign corporation or business association is a mutual savings bank or mutual savings fund society, or a national banking association organized under the laws of the United States of America, or a real estate investment trust as defined by R.S. 12:491 et seq., or a bank or trust company organized under the laws of any state of the United States of America or the District of Columbia, or an insurance company, or a corporation or business association under contract with a real estate investment trust as its advisor, or a corporation or business association chartered and engaged in business as a group insurance and annuity association, or a nonprofit or nontrading corporation or business association, or a corporation or business association all of the outstanding stock of which (except directors' qualifying shares) is owned by one or more such banks, societies, associations, companies or corporations, or a corporation, or business association, bank or trust company acting as a fiduciary or agent of a fiduciary or a nonprofit or nontrading corporation:

(1) Acquiring or making loans, or participations or interests therein, secured, directly or by assignment or pledge of obligations secured by such mortgages, by mortgages on immovable property, or making such loans through, or in participation with, national or state banks having their banking offices in this state or other Louisiana concerns, or modifying, renewing, extending or transferring such loans or security, or accepting substitute or additional obligors thereon.

(2) Maintaining depository or pledge-holder agreements or arrangements with national or state banks having their banking offices in this state, in connection with the taking of assignments or pledges of such loans or security.

(3) Making, collecting and servicing such loans or security through Louisiana concerns engaged in the business of servicing and loans.

(4) Acquiring immovable property securing such loans under foreclosure sale or in lieu of foreclosure, and managing, operating, leasing, selling or otherwise disposing of such property.

(5) Inspecting or appraising immovable property as direct or indirect security for such loans, and negotiating for such loans.

(6) Owning, modifying, renewing, extending, transferring or foreclosing on such loans, mortgages or mortgage notes, or accepting substitute or additional obligors thereon.

L. No foreign corporation or business association of the type described in Subsection K of this section and confining its business operations in Louisiana to the activities described in said Subsection K shall be required to pay any tax or fee required to be paid by foreign corporations or business associations under any law of this state; such exemption, however, shall not include ad valorem taxes assessed against any real property which such foreign corporations or business associations may own in this state. Nothing in this section shall be construed to permit any foreign corporation or business association to do business in violation of the small loan law of this state, nor of the laws of Louisiana governing the organization and operation of homesteads, building and loan associations or societies, or savings and loan associations or societies.

Acts 1968, No. 105, §1. Amended by Acts 1972, No. 751, §1.

§ 12:303 Name of authorized foreign corporation

A. No certificate of authority shall hereafter be issued to a foreign corporation unless its corporate name:

(1) Contains the word "Corporation", "Incorporated" or "Limited," or an abbreviation of any of these words, or the word "Company" or the abbreviation "Co." if not immediately preceded by "and" or "&", or unless the corporation shall, for use in this state, add at the end of its name one of such words or abbreviations;

(2) Does not contain any word or phrase which indicates or implies that it is organized for any purpose other than one or more of the purposes contained in its articles or certificate of incorporation, or that it is authorized or empowered to conduct the business of banking, insurance underwriting or operating a homestead or building and loan association, or to engage in the practice of law; and

(3) Is not, subject to the exceptions provided in R.S. 12:1-401(C), the same as or nondistinguishable upon the records of the secretary of state from the name of any business or nonprofit corporation organized under the laws of this state or of any foreign corporation authorized to transact business in this state, a trade name registered with the secretary of state, or a name the exclusive right to which is, at the time, reserved in the manner provided in Chapter 1 of this Title. In order to obviate this objection, a corporation may add some distinguishing term to its name for use in this state. No corporation shall include the phrase "doing business as" or the abbreviation "d/b/a" as part of the distinguishing term.

B. Whenever a foreign corporation which is authorized to transact business in this state, shall on or after January 1, 1969, change its name to one under which a certificate of authority would not be granted to it on application therefor, the certificate of authority of such corporation shall be deemed suspended, and it shall not thereafter transact any business in this state until it has changed its name to a name which is available to it under the laws of this state or until it has added some distinguishing term upon the records of the secretary of state to its name for use in this state.

C. Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practice in the use of trade names, nor derogate from the principles of law or the statutes of this state or of the United States with respect to the right to acquire and protect trade names.

Acts 1968, No. 105, §1; Acts 1983, No. 88, §1; Acts 1989, No. 654, §1, eff. July 7, 1989; Acts 2001, No. 631, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:304 Application for certificate of authority

A. Application by a foreign corporation to procure a certificate of authority shall be made to the secretary of state and shall set forth:

(1) The name of the corporation, the name of the state or country under the laws of which it is incorporated, and the federal taxpayer identification number of the corporation. The failure to include the federal taxpayer identification number of the corporation shall not invalidate nor cause the secretary of state to reject the application.

(2) If the name of the corporation does not conform to the requirements of R.S. 12:303, the name of the corporation with the word, abbreviation or distinguishing term upon the records of the secretary of state which it elects to add for use in this state.

(3) The address of the principal office of the corporation in the state or country under the laws of which it is incorporated, and the address or intended address of its principal business office outside of this state.

(4) The address of its principal business establishment in this state, the address of its registered office in this state, and the name of its registered agent in this state. If the corporation does not have a principal business establishment in this state, the address of its registered agent in this state shall be deemed to be the address of its principal business establishment in this state.

(5) The nature of the business which the corporation proposes to transact in this state, if it does not propose, or is not permitted, to transact in this state business of every nature which it is empowered to transact by its articles or certificate of incorporation. Such limited authorization shall not limit or reduce the corporation's tax liability, and the corporation shall not be entitled to any exemption from taxation granted to banks, homestead associations, insurance companies, nonprofit corporations, or other corporations granted specific exemptions under the laws of this state.

(6) The names and addresses of the directors and officers of the corporation.

(7) Repealed by Acts 1997, No. 299, §2.

(8) Repealed by Acts 1985, No. 266, §1.

(9) Such additional information as may be prescribed by the secretary of state as necessary or appropriate to a determination whether the corporation is entitled to a certificate of authority to transact business in this state, and to determine and assess the fees and taxes prescribed in this Chapter.

(10) That the secretary of state be and he is hereby authorized and directed to require each foreign corporation authorized to transact business in Louisiana on or before July 31, 1974, which has not supplied the designations specified in Paragraph (4) of this Subsection, to amend its application to do business in this state by supplying same on or before December 31, 1974. If the designations required by said paragraph have not been otherwise supplied on or before said date, same shall be included in the next annual report required of such foreign corporation, and in such event such designations shall be considered amendments to the corporation's application to do business in this state.

(11)(a) If the corporation contracts with the state, a statement acknowledging such contract shall be filed with the secretary of state. The secretary of state may prescribe and furnish forms for the statement. The statement shall include the names and addresses of all persons or corporate entities who hold an ownership interest of five percent or more in the corporation or who hold by proxy the voting power of five percent or more in the corporation and, if anyone is holding stock in his own name that actually belongs to another, the name of the person for whom held, including stock held pursuant to a counterletter. The statement acknowledging a state contract and ownership and voting interest shall be duly acknowledged, or executed by authentic act.

(b) This Paragraph does not apply to:

(i) Any agreement entered between the state and a corporation for electric or gas service.

(ii) Publicly traded corporations.

B. The application shall be made on a form prescribed and furnished by the secretary of state and shall be executed for the corporation by any officer before a notary public.

C.(1) Two copies, or three copies if the corporation is a banking corporation, of the application for a certificate of authority shall be delivered to the secretary of state together with a certificate of corporate existence or a certificate of good standing, not a certified copy of the corporation's articles or certificate of incorporation, from an authorized official of the jurisdiction of its incorporation bearing an original signature and dated within ninety days of its submission for a certificate of authority.

(2) If the corporation seeking the issuance of a certificate of authority to transact business in this state includes in its name the word "engineer", "engineering", "surveyor", or "surveying", the secretary of state prior to issuance of the certificate of authority shall require evidence satisfactory to him that written notice of such application for a certificate of authority has been delivered to the Louisiana Professional Engineering and Land Surveying Board in writing not less than ten days prior to the date of issuance of the certificate of authority. If the applicant corporation files with its application to the secretary of state a written waiver signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board waiving the requirement of ten days' written notice to said board as set forth in the preceding sentence, the secretary of state shall be authorized to proceed immediately with the processing of such application.

(3) Repealed by Acts 1997, No. 299, §2.

Acts 1968, No. 105, §1; Acts 1991, No. 335, §1; Acts 1991, No. 944, §2; Acts 1992, No. 765, §1, eff. Jan. 1, 1993; Acts 1993, No. 983, §1, eff. June 25, 1993; Acts 1997, No. 299, §§1, 2; Acts 1999, No. 342, §5; Acts 2003, No. 279, §2; Acts 2018, No. 560, §2, eff. May 28, 2018; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:305 Issuance of certificate of authority

A. If the secretary of state finds that the application conforms to law, he shall, when all fees and taxes have been paid as in this Chapter prescribed:

(1) Endorse on each of such documents the word "Filed", and the date of the filing thereof.

(2) File in his office one copy of the application, together with a certificate of corporate existence or a certificate of good standing from the incorporating state.

(3) Issue a certificate of authority to transact business in this state, to which he shall affix the other copy of application, and which shall be returned to the corporation or its representative. If the corporation's application sets forth the nature of the business which it proposes to transact in this state, the certificate of authority shall recite that the corporation's authority is limited to transaction of business of such nature.

B. If the corporation is a banking corporation which has applied for authority to transact business in this state of some other nature, the secretary of state shall, upon receipt of its application, mail or deliver a copy thereof to the office of financial institutions. If, within five days after such mailing or delivery, that office should deliver to the secretary of state a written objection to the issuance of a certificate of authority pursuant to such application, the secretary of state shall not issue such certificate.

Acts 1968, No. 105, §1; Acts 1985, No. 267, §1, eff. July 6, 1985; Acts 1989, No. 101, §1; Acts 1999, No. 342, §5.

§ 12:306 Effect of certificate of authority

A foreign corporation which before January 1, 1969 has received a certificate of authority which is still valid, or which shall on or after January 1, 1969 receive a certificate of authority, shall, until a certificate of revocation or of withdrawal shall have been issued as provided in this Chapter:

(1) Be authorized to transact business in this state, subject to such limitations as may be recited in the certificate of authority;

(2) Enjoy the same, but no greater, rights and privileges as a business or nonprofit corporation organized under the laws of this state to transact the business which such foreign corporation is authorized to transact in this state; and

(3) Except as in this Chapter otherwise provided, be subject to the same duties, restrictions, penalties and liabilities imposed on or after January 1, 1969 upon a business or nonprofit corporation of like character organized under the laws of this state.

Acts 1968, No. 105, §1.

§ 12:307 Amended certificate of authority

A. A foreign corporation authorized to transact business in this state shall, by making application therefor to the secretary of state, procure an amended certificate of authority if hereafter it changes its corporate name or proposes to transact business in this state other than that set forth in its prior application. The provisions in respect to the form and contents of such application, the manner of its execution and filing, and the issuance of an amended certificate of authority and the effect thereof, shall be the same as in the case of an original application for a certificate of authority.

B. If a foreign corporation changes its corporate name, it shall include with its application for an amended certificate of authority a certificate evidencing such change issued by the authorized official of the jurisdiction of incorporation of the corporation, or a certified copy of the amendment in the case that the authorized official of the jurisdiction of incorporation does not provide a certificate of such.

Acts 1968, No. 105, §1; Acts 1991, No. 335, §1; Acts 2023, No. 26, §2.

§ 12:307.1 Certificate of correction by a foreign corporation

Whenever the original application for a certificate of authority or an application for an amended certificate of authority filed with the secretary of state under any provision of this Chapter is an inaccurate record of the corporate action therein referred to, or is defectively or erroneously executed or acknowledged, such instrument may be corrected by filing with the secretary of state a certificate of correction. The secretary of state may prescribe and furnish forms for filing the certificate of correction. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth that portion of the instrument in corrected form. A certificate of correction shall be executed in the name of the corporation by any officer authorized by resolution or consent of the board of directors and shall be acknowledged by the person who signed it or may be executed by authentic act.

Acts 1985, No. 268, §1; Acts 1997, No. 299, §1; Acts 2019, No. 19, §2, eff. May 28, 2019; Acts 2023, No. 26, §2.

§ 12:308 Registered agent; registered office; principal business establishment; keeping of records by foreign corporation

A. Each foreign corporation authorized to transact business in this state shall have and continuously maintain in this state:

(1) At least one registered agent, which agent may be any of the following:

(a) An individual resident in this state whose business office is identical with the corporation's registered office.

(b) An individual attorney or a partnership which is authorized to practice law in this state.

(c) A domestic corporation, domestic limited liability company, foreign corporation, or foreign limited liability company authorized to transact business in this state, which has a business office identical with such registered office, which is authorized by its articles or certificate of incorporation or organization to act as the agent of a corporation for service of process, and which has on file with the secretary of state both a certificate or amended certificate setting forth the names of at least two individuals in such office, each of whom is authorized to receive any process served on it as such agent and a notarized affidavit of acknowledgement and acceptance signed by each registered agent. The failure to attach a notarized affidavit of acknowledgement and acceptance as required by this Section shall not be a defense to proper service of process on the corporation.

(2) A registered office, which may, but need not, be the same as its business office in this state.

B.(1) A foreign corporation authorized to transact business in this state may change its registered office, its registered agent, or its principal business establishment in this state, upon filing in the office of the secretary of state a statement setting forth:

(a) The name of the corporation.

(b) If the address of its registered office is to be changed, the address to which the registered office is to be changed.

(c) If its registered agent is to be changed, the name of its successor registered agent. Attached thereto shall be a notarized affidavit of acknowledgement and acceptance signed by the successor registered agent.

(d) If its registered agent is an individual or a corporation, that the address of its registered office and the address of the business office of its registered agent, as changed, will be identical.

(e) If the address of the principal business establishment is to be changed, the address to which such principal business establishment is to be changed.

(2) The statement shall be executed by the corporation by its president or a vice president, and acknowledged by him and delivered to the secretary of state. If only the address of the registered office is changed, the statement need only be executed by the registered agent. If the secretary of state finds that the statement conforms to the provisions of this Chapter, he shall file the statement in his office, and upon such filing, the change of address of the registered office, or the appointment of a new registered agent, as the case may be, shall become effective.

C. A similar statement executed by the registered agent shall be filed in like manner within thirty days after any change in the name of a corporate or partnership registered agent.

D. Any registered agent of a foreign corporation may resign as such agent upon filing a written notice of his resignation, executed in duplicate, with the secretary of state, who shall forthwith mail a copy thereof to the corporation at its principal business office address. The appointment of such agent shall terminate upon the expiration of thirty days after receipt of such notice by the secretary of state. If the registered agent resigns, or if for any other reason the corporation ceases to maintain a registered agent, a successor agent shall be appointed, under the procedure set forth in Subsection B of this Section, within thirty days after termination of the tenure of the former agent.

E. If the corporation's registered office should be vacated, a new office shall be designated, under the procedure set forth in Subsection B of this Section, within thirty days. If such designation is not made, the office of the secretary of state may thereafter be treated as the registered office of the corporation by any person other than the corporation itself.

F. Every corporation shall keep at its principal place of business in or outside the state, records in written form or in any other form capable of being converted into written form within a reasonable time, showing correct accounts of its properties and business transactions in this state. These records shall include accounts of its assets and liabilities, receipts and disbursements, and gains and losses and, if the corporation is engaged in this state in a business which will subject it to liability for state severance taxes, a complete account of all severances produced from its operations in this state. Such records may be in written form or in any other form capable of being converted into written form within a reasonable time.

G. The secretary of state may prescribe and furnish forms for filing the statement of change and agent resignation.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §§24, 25, emerg. eff. June 18, 1970 at 5:05 P.M.; Acts 1974, No. 477, §3; Acts 1976, No. 458, §1; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1987, No. 769, §1; Acts 2003, No. 366, §1; Acts 2017, No. 367, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:309 Annual report

A. Each foreign corporation authorized to transact business in this State shall file, within the time prescribed in Subsection B of this Section, an annual report setting forth:

(1) Its name.

(2) The address of its registered office in this state, if changed since its last previous annual report.

(3) The address of its principal office in the state or country under the laws of which it is incorporated, and of its principal business office outside of this state, if changed since its last previous annual report.

(4) The name of its registered agent in this state, if changed since its last previous annual report.

(5) The names and addresses of its directors and officers.

(6) The municipal address of its principal business establishment in this state, if changed since its last previous annual report.

(7) Repealed by Acts 1985, No. 266, §1.

B. Each year the annual report shall be delivered to the secretary of state on or before the anniversary date of qualifying to transact business, except that the first annual report shall be filed on or before the anniversary date of qualifying to transact business in Louisiana in the year next succeeding the calendar year in which the corporation's certificate of authority was issued by the secretary of state.

C. The secretary of state may prescribe and furnish forms for filing the annual report.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §26, emerg. eff. June 18, 1970, at 5:05 P.M.; Acts 1981, No. 494, §2, at 5:05 P.M.; Acts 1981, No. 494 §2; Acts 1985, No. 266, §1; Acts 1988, No. 98, §1; Acts 1992, No. 103, §1, eff. June 5, 1992; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:310 Change of corporate name

If a foreign corporation authorized to transact business in this state changes its corporate name, it shall procure an amended certificate of authority by making application therefor to the secretary of state and submitting a duplicate or original certificate of name change from an authorized official of the jurisdiction of its incorporation or a certified copy of the document in the case that the authorized official of the jurisdiction of incorporation does not provide such certificate.

Acts 1968, No. 105, §1; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1984, No. 405, §1, eff. July 6, 1984; Acts 1988, No. 98, §1; Acts 2023, No. 26, §2.

§ 12:311 Merger, consolidation, or dissolution

A. Whenever a foreign corporation authorized to transact business in this state shall hereafter be merged into another foreign corporation, or shall hereafter be a party to a statutory consolidation, or shall be dissolved, it shall, within thirty days, file with the secretary of state a certificate from the secretary of state or an authorized official of the jurisdiction of its incorporation or a certified copy of the document in the case that the authorized official of the jurisdiction of incorporation does not provide such certificate evidencing the merger, consolidation, or dissolution; but the filing thereof shall not of itself:

(1) Effect withdrawal of the corporation from this state, nor

(2) Enlarge or alter the nature of the business which the corporation is authorized to transact in this state, if the nature of such business is limited by its certificate of authority, nor

(3) Authorize the corporation to transact business in this state prohibited by law or under any other name than the name set forth in its certificate of authority.

B. The secretary of state, after all fees, charges, and taxes have been paid as required by law, shall record the certificate in his office, endorse thereon the date and, if requested, the hour of filing thereof with him, and, if a merger or consolidation is involved, issue a certificate of merger or consolidation containing the information prescribed in R.S. 12:112(F). A duplicate original of the certificate of merger or consolidation, or of the certificate of dissolution, issued by the secretary of state, shall, within thirty days after issuance of the certificate of merger or consolidation by, or the filing of the certificate of dissolution with, the secretary of state, be filed for record in the conveyance records of each parish in this state in which the corporation, or any of the other corporate parties to the merger or consolidation, has immovable property.

Acts 1968, No. 105, §1; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1986, No. 648, §1; Acts 1988, No. 101, §1; Acts 1991, No. 333, §1; Acts 1999, No. 342, §5; Acts 2023, No. 26, §2.

§ 12:312 Withdrawal

A. A foreign corporation authorized to transact business in this state may withdraw from this state upon procuring from the secretary of state a certificate of withdrawal. In order to procure such certificate, the corporation shall deliver to the Secretary of State an application for withdrawal, which shall set forth:

(1) The name of the corporation and the state or country under the laws of which it is incorporated.

(2) That the corporation is not transacting business in this state.

(3) That the corporation surrenders its authority to transact business in this state.

(4) That the corporation revokes the authority of its registered agent in this state to accept service of process, and consents that service of process in any action or proceeding based on any cause of action arising out of, resulting from or connected with any business transacted by it in this state during the time the corporation was authorized to transact business in this state, be made on the corporation by service thereof on the secretary of state, or on a person in his office designated to receive service of process on corporations.

(5) An address to which the secretary of state may mail a copy of any process which may be so served on the corporation.

(6) Such additional information as may be prescribed by the secretary of state as necessary or appropriate to determination and assessment of any unpaid fees or taxes payable by the corporation as prescribed in this Chapter.

B. The application for withdrawal shall be made on a form prescribed and furnished by the secretary of state, and shall be executed by the corporation by any officer before a notary public, or, if the corporation is in the hands of a receiver or trustee, shall be executed on behalf of the corporation by such receiver or trustee and shall be acknowledged by him.

C.(1) The application for withdrawal shall be delivered to the secretary of state. If the secretary of state finds that such application conforms to the provisions of this Chapter, he shall, when all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law and evidenced by certificates of the secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law:

(a) Issue a filed copy of the application endorsed with the month, day, and year of filing.

(b) File the application in his office.

(c) Issue a certificate of withdrawal.

(2) The certificate of withdrawal, and the filed copy of the application for withdrawal, issued by the secretary of state, shall be returned to the corporation or its representative. Upon the issuance of such certificate of withdrawal, the authority of the corporation to transact business in this state shall cease.

Acts 1968, No. 105, §1; Acts 1992, No. 447, §4; Acts 1997, No. 299, §1; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 1999, No. 342, §5; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:312.1 Termination of withdrawal proceedings

At any time before the certificate of withdrawal is issued by the secretary of state pursuant to R.S. 12:312, withdrawal proceedings may be terminated by delivering to the secretary of state a request that withdrawal proceedings be terminated. The request shall be signed by any officer of the corporation. The secretary of state may prescribe and furnish forms for filing the request to terminate withdrawal proceedings. After all fees and charges have been paid as required by law, the secretary of state shall place the request to terminate withdrawal proceedings on file in his office. The secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law shall be notified by the secretary of state of the termination of withdrawal proceedings.

Acts 1986, No. 647, §1; Acts 1992, No. 447, §4; Acts 1997, No. 299, §1; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 2018, No. 560, §2, eff. May 28, 2018; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:313 Revocation of certificate of authority

A. The certificate of authority of a foreign corporation to transact business in this state may be revoked by the secretary of state when:

(1) The corporation has failed to file its annual report within the time required by this Chapter, or has failed to pay any fees, taxes or penalties prescribed by law when they have become due and payable; or

(2) The corporation has failed to maintain a registered agent or a registered office in this state, or to maintain records, as required by this Chapter; or

(3) The corporation has failed, after change of its registered office or registered agent (or of the name of a corporate or partnership agent) to file in the office of the secretary of state a statement of such change as required by this Chapter; or

(4) The corporation has failed to file in the office of the secretary of state any certificate of name change or merger or its articles of incorporation and any amendments thereto within thirty days when so requested by the secretary of state; or

(5) A misrepresentation has been made of any material matter in any application, report or other document filed by the corporation pursuant to this Chapter; or

(6) The corporation has exercised in this state authority not conferred upon it by the laws of this state, or has abused authority conferred upon it; or

(7) The corporation has done or omitted any act which amounts to a surrender of its right to do business; or

(8) The corporation has been dissolved.

B. No certificate of authority of a foreign corporation shall be revoked by the secretary of state unless (1) he shall have given the corporation not less than sixty days' notice in writing of the grounds on which such proposed revocation is based, and (2) the corporation has failed, neglected or refused to correct the same within said sixty-day period.

C. Upon revocation, the authority of the corporation to transact business in this state shall cease, but the authority of its registered agent in this state to accept service of process shall continue.

D.(1) The certificate of authority of a foreign corporation to transact business in this state may be suspended by the secretary of state when, according to the records of his office, such foreign corporation is not in compliance with Paragraph (A)(1), (2), (3), or (4) of this Section and the secretary of state is authorized to revoke the suspension where the failure to comply with the Paragraph has been remedied by compliance.

(2) The secretary of state shall give the corporation at least sixty days written notice of the secretary's intention to suspend the corporation's certificate of authority. The notice shall be mailed to the corporation's last known address by United States mail.

(3) In the event any such corporation thereafter complies with the requirements of Paragraph (A)(1), (2), (3), or (4) of this Section, or shows that it was already in compliance with same, the secretary of state is authorized to revoke any suspension issued by him in respect to the corporation and to restore the corporation to good standing and record same in the archives of his office.

(4) If a corporation's certificate of authority is suspended for failure to file its annual report within the time required by this Chapter as referenced in Paragraph (A)(1) of this Section, and has been suspended for six months or more, the secretary of state shall revoke the suspension only if the required annual report is accompanied by a certificate of corporate existence or a certificate of good standing, not a certified copy of the corporation's articles or certificate of incorporation, from an authorized official of the jurisdiction of its incorporation bearing an original signature and dated within ninety days of its submission.

(5) The provisions of R.S. 12:314 shall be applicable to any suspension made pursuant to this Subsection.

Acts 1968, No. 105, §1. Amended by Acts 1970, No. 50, §27, emerg. eff. June 18, 1970, at 5:05 P.M; Acts 1972, No. 601, §1; Acts 1981, No. 582, §2, eff. July 20, 1981; Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1984, No. 717, §1, eff. July 12, 1984; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:314 Transacting business without authority

A. No foreign corporation transacting business in this state shall be permitted to present any judicial demand before any court of this state unless it has been authorized to transact such business, if required by, and as provided in, this Chapter. The burden of proof shall rest upon the corporation to establish that it has been so authorized, and the only legal evidence thereof shall be the certificate of the secretary of state or a duly authenticated copy thereof.

B. The failure of a foreign corporation to obtain a certificate of authority to transact business in this state shall not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action, suit or proceeding in any court of this state.

C. A foreign corporation which transacts business in this state without a certificate of authority shall be liable to this state, for the years or parts thereof during which it transacted business in this state without a certificate of authority, in an amount equal to all fees and taxes which would have been imposed by law upon such corporation, had it duly applied for and received a certificate of authority to transact business in this state as required by this Chapter, and had thereafter filed all reports required by this Chapter, plus all penalties imposed by this Chapter for failure to pay such fees and franchise taxes. The Attorney General shall bring proceedings to recover all amounts due this state under the provisions of this section.

Acts 1968, No. 105, §1. Amended by Acts 1976, No. 599, §1.

§ 12:314.1 Authority to investigate; penalty

A. The secretary of state may investigate any foreign corporation transacting business in this state which does not have a certificate of authority to transact business in this state.

B. The secretary of state may impose a penalty of not more than one thousand dollars per violation against such foreign corporations transacting business in this state without a valid certificate of authority.

C. The secretary of state shall adopt a schedule of penalties to be imposed under the provisions of this Section in accordance with the provisions of the Administrative Procedure Act.

D. If a penalty imposed under the provisions of this Section is not timely paid by a foreign corporation, the attorney general shall institute proceedings against the foreign corporation to collect such penalty.

Acts 1988, No. 513, §1.

§ 12:315 §315. Repealed by Acts 2017, No. 367, §3.

§315. Repealed by Acts 2017, No. 367, §3.

§ 12:316 Fees

A. A fee as provided in R.S. 49:222 shall be paid in advance to the secretary of state, for the use and benefit of the state, by every corporation:

(1) For filing and recording application for certificate of authority and certificate of existence, or a certificate of good standing.

(2) For filing and recording application for amended certificate of authority to change the name of the corporation.

(3) For filing and recording withdrawal proceedings.

(4) For filing and recording reinstatement proceedings.

(5) For filing and recording certificate of merger.

(6) For filing and recording termination of withdrawal proceedings.

B.(1) Additional copies, certified or otherwise, of documents or a certificate shall be furnished upon request for a fee as provided in R.S. 49:222, which shall be paid in advance.

(2) The secretary of state is authorized to charge a fee as provided in R.S. 49:222 for making, issuing, and sealing any other certificates required or permitted by this Chapter, for resignation of a registered agent or officer, appointment of a registered agent, change of a registered office, appointment of officers and directors, and for annual reports.

Acts 1968, No. 105, §1. Amended by Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 1983, No. 235, §1, eff. July 1, 1983; Acts 1983, 2nd Ex. Sess., No. 4, §1., eff. Jan. 1, 1984; Acts 1984, No. 741, §1, eff. July 13, 1984; Acts 1986, No. 649, §1; Acts 2008, No. 913, §2.

§ 12:317 Appointment of receiver

The court may appoint a receiver to take charge of a foreign corporation's property in this state on any ground set forth in R.S. 12:151, or on application by a receiver or liquidator duly appointed to take charge of the corporation's property by a court of competent jurisdiction in the state or country under the laws of which the corporation is incorporated. The provisions of R.S. 12:151 and 152 shall, mutatis mutandis , govern proceedings brought under this section.

Acts 1968, No. 105, §1.

§ 12:318 Pre-filing procedure

Any document to be filed with the Secretary of State by a foreign corporation may be delivered to the Secretary of State in advance, for filing as of any specified date (and, if specified upon such delivery, as of any given time on such date) within thirty days after the date of delivery.

Acts 1968, No. 105, §1.

§ 12:319 Definitions

Terms used in this Chapter shall, unless the context requires otherwise, have the same meaning as in Chapter 1 of this Title.

Acts 1968, No. 105, §1.

§ 12:320 Application to authorized corporations

Except as otherwise expressly provided in this Chapter, all of the provisions of this Chapter shall be applicable to every foreign corporation on or before January 1, 1969 authorized to transact business in this state; provided that this Chapter shall not affect or impair any right of any such foreign corporation which is guaranteed or protected by the Constitution of this state or of the United States; and provided further that this Chapter shall not be construed to impair or affect any act done, offense committed or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred, prior to January 1, 1969, but the same may be enjoyed, asserted and enforced, prosecuted or inflicted as fully, and to the same extent, as if this Chapter had not been enacted.

Acts 1968, No. 105, §1.

§ 12:321 Short title

This Chapter shall be known, and reference may be made thereto, as the "Foreign Corporation Law".

Acts 1968, No. 105, §1.

CHAPTER 4 SPECIAL CORPORATIONS

PART I ELECTRIC COOPERATIVES

§ 12:401 Organization authorized

Cooperative, nonprofit membership corporations may be organized under this Part for the purpose of supplying electrical energy and promoting and extending the use thereof.

Renumbered from R.S.1950, §12:301 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:402 Terms defined

As used in this Part:

A. "Cooperative" means a corporation organized under this Part and a corporation which becomes subject to this Part in the manner hereinafter provided.

B. "Member" means each incorporator of a cooperative and each person admitted to and retaining membership therein, and shall include a husband and wife admitted to joint membership.

C. "Person" includes any natural person, firm, association, corporation, business trust, partnership, federal agency, state or political subdivision or agency thereof, or any body politic.

Renumbered from R.S.1950, §12:302 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:403 Powers

A cooperative may:

(1) Sue and be sued, in its corporate name;

(2) Have perpetual existence, unless otherwise provided for in the articles of incorporation of the cooperative;

(3) Adopt a corporate seal and alter the same at pleasure;

(4) Generate, manufacture, purchase, acquire, accumulate and transmit electric energy, and distribute, sell, supply, and dispose of electric energy to its members, to governmental agencies and political subdivisions, and to other persons not in excess of ten per centum of the number of its members; provided, however, that should a cooperative acquire any electric facilities dedicated or devoted to the public use, it may, for the purpose of continuing service and avoiding hardship and to an extent which together with all other persons served by the cooperative on a non-member basis shall not exceed forty per centum of the total number of persons served by the cooperative, continue to serve the persons served directly from such facilities at the time of such acquisition without requiring that such persons become members. But such non-members shall have the right to become members upon such terms as are provided in the by-laws;

(5) Make loans to persons to whom electric energy is or will be supplied by the cooperative for the purpose of, and otherwise to assist such persons in, wiring their premises and installing therein electric and plumbing fixtures, appliances, apparatus and equipment of any and all kinds and character, and in connection therewith; purchase, acquire, lease, sell, distribute, install and repair such electric and plumbing fixtures, appliances, apparatus and equipment, and to accept or otherwise acquire, and to sell, assign, transfer, endorse, pledge, hypothecate and otherwise dispose of notes, bonds and other evidences of indebtedness and any and all types of security therefor;

(6) Make loans to persons to whom electric energy is or will be supplied by the cooperative for the purpose of, and otherwise assist such persons in, constructing, maintaining and operating electric refrigeration plants;

(7) Become a member in one or more other cooperatives or corporations or own stock therein;

(8) Construct, purchase, take, receive, lease as lessee, or otherwise acquire, and own, hold, use, equip, maintain, and operate, and sell, assign, transfer, convey, exchange, lease as lessor, mortgage, pledge, or otherwise dispose of or encumber, electric transmission and distribution lines or systems, electric generating plants, electric refrigeration plants, lands, buildings, structures, dams, plants and equipment, and any and all kinds of classes of real or personal property whatsoever, which shall be deemed necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized;

(9) Purchase or otherwise acquire, and own, hold, use and exercise and to sell, assign, transfer, convey, mortgage, pledge, hypothecate, or otherwise dispose of or encumber, franchises, rights, privileges, licenses, rights of way and easements;

(10) Borrow money and otherwise contract indebtedness, and to issue notes, bonds, and other evidences of indebtedness therefor, and secure the payment thereof by mortgage, pledge, deed of trust, or any other encumbrance upon any or all of its then owned or after-acquired real or personal property, assets, franchises, revenues or income;

(11) Construct, maintain and operate electric transmission and distribution lines along, upon, under and across all public thoroughfares, including without limitation, all roads, highways, streets, alleys, bridges and causeways, and upon, under and across all publicly owned lands, subject, however, to the requirements in respect to the use of such thoroughfares and lands that are imposed by law; and, provided, that such construction and operation shall not interfere with the use and occupancy thereof by other public utilities;

(12) Exercise the power of eminent domain in the manner provided by the laws of this state for the exercise of that power by corporations constructing or operating electric transmission and distribution lines or systems;

(13) Conduct its business and exercise any or all of its powers within or without this state;

(14) Adopt, amend and repeal by-laws; and

(15) Do and perform any and all other acts and things, and to have and exercise any and all other powers which may be necessary, convenient or appropriate to accomplish the purpose for which the cooperative is organized.

Renumbered from R.S.1950, §12:303 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 2012, No. 328, §1.

§ 12:404 Name

The name of each cooperative shall include the words "Electric" and "Cooperative," and the abbreviation "Inc.," provided, however, such limitation shall not apply if, in any affidavit made by the president or vice-president of the cooperative and filed with the Secretary of State, it shall appear that the cooperative desires to transact business in another state and is precluded therefrom by reason of its name; and provided, further, that any corporation which may be converted into a cooperative and become subject to this Part as provided in R.S. 12:417 may at its election retain the corporate name used by it prior to such conversion or such domestication. The name of a cooperative shall distinguish it from the name of any other corporation organized under the laws of, or authorized to transact business in, this state. The words "Electric" and "Cooperative" shall not both be used in the name of any corporation organized under the laws of, or authorized to transact business in, this state, except a cooperative or a corporation transacting business in this state pursuant to the provisions of this Part.

Renumbered from R.S.1950, §12:304 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:405 Incorporators

Five or more natural persons, or two or more cooperatives, may organize a cooperative in the manner hereinafter provided.

Renumbered from R.S.1950, §12:305 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:406 Articles of incorporation

A. The articles of incorporation of a cooperative shall recite in the caption that they are executed pursuant to this Part. The articles shall be executed by authentic act, signed by each of the incorporators, and shall state the following:

(1) The name of the cooperative.

(2) The address of its principal office.

(3) The names and addresses of the incorporators.

(4) The names and addresses of the persons who shall constitute its first board of directors.

(5) Its duration.

(6) Any provisions not inconsistent with this Part considered necessary or advisable for the conduct of its business and affairs, including any provision authorized by R.S. 12:1-202(B)(5).

B. The articles of incorporation shall be submitted to the Secretary of State for filing as provided in this Part.

C. It shall not be necessary to set forth in the articles of incorporation of a cooperative the purpose for which it is organized or any of the corporate power vested in a cooperative under this Part.

Renumbered from R.S.1950, §12:306 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1987, No. 261, §2, eff. July 3, 1987; Acts 2020, No. 50, §1, eff. June 5, 2020.

§ 12:407 Bylaws

A. The original bylaws of a cooperative shall be adopted by its board of directors. The first bylaws of a new cooperative resulting from a consolidation, or the surviving cooperative resulting from a merger, or the converted corporation resulting from a conversion, as provided in this Part, shall be adopted by the board of directors named in articles of conversion, merger, or consolidation, as the case may be.

B. Bylaws may be adopted, amended, or repealed by the members or the board of directors. However, only the members may amend the bylaws when the amendment concerns the dissolution of the cooperative or the sale, lease, or other disposition or encumbrance of all or any substantial portion of property belonging to the cooperative. The board of directors shall not adopt any bylaws in conflict with the provisions of R.S. 12:414, 418, or 421.

C. In the event voting by mail is authorized in the bylaws, the board of directors is authorized to prescribe conditions necessary for voting by mail, including the percentage of members required to constitute a quorum. However, only the members may prescribe conditions in the bylaws for voting by mail or the constituting of a quorum when the provisions of the bylaws relate to the dissolution of the cooperative or the sale, lease, merger, or other disposition or encumbrance of all or any substantial portion of property belonging to the cooperative.

D. The bylaws shall set forth the rights and duties of members and directors and may contain other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this Part or with its articles of incorporation. Nothing herein or in this Part shall limit the rights of members provided for in R.S. 12:417 or any rights otherwise granted in the bylaws and articles of incorporation which may authorize voting by mail or proxy.

E. Nothing herein or in this Part shall limit the right of the board of directors of the cooperative, as provided in R.S. 12:421(2), without authorization by the members thereof, to authorize the execution and delivery of a mortgage or mortgages or a deed of trust or deeds of trust upon, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises, or permits of the cooperative, whether acquired, or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board of directors shall determine, to secure any indebtedness of the cooperative to the United States of America or any agency or instrumentality thereof, or to any bank, insurance company, or other lending institution, any provision of the articles of incorporation or bylaws of a cooperative to the contrary notwithstanding.

Renumbered from R.S.1950, §12:307 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1978, No. 108, §1, eff. June 22, 1978; Acts 2010, No. 202, §1, eff. Jan. 1, 2011; Acts 2012, No. 328, §1.

§ 12:408 Members

A. No person who is not an incorporator shall become a member of a cooperative unless such person shall agree to use electric energy furnished by the cooperative when such electric energy is available through its facilities. The bylaws of a cooperative may provide that any person, including an incorporator, shall cease to be a member thereof if he fails or refuses to use electric energy made available by the cooperative or if electric energy has not been made available to such person by the cooperative within a specified time after such person has become a member thereof. Membership in the cooperative shall not be transferable, except as provided in the bylaws. The bylaws may prescribe additional qualifications and limitations in respect of membership.

B. An annual meeting of the members shall be held at such time as provided in the bylaws.

C. Special meetings of the members shall be called by the board of directors, by any three directors, by not less than ten per centum of the members, or by the president.

D. Meetings of members shall be held at such place as may be provided in the bylaws. In the absence of any such provision, all meetings shall be held in the city or town in which the principal office of the cooperative is located.

E. Except as hereinafter otherwise provided, written or printed notice stating the time and place of each meeting of members and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each member, either personally or by mail, not less than ten nor more than twenty-five days before the date of the meeting.

F. Unless otherwise required in the articles of incorporation or in the bylaws, five percent of all members, present in person, shall constitute a quorum for the transaction of business at all meetings of the members. For purposes of this Section, if voting by mail is authorized in the bylaws, members voting by mail shall be considered present in person. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting from time to time without further notice.

G. Each member shall be entitled to one vote on each matter submitted to a vote at a meeting. Voting shall be in person, but, if the bylaws so provide, may also be by proxy or by mail, or both. If the bylaws provide for voting by proxy or by mail, they shall also prescribe the conditions under which proxy or mail voting shall be exercised. In any event, only members may act as proxies and no member may act as proxy for more than three members at any meeting of the members.

Renumbered from R.S.1950, §12:308 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1978, No. 110, §1, eff. June 22, 1978.

§ 12:409 Board of directors; elections

A.(1) The business and affairs of a cooperative shall be managed by a board of not less than five directors, each of whom shall be a member of the cooperative or of another cooperative which shall be a member thereof. The bylaws shall prescribe the number of directors, their qualifications, other than those provided for in this Part, and the manner of holding meetings of the board of directors and of the election of successors to directors who shall resign, die, or otherwise be incapable of acting. The bylaws may also provide for the removal of directors from office and for the election of their successors. The bylaws shall provide that a member of the cooperative may be nominated for election to the board of directors upon the petition of the members; however, the bylaws may not require the signatures of more than fifty members. Without approval of the members, directors shall not receive any salaries for their services as directors, and, except in emergencies, shall not be employed by the cooperative in any capacity involving compensation. The bylaws may, however, provide that a fixed fee and expenses of attendance, if any, may be allowed to each director for attendance at each meeting of the board of directors.

(2) The bylaws shall provide that the committee charged by a cooperative with nominating persons for election to the board of directors shall select its nominees a minimum of twenty days prior to the last day for the filing of any petition to nominate a member for election to the board of directors.

B.(1) The directors of a cooperative named in any articles of incorporation, consolidation, merger, or conversion, as the case may be, shall hold office until the next following annual meeting of the members or until their successors shall have been elected and qualified. At each annual meeting or, in case of failure to hold the annual meeting as specified in the bylaws, at a special meeting called for that purpose, the members shall elect directors to hold office until the next annual meeting of the members, except as hereinafter otherwise provided. Each director shall hold office for the term for which he is elected or until his successor has been elected and qualified.

(2) The date, time, and place of any meeting of the nominating committee for the board of directors of each electric cooperative engaged in the retail distribution of electricity shall be published in at least two issues of the official journal of each parish in which the cooperative is domiciled or provides service, not less than ten days prior to the meeting. In lieu of publication in official journals, such publication may be accomplished by the use of the monthly issue of the membership publication immediately preceding the meeting, mailed to all members of the cooperative.

C. The directors shall be divided into three classes at the next annual meeting, each class to be as nearly equal in number as possible, with the term of office of the directors of the first class to expire at the next succeeding annual meeting, the term of the second class to expire at the second succeeding annual meeting, and the term of the third class to expire at the third succeeding annual meeting. At each annual meeting after such classification, a number of directors equal to the number of the class whose term expired at the time for such meeting shall be elected to hold office until the third succeeding annual meeting.

The provisions of this Subsection shall not be construed to reduce the term of office of any director holding such office on the effective date of this Subsection.

D. A majority of the board of directors shall constitute a quorum.

E. If a husband and wife hold a joint membership in a cooperative, either one, but not both, may be elected a director.

F. The board of directors may exercise all of the powers of a cooperative except such as are conferred upon the members by this Part, or its articles of incorporation or bylaws.

G.(1) Every meeting of the board of directors of an electric cooperative shall be open to attendance by members of the cooperative to the extent that such members can be reasonably, physically accommodated in the place in which the board of directors is meeting, unless such meeting is closed pursuant to the exceptions enumerated hereafter.

(2) The board of directors may meet in executive session to consider the following:

(a) Discussion of the character, professional competence, or physical or mental health of a person.

(b) Strategy sessions or negotiations with respect to collective bargaining, prospective litigation, or litigation when an open meeting would have a detrimental effect on the bargaining or litigating position of the cooperative.

(c) Discussion regarding the report, development, or course of action regarding security personnel, plans, or devices.

(d) Proceedings regarding allegations of misconduct.

(e) Cases of extraordinary emergency.

(3)(a) Any cooperative not under the jurisdiction of the Public Service Commission, prior to any change in rates charged for electric energy, shall conduct a public hearing after giving sixty days prior written notice by mail to all cooperative members. The notice may be included in a billing notice but shall be a separate and prominent document. The notice shall contain a brief explanation of the reasons for the effect of the rate increase on consumers and inform the consumers of the availability of a complete, written explanation of the reasons for and the basis of the rate increase. Such written explanation shall be available for examination by any member or his representative at all cooperative offices during regular business hours at least sixty days prior to the hearing.

(b) At the hearing, the directors of the cooperative shall present evidence in support of the rate change and shall provide the members or their representatives an opportunity to produce evidence regarding the rate change. If the directors of the cooperative fail to implement the rate change within sixty days of the public hearing, they shall conduct another public hearing prior to implementing the rate change. The press shall be admitted to the hearing.

H. Each member of the board of directors of any cooperative primarily engaged in the distribution of electricity and which elects directors by district shall be elected from a single member district, one district for each member of the board of directors. A quorum from each district shall be sufficient to validate the election of a candidate from the district. Elections conducted by mail ballot shall be conducted under the supervision of a certified public accountant. All costs of the election shall be paid by the cooperative.

Renumbered from R.S. 1950, §12:309 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1978, No. 109, §1, eff. June 22, 1978; Acts 1983, No. 636, §1, eff. July 19, 1983; Acts 1984, No. 779, §1, eff. July 13, 1984; Acts 1985, No. 421, §1; Acts 1985, No. 478, §1; Acts 1985, No. 485, §1.

§ 12:410 Districts

Notwithstanding any other provision of this Part, or any other statute, the by-laws may provide for the division and redivision of the territory served or to be served by a cooperative into two or more districts. In such case the by-laws shall prescribe the manner in which the several districts shall function with respect to the nomination and election of directors and otherwise, and may provide for the election and powers of district delegates. No member at any district meeting and no district delegate at any meeting shall vote by proxy or by mail.

Renumbered from R.S.1950, §12:310 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:411 Officers

The officers of a cooperative shall consist of a president, vice-president, secretary and treasurer, who shall be elected annually by and from the board of directors. No person shall continue to hold any of the above offices after he has ceased to be a director. The offices of secretary and of treasurer may be held by the same person. The board of directors may also elect or appoint such other officers, agents, or employees as it shall deem necessary or advisable and shall prescribe the powers and duties thereof. Any officer may be removed from office and his successor elected in the manner prescribed in the by-laws.

Renumbered from R.S.1950, §12:311 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:412 Amendment of articles of incorporation

A. A cooperative may amend its articles of incorporation by complying with the following requirements:

(1) The proposed amendment shall be approved first by the board of directors and shall be submitted then to a vote of the members at any annual or special meeting thereof, the notice of which shall set forth the proposed amendment. The proposed amendment, with such changes as the members shall choose to make therein, shall be deemed to be approved on the affirmative vote of not less than two thirds of those members voting thereon at such meeting; and

(2) Upon such approval by the members, articles of amendment shall be executed by authentic act on behalf of the cooperative by its president or vice-president and its corporate seal shall be affixed thereto and attested by its secretary. The articles of amendment shall recite in the caption that they are executed pursuant to this Part and shall state:

(a) The name of the cooperative;

(b) The address of its principal office;

(c) The date of the filing of its articles of incorporation in the office of the Secretary of State, and

(d) The amendment to its articles of incorporation.

(3) The president or vice-president executing such articles of amendment shall also make and annex thereto an affidavit stating that the provisions of this Section were duly complied with. Such articles of amendment and affidavit shall be submitted to the Secretary of State for filing as approved in this Part.

B. A cooperative may, without amending its articles of incorporation, upon authorization of its board of directors, change the location of its principal office by filing a certificate of change of principal office, executed and acknowledged by its president or vice-president under its seal attested by its secretary, in the office of the Secretary of State, and also in the office of the recorder of mortgages or the clerk of court in each parish in which its articles of incorporation or any prior certificate of change of principal office of such cooperative has been filed. Such cooperative shall also, within thirty (30) days after the filing of such certificate of change of principal office in the office of recorder of mortgages or clerk of court of any parish, file therein certified copies of its articles of incorporation and all amendments thereto, if the same are not already on file therein.

Renumbered from R.S.1950, §12:312 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:413 Consolidation

Any two or more cooperatives, each of which is hereinafter designated a "consolidating cooperative", may consolidate into a new cooperative, hereinafter designated the "new cooperative", by complying with the following requirements:

A. The proposition for the consolidation of the consolidating cooperatives into the new cooperative and proposed articles of consolidation to give effect thereto shall be first approved by the board of directors of each consolidating cooperative. The proposed articles of consolidation shall recite in the caption that they are executed pursuant to this Part and shall state:

(1) The name of each consolidating cooperative, the address of its principal office, and the date of the filing of its articles of incorporation in the office of the Secretary of State;

(2) The name of the new cooperative and the address of its principal office;

(3) The names and addresses of the persons who shall constitute the first board of directors of the new cooperative;

(4) The terms and conditions of the consolidation and the mode of carrying the same into effect, including the manner and basis of converting memberships in each consolidating cooperative into membership in the new cooperative and the issuance of certificates of membership in respect of such converted memberships; and

(5) Any provisions not inconsistent with this Part deemed necessary or advisable for the conduct of the business and affairs of the new cooperative.

B. The proposition for the consolidation of the consolidating cooperatives into the new cooperative and the proposed articles of consolidation approved by the board of directors of each consolidating cooperative then shall be submitted to a vote of the members thereof at any annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed consolidation. The proposed consolidation and the proposed articles of consolidation shall be deemed to be approved upon the affirmative vote of not less than two-thirds of those members of each consolidating cooperative voting thereon at such meeting.

C. Upon such approval by the members of the respective consolidating cooperatives, articles of consolidation in the form approved shall be executed by authentic act on behalf of each consolidating cooperative by its president or vice-president and its seal shall be affixed thereto and attested by its secretary. The president or vice-president of each consolidating cooperative executing such articles of consolidation shall also make and annex thereto an affidavit stating that the provisions of this section were duly complied with by such cooperative. Such articles of consolidation and affidavits shall be submitted to the Secretary of State for filing as provided in this Part.

Renumbered from R.S.1950, §12:313 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:414 Merger

Any one or more cooperatives, each of which is hereinafter designated a "merging cooperative," may merge into another cooperative, hereinafter designated the "surviving cooperative," by complying with the following requirements:

A. The proposition for the merger of the merging cooperatives in the surviving cooperative and proposed articles of merger to give effect thereto shall be first approved by the board of directors of each merging cooperative and by the board of directors of the surviving cooperative. The proposed articles of merger shall recite in the caption that they are executed pursuant to this Part and shall state:

(1) The name of each merging cooperative, the address of its principal office, and the date of the filing of its articles of incorporation in the office of the Secretary of State;

(2) The name of the surviving cooperative and the address of its principal office;

(3) The names and addresses of the persons who shall constitute the first board of directors of the surviving cooperative;

(4) A statement that the merging cooperatives elect to be merged into the surviving cooperative;

(5) The terms and conditions of the merger and mode of carrying the same into effect, including the manner and basis of converting the memberships in the merging cooperative or cooperatives into memberships in the surviving cooperative and the issuance of certificates of membership in respect of such converted membership; and

(6) Any provisions not inconsistent with this Part deemed necessary or advisable for the conduct of the business and affairs of the surviving cooperative.

B. The proposition for the merger of the merging cooperatives into the surviving cooperative and the proposed articles of merger approved by the board of directors of the respective cooperatives, parties to the proposed merger, then shall be submitted to a vote of the members of each such cooperative at any annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed merger. The proposed merger and the proposed articles of merger shall be deemed to be approved upon the affirmative vote of not less than two-thirds of those members of each cooperative voting thereon at such meeting.

C. Upon such approval by the members of the respective cooperatives, parties to the proposed merger, articles of merger in the form approved shall be executed by authentic act on behalf of each such cooperative by its president or vice-president and its seal shall be affixed thereto and attested by its secretary. The president or vice-president of each cooperative executing such articles of merger shall also make and annex thereto an affidavit stating that the provisions of this Section were duly complied with by such cooperative. Such articles of merger and affidavits shall be submitted to the Secretary of State for filing as provided in this Part.

Renumbered from R.S.1950, §12:314 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:415 Effect of consolidation or merger

The effect of consolidation or merger shall be:

A. The several cooperatives, parties to the consolidation or merger, shall be a single cooperative which, in the case of a consolidation, shall be the new cooperative provided for in articles of consolidation, and, in the case of a merger, shall be that cooperative designated in the articles of merger as the surviving cooperative, and the separate existence of all cooperatives, parties to the consolidation or merger, except the new or surviving cooperative, shall cease.

B. The new or surviving cooperatives shall have all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a cooperative organized under the provisions of this Part, and shall possess all the rights, privileges, immunities, and franchises, as well of a public as of a private nature, and all property, real and personal, applications for membership, all debts due on whatever account, and all other choses in action, of each of the consolidating or merging cooperatives, and furthermore all and every interest of, or belonging or due to, each of the cooperatives so consolidated or merged, shall be taken and deemed to be transferred to and vested in such new or surviving cooperative without further act or deed; and the title to any real estate or any interest therein, under the laws of this state vested in any such cooperatives shall not revert or be in any way impaired by reason of such consolidation or merger.

C. The new or surviving cooperative shall thenceforth be responsible and liable for all of the liabilities and obligations of each of the cooperatives so consolidated or merged, and any claim existing, or action or proceeding pending, by or against any of such cooperatives may be prosecuted as if such consolidation or merger had not taken place, but such new or surviving cooperative may be substituted in its place.

D. Neither the rights of creditors nor any liens upon the property of any of such cooperatives shall be impaired by such consolidation or merger.

E. In the case of a consolidation, the articles of consolidation shall be deemed to be the articles of incorporation of the new cooperative; and in the case of merger, the articles of incorporation of the surviving cooperative shall be deemed to be amended to the extent, if any, that changes therein are provided for in the articles of merger.

Renumbered from R.S.1950, §12:315 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:416 Conversion of existing corporations

Any corporation organized under the laws of this state for the purpose, among others, of supplying electric energy may be converted into a cooperative and become subject to this Part with the same effect as if originally organized under this Part by complying with the following requirements:

A. The proposition for the conversion of such corporation into a cooperative and proposed articles of conversion to give effect thereto shall be first approved by the board of directors of such corporation. The proposed articles of conversion shall recite in the caption that they are executed pursuant to this Part and shall state:

(1) The name of the corporation prior to its conversion into a cooperative;

(2) The address of the principal office of such corporation;

(3) The date of the filing of the articles of incorporation of such corporation in the office of the Secretary of State;

(4) The statute or statutes under which such corporation was organized;

(5) The name assumed by such corporation;

(6) A statement that such corporation elects to become a cooperative, subject to this Part;

(7) The names and addresses of the persons who shall constitute the first board of directors of the converted corporation upon filing of the articles of conversion;

(8) The manner and basis of converting memberships in or shares of stock of such corporation into memberships therein after completion of the conversion; and

(9) Any provisions not inconsistent with this Part deemed necessary or advisable for the conduct of the business and affairs of such corporation.

B. The proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion approved by the board of directors of such corporation shall then be submitted to a vote of the members or stockholders, as the case may be, of such corporation at any duly held annual or special meeting thereof, the notice of which shall set forth full particulars concerning the proposed conversion. The proposition for the conversion of such corporation into a cooperative and the proposed articles of conversion, with such amendments thereto as the members or stockholders of such corporation shall choose to make, shall be deemed to be approved upon the affirmative vote of not less than two-thirds of those members of such corporation voting thereon at such meeting, or, if such corporation is a stock corporation, upon the affirmative vote of the holders of not less than two-thirds of the capital stock of such corporation represented at such meeting.

C. Upon such approval by the members or stockholders of such corporation, articles of conversion in the form approved by such members or stockholders shall be executed by authentic act on behalf of such corporation by its president or vice-president and its corporate seal shall be affixed thereto and attested by its secretary. The president or vice-president executing such articles of conversion on behalf of such corporation shall also make and annex thereto an affidavit stating that the provisions of this Section with respect to the approval of its trustees or directors and its members or stockholders of the proposition for the conversion of such corporation into a cooperative and such articles of conversion were duly complied with. Such articles of conversion and affidavit shall be submitted to the Secretary of State for filing as provided in this Part. The term "articles of incorporation" as used in this Part shall be deemed to include the articles of conversion of a converted corporation.

Renumbered from R.S.1950, §12:316 by Acts 1968, No. 105, §1, eff. Jan. 1, 1969.

§ 12:417 Initiative by members

Notwithstanding any other provision of this Part, any proposition embodied in a petition signed by not less than ten per centum of the members of a cooperative, together with any document submitted with such petition to give effect to its proposition, shall be submitted to the members of a cooperative, either at a special meeting of the members held within forty-five days after the presentation of such petition, or, if the date of the next annual meeting of members falls within ninety days after such presentation or if the petitioner so requests, at such annual meeting. The approval of the board of directors shall not be required in respect of any proposition or document submitted to the members pursuant to this section and approved by them, but such proposition or document shall be subject to all other applicable provisions of this Part. Any affidavit or affidavits required to be filed with any such document pursuant to applicable provisions of this Part shall, in such cases, be modified to show compliance with the provisions of this section.

Renumbered from R.S.1950, §12:317 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:417.1 Corporate records; disclosure; right of members to inspect

A cooperative shall maintain for inspection by any member of the cooperative or his attorney during regular office hours every contract or agreement of a value in an amount in excess of fifteen thousand dollars. Each person or legal entity which is a party to any such contract or agreement with a cooperative shall submit a sworn statement disclosing any business or personal relationship which exists with a director or officer of that cooperative. The sworn statement shall be attached to all such contracts or agreements.

Added by Acts 1983, No. 636, §1, eff. July 19, 1983.

§ 12:418 Dissolution

A. A cooperative which has not commenced business may dissolve voluntarily by delivering to the Secretary of State articles of dissolution, executed and acknowledged on behalf of the cooperative by a majority of the incorporators. The articles of dissolution shall be submitted to the Secretary of State for filing as provided in this Part. The articles of dissolution shall state:

(1) The name of the cooperative;

(2) The address of its principal office;

(3) The date of its incorporation;

(4) That the cooperative has not commenced business;

(5) That the amount, if any, actually paid in on account of membership fees, less any part thereof disbursed for necessary expenses, has been returned to those entitled thereto and that all servitudes have been released to the grantors;

(6) That no debt of the cooperative remains unpaid; and

(7) That a majority of the incorporators elect that the cooperative be dissolved.

B. A cooperative which has commenced business may dissolve voluntarily and liquidate its affairs in the following manner:

(1) The board of directors shall first recommend that the cooperative be dissolved voluntarily and thereafter the proposition that the cooperative be dissolved shall be submitted to the members of the cooperative at any annual or special meeting the notice of which shall set forth such proposition. The proposed voluntary dissolution shall be deemed to be approved upon the affirmative vote of not less than a majority of all of the members of the cooperative. Notwithstanding any other provision of law in this Part, voting by proxy and mail may be authorized in the cooperative's bylaws for purposes of this Section as provided for in R.S. 12:407 and 408. This provision shall not limit the rights of members provided for in R.S. 12:417 or any rights otherwise granted in the bylaws and articles of incorporation which may authorize voting by mail or proxy.

(2) Upon such approval, a certificate of election to dissolve, hereinafter designated as the "certificate" shall be executed by authentic act on behalf of the cooperative by its president or vice-president and its corporate seal shall be affixed thereto and attested by its secretary. The certificate shall state:

(a) The name of the cooperative;

(b) The address of its principal office;

(c) The names and addresses of its directors; and

(d) The total number of members of the cooperative and the number of members who voted for and against the voluntary dissolution of the cooperative. The president or vice-president executing the certificate shall also make and annex thereto an affidavit stating that the provisions of this Sub-section were duly complied with. Such certificate and affidavit shall be submitted to the Secretary of State for filing as provided in this Part;

(3) Upon the filing of the certificate and affidavit by the Secretary of State, the cooperative shall cease to carry on its business except in so far as may be necessary for winding up thereof, but its corporate existence shall continue until articles of dissolution have been filed by the Secretary of State;

(4) After the filing of the certificate and affidavit by the Secretary of State the board of directors shall immediately cause notice of the liquidation proceedings to be mailed to each known creditor and claimant and to be published once a week for two successive weeks in a newspaper of general circulation in the parish in which the principal office of the cooperative is located;

(5) The board of directors shall have full power to liquidate and settle the affairs of the cooperative and shall proceed to collect the debts owing to the cooperative, convey and dispose of its property and assets, pay, satisfy, and discharge its debts, obligations and liabilities, and do all other things required to liquidate its business and affairs, and after paying or adequately providing for the payment of all its debts, obligations and liabilities, shall distribute the remainder of its property and assets among its members, and among other persons who have been members at any time during the seven years next preceding the date of such filing of the certificate, in proportion to the aggregate patronage of each such member and other person during such seven year period or, if the cooperative shall not have been in existence for such period, during the period of its existence; and

(6) When all debts, liabilities and obligations of the cooperative have been paid and discharged or adequate provision shall have been made therefor, and all of the remaining property and assets of the cooperative shall have been distributed pursuant to the provisions of this Section, the board of directors shall authorize the execution of articles of dissolution which shall thereupon be executed and acknowledged on behalf of the cooperative by its president or vice-president, and its corporate seal shall be affixed thereto and attested by its secretary. Such articles of dissolution shall recite in the caption that they are executed pursuant to this Part and shall state:

(a) The name of the cooperative;

(b) The address of the principal office of the cooperative;

(c) That the cooperative has heretofore delivered to the Secretary of State a certificate of election to dissolve and the date on which the certificate was filed by the Secretary of State in the records of his office;

(d) That all debts, obligations and liabilities of the cooperative have been paid and discharged or that adequate provision has been made therefor;

(e) That all the remaining property and assets of the cooperative have been distributed among the members in accordance with the provisions of this section; and

(f) That there are no actions or suits pending against the cooperative. The president or vice-president executing the articles of dissolution shall also make and annex thereto an affidavit stating that the provisions of this Sub-section were duly complied with. Such articles of dissolution and affidavit accompanied by proof of publication required in this Sub-section, shall be submitted to the Secretary of State for filing as provided in this Part.

Renumbered from R.S.1950, §12:318 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 2010, No. 202, §1, eff. Jan. 1, 2011.

§ 12:419 Filing of articles

A. Articles of incorporation, amendment, consolidation, merger, conversion, or dissolution, as the case may be, when executed by authentic act shall be presented to the secretary of state for filing in the records of his office. If the secretary of state shall find that the articles presented conform to the requirements of this Part, he shall, upon payment of a fee as provided in R.S. 49:222, file the articles so presented in the records of his office, and upon such filing, the incorporation, amendment, consolidation, merger, conversion, or dissolution provided for therein shall be in effect.

B. The cooperative or corporation shall deliver a certified copy thereof to the recorder of mortgages or clerk of court of the parish in which the principal office of each cooperative or corporation affected by such incorporation, amendment, consolidation, merger, conversion, or dissolution shall be located. The recorder of mortgages or clerk of court of any parish upon receipt of any such certified copy, shall file and index the same in the records of his office, but the failure of the secretary of state or of the recorder of mortgages or clerk of court of the parish to comply with the provisions of this Section shall not invalidate such articles. The provisions of this Section shall also apply to certificates of election to dissolve and affidavits of compliance executed pursuant to R.S. 12:418(B).

Acts 1989, No. 143, §1; Acts 2008, No. 913, §2.

§ 12:420 Refunds to members

A. Revenues of a cooperative for any fiscal year shall first be used to:

(1) Defray expenses of the cooperative and of the operation and maintenance of its facilities during such fiscal year;

(2) Pay interest and principal obligations of the cooperative coming due in such fiscal year;

(3) Finance, or to provide a reserve for the financing of, the construction or acquisition by the cooperative of additional facilities to the extent determined by the board of directors;

(4) Provide a reasonable reserve for working capital;

(5) Provide a reserve for the payment of indebtedness of the cooperative maturing more than one (1) year after the date of the incurrence of such indebtedness in an amount not less than the total of the interest and payments in respect thereof required to be made during the next following fiscal year; and

(6) Provide a fund for education in cooperation and for the dissemination of information concerning the effective use of electric energy and other services made available by the cooperative.

B. Revenues for any fiscal year in excess of the amount necessary to provide for the items listed in Sub-section A shall, unless otherwise determined by a vote of the board of directors, be distributed by the cooperative to its members as patronage refunds prorated in accordance with the patronage of the cooperative by the respective members paid for during such fiscal year. Nothing herein contained shall be construed to prohibit the payment by a cooperative of all or any part of its indebtedness prior to the date when the same shall become due.

C.(1) An electric cooperative is hereby authorized to donate capital credits due and payable by the cooperative to its members or former members when unclaimed by its members or former members for a period of two years from the date due and payable. A cooperative is hereby authorized to donate utility deposits due and payable by it to its members or former members when unclaimed by its members or former members for a period of two years from the date due and payable.

(2) Prior to the donation of such unclaimed capital credits and unclaimed utility deposits, an electric cooperative shall file a report in accordance with R.S. 9:168.

(3) The cooperative shall transfer these unclaimed capital credit funds and unclaimed utility deposit funds to an educational fund which shall be used for scholarships to be awarded only to persons who were active members of the cooperative, or the children of such persons, for at least one year as of January 31, 1995. These scholarships shall be donated to a qualified applicant or applicants selected by the board of directors of the cooperative based on qualifications and criteria set by the board and shall be made available only to persons attending an institution of higher education in the state of Louisiana.

(4) If a member or former member, after the expiration of the two-year period, makes a valid claim to capital credits or utility deposits which would have been due to him from the cooperative then the cooperative shall deduct from the fund available for scholarships each year the amount claimed and pay that amount to the member or former member who made the claim.

(5) Any other provision of law or special act governing a specific electric cooperative shall supersede this Subsection if this Subsection is in conflict therewith.

Renumbered from R.S.1950, §12:320 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1995, No. 498, §1.

§ 12:421 Disposition of property

A cooperative may not sell, mortgage, lease or otherwise dispose of or encumber all or any substantial portion of its property unless such sale, mortgage, lease or other disposition or encumbrance is authorized at a duly held meeting of the members thereof by the affirmative vote of not less than a majority of all of the members of the cooperative. However, notwithstanding anything herein contained, or any other provisions of law,

(1) The board of directors may sell, lease or otherwise dispose of all or a substantial portion of such property to another cooperative authorized to transact business in the state pursuant to this Part upon the authorization of a majority of those members of the cooperative present at a duly held meeting of the members thereof and

(2) The board of directors of the cooperative, without authorization by the members thereof, shall have full power and authority to authorize the execution and delivery of a mortgage or mortgages or a deed of trust or deeds of trust upon, or the pledging or encumbering of, any or all of the property, assets, rights, privileges, licenses, franchises and permits of the cooperative, whether acquired, or to be acquired, and wherever situated, as well as the revenues and income therefrom, all upon such terms and conditions as the board of directors shall determine, to secure any indebtedness of the cooperative to the United States of America or any agency or instrumentality thereof, or to any bank, insurance company, or other lending institution, any provision of the articles of incorporation or bylaws of a cooperative to the contrary notwithstanding.

Renumbered from R.S.1950, §12:321 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1970, No. 14, §1.

§ 12:422 Non-liability of members for debts of cooperative

The private property of the members of a cooperative shall be exempt from execution for the debts of the cooperative and no member shall be liable or responsible for any debts of the cooperative.

Renumbered from R.S.1950, §12:322 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:423 Recordation of mortgages and conveyances

Notwithstanding the provisions of any other Part, upon the recordation as a mortgage on real property of any mortgage, deed of trust, or other instrument executed by a cooperative or foreign corporation authorized to transact business in this state pursuant to this Part, which, by its terms creates a lien upon both real and personal property then owned or after-acquired, the lien thereof shall attach to all property of such cooperative then owned, described in such mortgage, deed of trust or other instrument and to all after-acquired property described therein immediately upon the acquisition thereof by such cooperative and the lien so created shall be superior to all claims of creditors of such cooperative and purchasers of such property and to all other liens affecting such property, except liens of prior record.

Renumbered from R.S.1950, §12:323 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:424 Waiver of notice

Whenever any notice is required to be given under the provisions of this Part or under the provisions of the articles of incorporation or by-laws of a cooperative, waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time fixed for the giving of such notice, shall be deemed equivalent to such notice. If a person or persons entitled to notice of a meeting attends such meeting, such attendance shall constitute a waiver of notice of the meeting, except in case the attendance is for the express purpose of objecting to the transaction of any business because the meeting has not been lawfully called or convened.

Renumbered from R.S.1950, §12:324 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:425 Taxation

Each cooperative shall pay annually, on or before the first day of July, to the department of revenue, a fee of ten dollars for each one hundred persons or fraction thereof to whom electricity is supplied within the state by it, but shall be exempt from all other excise and income taxes whatsoever.

Renumbered from R.S.1950, §12:325 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:426 Jurisdiction of the Public Service Commission

A. Cooperatives transacting business in this state pursuant to this Part shall not be subject to the jurisdiction and control of the Public Service Commission except as provided in R.S. 45:1163 and Subsections B and C of this Section.

B.(1) Upon petition of not less than ten percent of the members of an electric cooperative, the board of directors of the electric cooperative shall order a referendum election to be held to determine whether the electric cooperative shall be subject to the jurisdiction of the Public Service Commission. A petition shall be completed within sixty days of commencement.

(2)(a) Any member of an electric cooperative desiring a referendum election shall sign a petition addressed to the board of directors of the electric cooperative, in substantially the following form:

PETITION

TO:

The undersigned members respectfully request that you call an election to submit to the members the following proposition:

Shall the Public Service Commission have jurisdiction over this electric cooperative?

Signature

Address

Date

(b) Where signatures are made on more than one sheet, each sheet of the petition shall reproduce above the signatures the same matter as is on the first sheet. Each petitioner shall sign his name in his own handwriting and shall write his address and the date on which he signed. If a petitioner cannot sign his name he may have his name and address and the date written by another and shall affix his original "X" mark in the presence of two competent witnesses, who shall sign their names as witnesses to the mark.

(3) The petition shall be filed with the board of directors of the electric cooperative and the board shall order an election not less than sixty days nor more than ninety days from the date on which the petition was filed with the board.

(4)(a) On the date set by the board of directors for the election, the board shall mail postage prepaid and properly addressed to each member of the electric cooperative a ballot containing the following proposition:

Shall the Public Service Commission have jurisdiction over this electric cooperative:

YES_______________

NO _______________

(b) The ballot shall also contain a self-addressed envelope for the purpose of returning the ballot to an independent certified public accountant retained by the electric cooperative from a list obtained from the Society of Louisiana Certified Public Accountants to receive the ballots and certify the results of the election. The ballot shall also contain the date by which it must be received by the accountant for consideration in the election. The date by which the ballot must be received by the accountant shall be not more than thirty days after the date that it was mailed to the members by the board of directors. The board of directors shall not require that the ballots be returned by a date earlier than the thirtieth day after the ballots were mailed to the members. The election procedure shall require a signature form for verification, but shall not allow the signature to be traced to the vote of a particular member.

(5) The issue in the election shall be decided by a majority of the members voting whose ballots are received by the accountant. Twenty percent of the membership shall constitute a quorum for the election. The accountant shall notify the board of directors and the Public Service Commission of the results of the election.

C. When a majority of the members voting vote to place the cooperative under the jurisdiction of the Public Service Commission, the commission shall determine an effective date of the transfer which shall be within ninety days from the election. On and after the effective date of the transfer, the cooperative shall be subject to regulation by the Public Service Commission. In fixing and regulating the rates to be charged by an electric cooperative, the commission shall set rates sufficient to meet the covenants of the cooperative's mortgage and loan agreements. Such rates shall not be fixed or regulated on a rate of return basis.

D.(1) Except as provided in this Subsection, funds of an electric cooperative shall not be used for the purpose of supporting or opposing the issue presented in the election nor shall funds contributed to the electric cooperative or to a member of the board of directors of the electric cooperative be used for the purpose of supporting or opposing the issue presented in the election if the funds are contributed by an individual or firm which has conducted business with the cooperative, other than as a customer of electric service, within two years prior to the date on which the ballots are mailed by the board. No firm or individual which has contributed to a cooperative or member of the board of directors regarding an issue presented in the election shall do business with any electric cooperative in this state for a period of two years from the counting of the votes. Any contract in violation of this Subsection shall be unenforceable.

(2) During the election period, the cooperative may mail a written explanation to each member relating the merits and demerits of a change in regulation. If the cooperative sends such an explanation, it shall pay an equal sum of money for a similar mailing by the petitioners. The content of the cooperative's mailing shall be determined by the board of directors. The content of the petitioning members' mailing shall be determined by a ten-person committee of petitioners selected in the petition or, if not named in the petition, selected at random, from volunteer petitioners, by the certified public accountant selected to administer the election. Membership lists shall be provided the petitioners.

E. After the cooperative has been under the jurisdiction of the Public Service Commission for at least two years, the members may elect to remove the cooperative from the jurisdiction of the commission in the same manner as when electing to be placed under the jurisdiction of the committee.

F. A single electric cooperative shall not conduct more than one election held pursuant to this Subsection within a two year period. No election shall be held prior to the effective date of this Section.

Renumbered from R.S.1950, §12:326 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1970, No. 34, §3; Acts 1983, No. 636, §2, eff. Jan. 1, 1984; Acts 1984, 1st Ex. Sess., No. 2, §1, eff. March 27, 1984.

§ 12:427 Securities law exemption

The provisions of Part X of Chapter 2 of Title 51 shall not apply to any note, bond or other evidence of indebtedness issued by any cooperative pursuant to this Part to the United States of America or any agency or instrumentality thereof, or to any bank, insurance company, or other lending institution, or to any mortgage or deed of trust executed to secure the same. The provisions of said Part shall not apply to the issuance of membership certificates by any cooperative.

Renumbered from R.S.1950, §12:327 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1970, No. 14, §2.

§ 12:428 Acquisition of servitudes

A cooperative shall acquire a servitude on an immovable, unless such immovable is owned by the federal or state government or any agency or subdivision thereof, for the operation and maintenance of its electric transmission and distribution lines, along, upon, under or across any such immovable by virtue of the uninterrupted maintenance of such lines without the written or other consent of the owner thereof, along, upon, under or across the immovable for a period of one year; provided such servitude and operation does not interfere with the use of said property by other public utilities; provided further that in all cases where the written consent of the owner for the establishment of a servitude has been obtained and a line has been constructed along, upon, under or across the property under said consent it is not necessary that the written consent be recorded in the conveyance or other records of the parish where the property is located in order to make the servitude effective as to third parties.

Renumbered from R.S.1950, §12:328 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:429 Construction

This Part shall be construed liberally. The enumeration of any object, purpose, power, manner, method, or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods or things.

Renumbered from R.S.1950, §12:329 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:430 Short title

This Part of this Chapter shall be known and may be referred to by the short title: "Electric Cooperative Law."

Renumbered from R.S.1950, §12:330 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:430.1 Cooperatives; provision of broadband services; servitudes

A.(1)(a) Except as provided in Subparagraphs (b) and (c) of this Paragraph, a cooperative shall grant permission to a broadband affiliate or a broadband service provider to use the electric delivery system of the cooperative to provide broadband services. The use of the cooperative's electric delivery system for the provision of broadband services by the broadband affiliate or a broadband service provider shall not be considered an additional burden on the property upon which the cooperative's electric delivery system is located and shall not require the broadband affiliate or broadband service provider to obtain the additional consent from anyone having an interest in the property upon which the cooperative's electric delivery system is located.

(b) The provisions of Subparagraph (a) of this Paragraph shall not apply to any property owned or controlled by a railroad company operating in the state.

(c) Notwithstanding any provision of law to the contrary, a cooperative providing electric service may deny a broadband affiliate or broadband service provider access to its poles, ducts, conduits, or rights-of-way, on a nondiscriminatory basis where there is insufficient capacity and for reasons of safety, reliability, and generally applicable engineering purposes.

(2)(a) If a portion of a cooperative's electric delivery system is used by a broadband affiliate or broadband service provider for the purpose of providing broadband services and the landowner of the property on which such portion is located believes his property has been damaged by such use, the landowner may petition the district court in which the property is situated for any damages to which the landowner may be entitled pursuant to law, subject to the provisions of Subparagraph (b) of this Paragraph.

(b) A cooperative or its members shall not be liable for any recoverable damages to property awarded by a court pursuant to the provisions of this Subsection, and the damages shall be the sole responsibility of the broadband affiliate or broadband service provider.

B. A cooperative shall provide a broadband affiliate, broadband service provider, or broadband operator with nondiscriminatory access to locate its equipment for the provision of broadband services on the cooperative's electric delivery system on just, reasonable, and nondiscriminatory terms, conditions, and rates.

C. Any broadband affiliate, broadband service provider, or broadband operator wishing to attach to a cooperative's electric delivery system shall file written notice with the cooperative. The cooperative shall respond to the notice in accordance with the Public Service Commission's General Order dated September 4, 2014, or any subsequent related order.

D. A cooperative shall charge a broadband affiliate, broadband service provider, or broadband operator for the construction, installation, operation, use, and maintenance of those parts of its electric delivery system that are used or may be reserved for use by the broadband affiliate, broadband service provider, or broadband operator for the provision of broadband services. Any lease of facilities by a cooperative to a broadband affiliate that includes the use of the cooperative's poles shall include a pole attachment fee to be paid by the broadband affiliate to the cooperative. The fee charged by the cooperative to the broadband affiliate shall be the same amount as the pole attachment fee charged by the cooperative to any other broadband operator.

E. A cooperative shall not do any of the following:

(1) Use its electric energy sales revenue to subsidize the provision of broadband services to the public by a broadband affiliate or other broadband operator.

(2) Allow the installation or operation of a broadband system on its electric delivery system by a broadband affiliate or other broadband operator to diminish the reliability of the electric delivery system.

(3) Require any person to purchase broadband services from a broadband affiliate or other broadband operator, as a condition of receiving or continuing to receive electric energy from the cooperative.

(4) Disconnect, or threaten to disconnect, electric service to any customer due to the customer's failure to pay for broadband services provided to the customer by a broadband affiliate or other broadband operator.

F. A cooperative may make capital investments in a broadband affiliate, issue bonds on behalf of a broadband affiliate, make loans to a broadband affiliate at fair market rate, and enter into loan guarantees for the benefit of a broadband affiliate, all of which may be in such amounts and on such terms as the cooperative determines to be prudent, subject to the requirements established by the Public Service Commission's General Orders dated March 18, 1994, and November 13, 1996, or any subsequent related orders.

G. As used in this Section:

(1) "Broadband affiliate" means any entity that meets all of the following criteria:

(a) Is wholly or partially owned by a cooperative.

(b) Is formed to own or operate a broadband system or provide broadband high-speed internet services.

(2) "Broadband operator" means a broadband service provider that owns or operates a broadband system on a cooperative's electric delivery system with the cooperative's consent.

(3) "Broadband service provider" means an entity that provides broadband services to another on a wholesale basis or to an end-use customer on a retail basis.

(4) "Broadband services" means any service, using any equipment or technology, including wireline or fixed wireless broadband internet service, that consists of or includes the provision of or connectivity to a high-speed, high-capacity transmission medium meeting the Federal Communications Commission's benchmark of at least twenty-five megabits per second download and three megabits per second upload, or any subsequent benchmark determined by the Federal Communications Commission, that can carry signals from or to multiple sources and that does either of the following:

(a) Is used to provide access to the internet.

(b) Provides computer processing, information storage, information content or protocol conversion, including any service applications or information service provided over such high-speed access service. As used in this Part, "broadband services" shall also include video services, Voice over Internet Protocol services, wireless services, and internet protocol-enabled services.

(5) "Broadband system" means a facility used to deliver broadband internet access service as defined in 47 CFR 8.1 and other broadband services.

(6) "Electric delivery system" means the poles, lines, materials, equipment, servitudes, and other facilities or properties used by a cooperative.

Acts 2020, 1st Ex. Sess., No. 16, §1, eff. July 13, 2020.

§ 12:430.2 Reporting on broadband high-speed internet access

On March 1, 2021, and every March thereafter, each cooperative, or the statewide or trade association of each cooperative, shall submit a written report to the Senate Committee on Commerce, Consumer Protection and International Affairs and the House Committee on Commerce regarding any impediments to providing broadband high-speed internet access to rural residents. The information in the report shall include, at a minimum, the number of broadband affiliates and broadband service providers who have requested to use a cooperative's electric delivery system and the number of broadband operators, including any broadband affiliate, who have accessed a cooperative's electric delivery system to deploy broadband to rural residents in the state.

Acts 2020, 1st Ex. Sess., No. 16, §1, eff. July 13, 2020.

PART I-A PARTICULAR ELECTRIC COOPERATIVES

§ 12:431 Repealed by Acts 2014, No. 132, §1, eff. May 22, 2014.

Repealed by Acts 2014, No. 132, §1, eff. May 22, 2014.

§ 12:431.1 Repealed by Acts 2014, No. 132, §1, eff. May 22, 2014.

Repealed by Acts 2014, No. 132, §1, eff. May 22, 2014.

PART II SEA FOOD MARKETING ASSOCIATIONS

§ 12:441 Sea Food Marketing Associations authorized

Cooperative Sea Food Marketing Associations may be organized under this Part. These associations shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their members as producers.

Renumbered from R.S.1950, §12:351 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:442 Purpose of legislation

It is hereby declared that this Part was enacted in order to promote, foster and encourage the intelligent and orderly marketing of sea food products, skins and furs through cooperation, eliminate speculation, unnecessary middlemen and waste, make the distribution of sea food products, skins and furs as direct as can be efficiently done between producer and consumer, and to stabilize the marketing of such products, and skins and furs.

Renumbered from R.S.1950, §12:352 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:443 Terms defined

As used in this Part:

(1) "Association" means an association organized under this Part.

(2) "Member" means an actual member of an association without capital stock and the holder of common stock in an association organized with capital stock.

(3) "Person" includes individuals, firms, partnerships, corporations, and associations.

(4) "Sea food products" include shrimp, clams, fish, crabs, lobsters, and all other sea foods, as well as all by-products of sea foods.

(5) "Skins and furs" include all the skins and furs of all quadrupeds valuable for their skins or furs, including but not limited to alligators, minks, otter, muskrats, beaver, raccoons, opossums, weasels, spotted skunks, or "civet cats".

Renumbered from R.S.1950, §12:353 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1999, No. 341, §1.

§ 12:444 Persons who may organize

Ten or more persons, a majority of whom are residents of this state, engaged in the catching, gathering, or the production of seafood products and skins and furs, may form an association, with or without capital stock, under the provisions of this Part.

Renumbered from R.S.1950, §12:354 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1999, No. 341, §1.

§ 12:445 Activities in which association may engage

An association may be organized to engage in any activity in connection with the marketing or selling of seafood products and skins and furs of its members, or with the catching, gathering, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilizing thereof, or the manufacturing or marketing of byproducts thereof; or in connection with the manufacturing, selling, or supply to its members of machinery, equipment, or supplies; or more than one of the activities specified herein; or in the financing of the above enumerated activities.

Renumbered from R.S.1950, §12:355 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1999, No. 341, §1.

§ 12:446 Powers of association

Each association shall have the following powers:

(1) To engage in any activity in connection with the marketing or selling of the sea food products and skins and furs belonging to its members, or with the catching, gathering, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling or utilization of any sea food products or skins or furs produced or delivered to it by its members; or the manufacturing or marketing of the by-products thereof; or in connection with the purchase, hiring, or use, by its members of supplies, machinery or equipment, or in the financing of any such activities; or in any one or more of the activities specified in this section. No associations shall handle the sea food products or skins or furs belonging to any non-member, except as may be necessary and incidental to the handling of the products of the members; and in any case, the value of the products of non-members so handled, shall not exceed the value of the products handled by the association for its members.

(2) To borrow money and to make advances to members.

(3) To act as agent or representative of any member or members in any of the above mentioned activities.

(4) To purchase or otherwise acquire and to hold, own, and exercise all rights of ownership in, and to sell, transfer or pledge or guarantee the payment of dividends or interest on, or the retirement or redemption of shares of the capital stock or bonds of any corporation or association engaged in any related activity or in the warehousing or handling or marketing of any of the products handled by the association.

(5) To establish reserves and to invest the funds in bonds or such other property as may be provided in the bylaws.

(6) To buy, hold and exercise all privileges of ownership, over such movable or immovable property as may be necessary or convenient for the conducting and operating of any of the business of the association or incidental thereto.

(7) To do everything necessary, suitable, or proper for the accomplishment of any of the purposes or the attainment of any one or more of the objects herein enumerated; or conducive to or expedient for the interest or benefit of the association; and to contract accordingly; and, in addition, to exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized, or to the activities in which it is engaged; and to do any such thing, anywhere.

(8) To sue and be sued, prosecute and be prosecuted to judgment, in any suit before any court.

Renumbered from R.S.1950, §12:356 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:447 Members

A. Under the terms and conditions prescribed by its bylaws, an association may admit as members, or issue common stock or certificates of membership to such persons as are engaged in the business of catching, gathering, preserving, drying, processing, manufacturing, canning, packing, grading, storing, shipping, or utilization of seafood products, skins and furs, or the byproducts thereof, to be handled by or through the association. Certificates of membership issued by a nonstock association shall not be transferrable, and no person shall acquire common stock by operation of law or otherwise, except as provided herein.

B. If a member of a non-stock association is other than a natural person, such member may be represented by any individual, associate, officer, manager or member thereof, duly authorized in writing.

C. An association organized hereunder may become a member or stockholder of any other association organized hereunder.

Renumbered from R.S.1950, §12:357 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1999, No. 341, §1.

§ 12:448 Articles of association

A. Each association formed under this Part shall prepare and file articles of association, setting forth:

(1) The name of the association, and the location and post-office address of its registered office, and the name and post-office addresses of its registered agents.

(2) The purposes for which it is formed.

(3) The term for which it is to exist, not exceeding fifty years.

(4) The number of directors thereof, which must not be less than five but may be any number in excess thereof, and the term of office of such directors.

(5) If organized without capital stock, whether the property rights and interest of members shall be equal or unequal; the articles shall set forth the general rule or rules applicable to all members by which property rights and interests, respectively, of each member may and shall be determined and fixed; and provision to be made for the admission of new members, who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules.

(6) If organized with capital stock, the amount of such stock and the number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided, the articles of association must contain a statement of the number of shares of stock to which preference is granted and the number of shares of stock to which no preference is granted, and the nature and definite extent of the preference and privileges granted.

B. The articles must be subscribed by the incorporators and acknowledged by one of them before an officer authorized by the law of this state to take and certify acknowledgments. The articles shall be filed for record in the office of the secretary of state, and thereafter shall be filed and recorded in the clerk of court's office in the parish where the registered office of the association is located. Corporate existence shall begin as soon as the articles shall have been filed and recorded as hereinabove provided.

Acts 1989, No. 103, §1.

§ 12:449 Amendments to articles of association

The articles of incorporation may be altered or amended at any regular meeting, or at any special meeting called for that purpose. Any amendment must first be approved by two-thirds of the directors and must be then adopted by a vote of a majority of all members of the association. Amendments to the articles of incorporation, when so adopted, shall be filed in the same manner as required for the articles, in R.S. 12:448. Amendments shall be effective when filed in accordance with R.S. 12:448.

Renumbered from R.S.1950, §12:359 by Acts 1968, No. 105, §1, eff. Jan. 1, 1969.

§ 12:450 Bylaws

Each association incorporated under this Part, within thirty days after its incorporation, shall adopt for its government and management, a code of bylaws, not inconsistent with the powers granted by this Part. A majority vote of the members, or their written consent, shall be necessary to adopt such bylaws. Each association under its bylaws may also provide for:

(1) The time, place and manner of calling and conducting its meetings.

(2) The number of stockholders or members to constitute a quorum.

(3) The right of members to vote by proxy or by mail, or both, and the conditions, manner, form, and effect of such votes.

(4) The number of directors to constitute a quorum.

(5) The qualifications, and duties and term of office of directors and officers; the time of their election and the mode and manner of giving notice thereof.

(6) Penalties for violations of the bylaws.

(7) The amount of entrance, organization and membership fees, if any; the manner and method of collecting the same, and the purposes for which they may be used.

(8) The amount which each member shall be required to pay annually, or from time to time, if at all, to carry on the business of the association; the charge, if any, to be paid by each member for service rendered by the association to him; and the marketing contract between the association and its members, which every member or stockholder shall be required to sign.

(9) The qualifications of members of the association and the conditions precedent to membership or ownership of common stock; the method, time and manner of permitting members to withdraw, or the holders of common stock, to transfer their stock; the manner of assignment and transfer of the interest of members, and of the shares of common stock; the conditions upon which, and the time when, membership of any member shall cease; the automatic suspension of the rights of a member when he ceases to be eligible to membership in the association; and the mode, manner and effect of the expulsion of a member; the manner of determining the value of a member's interest and provision for its purchase by the association upon the death or withdrawal of a member or stockholder or upon the expulsion of a member or the forfeiture of his membership, or, at the option of the association, by conclusive appraisal by the board of directors. In case of the withdrawal or expulsion of a member, the board of directors shall appraise equitably and conclusively his property interest in the association and shall fix the amount thereof in money, which shall be paid to him at such time as may be fixed by the board of directors, but not beyond the termination of the current marketing agreement.

Renumbered from R.S.1950, §12:360 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:451 General and special meetings; how called

In its bylaws each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time, and ten per cent of the members, by petition setting forth the specific business to be brought before the association, may demand a special meeting at any time. Such meeting thereupon shall be called by the directors. Notice of each meeting, together with a statement of the purpose thereof, shall be mailed to each member at least five days prior to the meeting; provided, however, that the bylaws may require, instead, that such notice may be given by publication in a newspaper of general circulation, published at the location of the registered office of the association.

Renumbered from R.S.1950, §12:361 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:452 Board of directors

A. The affairs of the association shall be managed by a board of not less than five directors, elected by the members from their own members. The board shall have all rights and powers of the board of a business corporation organized under Chapter 1, and such other powers as may be necessary to the proper execution of this Part.

B. The bylaws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts. In such cases, the bylaws shall specify the number of directors to be elected by each district, the manner and method of re-appointing the directors and redistricting the territory covered by the association. The bylaws may provide that primary elections shall be held in each district to elect the directors apportioned to such districts and that the results of all such primary elections shall be ratified by the next regular meeting of the association or that they may be considered final as to the association. Such directors shall represent primarily the interests of the general public in such association. Directors so appointed need not be members, but shall have the same powers and rights as the other directors. Such directors shall not number more than one-fifth of the entire number of directors.

C. The directors may provide a fair remuneration for the time actually spent by its officers, directors and employees in its service. No director, during the term of his office, shall be a party to a contract for profit with the association differing in any way from the business relations accorded regular members.

D. The bylaws may provide for an executive committee and may allot to such committee all the functions and powers of the board of directors, subject to the general direction and control of the board. When a vacancy on the board of directors occurs, other than by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy, unless the bylaws provide for an election of directors by districts. In such case, the board of directors shall immediately call special election, to be participated in by the members in that district, to fill the vacancy.

Renumbered from R.S.1950, §12:362 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:453 Election of officers

The directors shall elect a president, one or more vice-presidents, and a secretary and a treasurer. These officers need not be directors, or members of the association. The directors may combine the two latter officers and designate the combined office as that of secretary-treasurer. The treasurer may be a bank or any depository, and as such shall not be considered as an officer but as an agent of the board of directors. In such case, the secretary shall perform the usual accounting duties of the treasurer, excepting that the funds shall be deposited only as authorized by the board of directors.

Renumbered from R.S.1950, §12:363 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:454 Certificates of membership and shares of stock

A. When a member of an association established without capital stock, has paid his membership fee in full, he shall receive a certificate of membership.

B. No association shall issue a certificate of stock to a member until it has been fully paid for. The promissory note of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security shall not affect the member's right to vote or hold office.

C. Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association A member shall be liable for the sum remaining unpaid on his membership fee or on his subscription to the capital stock, including any unpaid balance on any promissory note given in payment thereof.

D. No stockholder of an association shall own more than one-tenth of the common stock of the association. An association, in its bylaws, may limit the amount of common stock which one member may own to any amount less than one-tenth of the common stock.

E. No member or stockholder shall be entitled to more than one vote. Any association organized with stock, may issue preferred stock, with or without right to vote. Such stock may be redeemable or subject to retirement by the association, on such terms and conditions as may be provided for by the articles of association. These conditions shall be printed on the stock certificates.

F. The bylaws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the sea food products handled by the association, and such restrictions shall be printed upon every certificate of stock.

G. The association, at any time except when the debts of the association exceed fifty per cent of the assets thereof, may buy or purchase its common stock, at the book value thereof as conclusively determined by the board of directors, and pay for it in cash within thirty days thereafter.

Renumbered from R.S.1950, §12:364 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:455 Removal of officer or director

A. Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by ten per cent of the members, requesting the removal of the officer or director in question. The question of such removal shall be voted upon at the next regular or special meeting of the association and, by vote of the majority of the members, the association may remove the officer or director and fill the vacancy. The officer or director against whom such charges have been brought shall be informed in writing of the charges a reasonable time previous to the meeting, and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses. The person or persons so bringing charges against him shall have the same opportunity. But such officer or director may be suspended by a vote of two-thirds of the directors, pending the hearing of such charges.

B. If the bylaws provide for the election of directors by districts, with primary elections in each district, then the petition for removal of an officer or director must be signed by twenty per cent of the members residing in the district from which he was elected. The board of directors must call a special meeting of the members residing in that district to consider the removal of the officer or director. By a vote of the majority of the members of that district, the officer or director in question shall be removed from office.

Renumbered from R.S.1950, §12:365 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:456 Referendum

Upon demand of one-third of the entire board of directors, any matter approved or passed by the board shall be referred to the entire membership for decision at the next regular or special meeting; provided, however, that a special meeting may be called for the purpose.

Renumbered from R.S.1950, §12:366 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:457 Marketing contract

A. The association and its members may make and execute marketing contracts, requiring the members to sell, for any period of time, not in excess of ten years, all or any specified part of their sea foods or sea food products or commodities, exclusively to or through the association, or any facilities to be created by the association. If they contract a sale to the association, title to the products passes absolutely and unreservedly, except for recorded liens, to the association upon delivery, or when put in merchantable condition, or at any other specified time, if expressly and definitely agreed in the contract.

B. The contract may provide that the association may sell or resell the products delivered by its members, with or without taking title thereto, and pay over to its members the re-sale price, after deducting all necessary selling, overhead and other expenses, as defined in said contracts, including interest on preferred stock, not exceeding eight per cent per annum, reserves for the retiring of stock, if any, other proper reserves, and interest not exceeding eight per cent per annum upon common stock.

Renumbered from R.S.1950, §12:367 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:458 Breach of contract or of bylaws

A. The bylaws or the marketing contract of any association existing hereunder may fix, as liquidated damages, specific sums to be paid by the member to the association upon the breach or threatened breach by him of any provision of the bylaws or of the marketing contract regarding the sale or delivery or withholding of products, and may further provide that the members will pay all costs, premiums for bonds, expenses and fees in case any action is brought upon the contract by the association. These provisions shall be valid and enforceable in the courts of this state, and such clauses providing for liquidated damages shall be enforceable as such, and shall not be regarded as penalties.

B. In the event of any breach or threatened breach of such bylaws or marketing contract by a member or other person, the association shall be entitled to an injunction to prevent the breach or further breach of the bylaws or contract, and to specific performance relative thereto. Pending the adjudication of such an action and upon the filing a verified complaint showing the breach or threatened breach, together with a bond in the sum of one hundred dollars, the association shall be entitled to an injunction against the member or other person, provided, however, that the court in its discretion, may increase such bond to five hundred dollars, after a hearing, on five days notice to the parties.

Renumbered from R.S.1950, §12:368 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:459 Acquisitions of business, etc., and payment therefor

Whenever an association organized or existing under this Part, with preferred capital stock, shall purchase the stock or any other property, or any interest in any property of any person, it may discharge the obligations so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred capital stock to an amount which, at par value, would equal a fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest purchased shall be equivalent to payment in cash for the shares of stock issued.

Renumbered from R.S.1950, §12:369 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:460 Conflicting laws not to apply

A. Any provisions of law which are in conflict with this Part, shall be construed as not applying to associations.

B. Any exemptions referring to taxes or otherwise, applying to sea food products in the possession or under control of the individual catcher, gatherer or producer, shall apply similarly to such products delivered by its members, in the possession or under control of the association; provided that nothing herein contained shall in any way affect the severance taxes imposed by law upon sea food products.

Renumbered from R.S.1950, §12:370 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:461 Limitation of use of term "co-operative"

No person hereafter organized or doing business in this state shall be entitled to use the word "co-operative" as part of its corporate or other business name or title for producers' co-operative marketing activities, unless it has complied with the provisions of this Part.

Renumbered from R.S.1950, §12:371 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:462 Interest in other corporations or associations

An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any corporation or association, with or without capital stock, engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing, marketing or selling the products handled by the association, or the by-products thereof. If such corporations are warehousing corporations, they may issue legal warehouse receipts to the association, against the commodities delivered by it, or to any other person, and such legal warehouse receipts shall be considered as adequate collateral to the extent of the usual and current value of the commodity represented thereby. If such warehouse is licensed, or licensed and bonded under the laws of this state, or of the United States, its warehouse receipt delivered to the association on commodities of the association or its members, shall not be challenged or discriminated against because of ownership or control, wholly or in part, by the association.

Renumbered from R.S.1950, §12:372 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:463 Contracts and agreements with other associations

Any association, upon resolution adopted by its board of directors, may enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements and contracts and arrangements with any other similar corporation or association, formed in this or any other state, for the co-operative or more economical carrying on of its business, or any part or parts thereof. Any two or more associations may, by agreement between them, unite in employing and using, or may employ and use, separately the same personnel, methods, means and agencies for carrying on and conducting their respective businesses.

Renumbered from R.S.1950, §12:373 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:464 Existent associations may adopt the provisions of this Part

Any similar corporation or cooperative association organized under previously existing statutes, by a majority vote of its directors or members, may be brought under the provisions of this Part. It shall make out in duplicate a statement, signed and sworn to by a majority of its directors, to the effect that the corporation or cooperative association has, by a majority vote of its directors, decided to accept the benefits and be bound by the provisions of this Part. Articles of association shall be filed as required in R.S. 12:448 except that they shall be signed by a majority of the members of the board of directors. The filing fee shall be the same as for filing an amendment to articles of association.

Renumbered from R.S.1950, §12:374 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:465 How similar foreign associations may carry on business in Louisiana

Any similar cooperative marketing association, organized under appropriate laws of any other state, for the purposes and with the restrictions and limitations substantially the same as those set forth herein, may operate and do business in this state with all the rights, powers and privileges granted to any cooperative marketing association incorporated under this Part, upon compliance with Chapter 3.

Renumbered from R.S.1950, §12:375 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:466 Breach of marketing contract and knowingly spreading false reports concerning finances and management

Any person or any corporation whose officer or employee knowingly induces, or attempts to induce, any member of an association to breach his marketing contract with the association, or who knowingly spreads false reports about the finances or management of said association, shall be guilty of a misdemeanor and shall be subject to a fine of no less than one hundred dollars, nor more than one thousand dollars, for each offense. Such person or corporation shall be liable to the association aggrieved, in a civil suit, in the penal sum of one thousand dollars for each such offense.

Renumbered from R.S.1950, §12:376 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:467 Not in restraint of trade

No association shall be deemed to be in violation of the anti-trust statutes of this state or a combination in restraint of trade or an illegal monopoly. No association shall be deemed attempting to lessen competition or to fix prices arbitrarily. Marketing contracts or agreements between the association and its members, or any agreement authorized by this Part, shall be considered legal and not in restraint of trade or in violation of the anti-trust statutes of this state.

Renumbered from R.S.1950, §12:377 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:468 Repealed by Acts 1982, No. 526, §3, Aug. 11, 1982

Repealed by Acts 1982, No. 526, §3, Aug. 11, 1982

§ 12:469 Filing fees

A. A fee as provided in R.S. 49:222 shall be paid in advance to the secretary of state, for the use and benefit of the state, by every corporation:

(1) For filing and recording articles of association.

(2) For filing and recording amended articles of association.

(3) For filing and recording dissolution proceedings.

(4) For filing and recording merger proceedings.

B. Additional certified copies of documents and certificates will be furnished upon request or a certificate for a fee as provided in R.S. 49:222, which shall be paid in advance.

Renumbered from R.S.1950, §12:379 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1982, No. 526, §2, eff. Aug. 11, 1982; Acts 2008, No. 913, §2.

§ 12:470 Application of Chapter 1

The provisions of Chapter 1 and all powers and rights thereunder, shall apply to any association organized under this Part, except where such provisions are in conflict with the express provisions of this Part.

Renumbered from R.S.1950, §12:380 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:471 Short title

This Part of this Chapter shall be known and may be referred to by the short title: "Cooperative Sea Food Marketing Law."

Renumbered from R.S.1950, §12:381 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

PART III ORTHODOX CHURCHES

§ 12:481 Application of Part

This Part applies to all churches, congregations, parishes, committees and other religious organizations governed by jurisdictions, archdioceses and dioceses of any Orthodox Patriarchate, Synod or national church of the Orthodox Church, recognized by the apostolic historic Orthodox Patriarchates of Constantinople, Antioch, and Yugoslavia and in general to all churches, congregations, parishes, committees and other religious organizations founded or established with the intent and for the purpose of adhering to and maintaining the apostolic and historic communion, doctrine, discipline, canon law, tradition, worship and unity of the Orthodox Church.

Acts 1954, No. 226, §1. Renumbered from R.S.1950, §12:391 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:482 Permission to incorporate

An unincorporated church, congregation, parish or any other religious organization of such sect may apply to the appropriate hierarch, archbishop, bishop or administrator for permission to incorporate under this article. When such permission has been granted in writing, it shall be attached to the certificate of incorporation.

Acts 1954, No. 226, §2. Renumbered from R.S.1950, §12:392 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:483 Certificate of incorporation; form and contents

The certificate of incorporation shall be in the form provided by law for all religious corporations and must in addition recite therein that the purpose and intent of the corporation is to maintain, propagate, practice and forever perpetuate religious worship, service, sacraments and teachings in full accordance and unity with the doctrine, ritual, canon law, faith, practice, discipline, traditions and usages of the Orthodox Church and for the carrying out of the said purpose and intent to maintain a religious organization which will be adherent and obedient to the Orthodox ecclesiastical jurisdiction and authority and which shall recognize and remain subject to the duly appointed and canonical Orthodox hierarch, archbishop, bishop or administrator appropriate for the Orthodox communicant members comprising the same.

Acts 1954, No. 226, §3. Renumbered from R.S.1950, §12:393 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

PART IV REAL ESTATE INVESTMENT TRUSTS

§ 12:491 Real estate investment trusts authorized and defined

A. Real Estate Investment Trusts are hereby authorized as a recognized form of association for the conduct of business within this state.

B. A real estate investment trust is a trust created at law by an instrument under which property is held and managed by trustees for the benefit and profit of such persons as may be or may become the holders of transferable certificates evidencing beneficial interests in the trust estate, which has elected to qualify for taxation as a real estate investment trust under Part II, Subchapter M of the Internal Revenue Code of 1954, as amended.

Added by Acts 1962, No. 330, §1. Renumbered from R.S.1950, §12:395 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1970, No. 136, §1; Acts 1977, No. 526, §1.

§ 12:492 Qualification and restrictions and procedural rights

A. Any real estate investment trust desiring to do business in this state shall file with the secretary of state a verified copy of the trust instrument creating such a trust and any amendment thereto, the assumed business name, if any, and the names and addresses of its trustees. It shall also file true copies of the foregoing with the clerk of court in the parish in which it has its principal place of business in this state, and in any parish in which it owns any real property. Any person dealing with such trust shall be bound by the terms and conditions of the trust instrument and any amendments thereto so filed.

B. Except as otherwise specifically provided by law, any trust created under this part or entering this state pursuant thereto shall pay such taxes and fees as are imposed by the laws, ordinances, and resolutions of the state of Louisiana and any parishes and municipalities thereof on domestic and foreign corporations, respectively, on an identical basis therewith. In computing such taxes and fees, the shares of beneficial interest of such a trust shall have the character for tax purposes of shares of stock in private corporations.

C. Any such trust shall be subject to such applicable provisions of law, now or hereafter enacted, with respect to domestic and foreign corporations, respectively, as relate to the issuance of securities, filing of required statements or reports, service of process, general grants of power to act, right to sue and be sued, limitation of individual liability of shareholders, rights to acquire, mortgage, sell, lease, operate and otherwise to deal in real and personal property, and other applicable rights, and duties existing under the statutes of this state in a manner similar to those applicable to domestic and foreign corporation, except that the provision of R.S. 12:1-401 and 204 relative to the use of the word "Trust" shall not be applicable to real estate investment trusts, as herein defined.

D. The secretary of state, commissioner of securities, and the collector of revenue of the state of Louisiana may prescribe binding rules and regulations applicable to such trusts consistent with this Part.

E. Repealed by Acts 2001, No. 8, §18, eff. July 1, 2001.

F. Any real estate investment trust which has once elected to be taxed under Part II, Subchapter M of the Internal Revenue Code of 1954, as amended, shall not thereafter lose the rights and duties granted under this Section, notwithstanding the fact that such trust no longer qualifies for taxation under Part II, Subchapter M of the Internal Revenue Code of 1954, as amended, provided that such trust continues to be managed by trustees for the benefit and profit of at least one hundred holders of transferable certificates evidencing beneficial interests in the trust estate.

G.(1) Any person who has or has had a property right, a procedural right, or any personal or real right affected by the retroactive application of R.S. 12:491(B) or Subsection F of this Section both as amended by Act 526 of 1977, shall have a period of thirty days from the effective date of this Act to petition a district court of competent jurisdiction for any relief authorized by law as to any rights affected thereby.

(2) The petition shall set forth the manner in which such rights have been affected by the retroactive application of the aforesaid provisions of Act 526 of the 1977 Regular Session of the Louisiana Legislature. Upon a proper showing that a petitioner's rights have been adversely affected by the retroactive application of the aforesaid provisions of Act 526 of the 1977 Regular Session of the Louisiana Legislature, the court shall render judgment granting petitioners restoration of any rights lost thereby.

(3) Upon application and a showing that the judgment of this lawsuit may affect other pending actions, judicial proceedings or property rights the court shall grant a temporary restraining order and, in due course, a preliminary injunction and a permanent injunction staying such other actions or proceedings whether they be summary, ordinary, executory or extraordinary. Bond shall be fixed at $250.00.

H.(1) In order to affect the title to immovable property as to third persons a notice of lis pendens must be filed into the conveyance records of the parish in which the immovable property is located and a notice of lis pendens must be served by registered or certified mail on any person claiming a present ownership interest in the immovable property. The notice of lis pendens must contain a description of the immovable property and be filed and/or served within six months of the effective date of this Act.

(2) For purposes of the sale of immovable property in this state, such sale by a corporation, trust or unincorporated association, which previously qualified as a real estate investment trust, and acting through its authorized officer, trustee, or agent is valid for title purposes.

Added by Acts 1962, No. 330, §1. Renumbered from R.S.1950, §12:396 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1970, No. 136, §2; Acts 1977, No. 526, §1; Acts 1978, No. 723, §3, eff. July 17, 1978; Acts 2001, No. 8, §18, eff. July 1, 2001; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:493 Name of Part

This Part shall be known and may be referred to by the short title: "Real Estate Investment Trust Law."

Added by Acts 1962, No. 330, §1. Renumbered from R.S.1950, §12:397 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

PART V COOPERATIVE HOUSING CORPORATIONS

§ 12:499.1 Short title; purpose

A. This Part shall be known as the "Cooperative Housing Corporation Law".

B. The purpose of this Part is to foster safe, decent, and affordable housing in the state by enabling individuals to form cooperative corporations for the purpose of developing, acquiring, owning, and/or operating multi-family and single family housing units on a cooperative plan.

Acts 1990, No. 857, §1.

§ 12:499.2 Application of chapter; amendment of articles of incorporation to comply with chapter

This Part applies to all cooperative housing corporations organized pursuant to this Part. Any corporation organized under Chapter 2 of this Title may become a cooperative housing corporation by adopting an amendment to its articles electing to become subject to this Part. The amendment shall be adopted and filed, and shall be effective, according to the Chapter under which the corporation was initially organized before its election to be subject to this Part.

Acts 1990, No. 857, §1.

§ 12:499.3 Definitions

In this Part, the following words and phrases shall have the following meanings:

(1) "Board" means board of directors.

(2) "By-laws" means the by-laws of a cooperative housing corporation as they exist from time to time.

(3) "Cooperative housing corporation" means a corporation organized or existing under this Part.

(4) "Limited equity cooperative housing corporation" means a cooperative housing corporation organized and operated primarily for the benefit of low and moderate income persons, and whose equity, after allowance for maximum transfer value of its stock, is permanently dedicated to providing housing to persons of low or moderate income or to charitable purposes.

(5) "Member" means a person who holds voting stock of a cooperative housing corporation.

(6) "Proprietary lease" means an agreement between a cooperative housing corporation and its stockholder for the occupancy of a dwelling unit owned by the cooperative housing corporation.

(7) "Transfer value" means the value which may be paid or received upon the sale or transfer of the stock of a cooperative housing corporation.

Acts 1990, No. 857, §1.

§ 12:499.4 Application of laws; conflict of laws

The provisions of Chapter 2 of this Title 12 shall be applicable to cooperative housing corporations, and they shall enjoy the powers and privileges, and be subject to the duties, restrictions and liabilities of other corporations except where inconsistent with this Part. This Part shall take precedence in the event of any conflict with the provisions of Chapter 2 of this Title.

Acts 1990, No. 857, §1.

§ 12:499.5 Articles of organization

Three or more persons who are residents of this state, may organize a cooperative housing corporation by filing articles of organization with the secretary of state. The articles shall meet the requirements of Chapter 2 of this Title, and in addition, shall state the following:

(1) Whether transfer of corporation stock is restricted.

(2) Whether or not the corporation shall be authorized to pay dividends on its stock, but no cooperative housing corporation shall pay a dividend of more than six percent, noncumulative, upon its stock.

(3) Whether the transfer value of corporation stock is restricted.

Acts 1990, No. 857, §1.

§ 12:499.6 Name

The name of each cooperative housing corporation shall comply with the provisions of Chapter 2 of this Title, and in addition, shall contain the word "cooperative".

Acts 1990, No. 857, §1.

§ 12:499.7 Power to make, amend, or repeal by-laws

The power to make, amend, or repeal by-laws shall be reserved to the stockholders.

Acts 1990, No. 857, §1.

§ 12:499.8 Articles or by-laws

The articles or by-laws may provide for any of the following:

(1) Election of directors and other officials by unit or district.

(2) Voting by stockholders on the basis of one vote per member or one vote per dwelling unit rather than one vote per share.

(3) That any action required or permitted to be taken at a meeting of stockholders may be taken by mail ballot.

(4) A method of membership representation of stockholders at meetings by delegates from units or districts, provided that delegates be proportional to the number of members in each unit or district.

(5) Redemption or recall of stock.

(6) Termination of membership rights and privileges of a stockholder.

(7) Standards for eligibility to become a stockholder.

(8) The allocation of net savings among the uses permitted in R.S. 12:499.9.

Acts 1990, No. 857, §1.

§ 12:499.9 Net savings; apportionment

A. At least once a year the board of every cooperative housing corporation shall, after first setting aside an adequate portion of the net savings in a reserve fund for the general operation of the business, apportion the remainder of the net savings in one or more of the following ways:

(1) As a dividend not to exceed six percent, noncumulative, upon one or more classes of stock.

(2) As an equitable distribution or refund to all patrons in proportion to their individual patronage except that:

(a) In the case of a subscriber patron, the distribution or refund may be credited to the subscriber's account until the subscription has been fully paid; and

(b) In the case of a nonmember patron, the amount otherwise distributable may be retained by the cooperative housing corporation.

B. This Section shall not prevent a cooperative housing corporation from disposing of the net savings by reducing the cost of goods, facilities, or services or by applying such net savings otherwise for the common benefit of members.

C. This Section shall not prevent a cooperative housing corporation from adopting a system by which the net savings are deferred for a fixed period of time, nor from adopting a system in which the net savings distributed are partly in cash and partly in stock.

Acts 1990, No. 857, §1.

§ 12:499.10 Termination of proprietary leases

A cooperative housing corporation shall terminate all of its proprietary leases, only by agreement of proprietary lessees holding at least eighty percent of its stock or any larger percentage specified in the articles or by-laws.

Acts 1990, No. 857, §1.

§ 12:499.11 Loans

Any institution supervised either by the commissioner of financial institutions or the commissioner of insurance may make loans secured by pledge of a proprietary lease and the appurtenant stock of a cooperative housing corporation upon the same terms and with the same limitations as loans secured by mortgages on real property.

Acts 1990, No. 857, §1.

§ 12:499.12 Tax exemptions

The capital stock of a cooperative housing corporation incorporated under the provisions of this Part shall not be taxed for state purposes.

Acts 1990, No. 857, §1.

§ 12:499.13 Homestead exemption

Property owned by a cooperative housing corporation and subject to a proprietary lease shall be subject to the homestead exemption pursuant to Article VII, Section 20 of the Constitution of Louisiana.

Acts 1990, No. 857, §1.

CHAPTER 5 LOUISIANA UNINCORPORATED ASSOCIATION ACT

§ 12:501 Definitions

For the purposes of this Chapter, the following terms shall have the following meanings unless the context clearly indicates otherwise:

(1) "Immovable property" includes, without limitation, mineral rights, predial servitudes, and predial leases.

(2) "Member" means a person who, under the rules or practices of an unincorporated association, may participate in the selection of persons authorized to manage the affairs of the unincorporated association or in the development of policy of the unincorporated association.

(3) "Person" means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(4) "State" means the state of Louisiana.

(5) "Unincorporated association" means an unincorporated organization, other than one created by a trust, consisting of two or more members joined by mutual consent for a common, nonprofit purpose. However, co-ownership does not by itself establish an unincorporated association, even if the co-owners share use of the property for a nonprofit purpose.

Renumbered from R.S.1950, §12:401 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 907, §1; Acts 2008, No. 877, §1.

NOTE: Repealed by Acts 1985, No. 270, §1; however, superceded and reenacted by Acts 1985, No. 907, §2.

§ 12:502 Supplementary general principles of law

Provisions of the Louisiana Revised Statutes of 1950, and other principles of law supplement this Chapter unless displaced by a particular provision of this Chapter.

Renumbered from R.S.1950, §12:402 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 907, §1; Acts 2008, No. 877, §1.

NOTE: Repealed by Acts 1985, No. 270, §1; however, superceded and reenacted by Acts 1985, No. 907, §2.

§ 12:503 Territorial application

Immovable and movable property in this state may be acquired, held, encumbered, and transferred by an unincorporated association, whether or not the unincorporated association or a member has any other relationship to this state.

Renumbered from R.S.1950, §12:403 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 907, §1; Acts 2008, No. 877, §1.

NOTE: Repealed by Acts 1985, No. 270, §1; however, superceded and reenacted by Acts 1985, No. 907, §2.

§ 12:504 Immovable and movable property; unincorporated association as legatee or beneficiary

A. An unincorporated association is a legal entity separate from its members for the purposes of acquiring, holding, encumbering, donating and otherwise transferring immovable and movable property.

B. An unincorporated association in its name may acquire, hold, mortgage, hypothecate, encumber, donate, or otherwise transfer its interest in immovable or movable property.

C. An unincorporated association may be a beneficiary of a trust and has the capacity to receive donations inter vivos and mortis causa.

Renumbered from R.S.1950, §12:404 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 907, §1; Acts 2008, No. 877, §1.

NOTE: Repealed by Acts 1985, No. 270, §1; however, superceded and reenacted by Acts 1985, No. 907, §2.

§ 12:505 Statement of authority as to immovable property

A. An unincorporated association may execute and file a statement of authority to mortgage, hypothecate, encumber, donate, or otherwise transfer an interest in immovable property in the name of the unincorporated association.

B. An interest in immovable property held in the name of an unincorporated association may be mortgaged, hypothecated, encumbered, donated, or otherwise transferred by a person so authorized in a statement of authority filed in the conveyance records in the parish in which the immovable property is situated.

C. A statement of authority shall set forth all of the following:

(1) The name of the unincorporated association.

(2) The federal tax identification number, if any, of the unincorporated association.

(3) The address in this state, including the street address, if any, of the unincorporated association, or, if the unincorporated association does not have an address in this state, its address out of state.

(4) The fact that it is an unincorporated association.

(5) The name or title of a person authorized to transfer an interest in immovable property held in the name of the unincorporated association.

(6) That the transaction was duly authorized by a majority of the members or otherwise in accordance with the bylaws or other governing documents of the unincorporated association as duly adopted by a majority of the members.

D. A statement of authority shall be in the form of an authentic act and must be executed by a person who is not the person authorized to transfer the interest in immovable property.

E. A filing officer may collect a fee for filing a statement of authority in the amount authorized for filing a transfer of immovable property.

F. An amendment, including a cancellation, of a statement of authority shall meet the form requirements and be filed in the same manner as an original statement. Unless canceled earlier, a filed statement of authority or its most recent amendment is canceled by operation of law five years after the date of the most recent filing.

G. If the record title to immovable property is in the name of an unincorporated association and the statement of authority is filed in the conveyance records in the parish in which the immovable property is situated, the authority of the person named in a statement of authority to transfer is conclusive in favor of a person who gives value without notice that the person lacks authority.

Renumbered from R.S.1950, §12:405 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 907, §1; Acts 2008, No. 877, §1.

NOTE: Repealed by Acts 1985, No. 270, §1; however, superceded and reenacted by Acts 1985, No. 907, §2.

§ 12:506 Liability in tort and contract

A. An unincorporated association is a legal entity separate from its members for the purposes of determining and enforcing rights, duties, and liabilities in contract and tort.

B. A person is not liable for a breach of an unincorporated association's contract merely because the person is a member, is authorized to participate in the management of the affairs of the unincorporated association, is a person considered to be a member by the unincorporated association or made the contract or incurred the obligation on behalf of the unincorporated association, if the fact that the person was acting for the unincorporated association was disclosed to, known by or reasonably should have been known by the other party to the contract or to the party owed performance.

C. A person is not liable for a tortious act or omission for which an unincorporated association is liable merely because the person is a member, is authorized to participate in the management of the affairs of the unincorporated association, or is a person considered to be a member by the unincorporated association.

D. A tortious act or omission of a member or other person for which an unincorporated association is liable is not imputed to a person merely because the person is a member of the unincorporated association, is authorized to participate in the management of the affairs of the unincorporated association, or is a person considered to be a member by the unincorporated association.

E. A member of, or a person considered to be a member by, an unincorporated association may assert a claim against the unincorporated association. An unincorporated association may assert a claim against a member or a person considered to be a member by the unincorporated association.

Acts 2008, No. 877, §1.

§ 12:507 Capacity to assert and defend; standing

A. An unincorporated association, in its name, may institute, defend, intervene, or participate in a judicial, administrative, or other governmental proceeding or in an arbitration, mediation, or any other form of alternative dispute resolution.

B. An unincorporated association may assert a claim in its name on behalf of its members if one or more members of the unincorporated association have standing to assert a claim in their own right, the interests the unincorporated association seeks to protect are germane to its purposes, and neither the claim asserted nor the relief requested requires the participation of a member.

Acts 2008, No. 877, §1.

§ 12:508 Effect of judgment or order

A judgment or order against an unincorporated association is not by itself a judgment or order against a member or a person authorized to participate in the management of the affairs of the unincorporated association.

Acts 2008, No. 877, §1.

§ 12:509 Disposition of movable property of inactive unincorporated association

If an unincorporated association has been inactive for three years, or for a longer or shorter period specified in a document of the association, a person in possession or control of movable property of the association may transfer custody of the property as follows:

(1) If a document of an unincorporated association specifies a person to whom transfer is to be made under these circumstances, to that person.

(2) If no person is so specified, to an unincorporated association or nonprofit corporation pursuing broadly similar purposes, or to a government or governmental subdivision, agency, or instrumentality.

Acts 2008, No. 877, §1.

§ 12:510 Appointment of agent to receive service of process

A. An unincorporated association may file in the office of the secretary of state a statement appointing an agent authorized to receive service of process.

B. A statement appointing an agent shall set forth all of the following:

(1) The name of the unincorporated association.

(2) The federal tax identification number, if any, of the unincorporated association.

(3) The address in this state, including the street address, if any, of the unincorporated association, or, if the unincorporated association does not have an address in this state, its address out of state.

(4) The name of the person in this state authorized to receive service of process and the person's address, including the street address, in this state.

C. A statement appointing an agent shall be signed and acknowledged by a person authorized to manage the affairs of the unincorporated association. The statement shall also be signed and acknowledged by the person's appointed agent, who thereby accepts the appointment. The appointed agent may resign by filing a resignation in the office of the secretary of state and giving notice to the unincorporated association.

D. The secretary of state may collect a fee for filing a statement appointing an agent to receive service of process, an amendment, a cancellation, or a resignation in the amount charged for filing similar documents.

E. An amendment to or cancellation of a statement appointing an agent to receive service of process shall meet the requirements for execution of an original statement.

Acts 2008, No. 877, §1.

§ 12:511 Claim not abated by change

A claim for relief against an unincorporated association is not affected merely by a change in its members or persons authorized to manage the affairs of the unincorporated association.

Acts 2008, No. 877, §1.

§ 12:512 Dissolution of unincorporated association

An unincorporated association may be involuntarily dissolved and liquidated subject to supervision by the court, under the circumstances set forth in this Chapter.

Acts 2008, No. 877, §1.

§ 12:513 Involuntary proceedings for dissolution and appointment of liquidator

An involuntary proceeding for dissolution may be instituted against an unincorporated association by a member or by a creditor whose claim has been reduced to judgment, on which execution has been issued and returned "nulla bona".

Acts 2008, No. 877, §1.

§ 12:514 Grounds for involuntary dissolution

A. An unincorporated association may be dissolved and its assets liquidated by a court-appointed liquidator when any of the following occurs:

(1) The association's property has been abandoned for a period of at least one year.

(2) By failure of the members for a period of at least one year to elect officers or directors, or the failure of the directors or officers for a period of at least one year to serve, so that there is no one authorized to take charge of or conduct its affairs.

(3) The objects of the association have wholly failed, or are entirely abandoned, or their accomplishment is impracticable.

(4) The officers or directors have been deadlocked for a period of at least one year in the management of the association's affairs, and the members are unable to break the deadlock.

B. The qualifications and duties of the liquidator shall be the same as those of a court-appointed liquidator of a nonprofit corporation, as set forth in R.S. 12:252.

Acts 2008, No. 877, §1.

§ 12:515 Continuation of purpose

When any money or other property has been donated or contributed for certain purposes to an unincorporated association, the dissolution of the association originally administering the contributions or donations shall not cause them to fail or their purposes be defeated as long as there is in this state an unincorporated association or nonprofit corporation pursuing broadly similar purposes or a government or governmental subdivision, agency, or instrumentality capable of administering the funds or property for purposes germane to the purposes for which they were given.

Acts 2008, No. 877, §1.

§ 12:516 Disposition of assets

The net assets of the unincorporated nonprofit association shall be disposed of in the same manner as the net assets of a religious or charitable nonprofit corporation, as set forth in R.S. 12:249. Preference shall be accorded to state or local chapters, branches, or lodges of the same association, and then to associations or nonprofit corporations which were affiliated with the dissolved association, unless the articles or bylaws of the association expressly authorize some other disposition of its assets upon dissolution.

Acts 2008, No. 877, §1.

§ 12:517 Short title

This Chapter may be cited as the "Louisiana Unincorporated Association Act".

Acts 2008, No. 877, §1.

§ 12:518 Uniformity of application and construction

This Chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this Chapter among states enacting it.

Acts 2008, No. 877, §1.

§ 12:519 Severability clause

If any provision of this Chapter or its application to any person or circumstance is held invalid, the invalidity shall not affect any other provisions or applications of this Chapter which may be given effect without the invalid provision or application, and to this end the provisions of this Chapter are severable.

Acts 2008, No. 877, §1.

§ 12:520 Savings clause

This Chapter shall not affect an action or proceeding commenced or right accrued before this Chapter takes effect.

Acts 2008, No. 877, §1.

CHAPTER 6 TRANSFER OF STOCK

PART I IN GENERAL

§ 12:601 Person in whose name certificate stands regarded as legal owner

The person, firm, or corporation, in whose name a certificate representing shares of stock stands, or to whom a certificate is endorsed, whether in full or in blank, and who has possession of said certificate, shall be regarded as the legal owner. The legal owner has full power to pledge, sell or otherwise dispose of said stock. No person, corporation, firm or transfer agent shall be responsible to any one claiming any interest in, or ownership of, said shares, or any part thereof, by virtue of any undisclosed or latent legal or conventional title or interest therein.

Renumbered from R.S.1950, §12:501 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:602 Authority to transfer stock

The possession of a stock certificate, duly endorsed by or standing in the name of, a person, firm or corporation, shall be full and sufficient authority to any person, firm, or corporation, or to any transfer agent, to transfer the shares when instructed so to do. Such possession and endorsement shall be full protection to any person, firm, or corporation purchasing or lending money in good faith on the stock.

Renumbered from R.S.1950, §12:502 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:603 Transfer to heirs or legatees of deceased stockholder; proof required

A. When a person dies owning shares in any corporation domiciled or maintaining a share register for the transfer of shares in the state, the corporation may transfer the stock upon its books to the executor, or to the heirs or legatees of the deceased, or their legal representatives.

B. The corporation may transfer to the executor or to the heirs or legatees, if sui juris, or to their tutors, curators, guardians or other legal representatives, if not sui juris, any and all dividends that have accrued thereon.

C. An order of any court of competent jurisdiction ordering the transfer of shares to an executor or the judgment of any court of competent jurisdiction recognizing and putting such heirs or legatees in possession accompanied, if such heirs or legatees be not sui juris, by the letters of their tutors, curators, guardians, or other legal representatives, issued by any court of competent jurisdiction, shall be full and sufficient authority for the making of said transfer. When so made the letters of courts of competent jurisdiction shall be full protection to any such corporation making the transfer.

D. Copies of orders of court ordering the transfer of shares to an executor and copies of judgments recognizing and putting such heirs or legatees in possession and of the letters of such tutors, curators, guardians or other legal representatives rendered or issued by any court of this state, duly certified, or by any court of any other state of the United States, duly certified, according to the acts of Congress, or by any court of the District of Columbia, duly certified according to law, or by any court of any possession or dependency of the United States, duly certified according to law, or by any court of any foreign country, duly certified according to law of such place with the genuineness of the certification attested by a consular agent of the United States, shall be, as to any such corporation, full and conclusive proof of the contents thereof and of the jurisdiction of the court rendering or issuing the same.

E. All corporations are authorized to make such transfers upon the signature of the heirs or legatees of such deceased persons, if sui juris, accompanied by a copy of the judgment recognizing and putting such heirs or legatees in possession, duly certified as hereinabove set forth, or upon the signature of the tutors, curators, guardians, or other legal representatives of the heirs or legatees, if not sui juris, accompanied by a copy of the judgment recognizing and putting such heirs and legatees in possession, duly certified as hereinabove set forth, and a copy of the letters of such tutors, curators, guardians or other legal representatives, duly certified as hereinabove set forth.

F. Repealed by Acts 2010, No. 175, §6.

Renumbered from R.S.1950, §12:503 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 2010, No. 175, §§6, 7.

PART II UNIFORM STOCK TRANSFER LAW

§ 12:621 §§621 to 643 Repealed by Acts 1978, No. 165, §6, eff. Jan. 1, 1970

§§621 to 643 Repealed by Acts 1978, No. 165, §6, eff. Jan. 1, 1970

PART III CLEARING CORPORATIONS

§ 12:651 Repealed by Acts 1978, No. 165, §6, eff. Jan. 1, 1979

Repealed by Acts 1978, No. 165, §6, eff. Jan. 1, 1979

CHAPTER 7 FINANCING CORPORATE ACTIVITIES

§ 12:701 Borrowing money; issuance of bonds; security

A. Any corporation, foreign or domestic, business or nonprofit, may borrow from time to time such sums of money as may be required for its corporate purposes or for the acquisition of property or franchises.

B. For these purposes, any corporation may issue bonds or other obligations secured by mortgage or pledge, or both, of the franchises and the property, movable or immovable, whether owned at the time of the mortgage or pledge, or acquired thereafter, together with future incomes, revenues, contributions and receipts of the corporations.

C. The bonds or other obligations may be payable on the terms and at the times and places as the corporation, through its board of directors, or other managing body may direct or designate.

D. The corporation may sell, pledge, or otherwise dispose of these bonds or other obligations on the terms which the corporation, through its board of directors or other managing body, may deem expedient.

E. This Section shall not be construed as conferring any powers which are specifically denied to corporations by any other provisions of law.

Amended by Acts 1950, No. 235, §1; Acts 1952, No. 473, §1; Acts 1954, No. 52, §1. Renumbered from R.S. 1950, §12:601 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:702 Mortgages executed by public utility corporations and cable television companies; description of property; recordation; effect

A.(1) Mortgages securing bonds or other obligations executed pursuant to R.S. 12:701 by public utility corporations such as railroad, street railway, motor coach, trolley coach, bus, canal, sewerage, waterworks, electric, gas, gas pipeline, water power, telegraph, or telephone utilities, and also mortgages executed by cable television companies whether or not pursuant to R.S. 12:701, shall be effective as to after-acquired or future property to the extent set forth therein and the property subject thereto may be described in general terms.

(2) If any such mortgage, and any indentures or other instruments supplemental thereto and/or amendatory thereof, heretofore or hereafter recorded, secures the payment of bonds then and/or thereafter issuable in series, the recordation of such mortgage and of any such indentures or other instruments supplemental thereto and/or amendatory thereof, in the mortgage records shall, whether or not any bonds of a particular series or of any series remain outstanding or unpaid, be effective and preserve the evidence and effect of such mortgage, and of all such supplements and/or amendments thereto:

(a) Until ten years after the date of the (original) mortgage if all bonds of all series were issued with maturity dates less than nine years after the date of the (original) mortgage;

(b) Until six years after the maturity date of the last maturing or matured bond or bonds of any series if any bond of any series was issued with a maturity date nine years or more after the date of the (original) mortgage.

B. Such mortgage, if made of all of the transmission and distribution lines of any electric light or power, waterworks or gas light or fuel corporation, or a cable television company, shall bear upon the entire system of transmission and distribution lines and all extensions thereof or additions thereto made during the term of said mortgage, though the same be not completed or contemplated at the time the mortgage is made, and such mortgage may also be made to bind the appurtenances of said transmission or distribution lines, their equipment, accessories, substations, regulator stations, transformers, and any and all other parts thereof.

C. Anything in this Section or elsewhere in these Revised Statutes to the contrary notwithstanding, no person, firm or corporation operating a motor coach or bus line or lines under a permit from the Louisiana Public Service Commission may mortgage or pledge any such permits without the consent of the commission. The provisions of this Section shall be applicable to mortgages heretofore executed by such corporations.

Added by Acts 1952, No. 131, §1. Amended by Acts 1954, No. 52, §2, Renumbered from R.S. 1950, §12:602 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1977, No. 138, §1; Acts 1988, No. 171, §1; Acts 2001, No. 128, §11, eff. July 1, 2001.

{{NOTE: *SEE ACTS 1988, NO. 171, §§2 AND 3.}}

§ 12:703 Rate of interest paid by corporations

Notwithstanding any other provisions of the law of this state to the contrary, any debtor that is a domestic corporation, a foreign corporation, a partnership in commendam formed pursuant to the laws of this state, a foreign limited partnership, or a partnership all of the partners of which are either corporations, foreign limited partnerships, partnerships in commendam or partnerships comprised of corporations, foreign limited partnerships or partnerships in commendam, may agree to pay interest in excess of the maximum rate of conventional interest authorized by the laws of this state, whether in connection with unsecured or secured indebtedness and whether the secured indebtedness is secured, in whole or in part, directly or indirectly, by a real estate mortgage or chattel mortgage on property in this state or is otherwise secured, and as to any such agreement such debtor corporation or partnership shall be prohibited from asserting a claim or defense of usury or of the taking of interest in excess of the maximum rate of conventional interest, and any person, partnership or corporation whatsoever signing as co-maker, guarantor or endorser for such debtor corporation or partnership shall also be prohibited from asserting any such claim or defense. The term foreign limited partnership as used hereinabove shall mean any partnership domiciled in a state of the United States other than Louisiana or the District of Columbia which shall have been formed and is existing pursuant to the limited partnership law or Uniform Limited Partnership Law of any such state, and such partnership need not qualify as a partnership in commendam under the laws of this state.

Added by Acts 1965, No. 15, §1. Renumbered from R.S. 1950, §12:603 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1969, No. 31, §1; Acts 1970, No. 437, §1; Acts 1977, No. 210, §1.

§ 12:704 Repealed by Acts 2001, No. 128, §18, eff. July 1, 2001.

Repealed by Acts 2001, No. 128, §18, eff. July 1, 2001.

CHAPTER 8 PROFESSIONAL LAW CORPORATIONS

§ 12:801 Terms defined

A. As used in this Chapter:

(1) "Professional law corporation" means a corporation organized pursuant to this Chapter or the laws of any qualified state for the practice of law.

(2) "Qualified person" means:

(a) A natural person of full age who is authorized pursuant to the law in this state or any qualified state to render professional legal services.

(b) A general partnership in which all the partners are qualified persons as defined in Subparagraph (a) of this Paragraph.

(c) A professional law corporation in which all the shareholders are qualified persons as defined in Subparagraph (a) of this Paragraph.

(3) "Qualified state" means any state other than Louisiana, or territory of the United States or the District of Columbia, which allows qualified persons authorized to render professional legal services in Louisiana and not in such other state, to own shares in a professional law corporation under its laws.

B. All terms used in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter as when used in Chapter 1.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §901 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1991, No. 225, §1.

§ 12:802 Professional corporations

One or more qualified persons may form a corporation under Chapter 1 of this Title for the purpose of practicing law. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:902 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 535, §1, eff. July 12, 1985; Acts 1991, No. 225, §1.

§ 12:803 The corporate name

The corporate name shall consist of the full or last name or names of one or more voting shareholders, former voting shareholders or members of a predecessor law firm, may include "Limited" or "Ltd.", and shall end with one of the phrases (which may be in parentheses) "a Professional Law Corporation", "a Professional Corporation" or "a Law Corporation". The name need not contain "Incorporated" or "Inc."

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:903 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:804 Corporate authority

A professional law corporation shall engage in no business other than the practice of law, but may hold property for investment or in connection with its legal practice. A professional law corporation may hold a title insurance agency license and serve as a title insurance agent in accordance with Title 22 of the Louisiana Revised Statutes of 1950.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:904 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1997, No. 610, §1.

§ 12:805 Shares

A. There shall be only one class of shares of a professional law corporation, denominated common shares which shall be either with or without par value. Such shares may be, but are not required to be, designated as either voting or nonvoting shares, or any combination thereof. Shares not designated shall be considered voting shares. A professional law corporation shall not be treated as having more than one class of shares solely because there are differences in voting rights among the shares.

B.(1) Only a qualified person who holds shares shall be entitled to vote voting shares, and participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to legal services rendered by, or any other affairs of the corporation except as provided in R.S. 12:813(B).

(2) R.S. 12:78 shall not apply to professional law corporations.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:905 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1972, No. 78, §1; Acts 1985, No. 535, §1, eff. July 12, 1985; Acts 1991, No. 225, §1.

§ 12:806 Certificate of stock

A.(1) Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held by a qualified person, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of legal services by, the corporation, or to have access to any records or communications pertaining to legal services rendered by, or any other affairs of, the corporation."

(2) Each certificate of stock representing a nonvoting share shall contain a statement that such shares are nonvoting shares.

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:809.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation, and, except as provided in R.S. 12:22,* no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:906 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1985, No. 535, §1, eff. July 12, 1985; Acts 1991, No.225, §1.

*NOTE: REPEALED. SEE HISTORICAL NOTE UNDER THIS SECTION IN WEST'S LSA.

§ 12:807 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional law corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:907 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:808 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional law corporation may be taken on the affirmative vote of a majority (or such greater proportion as the articles of incorporation may specify) in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:908 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:809 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional law corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open, daily during business hours, to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:909 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:810 Directors

Only voting shareholders may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:910 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:811 Officers and agents

A. Only voting shareholders may be officers. If there is only one voting shareholder, all offices may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only qualified persons duly licensed to practice law in this state may render legal services in this state on behalf of a professional law corporation. Nothing in this Section shall be construed to prohibit a qualified person from rendering legal services on behalf of a professional law corporation organized pursuant to this Chapter in any other state, territory of the United States, or the District of Columbia in accordance with the rules and regulations of such state.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:911 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1991, No. 225, §1.

§ 12:812 Merger and consolidation

Professional law corporations may be merged into or consolidated only with other professional law corporations.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:912 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969.

§ 12:813 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional law corporation.

B. In the event of the death of a shareholder of a professional law corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of his succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:913 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969. Amended by Acts 1972, No. 79, §1.

§ 12:814 Certification of foreign professional law corporation

A. A foreign professional law corporation organized pursuant to the laws of any state, other than Louisiana, or territory of the United States, or District of Columbia shall be entitled to procure a certificate of authority to render professional legal services in Louisiana only if:

(1) A professional law corporation organized pursuant to this Chapter would be entitled to procure a certificate of authority or equivalent authority to render professional legal services in the state under whose laws the foreign professional law corporation is organized.

(2) The foreign professional law corporation satisfies the requirements of R.S. 12:803, 804, and 805(A).

(3) The foreign professional law corporation designates with the secretary of state, the qualified person or persons duly licensed to practice in this state through whom it will render professional legal services in Louisiana, and such qualified persons are not, at the time of such designation, so designated by any other foreign professional law corporation.

(4) All the shareholders, officers, and directors of the foreign professional law corporation are licensed to practice law in at least one qualified state.

(5) The foreign professional law corporation includes in its application, a statement acknowledging that it will be subject to the jurisdiction of the Louisiana Supreme Court with respect to the court's authority to adopt rules and regulations governing the practice of law in Louisiana.

B. No foreign professional law corporation shall maintain an office or transact business in Louisiana until it has obtained a certificate of authority to render professional legal services in Louisiana.

C. A foreign professional law corporation shall be subject to the provisions of Chapter 3 of this Title, as the same may from time to time be amended, except to the extent such provisions are inconsistent with this Chapter.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:914 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1991, No. 225, §1.

§ 12:815 Regulation by Supreme Court

Professional law corporations shall be subject to the discipline of the Supreme Court, and to the Supreme Court's authority to adopt rules and regulations governing the practice of law.

Added by Acts 1964, No. 354, §1. Renumbered from R.S. 1950, §12:915 by Acts 1968, No. 105, §3, eff. Jan. 1, 1969; Acts 1991, No. 225, §1.

§ 12:816 Short title

This Chapter shall be known and may be referred to by the short title "Professional Law Corporations Act".

Acts 1991, No. 225, §1.

CHAPTER 9 PROFESSIONAL MEDICAL CORPORATIONS

§ 12:901 Terms defined

A. As used in this Chapter, "professional medical corporation" means a corporation organized pursuant to this Chapter for the practice of medicine or podiatry.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1968, No. 27, §1; Acts 2005, No. 304, §1.

§ 12:902 Professional corporations

One or more natural persons, of full age and duly licensed to practice medicine or podiatry in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing medicine or podiatry. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1968, No. 27, §1; Acts 2005, No. 304, §1.

§ 12:903 The corporate name

The corporate name may consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor medical partnership, or it may consist of any other name approved by the secretary of state. The name shall end with one of the phrases (which may be in parentheses) "A Professional Medical Corporation," "A Professional Corporation" or "A Medical Corporation." The name may include "Limited" or "Ltd." The name need not contain "Incorporated" or "Inc."

Added by Acts 1968, No. 27, §1. Amended by Acts 1977, No. 450, §1.

§ 12:904 Corporate authority

A professional medical corporation shall engage in no business other than the practice of medicine or podiatry, but may hold property for investment or in connection with its medical practice.

Added by Acts 1968, No. 27, §1; Acts 2005, No. 304, §1.

§ 12:905 Shares

A. There shall be only one class of shares of a professional medical corporation, denominated common shares which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice medicine in this state, and who holds his shares in his own right, or another professional medical corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to medical services rendered by, or any other affairs of, the corporation, except as provided in R.S. 12:913(B).

C. R.S. 12:33 shall not apply to professional medical corporations.

Added by Acts 1968, No. 27, §1. Amended by Acts 1972, No. 319, §1; Acts 1979, No. 172, §1.

§ 12:906 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice medicine in the state of Louisiana or by another professional medical corporation, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of medical services by, the corporation, or to have access to any records or communications pertaining to medical services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:909.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation, and, except as provided in R.S. 12:22,¹ no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1968, No. 27, §1. Amended by Acts 1982, No. 870, §1.

¹As it appears in Act 27 of 1968.

§ 12:907 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional medical corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1968, No. 27, §1.

§ 12:908 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional medical corporation may be taken on the affirmative vote of a majority (or such greater proportion as the articles of incorporation may specify) in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1968, No. 27, §1.

§ 12:909 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional medical corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open, daily during business hours, to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1968, No. 27, §1.

§ 12:910 Directors

Only voting shareholders, or voting shareholders of another professional medical corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1968, No. 27, §1. Amended by Acts 1979, No. 172, §2.

§ 12:911 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional medical corporation, may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice medicine or podiatry in this state may render medical services on behalf of a professional medical corporation.

Added by Acts 1968, No. 27, §1. Amended by Acts 1979, No. 172, §3; Acts 2005, No. 304, §1.

§ 12:912 Merger and consolidation

Professional medical corporations may be merged into or consolidated only with other professional medical corporations.

Added by Acts 1968, No. 27, §1.

§ 12:913 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional medical corporation.

B. In the event of the death of a shareholder of a professional medical corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1968, No. 27, §1. Amended by Acts 1972, No. 134, §1.

§ 12:914 Regulation by Louisiana State Board of Medical Examiners

Professional medical corporations shall be subject to the discipline of the Louisiana State Board of Medical Examiners and to its authority to adopt rules and regulations governing the practice of medicine or podiatry.

Added by Acts 1968, No. 27, §1; Acts 2005, No. 304, §1.

§ 12:915 Short title

This Chapter shall be known and may be referred to by the short title "Professional Medical Corporations Act".

Added by Acts 1968, No. 27, §1.

CHAPTER 10 INDUSTRIAL OR ECONOMIC DEVELOPMENT CORPORATIONS

§ 12:951 Terms defined

As used in this Chapter, the following words and phrases, unless differently defined or described, shall have the meanings and references as follows:

(1) "Corporation" means a Louisiana industrial development corporation created under this Chapter.

(2) "Financial institution" means any banking corporation or trust company, savings and loan association, insurance company or related corporation, partnership, foundation, or other institution engaged primarily in lending or investing funds.

(3) "Member" means any financial institution authorized to do business within this state which shall undertake to lend money to a corporation created under this Chapter, upon its call, and in accordance with the provisions of this Chapter.

(4) "Board of directors" means the board of directors of the corporation created under this Chapter.

(5) "Loan limit" means, for any member, the maximum amount permitted to be outstanding at one time on loans made by such member to the corporation, as determined under the provisions of this Chapter.

Acts 1969, No. 49, §1.

§ 12:952 Incorporators; articles of incorporation; approval

A. Twenty-five or more persons, a majority of whom shall be residents of this state, who may desire to create an industrial development corporation under the provisions of this Chapter for the purpose of promoting, developing, and advancing the prosperity and economic welfare of the state and, to that end, to exercise the powers and privileges hereinafter provided, may be incorporated by filing in the office of the secretary of state as hereinafter provided, articles of incorporation. The articles of incorporation shall contain:

(1) The name of the corporation, which shall include the words "Industrial Development Corporation of Louisiana" or "Economic Development Corporation of America".

(2) The location of the principal office of the corporation, but such corporation may have offices in such other places within the state as may be fixed by the board of directors.

(3) The purposes for which the corporation is founded, which shall be:

(a) To promote, stimulate, develop, and advance the business prosperity and economic welfare of Louisiana and its citizens;

(b) To encourage and assist through loans, investments, or other business transactions in the location of new business and industry in this state and to rehabilitate and assist existing business and industry;

(c) To stimulate and assist in the expansion of all kinds of business activity which will tend to promote the business development and maintain the economic stability of this state, provide maximum opportunities for employment, encourage thrift, and improve the standard of living of the citizens of this state;

(d) Similarly, to cooperate and act in conjunction with other organizations, public or private, in the promotion and advancement of industrial, commercial, agricultural, and recreational developments in this state; and

(e) To provide financing for the promotion, development, and conduct of all kinds of business activity in this state.

(4) The names and post office addresses of the members of the first board of directors who, unless otherwise provided by the articles of incorporation or the bylaws, shall hold office for the first year of existence of the corporation or until their successors are elected and have qualified.

(5) Any provision which the incorporators may choose to insert for the regulation of the business and for the conduct of the affairs of the corporation and any provision creating, dividing, limiting, and regulating the powers of the corporation, the directors, stockholders, or any class of the stockholders, including but not limited to a list of the officers and provisions governing the issuance of stock certificates to replace lost or destroyed certificates; provided that no provision shall be contained for cumulative voting for directors.

(6)(a) The amount of authorized capital stock and the number of shares into which it is divided, the par value of each share, and the amount of capital with which it will commence business and, if there is more than one class of stock, a description of the different classes; the names and post office addresses of the subscribers of stock and the number of shares subscribed by each.

(b) The aggregate of the subscription shall be the minimum amount of capital with which the corporation shall commence business which shall not be less than two hundred fifty thousand dollars.

(7) A recitation that the corporation is organized under the provisions of this Chapter.

B. The articles of incorporation may also contain any provision consistent with the laws of this state for the regulation of the affairs of the corporation.

C. The articles of incorporation shall be in writing, subscribed by not less than three natural persons competent to contract and acknowledge, and filed in the office of the secretary of state for approval. A duplicate copy so subscribed and acknowledged may also be filed.

D.(1) The secretary of state shall not approve articles of incorporation for a corporation organized under this Chapter until a total of at least five national banks, state banks, savings banks, industrial savings banks, federal savings and loan associations, state savings and loan associations, or insurance companies authorized to do business within this state, or any combination thereof, have agreed in writing to become members of the corporation; and the written agreement shall be filed with the secretary of state with the articles of incorporation, and the filing of same shall be a condition precedent to the approval of the articles of incorporation by the secretary of state.

(2) Whenever the articles of incorporation shall have been filed in the office of the secretary of state and approved by him, and all filing fees and taxes prescribed by Louisiana statutes have been paid, the subscribers, their successors, and assigns shall constitute a corporation, and the corporation shall then be authorized to commence business and stock thereof to the extent herein or hereafter duly authorized may from time to time be issued.

Acts 1969, No. 49, §2. Acts 1984, No. 890, §1, eff. July 20, 1984.

§ 12:953 Powers

In furtherance of its purposes and in addition to the powers now or hereafter conferred on business corporations by Louisiana statutes, the corporation shall, subject to the restrictions and limitations herein contained, have the following powers:

(1) To elect, appoint, and employ officers, agents, and employees; to make contracts and incur liabilities for any of the purposes of the corporation; provided, that the corporation shall not incur any secondary liability by way of guaranty or endorsement of the obligations of any person, firm, corporation, joint-stock company, association or trust, or in any other manner.

(2) To borrow money from its members and the Small Business Administration and any other similar federal agency for any of the purposes of the corporation; to issue therefor its bonds, debentures, notes or other evidences of indebtedness, whether secured or unsecured, and to secure the same by mortgage, pledge, deed of trust or other lien on its property, franchises, rights, and privileges of every kind and nature, or any part thereof or interest therein, without securing stockholder or member approval.

(3) To make loans to any person, firm, corporation, joint-stock company, association or trust, and to establish and regulate the terms and conditions with respect to any such loans and the charges for interest and service connected therewith; provided, however, that the corporation shall not approve any application for a loan unless and until the person applying for said loan shall show that he has applied for the loan through ordinary banking channels and that the loan has been refused by at least one bank or other financial institution.

(4) To purchase, receive, hold, lease, or otherwise acquire, and to sell, convey, transfer, lease, or otherwise dispose of real and personal property, together with such rights and privileges as may be incidental and appurtenant thereto and the use thereof, including, but not restricted to any real or personal property acquired by the corporation from time to time in the satisfaction of debts or enforcement of obligations.

(5) To acquire the good will, business, rights, real and personal property and other assets, or any part thereof, or interest therein, of any persons, firms, corporation, joint-stock companies, associations or trusts, and to assume, undertake, or pay the obligations, debts, and liabilities of any such person, firm, corporation, joint-stock company, association or trust; to acquire improved or unimproved real estate for the purpose of constructing industrial plants or other business establishments thereon or for the purpose of disposing of such real estate to others for the construction of industrial plants or other business establishments; and to acquire, construct or reconstruct, alter, repair, maintain, operate, sell, convey, transfer, lease, or otherwise dispose of industrial plants or business establishments.

(6) To acquire, subscribe for, own, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the stock, shares, bonds, debentures, notes or other securities and evidences of interest in, or indebtedness of any person, firm, corporation, joint-stock company, association or trust, and while the owner or holder thereof to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon.

(7) To mortgage, pledge, or otherwise encumber any property, right or thing of value, acquired pursuant to the powers contained in paragraphs (4), (5), or (6) as security for the payment of any part of the purchase price thereof.

(8) To cooperate with and to avail itself of the facilities of the United States Department of Commerce, Louisiana Economic Development, and any other similar state or federal governmental agencies; and to cooperate with and assist, and otherwise encourage organizations in the various communities of the state in the promotion, assistance, and development of the business prosperity and economic welfare of such communities or of this state or of any part thereof.

(9) To do all acts and things necessary or convenient to carry out the powers expressly granted in this Chapter.

Acts 1969, No. 49, §3.

§ 12:954 Acquisition and disposition of securities; evidences of indebtedness; stock; loans from members

Notwithstanding any provision of law to the contrary or any provision in their respective charters, agreements of association, articles of organization, or trust indentures:

(1) Any person, including all domestic corporations organized for the purpose of carrying on business with this state, and further including without implied limitation public utility companies and insurance companies, and foreign corporations licensed to do business within this state, and all financial institutions as defined herein, and all trusts, are hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of any bonds, securities, or other evidences of indebtedness created by, or the shares of the capital stock of the corporation, and while owners of said stock to exercise all the rights, powers, and privileges of ownership, including the right to vote thereon, all without the approval of any regulatory authority of the state except as otherwise provided in this Chapter; provided, however, that a financial institution which does not become a member of the corporation shall not be permitted to acquire any shares of the capital stock of the corporation;

(2) All financial institutions are hereby authorized to become members of the corporation and to make loans to the corporation as provided herein; and

(3) Each financial institution that becomes a member of the corporation is hereby authorized to acquire, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds, securities, or other evidences of indebtedness created by the corporation, or the shares of the capital stock of the corporation, and while the owner of the stock, such financial institution shall have the authority to exercise all the rights, powers, and privileges of ownership, including the right to vote, all without the approval of any regulatory authority of the state. However, the amount of the capital stock of the corporation which may be acquired by any member pursuant to the authority granted in this Section shall not exceed ten percent of the loan limit of such member.

(4) The amount of capital stock of the corporation which any member is authorized to acquire pursuant to the authority granted in this Section is in addition to the amount of capital stock in corporations which such member may otherwise be authorized to acquire.

Acts 1969, No. 49, §4; Acts 2003, No. 292, §1.

§ 12:955 Applications for membership; loans to corporation

Any financial institution may request membership in the corporation by making application to the board of directors on such form and in such manner as said board of directors may require, and membership shall become effective upon acceptance of such application by said board.

Each member of the corporation shall make loans to the corporation as and when called upon by it to do so on such terms and other conditions as shall be approved from time to time by the board of directors, subject to the following conditions:

(1) All loan limits shall be established at the thousand dollar amount nearest to the amount computed in accordance with the provisions of this section.

(2) No loan to the corporation shall be made if immediately thereafter the total amount of the obligations of the corporation would exceed ten times the amount then paid in on the outstanding capital stock of the corporation.

(3) The total amount outstanding on loans to the corporation made by any member at any one time, when added to the amount of the investment in the capital stock of the corporation then held by such member, shall not exceed:

(a) Twenty percent of the total amount then outstanding on loans to the corporation by all members, including in said total amount outstanding amounts validly called for loan but not yet loaned.

(b) The following limit, to be determined as of the time such member becomes a member on the basis of the audited balance sheet of such member at the close of its fiscal year immediately preceding its application for membership, or in the case of an insurance company, its last annual statement to the state insurance commissioner; two and one half percent of the capital and surplus of commercial banks and trust companies; one half of one percent of the total outstanding loans made by savings and loan associations, and building and loan associations; two and one half percent of the capital and unassigned surplus of stock insurance companies, except fire insurance companies; two and one half percent of the unassigned surplus of mutual insurance companies, except fire insurance companies; one tenth of one percent of the assets of fire insurance companies; and such limits as may be approved by the board of directors of the corporation for other financial institutions.

(4) Subject to Subparagraph (a) of Paragraph (3) of this section, each call made by the corporation shall be prorated among the members of the corporation in substantially the same proportion to the adjusted loan limits of all members. The adjusted loan limit of a member shall be the amount of such member's loan limit, reduced by the balance of outstanding loans made by such member to the corporation and the investment in capital stock of the corporation held by such member at the time of such call.

(5) All loans to the corporation by members shall be evidenced by bonds, debentures, notes, or other evidences of indebtedness of the corporation, which shall be freely transferable at all times, and which shall bear interest at a rate of not less than one-quarter of one percent in excess of the rate of interest determined by the board of directors to be the prime rate prevailing at the date of issuance thereof on unsecured commercial loans.

Acts 1969, No. 49, §5.

§ 12:956 Duration of membership; notice of withdrawal

Membership in the corporation shall be for the duration of the corporation; provided that upon written notice given to the corporation five years in advance, a member may withdraw from membership in the corporation at the expiration date of such notice.

A member shall not be obligated to make any loans to the corporation pursuant to calls made subsequent to notice of the intended withdrawal of said member.

Acts 1969, No. 49, §6.

§ 12:957 Powers of stockholders and members; voting

The stockholders and the members of the corporation shall have the following powers of the corporation:

(1) To determine the number of and elect directors as provided in R.S. 12:959;

(2) To make, amend, and repeal bylaws;

(3) To amend its charter as provided in R.S. 12:958;

(4) To dissolve the corporation as provided in R.S. 12:965;

(5) To do all things necessary or desirable to secure aid, assistance loans and other financing from any financial institutions, and from any agency established under the Small Business Investment Act of 1958, Public Law 85-699, 85th Congress,¹ or other similar federal laws now or hereafter enacted;

(6) To exercise such other of the powers of the corporation consistent with this Chapter as may be conferred on the stockholders and the members by the bylaws.

As to all matters requiring action by the stockholders and the members of the corporation, said stockholders and said members shall vote separately thereon by classes, and except as otherwise herein provided, such matters shall require the affirmative vote of a majority of the votes to which the stockholders present or represented at the meeting shall be entitled and the affirmative vote of a majority of the votes to which the members present or represented at the meeting shall be entitled.

Each stockholder shall have one vote, in person or by proxy, for each share of capital stock held by him, and each member shall have one vote, in person or by proxy, except that any member having a loan limit of more than one thousand dollars shall have one additional vote, in person or by proxy, for each additional one thousand dollars which such member is authorized to have outstanding on loans to the corporation at any one time as determined under R.S. 12:955(3)(b).

Acts 1969, No. 49, §7.

¹15 U.S.C.A. §§77c, 77ddd, 80a-18, 633, 636, 661, 662, 671, 672, 681-688, 691, 695, 696.

§ 12:958 Amendment of articles; certification of amendment

The articles of incorporation may be amended by the votes of the stockholders and the members of the corporation, voting separately by classes, and such amendments shall require approval by the affirmative vote of two thirds of the votes to which the stockholders shall be entitled and two thirds of the votes to which the members shall be entitled; provided that no amendment of the articles of incorporation which is inconsistent with the general purposes expressed herein or which authorizes any additional class of capital stock to be issued, or which eliminates or curtails the right of the state comptroller to examine the corporation or the obligation of the corporation to make reports as provided in R.S. 12:962, shall be made; and provided further that no amendment of the articles of incorporation which increases the obligation of a member to make loans to the corporation, or makes any change in the principal amount, interest rate, maturity date, or in the security or credit position of any outstanding loan of a member to the corporation, or affects a member's right to withdraw from membership as provided herein, or affects a member's voting rights as provided herein, shall be made without the consent of each member affected by such amendment.

Within thirty days after any meeting at which an amendment of the articles of incorporation has been adopted, articles of amendment signed and sworn to by the president, treasurer, and a majority of the directors, setting forth such amendment and due adoption thereof, shall be submitted to the secretary of state who shall examine them, and if he finds that they conform to the requirements of this Chapter, shall so certify and endorse his approval thereon. Thereupon, the articles of amendment shall be filed in the office of the secretary of state, and no such amendment shall take effect until such articles of amendment shall have been filed as aforesaid.

Acts 1969, No. 49, §8.

§ 12:959 Officers; board of directors; responsibility for losses

A.(1) The business and affairs of the corporation shall be managed and conducted by a board of directors, a president, a vice president, a secretary, a treasurer, and other such officers and agents as the corporation by its bylaws shall authorize.

(2) The board of directors shall consist of not less than fifteen nor more than twenty-one directors, as shall be determined in the first instance by the incorporators and thereafter annually by the members and the stockholders of the corporation. The board of directors may exercise all the powers of the corporation except those conferred by law or by the bylaws of the corporation upon the stockholders or members and it shall choose and appoint all the agents and officers of the corporation and fill all vacancies except vacancies in the office of director, which shall be filled as provided in this Subsection. The board of directors shall be elected in the first instance by the incorporators and thereafter at the annual meeting, which annual meeting shall be held during the month of January or, if no annual meeting shall be held in the year of incorporation, then within ninety days after the approval of the articles of incorporation at a special meeting as provided in this Subsection.

(3) At each annual meeting or at each special meeting held as provided in this Subsection, the members of the corporation shall elect two-thirds of the board of directors, and the stockholders shall elect the remaining directors. The directors shall hold office until the next annual meeting of the corporation or special meeting held in lieu of the annual meeting after the election and until their successors are elected and qualified unless sooner removed in accordance with the provisions of the bylaws. Any vacancy in the office of a director elected by the members shall be filled by the directors elected by the members, and any vacancy in the office of a director elected by the stockholders shall be filled by the directors elected by the stockholders.

B. Directors and officers shall not be responsible for losses unless the same shall have been occasioned by the willful misconduct of such directors and officers.

Acts 1969, No. 49, §9; Acts 2003, No. 292, §1.

§ 12:960 Retention of earned surplus

Each year the corporation shall set apart as earned surplus not less than ten percent of its net earnings for the preceding fiscal year until such surplus shall be equal in value to one half of the amount paid in on the capital stock then outstanding. Whenever the amount of surplus established herein shall become impaired, it shall be built up again to the required amount in the manner provided for its original accumulation. Net earnings and surplus shall be determined by the board of directors, after providing for such reserves as said directors deem desirable, and the determination of the directors made in good faith shall be conclusive on all persons.

Acts 1969, No. 49, §10.

§ 12:961 Deposits

The corporation shall not deposit any of its funds in any banking institution unless such institution has been designated as a depository by a vote of a majority of the directors present at an authorized meeting of the board of directors, exclusive of any director who is an officer or director of the depository so designated. The corporation shall not receive money on deposit.

Acts 1969, No. 49, §11.

§ 12:962 Annual audit

The corporation shall be examined at least once annually by the banking commissioner and shall make reports of its condition not less than annually to said banking commissioner and more frequently upon call of the banking commissioner, who in turn shall make copies of such reports available to the governor; and the corporation shall also furnish such other information as may from time to time be required by the banking commissioner and secretary of state. The corporation shall pay the actual cost of said examinations. The banking commissioner shall exercise the same power and authority over corporations organized under this Chapter as is now exercised over banks and trust companies by the provisions of the Louisiana Banking Code, where such banking code is not in conflict with this Chapter.

Acts 1969, No. 49, §12.

§ 12:963 Initial meeting of incorporators; quorum

The first meeting of the corporation shall be called by a notice signed by three or more of the incorporators, stating the time, place, and purpose of the meeting, a copy of which notice shall be mailed or delivered to each incorporator at least five days before the day appointed for the meeting. Said first meeting may be held without such notice upon agreement in writing to that effect, signed by all the incorporators. There shall be recorded in the minutes of the meeting a copy of said notice or of such unanimous agreement of the incorporators.

At such first meeting, the incorporators shall organize by the choice, by ballot, of a temporary clerk; by the adoption of bylaws; by the election by ballot of directors; and by action upon such other matters within the powers of the corporation as the incorporators may see fit. The temporary clerk shall be sworn and shall make and attest a record of the proceedings. Ten of the incorporators shall be a quorum for the transaction of business.

Acts 1969, No. 49, §13.

§ 12:964 Duration of corporation

The period of duration of the corporation shall be fifty years, subject, however, to the right of the stockholders and the members to dissolve the corporation prior to the expiration of said period as provided in R.S. 12:965.

Acts 1969, No. 49, §14.

§ 12:965 Dissolution; distribution of assets

The corporation may be dissolved upon the affirmative vote of two-thirds of the votes to which the stockholders shall be entitled and two-thirds of the votes to which the members shall be entitled. Upon any dissolution of the corporation, none of the corporation's assets shall be distributed to the stockholders until all sums due the members who are also creditors of the corporation have been paid in full.

Acts 1969, No. 49, §15; Acts 2003, No. 292, §1.

§ 12:966 Pledge of state credit prohibited

Under no circumstances shall the credit of the state be pledged to any corporation organized under the provisions of this Chapter.

Acts 1969, No. 49, §16.

§ 12:967 State development company; federal definition

Any corporation organized under the provisions of this Chapter shall be a state development company, as defined in the Small Business Investment Act of 1958, Public Law 85-699, 85th Congress,¹ or any other similar federal legislation, and shall be authorized to operate on a statewide basis.

Acts 1969, No. 49, §17.

¹15 U.S.C.A. §§77c, 77ddd, 80a-18, 633, 636, 661, 662, 671, 672, 681-688, 691, 695, 696.

§ 12:968 Tax exemptions, credits and privileges applicable

Any tax exemptions, tax credits, or tax privileges granted to banks, savings and loan associations, trust companies, and other financial institutions by any general laws are granted to corporations organized pursuant to this Chapter.

Acts 1969, No. 49, §18.

§ 12:969 License fees

Every corporation organized and engaged in business under the provisions of this Chapter shall pay an annual state occupational license tax of fifty dollars. In addition, parishes and municipalities are authorized to levy the occupational license taxes as prescribed; however, no parish or municipality shall levy any such occupational license tax in an amount greater than those prescribed.

Acts 1969, No. 49, §19; Acts 2003, No. 292, §1.

§ 12:970 Fiscal year

Corporations organized under this Chapter shall adopt the calendar year as their fiscal year.

Acts 1969, No. 49, §20.

§ 12:971 Applicability of Louisiana business corporation law

The corporation shall be subject to all of the provisions of Chapter 1 of this Title, as amended from time to time, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Acts 1984, No. 890, §1, eff. July 20, 1984.

§ 12:972 Savings clause

Nothing herein contained shall be interpreted or construed as disapproving any act, action, or conduct which is or has been or may be in accordance with existing law, prior to amendment, nor shall anything herein contained be interpreted or construed as approving any act, action, or conduct which is or has been or may be in violation of existing law.

Acts 1984, No. 890, §1, eff. July 20, 1984.

CHAPTER 11 PROFESSIONAL DENTAL CORPORATIONS AND LIMITED LIABILITY COMPANIES

§ 12:981 Terms defined

As used in this Chapter:

A. "Professional dental corporation" means a corporation organized pursuant to this Chapter for the practice of dentistry.

B. "Professional dental limited liability company" means a limited liability company organized pursuant to this Chapter for the practice of dentistry.

C. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning.

Added by Acts 1970, No. 127, §1; Acts 1995, No. 488, §1.

§ 12:982 Professional corporations

One or more natural persons of full age and duly licensed to practice dentistry in this state may form a corporation under Chapter 1 of this Title for the purpose of practicing dentistry. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1970, No. 127, §1.

§ 12:982.1 Professional limited liability companies

One or more natural persons of full age and duly licensed to practice dentistry in this state may form a limited liability company under Chapter 22 of this Title for the purpose of practicing dentistry. Such limited liability company shall be subject to the provisions of Chapter 1 as the same may from time to time be amended, except to the extent that the provisions are inconsistent with provisions of this Chapter.

Acts 1995, No. 488, §1; Acts 2001, No. 476, §1, eff. June 21, 2001.

§ 12:983 Corporate and limited liability company name

A. The corporate name shall consist of the full name or names as used on the license to practice dentistry issued by the Louisiana State Board of Dentistry of one or more voting shareholders, may include "Limited" or "Ltd.", and shall end with one of the phrases, which may be in parentheses, "A Professional Dental Corporation", "A Professional Corporation", or "A Dental Corporation". The name need not contain "Incorporated" or "Inc."

B. The name of the limited liability company shall consist of the full names as used on the license to practice dentistry issued by the Louisiana State Board of Dentistry of all participating members and shall contain the words "limited liability company", the abbreviation "L.L.C." or the abbreviation "L.C.", as required in R.S. 12:1306(A)(1).

C. This Section shall apply to all dental practices as defined in Chapter 9 of Title 37 of the Louisiana Revised Statutes of 1950¹ whether or not said dental practices are in conformity herewith prior to August 15, 1995.

Added by Acts 1970, No. 127, §1. Amended by Acts 1975, No. 232, §1; Acts 1979, No. 400, §1, eff. July 11, 1979; Acts 1995, No. 488, §1.

¹R.S. 37:751 et seq.

§ 12:984 Corporate and limited liability company authority

A professional dental corporation or limited liability company shall engage in no business other than the practice of dentistry, but may hold property for investment or in connection with its dental practice.

Added by Acts 1970, No. 127, §1. Acts 1995, No. 488, §1.

§ 12:985 Shares

A. There shall be only one class of shares of professional dental corporations, denominated common shares, which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice dentistry in this state, and who holds his shares in his own right, or another professional dental corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to dental services rendered by, or any other affairs of, the corporation, except as provided in R.S. 12:993B.

C. R.S. 12:78 shall not apply to professional dental corporations.

Added by Acts 1970, No. 127, §1. Amended by Acts 1972, No. 80, §1; Acts 1980, No. 674, §1.

§ 12:985.1 Members

There shall be only one class of limited liability company members with membership interest therein, all of which interest shall be owned by a natural person duly licensed to practice dentistry in this state and who holds his membership in his own right or as a professional dental corporation, who shall be entitled to vote such membership interest and to participate in the limited liability company earnings. Any other membership interest holders shall have no voting rights for any purpose whatsoever, should not participate in the limited liability company's earnings, and shall have no access to any records or communications pertaining to dental services rendered by, or any other affairs of, the limited liability company, except as provided in R.S. 12:993(B).

Acts 1995, No. 488, §1.

§ 12:986 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice dentistry in the state of Louisiana or when held by another professional dental corporation, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of dental services by, the corporation, or to have access to any records or communications pertaining to dental services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders made pursuant to R.S. 12:989.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation, and, except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless in either event such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1970, No. 127, §1. Amended by Acts 1980, No. 674, §1.

§ 12:986.1 Membership interest

A membership interest in a dental limited liability company shall not be assignable in whole or part except to another natural person licensed to practice dentistry in this state or a professional dental corporation.

Acts 1995, No. 488, §1.

§ 12:987 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to or holder of shares of a professional dental corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1970, No. 127, §1.

§ 12:987.1 Liability of holder of interest in a limited liability company

A holder of an interest in a limited liability company has the liability imposed by Chapter 22 of this Title. Nothing herein shall be construed as a derogation of any rights which any person may by law have against any owner of a membership interest or manager of a dental limited liability company.

Acts 1995, No. 488, §1.

§ 12:988 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional dental corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1970, No. 127, §1.

§ 12:988.1 Action of holders of membership interest

Any action by, or requiring the assent of, the holders of a membership interest in a dental limited liability company may be taken on the affirmative vote of a majority, or such greater proportion as the dental limited liability company operating agreement may specify, in interest of the membership interest holders present or represented at a meeting duly called and held upon due notice, at which a quorum is present or represented.

Acts 1995, No. 488, §1.

§ 12:989 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional dental corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made or who thereafter become shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open daily during business hours to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1970, No. 127, §1.

§ 12:989.1 Membership ownership agreements

A. Any lawful provision regulating the affairs of a dental limited liability company or the rights and liabilities of the holders of a membership interest in the company, which is not required to be set forth in the articles of organization and/or operating agreement of a dental limited liability company, may be set forth in an agreement among all of the owners of a membership interest, and such agreement shall be binding on the dental limited liability company and all persons who are at the time such agreement is made or who thereafter become owners of a membership interest in a dental limited liability company. Such agreement may be terminated at any time by a majority of the dental limited liability company membership owners.

B. A duplicate copy of the agreement shall be filed in the company's registered office and shall be open daily during business hours to the inspection of any member or his attorney or legal representative.

Acts 1995, No. 488, §1.

§ 12:990 Directors

Only voting shareholders, or voting shareholders of another professional dental corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1970, No. 127, §1. Amended by Acts 1980, No. 674, §1.

§ 12:991 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional dental corporation, may be officers. If there is only one voting shareholder, all offices may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice dentistry in this state may render dental services in behalf of a professional dental corporation.

C. Only a voting membership interest owner may be a dental limited liability manager.

Added by Acts 1970, No. 127, §1. Amended by Acts 1980, No. 674, §1; Acts 1995, No. 488, §1.

§ 12:992 Merger and consolidation

Professional dental corporations and limited liability companies may be merged into or consolidated only with other professional dental corporations and dental limited liability companies.

Added by Acts 1970, No. 127, §1; Acts 1995, No. 488, §1.

§ 12:993 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional dental corporation.

B. In the event of the death of a shareholder of a professional dental corporation, said shareholder's succession representative or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation for the purposes of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

C. The fact that there are no persons qualified as membership interest owners shall be an additional ground for the involuntary dissolution of a limited liability company.

D. In the event of the death of a membership interest owner of a dental limited liability company, said membership interest owner's succession representative or those placed in possession of said membership interest owner if there is no administration of the succession, as the case may be, shall be entitled to vote the membership interest of said membership owner and to be elected as manager of the dental limited liability company for the sole purpose of effectuating a voluntary dissolution and liquidation of the dental limited liability company, in or out of court, pursuant to the Louisiana Business Limited Liability Company Law.

Added by Acts 1970, No. 127, §1. Amended by Acts 1972, No. 81, §1; Acts 1995, No. 488, §1.

§ 12:994 Regulation by Louisiana State Board of Dentistry

Professional dental corporations and dental limited liability companies shall be subject to the discipline of the Louisiana State Board of Dentistry and to its authority to adopt rules and regulations governing the practice of dentistry.

Added by Acts 1970, No. 127, §1; Acts 1995, No. 488, §1.

§ 12:995 Short title

This Chapter shall be known and may be referred to by the short title "Professional Dental Corporations Law."

Added by Acts 1970, No. 127, §1.

CHAPTER 12 PROFESSIONAL ACCOUNTING CORPORATIONS

§ 12:1011 Terms defined

As used in this Chapter:

A. "Professional accounting corporation" means a corporation organized pursuant to this Chapter and meeting the requirements to obtain a permit as a certified professional accounting firm as provided for by the Louisiana Accountancy Act, R.S. 37:71 et seq.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter as when used in Chapter 1.

C. All terms used both in this Chapter and in the Louisiana Accountancy Act shall have the same meaning when used in this Chapter as when used in the Louisiana Accountancy Act.

Added by Acts 1970, No. 191, §1. Amended by Acts 1979, No. 510, §2; Acts 2000, 1st Ex. Sess., No. 30, §1, eff. April 14, 2000.

§ 12:1012 Professional corporations

One or more natural persons of full age may form a corporation under Chapter 1 of this Title as a professional accounting corporation subject to the ownership requirements contained in the Louisiana Accountancy Act. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter and the provisions of the Louisiana Accountancy Act.

Added by Acts 1970, No. 191, §1; Acts 2000, 1st Ex. Sess., No. 30, §1, eff. April 14, 2000.

§ 12:1013 The corporate name

The corporate name shall consist of the full or last name or the names of one or more voting shareholders, former voting shareholders, or members of a predecessor accounting firm, may include "limited" or "Ltd.", and shall end with one of the phrases which may be in parenthesis "A Professional Accounting Corporation", "A Professional Corporation", or "A Corporation of Certified Public Accountants". The name need not contain "Incorporated" or "Inc.".

Added by Acts 1970, No. 191, §1.

§ 12:1014 Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

§ 12:1015 Shares

A. There shall be only one class of shares of a professional accounting corporation, denominated common shares which shall be either with or without par value.

B. The ownership of shares in a professional accounting corporation shall be subject to the provisions of the Louisiana Accountancy Act.

C. Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

D. R.S. 12:78 shall not apply to professional accounting corporations.

Added by Acts 1970, No. 191, §1. Amended by Acts 1972, No. 82, §1; Acts 2000, 1st Ex. Sess., No. 30, §§1, 2, eff. April 14, 2000.

§ 12:1016 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name.

B. Each certificate of stock shall contain reference to any and all agreements among the corporation's voting shareholders made pursuant to R.S. 12:1019.

C. There shall be no provision for compulsory offer of shares for purchases by or sale to the corporation, and, except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1970, No. 191, §1; Acts 2000, 1st Ex. Sess., No. 30, §1, eff. April 14, 2000.

§ 12:1017 Liability of incorporators, subscribers, shareholders, directors, officers, and agents

A. A subscriber to, or holder of, shares of a professional accounting corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and the said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. The shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such persons, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1970, No. 191, §1; Acts 1987, No. 135, §1; Acts 2000, 1st Ex. Sess., No. 30, §1, eff. April 14, 2000.

§ 12:1018 Actions of shareholders

Any action by, or requiring the assent of, the shareholders of a professional corporation may be taken on the affirmative vote of a majority in interest or such greater proportion as the articles of incorporation may specify of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1970, No. 191, §1.

§ 12:1019 Shareholders agreements

A. Any lawful provision regulating the affairs of a professional accounting corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the article of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding upon the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open, daily during business hours, to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1970, No. 191, §1.

§ 12:1020 Directors

Only voting shareholders may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1970, No. 191, §1.

§ 12:1021 Officers and agents

A. Only voting shareholders may be officers. If there is only one voting shareholder, all offices may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

Added by Acts 1970, No. 191, §1. Amended by Acts 1979, No. 510, §3; Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

§ 12:1022 Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

Repealed by Acts 2000, 1st Ex. Sess., No. 30, §2, eff. April 14, 2000.

§ 12:1023 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional accounting corporation.

B. In the event of the death of a shareholder of a professional accounting corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1970, No. 191, §1. Amended by Acts 1972, No. 83, §1.

§ 12:1024 Regulation by state board of certified public accountants of Louisiana

Professional accounting corporations shall be subject to the discipline of the State Board of Certified Public Accountants of Louisiana and its authority to adopt rules and regulations governing the practice of accounting, pursuant to the Louisiana Accountancy Act.

Added by Acts 1970, No. 191, §1; Acts 2000, 1st Ex. Sess., No. 30, §1, eff. April 14, 2000.

§ 12:1025 Short title

This Chapter may be known and may be referred to by the short title "Professional Accounting Corporations Law".

Added by Acts 1970, No. 191, §1.

CHAPTER 13 MISCELLANEOUS PROVISIONS APPLICABLE TO MORE THAN ONE KIND OF CORPORATION

§ 12:1041 Suppression of criminally operated businesses by domestic and foreign corporations; proceedings

A. The attorney general is authorized to institute civil proceedings against any domestic corporation to procure a judgment annulling, vacating or forfeiting its articles of incorporation and franchise, and against any foreign corporation to revoke its certificate of authority to transact business in this state when:

1. Any of the corporation officers or any other person controlling the management or operation of such corporation, with the knowledge of the president and a majority of the board of directors or under such circumstances that the president and a majority of the directors should have knowledge, is a person or persons engaged in activities such as organized violent revolutionary or unlawful activity aimed at the overthrow of the government of the State of Louisiana or any of its political subdivisions, or any boards, commissions, agency or official of either, or any unlawful activity aimed at organized homosexuality, organized crimes against nature, organized prostitution, organized gambling, organized narcotics, organized extortion or organized embezzlement, or who is connected directly or indirectly with organizations, syndicates or criminal societies engaged in any of these; or

2. A director, officer, employee, agent or stockholder acting for, through or on behalf of such corporation has, in conducting the corporation's affairs, purposely engaged in a persistent course of violent revolutionary or unlawful activity aimed at the overthrow of the government of the State of Louisiana or any of its political subdivisions, or any boards, commissions, agency or official or any unlawful activity aimed at homosexuality, crimes against nature, intimidation and coercion, bribery, prostitution, gambling, extortion, embezzlement, unlawful sale of narcotics or other illegal conduct, with the knowledge of the president and majority of the board of directors or under such circumstances that the president and a majority of the directors should have knowledge, with the intent to compel or induce other persons, firms or corporations to deal with such corporation or engage in any such illegal conduct, and

3. For the prevention of future illegal conduct of the same character, the public interest requires the charter of the corporation to be annulled, vacated or forfeited and the corporation to be dissolved or the certificate of authority to transact business in this state revoked.

B. The proceedings authorized by this section may be instituted against a corporation in the district court for the parish of its registered office or for any parish in which it is doing business. The proceedings shall be conducted in accordance with the Louisiana Code of Civil Procedure and the applicable rules of court.

The proceedings herein authorized shall be in addition to any other proceeding authorized by law for the purpose of annulling, vacating or forfeiting the articles and franchise of a domestic corporation and/or revoking the certificate of authority of a foreign corporation to transact business in this state.

Acts 1970, No. 527, §§1, 2.

§ 12:1042 Franchise agreements; provisions for dispute resolution

Unless provisions of a business franchise agreement provide otherwise, when the business to be conducted pursuant to the agreement and the business location of the franchisee are exclusively in this state, disputes arising under a business franchise agreement shall be resolved in a forum inside this state and interpretation of the provisions of the agreement shall be governed by the laws of this state.

Acts 1991, No. 855, §1.

CHAPTER 14 PROFESSIONAL CHIROPRACTIC CORPORATIONS

§ 12:1051 Terms defined

As used in this Chapter:

A. "Professional chiropractic corporation" means a corporation organized pursuant to this Chapter for the practice of chiropractic.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1976, No. 686, §1.

§ 12:1052 Professional corporations

One or more natural persons, of full age and duly licensed to practice chiropractic in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing chiropractic. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provision of this Chapter.

Added by Acts 1976, No. 686, §1.

§ 12:1053 The corporate name

The corporate name shall consist of the full or last name or names of one or more voting shareholders, former voting shareholders or members of a predecessor chiropractic partnership, may include "Limited" or "Ltd.", shall end with one of the phrases (which may be in parentheses) "A Professional Chiropractic Corporation", or "A Professional Corporation."

The name need not contain "Incorporated" or "Inc."

Added by Acts 1976, No. 686, §1.

§ 12:1054 Corporate authority

A professional chiropractic corporation shall engage in no business other than the practice of chiropractic but may hold property for investment or in connection with its chiropractic practice.

Added by Acts 1976, No. 686, §1.

§ 12:1055 Shares

A. There shall be only one class of shares of a professional chiropractic corporation, denominated common shares which shall be either with or without par value.

B. A shareholder who is a natural person duly licensed to practice chiropractic in this state, and who holds his shares in his own right, shall be entitled to vote his shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose directly related to the practice of chiropractic by the corporation.

C. R.S. 12:78 shall not apply to professional chiropractic corporations.

Added by Acts 1976, No. 686, §1.

§ 12:1056 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice chiropractic in the state of Louisiana, the shares represented by this certificate are not entitled to be voted on matters directly related to the practice of chiropractic and the holder is not entitled to participate in the rendition of chiropractic services by the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:1059.

C. There shall be no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1976, No. 686, §1.

§ 12:1057 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional chiropractic corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1976, No. 686, §1.

§ 12:1058 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional chiropractic corporation may be taken on the affirmative vote of a majority (or such proportion as the articles of incorporation may specify) in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1976, No. 686, §1.

§ 12:1059 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional chiropractic corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open, daily during business hours, to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1976, No. 686, §1.

§ 12:1060 Directors

Only shareholders may be directors. If there are fewer than three shareholders, there need be only as many directors as shareholders. The office of a director shall become vacant if he ceases to be a shareholder.

Added by Acts 1976, No. 686, §1.

§ 12:1061 Officers and agents

A. Only shareholders may be officers. If there is only one shareholder, all offices may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a shareholder.

B. Only natural persons duly licensed to practice chiropractic in this state or persons possessing temporary licenses may render chiropractic services in behalf of a professional chiropractic corporation.

Added by Acts 1976, No. 686, §1.

§ 12:1062 Merger and consolidation

Professional chiropractic corporations may be merged into or consolidated only with other professional chiropractic corporations.

Added by Acts 1976, No. 686, §1.

§ 12:1063 Dissolution

A. The fact that it has no shareholders shall be a ground for involuntary dissolution of a professional chiropractic corporation.

B. In the event of the death of a shareholder of a professional chiropractic corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1976, No. 686, §1.

§ 12:1064 Regulation by Louisiana State Board of Chiropractic Examiners

Professional chiropractic corporations shall be subject to the discipline of the Louisiana State Board of Chiropractic Examiners and to its authority to adopt rules and regulations governing the practice of chiropractic.

Added by Acts 1976, No. 686, §1.

§ 12:1065 Short title

This Chapter shall be known and may be referred to by the short title "Professional Chiropractic Corporations Act."

Added by Acts 1976, No. 686, §1.

CHAPTER 15 PROFESSIONAL NURSING CORPORATIONS

§ 12:1071 Terms defined

As used in this Chapter:

A. "Professional nursing corporation" means a corporation organized pursuant to this Chapter for the practice of nursing.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1977, No. 730, §1.

§ 12:1072 Professional corporations

One or more natural persons, of full age and duly licensed to practice nursing in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing nursing. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1977, No. 730, §1.

§ 12:1073 The corporate name

The corporate name shall consist of the full or last names of one or more voting shareholders, former voting shareholders or members of a predecessor nursing or anesthetists' partnership; may include "Limited" or "Ltd."; and shall end with one of the phrases, which may be in parentheses, "A Professional Nursing Corporation," or "A Professional Corporation."

The name need not contain "Incorporated" or "Inc."

Added by Acts 1977, No. 730, §1.

§ 12:1074 Corporate authority

A professional nursing corporation shall engage in no business other than the practice of nursing but may hold property for investment or in connection with its nursing practice.

Added by Acts 1977, No. 730, §1.

§ 12:1075 Shares

A. There shall be only one class of shares of professional nursing corporations, denominated common shares which shall be either with or without par value.

B. A shareholder who is a natural person duly licensed to practice nursing in this state, and who holds his shares in his own right, shall be entitled to vote his shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to nursing services rendered by or any other affairs of, the corporation, except as provided in R.S. 12:1083(B).

C. R.S. 12:33 shall not apply to professional nursing corporations.

Added by Acts 1977, No. 730, §1.

§ 12:1076 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice nursing in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or the rendition of nursing services by the corporation, or to have access to any records or communications pertaining to nursing services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:1079.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation and, except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless in either event such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1977, No. 730, §1.

§ 12:1077 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional nursing corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1977, No. 730, §1.

§ 12:1078 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional nursing corporation may be taken on the affirmative vote of a majority, or such proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1977, No. 730, §1.

§ 12:1079 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional nursing corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be open, daily during business hours, to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1977, No. 730, §1.

§ 12:1080 Directors

Only voting shareholders may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1977, No. 730, §1.

§ 12:1081 Officers and agents

A. Only voting shareholders may be officers. If there is only one voting shareholder, all offices may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice nursing in this state or persons possessing temporary licenses may render nursing services in behalf of a professional nursing corporation.

Added by Acts 1977, No. 730, §1.

§ 12:1082 Merger and consolidation

Professional nursing corporations may be merged into or consolidated only with other professional nursing corporations.

Added by Acts 1977, No. 730, §1.

§ 12:1083 Dissolution

A. The fact that it has no voting shareholders shall be a ground for involuntary dissolution of a professional nursing corporation.

B. In the event of the death of a shareholder of a professional nursing corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1977, No. 730, §1.

§ 12:1084 Regulation by Louisiana State Board of Nursing

Professional nursing corporations shall be subject to the discipline of the Louisiana State Board of Nursing and to its authority to adopt rules and regulations governing the practice of nursing.

Added by Acts 1977, No. 730, §1; Acts 2012, No. 811, §2, eff. July 1, 2012.

§ 12:1085 Short title

This Chapter shall be known and may be referred to by the short title "Professional Nursing Corporations Act."

Added by Acts 1977, No. 730, §1.

CHAPTER 16 PROFESSIONAL ARCHITECTURAL CORPORATIONS

§ 12:1086 Terms defined

As used in this Chapter:

A. "Professional architectural corporation" means a corporation organized pursuant to this Chapter for the practice of architecture as provided for by R.S. 37:141 through R.S. 37:158, inclusive, or a corporation which is certified to be in compliance therewith by the Louisiana State Board of Architectural Examiners.

B. All terms used both in this Chapter and in Chapter 1 of this Title should have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1087 Professional corporation

A corporation formed under Chapter 1 of this Title for the purpose of practicing architecture shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1088 Corporate name

The corporate name may consist of the full or last name or names of one or more shareholders duly licensed to practice architecture in this state, may include "Limited" or "Ltd."; or it may consist of any other name approved by the secretary of state. However, in either case the name shall end with one of the phrases: "A Professional Architectural Corporation", "A Professional Corporation", or "An Architectural Corporation", which phrase may be in parentheses. The name need not contain "Incorporated" or "Inc." but such use shall not be prohibited.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1089 Corporate authority

A professional architectural corporation shall engage in the business of the practice of architecture and may engage in any business not in conflict with such business activity. It may hold, own, lease, or otherwise deal in property for investment or in connection with its architectural practice.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1090 Shares

A. There shall be only one class of shares of professional architectural corporations, denominated common shares which shall be either with or without par value.

B. A majority of the outstanding shares of a professional architectural corporation shall be held by one or more natural persons duly licensed to practice architecture in this state, holding his shares in his own right.

C. The requirement of Subsection B of this Section may be met if such shares are held or owned by a holding company, a majority of the stock of which is owned by one or more natural persons duly licensed to practice architecture in this state, and the holding company is the direct owner of the stock of such professional architectural corporation.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1091 Certificate of stock

A. Each certificate of stock shall contain reference to any and all agreements among the corporation's shareholders made pursuant to R.S. 12:1094.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1092 Liability of incorporators, subscribers, shareholders, directors, officers, and agents

A. A subscriber to or holder of shares of a professional architectural corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty, or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1093 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional architectural corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in the interest of the shareholders present or represented at a meeting duly called and held on due notice or waiver thereof in writing, at which a quorum is present or represented.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1094 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional architectural corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the shareholders.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1095 Directors

A. The number and qualifications of directors shall be determined by a majority vote of the shareholders.

B. A majority of the board of directors, if more than two, shall be natural persons, duly licensed to practice architecture in this state.

C. Corporations having fewer than three directors shall have at least one director who is a natural person, duly licensed to practice architecture in this state.

D. Corporations having fewer than three directors pursuant to R.S. 12:1095(B) shall have at least one director who is a natural person, duly licensed to practice architecture in this state.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1096 Officers

There shall be a president, a secretary and such other officers as the shareholders may elect. If there is only one shareholder, all offices may be combined in his person.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1097 Contracts

A. A professional architectural corporation shall be entitled to enter into contracts to provide architectural services and such other contracts as may be consistent with the practice of architecture.

B. Architectural services rendered on behalf of a professional architectural corporation must be performed by or under the direct supervision of a natural person duly licensed to practice architecture in this state.

C. A contract to provide architectural services by a professional architectural corporation which at any time during the existence of the contract fails to comply with the requisites of La.R.S. 12:1090(B) shall be voidable by any other party thereto.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1098 Merger and consolidation

Professional architectural corporations may be merged into or consolidated only with other professional architectural corporations.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1099 Dissolution

A. The fact that it has less than a majority of outstanding shares held by one or more natural persons duly licensed to practice architecture in this state shall be an additional ground for involuntary dissolution of a professional architectural corporation.

B. In the event of the death of a shareholder of a professional architectural corporation, said shareholder's succession representative or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation for the purposes of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law, or for the purpose of reorganizing or continuing the corporation subject to the provisions of this Chapter.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1100 Regulation by Louisiana State Board of Architectural Examiners

A. Professional architectural corporations shall be subject to the discipline of the Louisiana State Board of Architectural Examiners and to its authority to adopt rules and regulations governing the practice of architecture.

B. If upon the effective date of this Act an architect or architects who are duly licensed to practice architecture in this state are so engaged in corporation form, contracts entered into by such corporations to perform or furnish professional architectural services shall not be rendered invalid by virtue of the noncompliance with the provisions of this Act. Architects operating in corporate form as of the effective date hereof shall cause such corporations to comply with the provisions of this Act within ninety days of the effective date of this Act.

C. Evidence of such compliance referred to in Subsection B of this Section shall be accomplished by the corporations filing with the Louisiana State Board of Architectural Examiners a declaration duly certified by the corporate president and secretary and sworn to before a Notary Public, that such corporation is in full compliance with this Act and particularly with R.S. 12:1090(B).

D. Upon the receipt of such certification, the Louisiana State Board of Architectural Examiners shall issue a certificate of compliance upon being reasonably satisfied from the evidence available to it that the corporation meets the requirements of this Act. The failure of the board to issue such a certificate without just cause shall in no way effect or invalidate contracts to furnish architectural services heretofore entered into by the corporation seeking to qualify without a hearing conducted by the board under the provisions of the Louisiana Administrative Procedure Act.

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

§ 12:1101 Short title

This Chapter shall be known and may be referred to by the short title "Professional Architectural Corporations Law."

Added by Acts 1979, No. 225, §1, eff. July 9, 1979.

CHAPTER 17 PROFESSIONAL OPTOMETRY CORPORATIONS

§ 12:1110 Terms defined

As used in this Chapter:

A. "Professional Optometry Corporation" means a corporation organized pursuant to this Chapter for the practice of optometry as provided for by R.S. 37:1041 through R.S. 37:1067 inclusive.

B. All terms used in this Chapter and in Chapter 1 of this Title shall have the same meanings when used in this Chapter as when used in Chapter 1.

Added by Acts 1980, No. 404, §1.

§ 12:1111 Professional corporations

One or more natural persons of the age of majority and duly licensed to practice optometry in this state may form a corporation under Chapter 1 of this Title for the purpose of practicing optometry. Such corporations shall be subject to all of the provisions of Chapter 1 of this Title, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1980, No. 404, §1.

§ 12:1112 Corporate name

The corporate name shall consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor optometry partnership or firm. It may include "Limited" or "Ltd.," and shall end with one of the phrases which may be in parenthesis "A Professional Optometry Corporation," "A Professional Corporation," or "An Optometry Corporation." The name need not contain "Incorporated" or "Inc."

Added by Acts 1980, No. 404, §1.

§ 12:1113 Corporate authority

A professional optometry corporation shall engage in no business other than the practice of optometry, but may hold property for investment or in connection with its optometry practice.

Added by Acts 1980, No. 404, §1.

§ 12:1114 Shares

A. There shall be only one class of shares of professional optometry corporations, denominated common shares, which shall be either with or without par value.

B. Only a shareholder who is a natural person duly licensed to practice optometry in this state, and who holds his shares in his own right, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatsoever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to optometry services rendered by, or any other affairs of, the corporation, except as provided in R.S. 12:1122(B).

C. R.S. 12:33 shall not apply to professional optometry corporations.

Added by Acts 1980, No. 404, §1.

§ 12:1115 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement:

"Except when held in his own right by a natural person duly licensed to practice optometry in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of optometry care by, the corporation, or to have access to any records or communications pertaining to optometry services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:1118.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation and, except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless in either event such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1980, No. 404, §1.

§ 12:1116 Liability of incorporators, subscribers, shareholders, directors, officers, or agents

A. A subscriber to or holder of shares in a professional optometry corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other neglect or wrongful act, by such person or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1980, No. 404, §1.

§ 12:1117 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional optometry corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1980, No. 404, §1.

§ 12:1118 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional optometry corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made or who thereafter become shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office, and shall be opened daily during business hours to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1980, No. 404, §1.

§ 12:1119 Directors

Only voting shareholders may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1980, No. 404, §1.

§ 12:1120 Officers and agents

A. Only voting shareholders may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice optometry in this state may render optometry services on behalf of a professional optometry corporation.

Added by Acts 1980, No. 404, §1.

§ 12:1121 Merger and consolidation

Professional optometry corporations may be merged into or consolidated only with other professional optometry corporations.

Added by Acts 1980, No. 404, §1.

§ 12:1122 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional optometry corporation.

B. In the event of the death of a shareholder of a professional optometry corporation, said shareholder's succession representative, or those placed in possession of the shares of such shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder, and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1980, No. 404, §1.

§ 12:1123 Regulation by Louisiana State Board of Optometry

Professional optometry corporations shall be subject to the discipline of the Louisiana State Board of Optometry Examiners and its authority to adopt rules and regulations governing the practice of optometry.

Added by Acts 1980, No. 404, §1.

§ 12:1124 Short title

This Chapter shall be known as and may be referred to by the short title "Professional Optometry Corporations Law."

Added by Acts 1980, No. 404, §1.

CHAPTER 18 PROFESSIONAL PSYCHOLOGY CORPORATIONS

§ 12:1130 Terms defined

As used in this Chapter:

A. "Professional psychology corporation" means a corporation organized pursuant to this Chapter for the practice of psychology.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1980, No. 523, §1.

§ 12:1131 Professional corporations

One or more natural persons, of full age and duly licensed to practice psychology in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing psychology. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1980, No. 523, §1.

§ 12:1132 The corporate name

The corporate name may consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor psychology partnership, or it may consist of any other name approved by the secretary of state. The name shall end with one of the phrases (which may be in parentheses) "A Professional Psychology Corporation," "A Professional Corporation" or "A Psychology Corporation." The name may include "Limited" or "Ltd." The name need not contain "Incorporated" or "Inc."

Added by Acts 1980, No. 523, §1.

§ 12:1133 Corporate authority

A professional psychology corporation shall engage in no business other than the practice of psychology, but may hold property for investment or in connection with its psychology practice.

Added by Acts 1980, No. 523, §1.

§ 12:1134 Shares

A. There shall be only one class of shares of a professional psychology corporation, denominated common shares, which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice psychology in this state, and who holds his shares in his own right, or another professional psychology corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to psychological services rendered by, or any other affairs of, the corporation, except as provided in R.S. 12:1142.

C. R.S. 12:33 shall not apply to professional psychology corporations.

Added by Acts 1980, No. 523, §1.

§ 12:1135 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice psychology or another professional psychology corporation in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of psychological services by, the corporation, or to have access to any records or communications pertaining to psychological services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders made pursuant to R.S. 12:1138.

C. There shall be no provision for compulsory offer of shares for purchase or by sale to the corporation, and, except as provided in R.S. 12:22,¹ no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1980, No. 523, §1.

¹So in enrolled bill. Present R.S. 12:22 deals with purposes for incorporation. Former R.S. 12:22, repealed by Acts 1968, No. 105, §1, provided: "If a shareholder be indebted to the corporation on account of unpaid subscriptions for shares, the corporation shall have a vendor's privilege upon such shares to the extent of this indebtedness." See, now, R.S. 12:71.

§ 12:1136 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional psychology corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1980, No. 523, §1.

§ 12:1137 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional psychology corporation may be taken on the affirmative vote of a majority (or such greater proportion as the articles of incorporation may specify) in interest of the voting shareholders present or represented at a meeting duly called and held on due notice at which a quorum is present or represented.

Added by Acts 1980, No. 523, §1.

§ 12:1138 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional psychology corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office which shall be open daily during business hours to the inspection of any shareholder or his attorney or legal representative.

Added by Acts 1980, No. 523, §1.

§ 12:1139 Directors

Only voting shareholders, or voting shareholders of another professional psychology corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1980, No. 523, §1.

§ 12:1140 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional psychology corporation, may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice psychology in this state may render psychological services on behalf of a professional psychology corporation.

Added by Acts 1980, No. 523, §1.

§ 12:1141 Merger and consolidation

Professional psychology corporations may be merged into or consolidated only with other professional psychology corporations.

Added by Acts 1980, No. 523, §1.

§ 12:1142 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional psychology corporation.

B. In the event of the death of a shareholder of a professional psychology corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1980, No. 523, §1.

§ 12:1143 Regulation by the Louisiana State Board of Examiners of Psychologists

Professional psychology corporations shall be subject to the discipline of the Louisiana State Board of Examiners of Psychologists and to its authority to adopt rules and regulations governing the practice of psychology.

Added by Acts 1980, No. 523, §1.

§ 12:1144 Short title

This Chapter shall be known and may be referred to by the short title "Professional Psychology Corporations Act".

Added by Acts 1980, No. 523, §1.

CHAPTER 19 PROFESSIONAL VETERINARY MEDICINE CORPORATIONS

§ 12:1151 Terms defined

As used in this Chapter:

A. "Professional veterinary medicine corporation" means a corporation organized pursuant to this Chapter for the practice of veterinary medicine.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Added by Acts 1982, No. 218, §1.

§ 12:1152 Professional corporations

One or more natural persons, of full age and duly licensed to practice veterinary medicine in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing veterinary medicine. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1982, No. 218, §1.

§ 12:1153 The corporate name

The corporate name may consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor veterinary medical partnership, or it may consist of any other name approved by the secretary of state. The name shall end with one of the phrases, which may be in parentheses, "A Professional Veterinary Medicine Corporation," "A Professional Corporation" or "A Veterinary Medicine Corporation." The name may include "Limited" or "Ltd." The name need not contain "Incorporated" or "Inc."

Added by Acts 1982, No. 218, §1.

§ 12:1154 Corporate authority

A professional veterinary medicine corporation shall engage in no business other than the practice of veterinary medicine, but may hold property for investment or in connection with its veterinary medical practice.

Added by Acts 1982, No. 218, §1.

§ 12:1155 Shares

A. There shall be only one class of shares of a professional veterinary medicine corporation, denominated common shares which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice veterinary medicine in this state, and who holds his shares in his own right, or another professional veterinary medicine corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to medical services rendered by, or any other affairs of, the corporations, except as provided in R.S. 12:913(B).

C. R.S. 12:33 shall not apply to professional veterinary medicine corporations.

Added by Acts 1982, No. 218, §1.

§ 12:1156 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice veterinary medicine in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of veterinary medicine services by, the corporation or to have access to any records or communications pertaining to medical services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:1159.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation, and, except as provided in R.S. 12:22,¹ no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Added by Acts 1982, No. 218, §1.

¹In subsec. C, "R.S. 12:22" is as it appears in the original bill and the enrolled act.

§ 12:1157 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional veterinary medicine corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt of liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1982, No. 218, §1.

§ 12:1158 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional veterinary medicine corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Added by Acts 1982, No. 218, §1.

§ 12:1159 Shareholders' agreements

Any lawful provision regulating the affairs of a professional veterinary medicine corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

Added by Acts 1982, No. 218, §1.

§ 12:1160 Directors

Only voting shareholders, or voting shareholders of another professional veterinary medicine corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Added by Acts 1982, No. 218, §1.

§ 12:1161 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional veterinary medicine corporation, may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice veterinary medicine in this state may render medical services on behalf of a professional veterinary medicine corporation.

Added by Acts 1982, No. 218, §1.

§ 12:1162 Merger and consolidation

Professional veterinary medicine corporations may be merged into or consolidated only with other professional veterinary medicine corporations.

Added by Acts 1982, No. 218, §1.

§ 12:1163 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional veterinary medicine corporation.

B. In the event of the death of a shareholder of a professional veterinary medicine corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Added by Acts 1982, No. 218, §1.

§ 12:1164 Regulation by Louisiana Board of Veterinary Medicine

Professional medical corporations shall be subject to the discipline of the Louisiana Board of Veterinary Medicine and to its authority to adopt rules and regulations governing the practice of medicine.

Added by Acts 1982, No. 218, §1; Acts 2012, No. 811, §2, eff. July 1, 2012.

§ 12:1165 Short title

This Chapter shall be known and may be referred to by the short title "Professional Veterinary Medicine Corporations Act".

Added by Acts 1982, No. 218, §1.

CHAPTER 20 ARCHITECTURAL-ENGINEERING CORPORATIONS

§ 12:1171 Terms defined

As used in this Chapter:

A. "Architectural-engineering corporation" means a corporation organized pursuant to this Chapter for the practice of architecture as provided for by R.S. 37:141 et seq., and for the practice of engineering as provided for by R.S. 37:681 et seq., and which is certified to be in compliance therewith by the Louisiana State Board of Architectural Examiners and the Louisiana Professional Engineering and Land Surveying Board.

B. All terms used in this Chapter shall have the same meaning as provided in Chapter 1.

C. A corporation formed under Chapter 1 of this Title for the purpose of practicing architecture and engineering shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983; Acts 2003, No. 279, §2.

§ 12:1172 Corporate name

The corporate name may consist of any name approved by the secretary of state; however, it may only contain the full or last name or names of one or more shareholders duly licensed to practice architecture or engineering in this state. In all cases the corporate name shall end with language sufficient to identify the corporation as a corporation, such as, but not by way of limitation, "Incorporated", "Inc.", "Limited", or "Ltd.".

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1173 Corporate authority

A. An architectural-engineering corporation licensed by the State Board of Architectural Examiners and licensed by the Louisiana Professional Engineering and Land Surveying Board may offer and provide architectural services and engineering services in this state.

B.(1) In order to become licensed to practice architecture and to practice engineering, such a corporation on an annual basis shall file with the State Board of Architectural Examiners and with the Louisiana Professional Engineering and Land Surveying Board written requests for such licensure, designating therein the supervising professional architect who shall perform all professional architectural services or who shall directly supervise the performance of all architectural services by said corporation, and further designating the supervising professional engineer who shall perform all professional civil, mechanical, or electrical engineering services or those services in any other discipline of professional engineering which the Louisiana Professional Engineering and Land Surveying Board and the State Board of Architectural Examiners may jointly specify, or who shall directly supervise the performance of all such engineering services by said corporation.

(2) Only those persons may be designated as supervising professional architects or engineers who previously have been licensed by the State Board of Architectural Examiners pursuant to the provisions of R.S. 37:141 et seq., or who previously have been licensed by the Louisiana Professional Engineering and Land Surveying Board and listed as practicing civil, mechanical, or electrical engineering or any other discipline of professional engineering that the Louisiana Professional Engineering and Land Surveying Board may specify pursuant to the provisions of R.S. 37:681 et seq., who are in compliance with said provisions, who are full-time active employees of the corporation and whose primary occupation is with that corporation.

C. The corporation shall authorize such licensed supervisory professional architects or engineers to appear for and act on behalf of the corporation in connection with the execution and performance of all contracts to provide architectural services and civil, mechanical, or electrical engineering services and those of any other discipline of professional engineering which the Louisiana Professional Engineering and Land Surveying Board may specify.

D. In the event that such licensed supervisory professional architect ceases to become a full-time active employee of the corporation or is no longer employed by the corporation on a primary basis, the authority of the corporation thereafter to practice architecture is suspended until such time as the corporation designates another supervising professional architect pursuant to Subsection B hereof.

E. In the event that such licensed supervisory professional engineer ceases to become a full-time active employee of the corporation or is no longer employed by the corporation on a primary basis, the authority of the corporation thereafter to practice engineering in the disciplines of civil, mechanical, or electrical engineering or any other discipline of professional engineering which the Louisiana Professional Engineering and Land Surveying Board may specify, is suspended until such time as the corporation designates another supervising professional engineer pursuant to Subsection B hereof.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983; Acts 2003, No. 279, §2.

§ 12:1174 Directors, officers, and agents; liability

A. A subscriber to or holder of shares of an architectural-engineering corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may have against an incorporator, subscriber, shareholder, director, officer, employee, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty, or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1175 Shareholders' agreements

Any lawful provision regulating the affairs of an architectural-engineering corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the shareholders.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1176 Directors

The numbers and qualifications of directors shall be determined by a majority vote of the shareholders.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1177 Officers

There shall be a president, a secretary, and such other officers as the shareholders may elect. If there is only one shareholder, all offices may be combined in his person.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1178 Contracts

A. An architectural-engineering corporation shall be entitled to enter into contracts to provide architectural services and engineering services and such other contracts as may be consistent with the practice of architecture and engineering.

B. Architectural services rendered on behalf of an architectural-engineering corporation must be performed by or under the direct supervision of a natural person duly licensed to practice architecture in this state.

C. Civil, mechanical, or electrical engineering services or those of any other discipline of professional engineering which the Louisiana Professional Engineering and Land Surveying Board may specify, and which are rendered on behalf of an architectural-engineering corporation, must be performed by or under the direct supervision of a natural person duly licensed to practice engineering in this state and having been listed as practicing in that respective discipline of engineering.

D. A contract to provide any services by an architectural-engineering corporation which at any time during the existence of the contract fails to comply with the requisites of this Chapter shall be voidable by any other party thereto.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983; Acts 2003, No. 279, §2.

§ 12:1179 Regulation

A. Within fifteen days after receipt of the annual written request by an architectural-engineering corporation for licensure as an architect or engineer as the case may be, the State Board of Architectural Examiners and the Louisiana Professional Engineering and Land Surveying Board shall act upon said request.

B. To the extent that it engages in the business of the practice of architecture, an architectural-engineering corporation shall be subject to the discipline of the Louisiana State Board of Architectural Examiners and to its authority to adopt rules and regulations governing the practice of architecture.

C. To the extent that it engages in the business of the practice of engineering, an architectural-engineering corporation shall be subject to the discipline of the Louisiana Professional Engineering and Land Surveying Board, and to its authority to adopt rules and regulations governing the practice of engineering.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983; Acts 2003, No. 279, §2.

§ 12:1180 Compliance by existing corporation

If upon the effective date of this Chapter a previously existing engineering corporation or professional architectural corporation desires to operate as an architectural-engineering corporation, it may do so by compliance with the provisions of this Chapter and shall be entitled but not required to form a separate corporation for that purpose.

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

§ 12:1181 Short title

This Chapter shall be known and may be referred to by the short title "Architectural-Engineering Corporation Law".

Added by Acts 1983, No. 465, §1, eff. July 6, 1983.

CHAPTER 21 PROFESSIONAL OCCUPATIONAL THERAPY CORPORATIONS

§ 12:1190 Terms defined

A. As used in this Chapter, "professional occupational therapy corporation" means a corporation organized pursuant to this Chapter for the practice of occupational therapy.

B. All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter as when used in Chapter 1.

Acts 1990, No. 586, §1.

§ 12:1191 Professional corporations

One or more natural persons, of full age and duly licensed to practice occupational therapy in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing occupational therapy. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Acts 1990, No. 586, §1.

§ 12:1192 Corporate name

The corporate name may consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor occupational therapy partnership, or it may consist of any other name approved by the secretary of state. The name shall end with one of the phrases, which may be in parentheses, "A Professional Occupational Therapy Corporation", "A Professional Corporation", or "An Occupational Therapy Corporation". The name may include "Limited" or "Ltd.". The name need not contain "Incorporated" or "Inc.".

Acts 1990, No. 586, §1.

§ 12:1193 Corporate authority

A professional occupational therapy corporation shall engage in no business other than the practice of occupational therapy, but may hold property for investment or in connection with its occupational therapy practice.

Acts 1990, No. 586, §1.

§ 12:1194 Shares

A. There shall be only one class of shares of a professional occupational therapy corporation, denominated common shares which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice occupational therapy in this state, and who holds his shares in his own right, or another professional occupational therapy corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to therapy services rendered by, or any other affairs of, the corporations, except as provided in R.S. 12:913(B).

C. R.S. 12:33 shall not apply to professional occupational therapy corporations.

Acts 1990, No. 586, §1.

§ 12:1195 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name, and the following statement: "Except when held in his own right by a natural person duly licensed to practice occupational therapy in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of occupational therapy services by, the corporation or to have access to any records or communications pertaining to therapy services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders, made pursuant to R.S. 12:1198.

C. There shall be no provision for compulsory offer of shares for purchase by or sale to the corporation, and except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Acts 1990, No. 586, §1.

§ 12:1196 Liability of incorporators, subscribers, shareholders, directors, officers, and agents

A. A subscriber to, or holder of, shares of a professional occupational therapy corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer, or agent of the corporation, because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act, by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Acts 1990, No. 586, §1.

§ 12:1197 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional occupational therapy corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice, at which a quorum is present or represented.

Acts 1990, No. 586, §1.

§ 12:1198 Shareholders' agreements

Any lawful provision regulating the affairs of a professional occupational therapy corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

Acts 1991, No. 857, §1.

§ 12:1199 Directors

Only voting shareholders, or voting shareholders of another professional occupational therapy corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Acts 1990, No. 586, §1.

§ 12:1200 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional occupational therapy corporation, may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice occupational therapy in this state may render therapy services on behalf of a professional occupational therapy corporation.

Acts 1990, No. 586, §1.

§ 12:1201 Merger and consolidation

Professional occupational therapy corporations may be merged into or consolidated only with other professional occupational therapy corporations.

Acts 1990, No. 586, §1.

§ 12:1202 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional occupational therapy corporation.

B. In the event of the death of a shareholder of a professional occupational therapy corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation, for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Acts 1990, No. 586, §1.

§ 12:1203 Regulation by Louisiana State Board of Medical Examiners

Professional occupational therapy corporations shall be subject to the discipline of the Louisiana State Board of Medical Examiners and to its authority to adopt rules and regulations governing the practice of occupational therapy.

Acts 1990, No. 586, §1.

§ 12:1204 Short title

This Chapter shall be known and may be referred to by the short title "Professional Occupational Therapy Corporations Act".

Acts 1990, No. 586, §1.

CHAPTER 22 LIMITED LIABILITY COMPANIES

PART I DEFINITIONS

§ 12:1301 Definitions

A. As used in this Chapter, unless the context otherwise requires:

(1) "Articles of organization" means documents filed under R.S. 12:1304 for the purpose of forming a limited liability company and those documents as amended or restated.

(2) "Business" means any trade, occupation, profession, or other commercial activity, including but not limited to professions licensed by a state or other governmental agency whether or not engaged in for profit.

(3) "Capital contribution" means anything of value that a person contributes to the limited liability company as a prerequisite for, or in connection with, membership, including cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.

(4) "Constituent entity" means each limited liability company, partnership, partnership in commendam, limited partnership, or corporation which is party to an agreement of merger or consolidation pursuant to R.S. 12:1358.

(5) "Corporation" means a corporation formed under the laws of this state or a foreign corporation as defined in this Section.

(6) "Foreign corporation" means a corporation formed under the laws of any state other than this state or under the laws of any foreign country.

(7) "Foreign limited liability company" means a limited liability company formed under the laws of any state other than this state.

(8) "Foreign limited partnership" means a limited partnership formed under the laws of any state other than this state or under the laws of any foreign country.

(9) "Foreign partnership" means a partnership formed under the laws of any state other than this state, or under the laws of any foreign country.

(10) "Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association having one or more members that is organized and existing under this Chapter. No limited liability company organized under this Chapter shall be deemed, described as, or referred to as an incorporated entity, corporation, body corporate, body politic, joint stock company, or joint stock association.

(11) "Limited partnership" means a partnership in commendam formed under the laws of this state or a foreign limited partnership as defined in this Section.

(11.1) "Low-profit limited liability company" or "L3C" means a limited liability company organized for the purposes set forth in R.S. 12:1302(C).

(12) "Manager" or "managers" means a person or persons designated by the members of a limited liability company to manage the limited liability company as provided in its articles of organization.

(13) "Member" means a person with a membership interest in a limited liability company with the rights and obligations specified under this Chapter.

(14) "Membership interest" or "interest" means a member's rights in a limited liability company, collectively, including the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management.

(15) "New entity" means the entity into which constituent entities consolidate, as identified in the agreement or certificate of consolidation provided for in R.S. 12:1360.

(16) "Operating agreement" means any agreement, written or oral, of the members as to, or in the case of a limited liability company having a single member, any written agreement between the member and the company memorializing the affairs of a limited liability company and the conduct of its business.

(17) "Partnership" means a partnership formed under the laws of this state or a foreign partnership as defined in this Section.

(18) "Person" means a natural person, corporation, partnership, limited partnership, domestic or foreign limited liability company, joint venture, trust including a common law trust, business trust, statutory trust, voting trust, or any other form of trust, estate, or association.

(19) "State" means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

(20) "Surviving entity" means the constituent entity surviving a merger, as identified in the agreement or certificate of merger provided for in R.S. 12:1360.

B. Paragraphs (A)(2), (10), and (16) of this Section shall apply to all limited liability companies regardless of date of organization.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1997, No. 717, §1, eff. July 8, 1997; Acts 2010, No. 417, §1; Acts 2014, No. 261, §1.

PART II FORMATION

§ 12:1302 Purpose

A. A limited liability company may be organized under this Chapter and may conduct business for any lawful purpose, unless a more limited purpose is stated in its articles of organization. A limited liability company shall not be formed for the purpose of insurance underwriting in all of its several forms.

B. A limited liability company that is subject to regulation by another provision of state law may be formed under this Chapter if not prohibited by such other law. Such a limited liability company shall be subject to all limitations of such other law.

C.(1) A limited liability company organized as a low-profit limited liability company shall set forth in its articles of organization a business purpose that satisfies and which limited liability company is at all times operated to satisfy each of the following requirements:

(a) The entity significantly furthers the accomplishment of one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B) of the Internal Revenue Code and would not have been formed but for the entity's relationship to the accomplishment of charitable or educational purposes.

(b) No significant purpose of the entity is the production of income or the appreciation of property provided; however, the fact that an entity produces significant income or capital appreciation shall not, in the absence of other factors, be conclusive evidence of a significant purpose involving the production of income or the appreciation of property.

(c) No purpose of the entity is to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D) of the Internal Revenue Code.

(2) If a company that is organized pursuant to the requirements of Paragraph (1) of this Subsection at its formation at any time ceases to satisfy any one of the requirements, it shall immediately cease to be a low-profit limited liability company, but by continuing to meet all the other requirements of this Chapter, shall continue to exist as a limited liability company. The name of the company shall be changed to be in conformance with R.S. 12:1306.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 2003, No. 361, §2; Acts 2010, No. 417, §1.

§ 12:1303 Powers

A. All limited liability companies, regardless of date of organization, shall have the powers, rights, and privileges provided for a corporation organized under the Business Corporation Law (R.S. 12:1 et seq.), and provided for a partnership organized under Title XI of Book III of the Louisiana Civil Code.

B. Without limiting the grant of powers, rights, and privileges contained in Subsection A of this Section, every limited liability company shall have perpetual existence, unless a limited period of duration is stated in the articles of organization.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 1997, No. 717, §1, eff. July 8, 1997.

§ 12:1304 Formation

A. One or more persons capable of contracting may form a limited liability company by filing the articles of organization and the initial report with the secretary of state. The articles of organization and initial report may be delivered to the secretary of state in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery. The secretary of state may prescribe and furnish forms for filing the articles of organization and initial report.

B. If the secretary of state finds that the articles of organization and initial report are in compliance with the provisions of this Chapter and after all fees have been paid as required by law, the secretary of state shall record the articles of organization and initial report in his office, endorse on each the date, and if requested, the hour of filing thereof with him, and issue a certificate of organization which shall show the date and, if endorsed on the articles of organization, the hour of filing of the articles of organization with him. The certificate of organization shall be conclusive evidence of the fact that the limited liability company has been duly organized, except that in any proceeding brought by the state to annul, forfeit, or vacate a limited liability company's articles of organization, the certificate of organization shall be only prima facie evidence of due organization.

C. Upon the issuance of the certificate of organization, the limited liability company shall be duly organized, and its separate existence shall begin as of the time of filing of the articles of organization with the secretary of state. However, if the articles were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the limited liability company shall be duly organized, and its separate existence shall begin, as of the time of such acknowledgment or execution.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1997, No. 717, §1, eff. July 8, 1997; Acts 1999, No. 342, §5; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1305 Articles of organization; initial report

A. The articles of organization shall be written in the English language and shall be executed by at least one person, who need not be a member or manager of the limited liability company. The articles of organization shall be acknowledged by the person or one of the persons who signed the articles of organization or may be executed by authentic act.

B. The articles of organization shall set forth the following:

(1) The name of the limited liability company.

(2) The purposes for which the limited liability company is formed or that its purpose is to engage in any lawful activity for which limited liability companies may be formed under this Chapter.

(3) Whether the company is a low-profit limited liability company.

C. The articles of organization may set forth the following:

(1) A statement of whether and to what extent there are limitations on the authority of members to bind the limited liability company or that such limitations are contained in a written operating agreement.

(2) A statement of whether and to what extent the limited liability company will be managed by managers.

(3) A statement regarding restrictions on the authority of managers or that such restrictions are contained in a written operating agreement.

(4) The latest date, if any, on which the limited liability company is to dissolve.

(5) A statement that persons dealing with the limited liability company may rely upon a certificate of one or more managers, members, or other certifying officials, whose names are included in the statement, to establish the membership of any member, the authenticity of any records of the limited liability company, or the authority of any person to act on behalf of the limited liability company, including but not limited to the authority to take the actions referred to in R.S. 12:1318(B), unless otherwise provided in the articles of organization.

(6) Any other provision, not inconsistent with law, that the members elect to set forth in the articles of organization.

D. It shall not be necessary to set forth in the articles of organization any of the powers enumerated in this Chapter.

E. The initial report shall be signed by each person who signed the articles of organization, or by his agent duly authorized by a document attached to the report, and shall set forth the following:

(1) The location and municipal address, if any, not a post office box only, of the limited liability company's registered office.

(2) The full name and municipal address, if any, not a post office box only, of each of its registered agents.

(3) A notarized affidavit of acknowledgment and acceptance signed by each of its registered agents.

(4) The names and municipal addresses, not a post office box only, of the first managers, if management of the limited liability company is vested in one or more managers, or the members, if management of the limited liability company is reserved to the members, and if, in either case, they have been selected when the articles of organization are filed with the secretary of state. If the initial managers, if management of the limited liability company is vested in one or more managers, or initial members, if management of the limited liability company is reserved to the members, are not named in the initial report, a supplementary report setting forth their names and addresses and signed by each person who signed the articles of organization shall be filed with the secretary of state as soon as they have been selected.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 1995, No. 847, §3, eff. June 27, 1995; Acts 2010, No. 417, §1.

§ 12:1306 Name

A. The name of each limited liability company as set forth in its articles of organization:

(1)(a) Except for low-profit limited liability companies, shall contain the words "limited liability company", the abbreviation "L.L.C.", or the abbreviation "L.C.".

(b) For low-profit limited liability companies, shall contain the words "low-profit limited liability company", the abbreviation "L3C", or the abbreviation "l3c".

(2) Shall not contain any word or phrase which indicates or implies that it is organized for any purpose not lawful for a limited liability company or contrary to its articles of organization and shall not contain the phrase "doing business as" or the abbreviation "d/b/a".

(3) Shall be distinguishable upon the records of the secretary of state from the name of any corporation, partnership, or other limited liability company organized under the laws of this state, any foreign corporation, partnership, or limited liability company registered or qualified to do business in this state, any name which is reserved under R.S. 12:1307 or R.S. 12:1-402(A), or any trade name registered with the secretary of state, unless any of the following Subparagraphs apply:

(a) The other registrant consents to the use of the name in writing and submits the document required by law to change its name to one that is distinguishable upon the records of the secretary of state from the name of the applying corporation or limited liability company, effective no later than the time that the applying corporation or limited liability company will begin to use the registrant's former name.

(b) The corporation or other limited liability company has theretofore been authorized to do business in this state for more than two years and has never actively engaged in business in this state. The failure of a domestic or foreign corporation to file a Louisiana corporate franchise tax return for two consecutive years shall constitute prima facie evidence that it has not actively engaged in business in this state during such period.

(c) The corporation or other limited liability company has failed to pay the taxes due by it to the state for the preceding five consecutive years.

(d) The corporation, if it is a foreign corporation, has not been authorized to do business in the state and has not filed a Louisiana corporate franchise tax return for two consecutive years.

(e) The charter of the corporation has been revoked by the secretary of state and that corporation has not filed a Louisiana corporate franchise tax return for two consecutive years.

(f) The other corporation or limited liability company filed for dissolution or withdrawal prior to the preceding five years and has not received the tax clearances required for final dissolution or withdrawal.

(4) Shall not imply that the company is an administrative agency of this state, or any of its political subdivisions, or of the United States.

(5) Shall not contain words or phrases that consist of or comprise immoral, deceptive, or scandalous matter.

B. Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practice in the use of trade names, nor derogate from principles of law or the statutes of this state, or of the United States, with respect to the right to acquire and protect trade names.

C. The assumption of a name in violation of this Section shall not affect or vitiate the existence of the limited liability company, but any court having jurisdiction may, upon application of the state or of any person interested or affected, enjoin a limited liability company from doing business under a name assumed in violation of this Section, although its articles of organization may have been filed and recorded and a certificate of organization issued.

D. No limited liability company shall include in its name any words which deceptively or falsely suggest a charitable or nonprofit nature.

E. If the limited liability company seeking the issuance of a certificate of organization in this state includes in its name the word "engineer", "engineering", "surveyor", "surveying", or any derivative thereof, the secretary of state shall require, prior to the issuance of the certificate of organization, evidence satisfactory to him that written notice of such application for a certificate of organization has been delivered to the Louisiana Professional Engineering and Land Surveying Board in writing not less than ten days prior to the date of issuance of the certificate of organization. If the applicant limited liability company files with its application to the secretary of state a written waiver signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board waiving the requirement of ten days written notice to said board, as set forth in the preceding sentence, the secretary of state shall be authorized to proceed immediately with the processing of such application.

F.(1) A limited liability company name shall not contain the word "insurance" unless the limited liability company is an independent insurance agency or brokerage firm.

(2) If a limited liability company seeking issuance of a certificate of organization in Louisiana includes in its name the words "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", or "credit union", the secretary of state shall require written approval from the commissioner of the office of financial institutions dated not less than fourteen days prior to the issuance of the certificate of organization.

G. If a limited liability company seeking issuance of a certificate of organization in this state includes in its name the words "architect", "architectural", or "architecture", the secretary of state shall not file the articles of organization until the secretary of state receives either of the following:

(1) Satisfactory evidence that written notice of the proposed use of that name was delivered to the Louisiana State Board of Architectural Examiners at least ten days earlier.

(2) A written waiver of the ten-day notice requirement, signed by the executive director or any member of the Louisiana State Board of Architectural Examiners.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1999, No. 342, §5; Acts 2001, No. 631, §1; Acts 2003, No. 279, §2; Acts 2003, No. 361, §2; Acts 2010, No. 417, §1; Acts 2017, No. 367, §1; Acts 2018, No. 560, §2, eff. May 28, 2018; Acts 2023, No. 26, §2.

§ 12:1307 Reservation of name; transfer of reserved name

A. The exclusive right to use a specified name for a domestic or foreign limited liability company may be reserved by any of the following:

(1) A person who intends to organize a domestic limited liability company under this Chapter.

(2) A domestic limited liability company which proposes to change its name.

(3) A foreign limited liability company which intends to apply for authority to do business in this state.

(4) A foreign limited liability company authorized to do business in this state which proposes to change its name.

B.(1) A person may reserve a specified name by filing a signed application with the secretary of state.

(2) If the secretary of state finds that the name is available for use by a limited liability company, he shall reserve the name for the exclusive use of the applicant for a nonrenewable period of one hundred twenty days.

(3) Repealed by Acts 2015, No. 398, §4, eff. Oct. 5, 2015.

C. The exclusive right to use a reserved name may be transferred to another person by filing with the secretary of state a notice of the transfer that specifies the name and address of the transferee and is signed by the applicant for whom the name was reserved.

D. The owner of the reserved name may terminate the reservation by delivering to the secretary of state a signed notice of termination.

E. The secretary of state may prescribe and furnish forms to reserve the name and transfer the name.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2015, No. 398, §§2, 4, eff. Oct. 5, 2015; Acts 2019, No. 19, §2, eff. May 28, 2019; Acts 2022, No. 193, §2.

§ 12:1308 Registered office and registered agent

A. Each limited liability company shall continuously maintain:

(1) A registered office in this state.

(2) At least one registered agent who shall be one of the following:

(a) A citizen of the state who resides in this state.

(b) A partnership or professional law corporation, which is authorized to practice law in this state, or a domestic corporation, domestic limited liability company, foreign corporation, or foreign limited liability company authorized to transact business in this state, which is authorized by its articles or certificate of incorporation or organization to act as the agent of a limited liability company for service of process and which has on file with the secretary of state a certificate setting forth the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served upon it as such agent. Legal process and other notices or demands may be served on the limited liability company by service upon this agent and, if the agent is a partnership, upon any partner.

B. The location and post office address of the original registered office and the full name and post office address of the original registered agent shall be stated in the initial report as provided in R.S. 12:1305(E).

C.(1) After organization, a limited liability company may change its registered agent or registered office by filing for record with the secretary of state a statement authorizing the designation or change signed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members. Any change of registered agent shall be accompanied by a notarized affidavit of acknowledgment and acceptance signed by the new registered agent.

(2) A limited liability company may change the address of its registered agent by filing for record with the secretary of state a statement of the change signed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members.

(3) A change of a registered office or registered agent or address of the registered agent for a limited liability company under this Subsection shall be effective when the secretary of state accepts the statement for record.

D.(1) A registered agent may change his address in this state by filing for record with the secretary of state a statement of the change signed by him or on his behalf.

(2) The statement shall include the name of the limited liability company for which the change is effective and the new address of the registered agent.

(3) If the old and new addresses of the registered agent are the same as the old and new addresses of the registered office of the limited liability company, the statement may include a change of address of the registered office if:

(a) The registered agent notifies the limited liability company in writing.

(b) The statement recites that the registered agent has done so.

(4) The change of address of the registered agent or registered office is effective when the secretary of state accepts the statement for record.

E.(1) A registered agent may resign but such resignation shall be effective only by providing written notice to the limited liability company and the secretary of state. If the registered agent resigns, or for any other reason the limited liability company ceases to maintain a registered agent, a successor agent shall be appointed pursuant to Paragraph (C)(1) of this Section and the successor agent's address shall be filed pursuant to Paragraph (C)(2) of this Section, within thirty days of the resignation or other event which terminated the tenure of the former agent. Upon compliance with the provisions of this Section, the successor agent shall be vested with the powers of the agent succeeded.

(2) Repealed by Acts 2003, No. 367, §2.

F. The designation of a registered office shall remain effective until a change is made therein and notice of the change is filed in the manner hereinabove provided. However, if no statement of change is filed within thirty days after the registered office has been vacated, the office of the secretary of state may thereafter be treated as the registered office by any person other than the limited liability company itself. The registered office shall be considered the domicile of the limited liability company for all purposes.

G. The secretary of state may prescribe and furnish forms to file the notice of change and agent resignation.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 2003, No. 367, §§1 and 2; Acts 2004, No. 543, §1; Acts 2017, No. 367, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1308.1 Annual report

A. On or before the anniversary date of organization of each limited liability company, a manager of the company, if its management is vested in one or more managers, or a member of the company, if its management is reserved to the members, shall file an annual report each year with the secretary of state, signed in the name of the limited liability company by the manager, member, or agent stating the following:

(1) The municipal address, which shall not be a post office box only, of its registered office.

(2) The name and municipal address, which shall not be a post office box only, of each of its registered agents.

(3) The name and municipal address, which shall not be a post office box only, of each manager, if management of the limited liability company is vested in one or more managers, or each member, if management of the limited liability company is reserved to the members.

B. The secretary of state may prescribe and furnish forms to file the annual report.

C. The provisions of this Section shall apply to any domestic limited liability company organized on or after July 7, 1992.

Acts 2001, No. 1186, §2; Acts 2003, No. 367, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1308.2 Failure to file annual report; revocation and reinstatement of articles; limitation on authority to do business with the state

A. The secretary of state shall revoke the articles of organization of a domestic limited liability company if it fails to file an annual report for three consecutive years according to the records of the secretary of state.

B. At least thirty days prior to revoking the articles of organization pursuant to this Section, the secretary of state shall give notice to the affected limited liability company of his intent to revoke its articles of organization by directing notice of such intention to its last designated registered agent, as shown on the records of the secretary of state. Such notice shall be in writing and shall be sent to the registered agent by United States mail at the last known address of the agent. If there is no registered agent of record, the notice shall be directed to the limited liability company at its registered office.

C.(1) The articles of organization shall be reinstated if each of the following is filed with the secretary of state within three years of the effective date of the revocation:

(a)(i) An application for reinstatement, signed and acknowledged by a member or manager.

(ii) The secretary of state may prescribe and furnish forms for filing the application for reinstatement.

(iii) If a suit for liquidation or receivership of the limited liability company has been filed at the time at which such application is made, the application shall be accompanied by a document indicating the unanimous written consent to the reinstatement by all members or managers.

(iv) The limited liability company shall certify the signatures of all managers or members on such document.

(b) The current annual report of the limited liability company.

(c) The fee for reinstatement proceedings authorized by R.S. 12:1364(A)(1).

(2) Upon reinstatement pursuant to this Subsection, the secretary of state shall furnish a certificate of reinstatement to the limited liability company. The certificate of reinstatement and articles of organization shall be retroactive, and the articles of organization shall continue in existence as though the revocation had not occurred.

D. Upon revocation of its articles of organization, the name of the limited liability company shall not be available to another entity as a limited liability name, corporate name, or trade name for a three-year period. If the name is available after the three years, the limited liability company may reinstate it by following the same procedures and by satisfying the same provisions and requirements as set forth in this Section. If the name is not available, an amendment changing the original name shall be filed as provided in R.S. 12:1309.

E.(1) As used in this Subsection, the term "not in good standing" means that a limited liability company is delinquent in filing the annual report required by R.S. 12:1308.1.

(2) Each limited liability company which is not in good standing shall be prohibited from engaging in commercial business operations with the state or its boards, agencies, departments, or commissions. Any contract between the state or its boards, agencies, departments, or commissions and a limited liability company which is not in good standing may be declared null and void by the board, agency, department, commission, or the division of administration.

F. Nothing contained in this Section shall be construed to prevent the state, through the office of the attorney general, from asserting a cause of action to revoke the articles of organization of a limited liability company on any of the following grounds:

(1) That the limited liability company was procured through fraud practiced upon the state.

(2) That the limited liability company has continued to abuse authority conferred upon it.

(3) That the limited liability company should not have been formed under this Chapter or has been so formed without substantial compliance with the requirements of this Chapter.

G. Revocation of the articles of organization of a limited liability company pursuant to this Section shall not affect any cause of action against the limited liability company or the right to proceed against any property owned by the limited liability company. Such revocation shall also not prohibit a limited liability company from selling property belonging to the company in the same manner as if the revocation had not occurred.

Acts 2001, No. 1186, §2; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1308.3 Conversion of state of organization

A. Unless prohibited by the laws of the other state, a domestic limited liability company may convert its state of organization from this state to any other state, and a foreign limited liability company may convert its state of organization from any other state to this state.

B. Such conversion may be made by a limited liability company only pursuant to this Section and only after authorization by a majority of the members, or by such larger vote as the articles of organization or an operating agreement may require.

C. The domestic or foreign limited liability company seeking conversion shall file with the secretary of state a written request for conversion of the state of organization. If the company is manager-managed, the request shall be executed by a manager of the company. The request for conversion shall be acknowledged by at least one of the persons who signed it or may be executed by authentic act. The secretary of state may prescribe and furnish forms for filing the request for conversion. If the company is member-managed, the request shall be executed by a member of the company. The request shall contain all of the following:

(1) The name of the limited liability company, which shall comply with the provisions of R.S. 12:1306.

(2) The full name and municipal address of either each current manager of the limited liability company, if management of the limited liability company is vested in one or more managers, or of each of the current members, if management of the limited liability company is reserved to the members.

(3) A statement, as appropriate, that the limited liability company is converting its state of organization from another named state to this state and is continuing its existence in and under the laws of this state, or is converting its state of organization from this state to another named state and is continuing its existence in and under the laws of such other named state.

(4) A statement that a majority of the members, or such larger vote as the articles of organization or the operating agreement may require, has approved the conversion of the state of organization.

(5) The manner and basis of converting the interests of the members of the limited liability company into the interests of the members in the converted limited liability company.

(6) A statement that the limited liability company, in changing its state of organization, has complied with the laws and requirements of both the prior and new state of organization.

(7) Any other provision, attachment, or exhibit, not inconsistent with law, that the members elect to set forth or include in the certificate of conversion.

(8) If the limited liability company is converting its state of organization from another state to this state:

(a) The location and municipal street address, if any, of the limited liability company's registered office. An address consisting of a post office box alone is insufficient.

(b) The location and municipal street address, if any, of each of the limited liability company's registered agents, together with a notarized affidavit of acknowledgment and acceptance signed by each such agent. An address consisting of a post office box alone is insufficient.

(c) A copy of its articles of organization which are in compliance with the requirements of R.S. 12:1305, when the written request for conversion is filed with the secretary of state.

D. The request for conversion may be delivered to the secretary of state for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery.

E. If the secretary of state finds that the request for conversion is in compliance with the provisions of this Section, and after all fees have been paid as required by law, the secretary of state shall record in his office the request for conversion and any attachments or exhibits thereto, after endorsing thereon the date and, if requested, the hour of filing. Thereafter, the secretary of state shall either issue to the limited liability company a certificate of conversion, reciting that such limited liability company has complied with the requirements of this state for converting its state of organization, or advise the limited liability company with reasons why it has denied the request for conversion.

F. Upon receipt of the certificate of conversion from the secretary of state, and after compliance as applicable with the laws of the other state:

(1) A domestic limited liability company converting its state of organization from this state to another state shall be deemed to be organized solely under the laws of such other state and no longer under the laws of this state. The limited liability company shall continue to exist without interruption in its organizational form. All rights, title, interests, obligations, and liabilities of the limited liability company shall continue in the limited liability company without impairment, diminution, or termination. Any proceeding pending by or against the limited liability company or its members or managers, in their capacities as such, may be continued by or against the limited liability company without the need for substituting a new party to such proceeding as a result of any conversion of the state of organization as authorized in this Section. The limited liability company shall be deemed to have appointed the secretary of state in this state as its agent for service of process in any proceeding to enforce any liability or obligation against the limited liability company arising or existing prior to the effective time of the conversion of the state of organization.

(2) A foreign limited liability company converting its state of organization from another state to this state shall be deemed to be organized solely under the laws of this state and no longer under the laws of such other state. The limited liability company shall continue to exist without interruption in its organizational form. All rights, title, interests, obligations, and liabilities of the limited liability company shall continue in the limited liability company without impairment, diminution, or termination. Any proceeding pending by or against the limited liability company or its members or managers, in their capacities as such, may be continued by or against the limited liability company without the need for substituting a new party to such proceeding as a result of a change of the state of organization authorized under this Section. The certificate of conversion issued by the secretary of state shall be conclusive evidence of the fact that the limited liability company has been duly organized under the laws of this state, except that in any proceeding brought by the state to annul, forfeit, or vacate a company's franchise, the certificate of conversion shall be only prima facie evidence of due organization.

G. In addition to the other requirements of this Section, a domestic limited liability company converting its state of organization from this state to another state shall also file with the secretary of state a certified copy of the certificate of organization or other official certificate obtained by it from the other state evidencing the company's organization under the laws of such state. Such certified copy shall be filed with the secretary of state not later than thirty days after issuance of the official certificate evidencing the company's organization under the laws of the other state.

Acts 2012, No. 476, §1, eff. Jan. 1, 2013; Acts 2017, No. 367, §1; Acts 2018, No. 560, §2, eff. May 28, 2018; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1309 Amendment of articles of organization

A. The articles of organization shall be amended when any of the following occurs:

(1) There is a change in the name of the limited liability company.

(2) There is a false or erroneous statement in the articles of organization.

(3) The members desire to make a change in any other statement in the articles of organization in order to accurately represent their agreement.

(4) In accordance with R.S. 12:1302(C)(2), the company ceases to be a low-profit limited liability company.

B. After an amendment has been adopted as provided by this Chapter, articles of amendment setting forth the amendment, the date, and manner of adoption thereof shall be executed in the limited liability company's name by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member of the limited liability company, if management of the limited liability company is reserved to the members. The articles of amendment shall be acknowledged by at least one of the persons who signed them or may be executed by authentic act. The secretary of state may prescribe and furnish forms for filing the amendment.

C. The articles of amendment shall be filed with the secretary of state. Articles of amendment may be delivered to the secretary of state for filing as of any specified date, and if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. When all taxes, fees, and charges have been paid as required by law, the secretary of state shall record the articles of amendment in his office and endorse thereon the date and, if requested, the hour of the filing thereof with him. Thereupon, the amendment shall be effective as of the date and, if endorsed on the articles of amendment, the hour of filing. However, if the articles of amendment were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the amendment shall be effective as of the time of the acknowledgment or execution.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1999, No. 342, §5; Acts 2010, No. 417, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1310 Certificates of correction

A. If any instrument filed with the secretary of state under this Chapter contains an inaccurate record of the action therein referred to or has been defectively executed, the instrument may be corrected by the filing of a certificate of correction.

B. A certificate of correction shall set forth the following:

(1) The title of the instrument being corrected.

(2) The name of each party to the instrument being corrected.

(3) The date that the instrument being corrected was filed.

(4) The provision in the instrument as previously filed and as corrected and, if execution of the instrument was defective, the manner in which it was defective.

C. A certificate of correction shall not make any other change or amendment that would not have complied in all respects with the requirements of this Chapter at the time the instrument being corrected was filed.

D. Repealed by Acts 1995, No. 847, §5, eff. June 27, 1995.

E. A certificate of correction shall not:

(1) Change the effective date of the instrument being corrected.

(2) Affect any right or liability accrued or incurred before its filing, except that any right or liability accrued or incurred by reason of the error or defect being corrected shall be extinguished by the filing if the person having the right has not detrimentally relied on the original instrument.

F. The certificate of correction shall be executed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members. The certificate of correction shall be acknowledged by at least one of the persons who signed it or may be in the form of an authentic act. The certificate of correction shall be filed with the secretary of state, who, after all taxes, fees, and charges have been paid as required by law, shall record the certificate of correction in his office and endorse thereon the date and, if requested, the hour of the filing thereof with him. The secretary of state may prescribe and furnish forms for filing the certificate of correction.

G. A multiple original of the certificate of correction, or a copy certified by the secretary of state, shall be filed for record in each office of the recorder of conveyances, if any, in which the instrument corrected thereby was required to be filed by this Chapter. In the case of a certificate of correction to an agreement or certificate of merger or consolidation authorized under this Chapter, a copy of the certificate of correction shall, within twenty days after filing thereof with the secretary of state, be mailed to each member or former member of any party to the merger or consolidation whose property rights are affected by the correction made therein.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §5, eff. June 27, 1995; Acts 1999, No. 342, §5; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1310.1 Retroactivity of company's existence; acquisition of immovable property prior to limited liability company's existence

Whenever any immovable property is acquired by one or more persons acting in any capacity for and in the name of any limited liability company which has not been issued a certificate of organization as provided by law, and the limited liability company is subsequently issued a certificate of organization in accordance with the provisions of R.S. 12:1304, the limited liability company's existence shall be retroactive to the date of acquisition of an interest in such immovable property, but such retroactive effect shall be without prejudice to rights validly acquired by third persons in the interim between the date of acquisition and the date that the limited liability company was issued the certificate of organization.

Acts 2005, No. 136, §2, eff. June 22, 2005.

PART III MANAGEMENT AND MANAGEMENT RIGHTS OF MEMBERS

§ 12:1311 Management by members

Except as otherwise provided in the articles of organization, the business of the limited liability company shall be managed by the members, subject to any provision in a written operating agreement restricting or enlarging the management rights and duties of any member or group or class of members.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1312 Managers

A. The articles of organization may provide that the business of the limited liability company shall be managed by or under the authority of one or more managers who may, but need not, be members.

B. The articles of organization or an operating agreement may prescribe qualifications for managers.

C. The number of managers shall be specified in or fixed in accordance with the articles of organization or an operating agreement.

D. If a manager is listed in the articles of organization, an amendment thereto, or a supplemental report, a municipal address, which shall not be a post office box only, shall be indicated for each such manager.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1999, No. 342, §5.

§ 12:1313 Election and removal of managers

If management is vested in one or more managers pursuant to R.S. 12:1312, then, unless otherwise provided in the articles of organization or an operating agreement:

(1) Election of managers to fill initial positions or vacancies shall be by plurality vote of the members.

(2) Any or all managers may be removed by a vote of a majority of the members, with or without cause, at a meeting called expressly for that purpose.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1314 Duties of members and managers

A. Subject to the provisions of R.S. 12:1315, a member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312:

(1) Shall be deemed to stand in a fiduciary relationship to the limited liability company and its members and shall discharge his duties in good faith, with the diligence, care, judgment, and skill which an ordinary prudent person in a like position would exercise under similar circumstances. Nothing contained in this Section shall derogate from any indemnification authorized by R.S. 12:1315.

(2) In discharging his duties, shall be fully protected in relying in good faith upon the records of the limited liability company and upon such information, opinions, reports, or statements presented to the limited liability company, the members, managers, or any committee thereof by any of the limited liability company's members, managers, employees, or by any committee of the members or managers, or by any legal counsel, appraiser, engineer, including a petroleum reservoir engineer, or independent or certified public accountant selected with reasonable care by the members, managers, any committee thereof, any agent having the authority to make such selection, or by any other person as to matters the member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the members, managers, any committee thereof, or any agent having the authority to make such selection.

(3) Is not protected by Paragraph (2) of this Subsection if he has knowledge concerning the matter in question that makes reliance otherwise permitted by Paragraph (2) of this Subsection unwarranted.

(4) Shall not be liable for any action taken on behalf of the limited liability company or any failure to take any action if he performed the duties of his office in compliance with this Section.

(5) Shall account to the limited liability company and hold as trustee for it any profit or benefit derived by him, without the informed consent of a majority of the uninterested members in accordance with R.S. 12:1318(C), from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by him of its property unless he proves under strict judicial scrutiny the fairness of the transaction to the limited liability company.

B. Notwithstanding the provisions of Subsection A of this Section, a member or manager shall not be personally liable to the limited liability company or the members thereof for monetary damages unless the member or manager acted in a grossly negligent manner as defined in Subsection C of this Section, or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, including but not limited to intentional tortious conduct or intentional breach of his duty of loyalty.

C. As used in this Section, "gross negligence" shall be defined as a reckless disregard of or a carelessness amounting to indifference to the best interests of the limited liability company or the members thereof.

D. A member or manager who makes a business judgment in good faith fulfills the duty of diligence, care, judgment, and skill under Subsection A of this Section if the member or manager:

(1) Does not have a conflict of interest with respect to the subject of the business judgment.

(2) Is informed with respect to the subject of the business judgment to the extent the member or manager reasonably believes to be appropriate under the circumstances.

(3) Rationally believes that the business judgment is in the best interests of the limited liability company and its members.

E. A person alleging a breach of the duty of diligence, care, judgment, and skill owed by a member or manager under Subsection A has the burden of proving the alleged breach of duty, including the inapplicability of the provisions as to the fulfillment of the duty under Paragraph A(2) and Subsection D, and, in a damage action, the burden of proving that the breach was the legal cause of damage suffered by the limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 1999, No. 1253, §2, eff. July 12, 1999.

§ 12:1315 Limitation of liability and indemnification of members and managers

A. Subject to Subsection B of this Section, the articles of organization or a written operating agreement may:

(1) Eliminate or limit the personal liability of a member or members, if management is reserved to the members, or a manager or managers, if management is vested in one or more managers pursuant to R.S. 12:1312, for monetary damages for breach of any duty provided for in R.S. 12:1314.

(2) Provide for indemnification of a member or members, or a manager or managers, for judgments, settlements, penalties, fines, or expenses incurred because he is or was a member or manager.

B. No provision permitted under Subsection A shall limit or eliminate the liability of a member or manager for the amount of a financial benefit received by a member or manager to which he is not entitled or for an intentional violation of a criminal law.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1316 Voting by managers

Except as otherwise provided in the articles of organization or an operating agreement, if the limited liability company has more than one manager, each manager shall be entitled to a single vote on all matters properly brought before the managers, and all decisions of the managers shall be made by majority vote of the managers. In the absence of such a provision in the articles or operating agreement, no manager shall have the right to vote by proxy.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2014, No. 261, §1.

§ 12:1317 Agency power of managers or members

A. Each member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, is a mandatary of the limited liability company for all matters in the ordinary course of its business other than the alienation, lease, or encumbrance of its immovables, unless such mandate is restricted or enlarged in the articles of organization or unless such member or manager lacks the authority to act for the limited liability company and the person with whom he is dealing has knowledge of the fact that he lacks such authority.

B. Persons dealing with a member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, of the limited liability company shall be deemed to have knowledge of restrictions on the authority of such a member or manager contained in a written operating agreement if the articles of organization of the limited liability company contain a statement that such restrictions exist.

C. Persons dealing with a limited liability company may rely upon a certificate of any person named in the statement provided for in R.S. 12:1305(C)(5), or, if no such person or persons are so named, upon a certificate of one or more managers or members, to establish the membership of any member, the authenticity of any records of the limited liability company, or the authority of any person to act on behalf of the limited liability company, including but not limited to the authority to take actions referred to in R.S. 12:1318(B).

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1317.1 Company representation; state entities

Any representative of a limited liability company having five or fewer members shall have the consent of a majority interest of the members and evidence of such consent by authentic act in order to represent the company interest to any state agency, board, or commission or to represent the company interest at any hearing or proceeding held by any state agency, board, or commission.

Acts 2001, No. 1186, §2.

§ 12:1318 Voting rights of members

A. Unless otherwise provided in the articles of organization or a written operating agreement, each member of a limited liability company shall be entitled to cast a single vote on all matters properly brought before the members, and all decisions of the members shall be made by majority vote of the members.

B. Unless otherwise provided in the articles of organization or a written operating agreement, a majority vote of the members shall be required to approve the following matters, whether or not management is vested in one or more managers pursuant to R.S. 12:1312:

(1) The dissolution and winding up of the limited liability company.

(2) The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company.

(3) The merger or consolidation of the limited liability company.

(4) The incurrence of indebtedness by the limited liability company other than in the ordinary course of its business.

(5) The alienation, lease, or encumbrance of any immovables of the limited liability company.

(6) An amendment to the articles of organization or an operating agreement.

C. No contract or transaction between a limited liability company and one or more of its members, if management is reserved to the members, or managers, if management is vested in one or more managers pursuant to R.S. 12:1312, or a person in which such a member or manager has a financial interest, shall be void or voidable solely for this reason, solely because the interested member or manager was present at or participated in the meeting which authorized the contract or transaction, or solely because his or their votes were counted for such purpose, if the material facts as to his interest and to the contract or transaction was disclosed or known to the members and the contract or transaction was approved by a majority vote of the members without counting the vote of the interested member, or if the contract or transaction was fair to the limited liability company as of the time it was authorized, approved, or ratified by the members. Interested members may be counted in determining the presence of a quorum at a meeting which authorized the contract or transaction.

D. The articles of organization or a written operating agreement may provide for any other voting rights of members not inconsistent with Subsection C of this Section.

E.(1) A member shall have the right to cast his vote either in person or, subject to the following provisions, by proxy duly authorized in writing, signed by the member and filed in the registered office of the limited liability company at or before the meeting.

(2) The authority of the holder of a proxy to act shall not be revoked by the death of the member who executed the proxy unless, before the authority is exercised, written notice of such death is received by the registered office of the limited liability company.

(3)(a) A proxy shall be revocable at will, unless otherwise validly provided by agreement or by any provision of the proxy. The validity of every unrevoked proxy shall cease eleven months after the date of its execution, unless some other definite period of validity is expressly provided. In no case shall an outstanding proxy be valid for longer than three years.

(b) The revocation of a proxy, if revocable, shall not be effective until written notice has been given to the office of the limited liability company, or unless a proxy of later date is filed with the office at or before the meeting.

(4) A proxy regular on its face and signed in the name of a member entitled to vote at the meeting shall be deemed valid unless challenged before it is voted, and the burden of proving invalidity shall be on the challenger.

(5) When shares are registered in the names of two or more persons, other than trustees, a proxy signed by any one or more of them shall be deemed valid unless the limited liability company receives written notice to the contrary from a nonsigning member before the proxy is voted.

(6) Except as otherwise provided in the articles or bylaws, without limiting the manner in which a member may authorize another person or persons to act for him as proxy, pursuant to this Subsection, the following shall constitute a valid means by which a member may grant such authority:

(a) A member may execute a writing authorizing another person or persons to act for him as proxy. Execution may be accomplished by the member or his authorized officer, director, employee, or agent signing such writing or causing his signature to be affixed to such writing by any reasonable means, including but not limited to facsimile signature.

(b)(i) A member may authorize another person or persons to act for him as proxy by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy, or to a proxy solicitation firm, proxy support service organization, or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission.

(ii) Any such telegram, cablegram, or other means of electronic transmission shall be submitted with information from which it can be determined that the telegram, cablegram, or other electronic transmission was authorized by the member. If it is determined that such telegrams, cablegrams, or other electronic transmissions are valid, the inspectors or other such persons making that determination shall specify the information upon which they relied.

(c) Any copy, facsimile telecommunication, or other reliable reproduction of the writing or transmission, created pursuant to this Subsection may be substituted or used in lieu of the original writing or transmission for all purposes for which the original writing or transmission could be used. Such copy, facsimile telecommunication, or other reliable reproduction shall be a complete reproduction of the entire original writing or transmission.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2014, No. 261, §1.

§ 12:1319 Records and information

A. Each limited liability company shall keep at its registered office the following:

(1) A current list of the full name and last known business address of each member and manager, if management is vested in one or more managers pursuant to R.S. 12:1312.

(2) Copies of records which would enable a member to determine the relative voting rights of the members.

(3) A copy of the articles of organization, together with any amendments thereto.

(4) Copies of the limited liability company's federal and state income tax returns and reports, if any, for the three most recent years.

(5) A copy of any operating agreement which is in writing.

(6) Copies of any financial statements of the limited liability company for the three most recent years.

B. Unless otherwise provided in the articles of organization or an operating agreement, a member may do any of the following:

(1) At the member's own expense, inspect and copy any limited liability company record upon reasonable request during ordinary business hours.

(2) Obtain from time to time upon reasonable demand the following:

(a) True and complete information regarding the state of the business and financial condition of the limited liability company.

(b) Promptly after becoming available, a copy of the limited liability company's federal and state income tax returns for each year.

(c) Other information regarding the affairs of the limited liability company as is just and reasonable.

(3) Demand a formal accounting of the limited liability company's affairs whenever circumstances render it just and reasonable.

C. Failure of the limited liability company to keep or maintain any of the records or information required pursuant to this Section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company.

D. Except as otherwise provided in the articles of organization or an operating agreement, a limited liability company and its members, managers, and agents may recognize and treat a person registered on its records as a member, as such for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to the ownership of such membership interests. Rights under this Section shall not be affected by any actual or constructive notice which the limited liability company or any of its managers, members, or agents may have to the contrary.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1320 Liability to third parties of members and managers

A. The liability of members, managers, employees, or agents, as such, of a limited liability company organized and existing under this Chapter shall at all times be determined solely and exclusively by the provisions of this Chapter.

B. Except as otherwise specifically set forth in this Chapter, no member, manager, employee, or agent of a limited liability company is liable in such capacity for a debt, obligation, or liability of the limited liability company.

C. A member, manager, employee, or agent of a limited liability company is not a proper party to a proceeding by or against a limited liability company, except when the object is to enforce such a person's rights against or liability to the limited liability company.

D. Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

PART IV FINANCE

§ 12:1321 Contributions to capital

The contribution of a member to a limited liability company may take the form of cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1322 Liability for contribution

A. A promise by a member to contribute to the limited liability company shall not be enforceable unless set forth in a writing signed by the member.

B. Except as provided in a written operating agreement, a member's obligation to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services shall not be discharged if he is unable to perform because of death, disability, or other reason. If a member does not make the required contribution of property or services, he or his personal representative is obligated, at his or his personal representative's option, to either contribute cash equal to that portion of value of the stated contribution which has not been made or forfeit his entire membership interest, or, in the case of a personal representative, forfeit all rights in such membership interest to which he may otherwise be entitled. However, a creditor of a limited liability company who extends credit after a member signs a writing which reflects the obligation and before any such election to forfeit the membership interests is made may enforce the original obligation to the extent that the limited liability company refuses or is unable to honor the extension of credit.

C. Unless otherwise provided in a written operating agreement, the obligation of a member to make a contribution or return money or other property paid or distributed in violation of this Chapter may be compromised only with the unanimous consent of the members. Notwithstanding such a compromise, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation, after a member signs a writing which reflects the obligation and before the amendment or compromise, may enforce the original obligation to the extent that the limited liability company refuses or is unable to honor the extension of credit.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1323 Sharing of profits and losses

The profits and losses of a limited liability company shall be allocated among the members and among classes of members in the manner provided in a written operating agreement. To the extent the operating agreement does not so provide in writing, profits and losses shall be allocated equally among the members. The provisions of this Section regarding the allocation of losses shall not affect the limitations on the liability of members and managers set forth in R.S. 12:1320.

Acts 1992, No. 780, §2, eff. July 7, 1992.

PART V DISTRIBUTIONS

§ 12:1324 Interim distributions

A. Except as provided in this Chapter, a member is entitled to receive distributions from a limited liability company before the withdrawal of the member from the limited liability company and before the dissolution and winding up of the limited liability company to the extent and at the times or upon the occurrence of the events provided in an operating agreement or as authorized by the members.

B. Interim distribution of cash or other assets of a limited liability company shall be allocated among the members and among classes of members in the manner provided in a written operating agreement. To the extent such operating agreement does not so provide in writing, distributions shall be made equally to the members.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1325 Distributions upon withdrawal

A. If a limited liability company has been constituted for a term, a member may withdraw without the consent of the other members prior to the expiration of the term, provided he has just cause arising out of the failure of another member to perform an obligation.

B. A member of a limited liability company not entered into for a term may withdraw or resign from a limited liability company at the time or upon the happening of an event specified in a written operating agreement and in accordance with the written operating agreement. If a written operating agreement does not specify the time or the events upon the happening of which a member may withdraw or resign, a member of a limited liability company not entered into for a term may resign or withdraw upon not less than thirty days prior written notice to the limited liability company at its registered office as filed of record with the secretary of state and to each member and manager at each member's and manager's address as set forth on the records of the limited liability company.

C. Except as otherwise provided in this Chapter, on withdrawal or resignation, a withdrawing or resigning member is entitled to receive such distribution, if any, to which the member is entitled under a written operating agreement and, if not otherwise provided in a written operating agreement, within a reasonable time after withdrawal or resignation, the fair market value of the member's interest as of the date of the member's withdrawal or resignation.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 1995, No. 847, §3, eff. June 27, 1995.

§ 12:1326 Distribution in kind

Except as provided in a written operating agreement, a member, regardless of the nature of the member's contribution, shall have no right to demand and receive any distribution from a limited liability company in any form other than cash. No member shall be compelled to accept from a limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds the percentage in which the member shares in distributions from the limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1327 Restrictions on making distributions

A. No distribution shall be made if, after giving effect to the distribution:

(1) The limited liability company would not be able to pay its debts as they become due in the usual course of business.

(2) The limited liability company's total assets would be less than the sum of its total liabilities plus, unless the articles of organization or a written operating agreement provides otherwise, the amount that would be needed if the limited liability company were to be dissolved at the time of the distribution to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution.

(3) The authorization or payment thereof would be contrary to any restrictions contained in the articles of organization or a written operating agreement.

B.(1) The limited liability company may base a determination that a distribution is not prohibited under Subsection A of this Section either on financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances or a fair valuation or other method that is reasonable under the circumstances. For purposes of this Section, generally accepted accounting principles are deemed to be reasonable.

(2) Unless the articles of organization provide otherwise, a limited liability company, including a limited liability company engaged in extractive or oil and gas activities, which owns wasting assets, including oil and gas properties, intended for sale in the ordinary or usual course of business or which owns property having a limited life, such as a lease for a term of years or patents, need make no allowance for depletion or amortization of the cost of such assets in computing total assets.

(3) In computing amounts available for distribution, proper allowance shall, except as provided in Paragraph (2) of this Subsection, be made for depreciation and depletion sustained, and ascertained or known losses of every character. Deferred assets and prepaid expenses shall be considered as assets only to the extent of amounts thereof not used or amortized.

(4) Without limitation of other items that may be properly included therein, limited liability companies engaged in the business of extraction and sale of oil and gas may include in the calculation of depletion for such purposes their aggregate intangible drilling costs of drilling oil and gas wells. Such costs may include any item of expense or cost not recoverable from a well after it becomes uneconomical other than casing, such as seismic costs, drilling costs, stimulation costs, secondary and tertiary recovery costs, completion costs, work over costs, well site preparation expenses, and other similar expenses or costs, aggregate leasehold costs, and any item of expense or cost relating to the acquisition of a lease other than rental, such as title verification, other title review expenses, and lease bonuses.

(5) If terms of indebtedness provide that payment of principal and interest is to be made only if and to the extent that payment of a distribution to members could then be made under this Section, indebtedness of a limited liability company, including indebtedness issued as a distribution, shall not be a liability for purposes of determinations made under this Subsection.

C. The effect of a distribution under Subsection A of this Section shall be measured as of the date upon which the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization, or the date upon which payment is made if it occurs more than one hundred twenty days after the date of authorization.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1328 Liability upon wrongful distribution

A. Each member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, who knowingly, or without the exercise of reasonable care and inquiry, votes for or assents to a distribution in violation of the articles of organization, an operating agreement, or R.S. 12:1327 shall be jointly and severally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating R.S. 12:1327, the articles of organization, or an operating agreement. Each member shall be liable to the limited liability company for the amount which the member received in violation of this Section.

B. Each member or manager liable under Subsection A of this Section for an unlawful distribution shall be entitled to a contribution from each other member or manager who could be held liable under such Subsection.

C. An action to enforce liability under this Section must be brought within two years from the date of which the effect of the distribution is measured under R.S. 12:1327, except that a member or manager held liable under Subsection A of this Section solely because of having voted for or assented to an unlawful distribution may bring an action to enforce his right of contribution under this Section within two years from the date of payment by the member or manager on account of such liability. These time limits shall not be subject to suspension on any ground, nor to interruption except by timely suit.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

PART VI ASSIGNMENT OF MEMBERSHIP INTERESTS

§ 12:1329 Nature of membership interest

A membership interest shall be an incorporeal movable. A member shall have no interest in limited liability company property.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1330 Assignment of membership interest

A. Unless otherwise provided in the articles of organization or an operating agreement, a membership interest shall be assignable in whole or in part. An assignment of a membership interest shall not entitle the assignee to become or to exercise any rights or powers of a member until such time as he is admitted in accordance with the provisions of this Chapter. An assignment shall entitle the assignee only to receive such distribution or distributions, to share in such profits and losses, and to receive such allocation of income, gain, loss, deduction, credit, or similar item to which the assignor was entitled to the extent assigned.

B. Unless otherwise provided in the articles of organization or an operating agreement, the pledge of or granting of a security interest, lien, or other encumbrance in or against any or all of the membership interest of a member shall not cause the member to cease to be a member or to have the power to exercise any rights or powers of a member.

C. Unless otherwise provided in a written operating agreement and except to the extent assigned by agreement, until an assignee of a membership interest becomes a member, the assignee shall have no liability as a member solely as a result of such assignment.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1331 Rights of judgment creditor

On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the membership interest of the member with payment of the unsatisfied amount of judgment with interest. To the extent so charged, the judgment creditor shall have only the rights of an assignee of the membership interest. This Chapter shall not deprive any member of the benefit of any exemption laws applicable to his membership interest.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1332 Right of assignee to become a member

A. Except as otherwise provided in the articles of organization or a written operating agreement:

(1) An assignee of an interest in a limited liability company shall not become a member or participate in the management of the limited liability company unless the other members unanimously consent in writing.

(2) Until the assignee of an interest in a limited liability company becomes a member, the assignor shall continue to be a member.

B. An assignee who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this Chapter. Except as otherwise provided in the articles of organization or a written operating agreement, an assignee who becomes a member also shall be liable for any obligations of his assignor to make contributions under R.S. 12:1322 and to return under R.S. 12:1328(A) distributions received in violation of R.S. 12:1327. However, the assignee shall not be obligated for liabilities unknown to the assignee at the time that he became a member.

C. Whether or not an assignee of a membership interest becomes a member, the assignor shall not be released from his liability to the limited liability company under R.S. 12:1322 and 1328.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1333 Powers of estate of a deceased or incompetent member

A. Except as otherwise provided in the articles of organization, a written operating agreement, or as provided in R.S. 12:1333.1, if a member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the member's membership ceases and the member's executor, administrator, guardian, conservator, or other legal representative shall be treated as an assignee of such member's interest in the limited liability company.

B. If the last remaining member dies, the duly appointed executor or administrator of the member shall have the authority to sell any real estate owned by the limited liability company.

C. If the last remaining member is an individual and a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the curator of the member shall have the authority to sell any real estate owned by the limited liability company.

D. Except as otherwise provided in the articles of organization or a written operating agreement, if a member is a corporation, trust, or other entity and is dissolved or terminated, the member's membership ceases and the member's legal representative or successor shall be treated as an assignee of such member's interest in the limited liability company.

E. If all members die, the succession representative of any of the deceased members may petition the court for dissolution, windup, and liquidation of the limited liability company pursuant to R.S. 12:1334 et seq.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 2014, No. 251, §1; Acts 2016, No. 170, §1; Acts 2022, No. 156, §1.

§ 12:1333.1 Single-member limited liability company; powers of the estate succession representative

A. Notwithstanding any provision of law to the contrary, the death of the member of a single-member limited liability company shall not result in the termination of the interest of the deceased single member in that limited liability company or in the termination of that limited liability company, but instead the interest of the member in the single-member limited liability company shall be fully heritable.

B. Unless otherwise provided in the articles of organization or a written operating agreement, and notwithstanding the provisions of R.S. 12:1333, upon the death of the member of a single-member limited liability company, the deceased member's properly appointed succession representative, on behalf of the deceased member's estate, may exercise all of the deceased member's rights for the purpose of settling or administering the member's estate, including all financial and management rights related to the single-member limited liability company held by the deceased member at the time of his death.

C. Unless otherwise provided in the articles of organization or a written operating agreement, once the deceased member's interest in a single-member limited liability company is transferred to any heir or legatee, as recognized by a judgment of possession, the heir or legatee shall have full rights of membership in the limited liability company, including all financial and management rights.

D. For purposes of this Section, a "single-member limited liability company" means a limited liability company that had no assignees and only one member at the time of the member's death.

E. The provisions of this Section shall be subject to and shall not supersede any rules, regulations, or laws governing or restricting the ownership or practice of any regulated industry or profession.

Acts 2022, No. 156, §1.

PART VII DISSOLUTION

§ 12:1334 Dissolution

Except as provided in the articles of organization or a written operating agreement, a limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following:

(1) The occurrence of events specified in writing in the articles of organization or operating agreement.

(2) The consent of its members in accordance with R.S. 12:1318.

(3) Repealed by Acts 1997, No. 717, §2, eff. July 8, 1997.

(4) Entry of a decree of judicial dissolution under R.S. 12:1335.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 1997, No. 717, §2, eff. July 8, 1997.

§ 12:1335 Judicial dissolution

On application by or for a member, any court of competent jurisdiction may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1335.1 Dissolution by affidavit

A. In addition to all other methods of dissolution, if a limited liability company is no longer doing business, owes no debts, and owns no immovable property, it may be dissolved by filing an affidavit with the secretary of state executed by the members or by the organizer, if no membership interests have been issued, attesting to such facts and requesting that the limited liability company be dissolved. Thereafter, the members, or the organizer if no membership interests have been issued, shall be personally liable for any debts or other claims against the limited liability company in proportion to their ownership interest in the company. The secretary of state may prescribe and furnish forms for filing the affidavit.

B. The secretary of state shall reinstate a limited liability company that has been dissolved pursuant to this Section only upon receipt of an order issued by a court of competent jurisdiction directing him to do so.

Acts 1997, No. 717, §1, eff. July 8, 1997; Acts 1998, 1st Ex. Sess., No. 102, §1, eff. May 5, 1998; Acts 2016, No. 147, §1, eff. Feb. 1, 2017; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1336 Winding up

A. Except as otherwise provided in the articles of organization or a written operating agreement, upon dissolution the members shall wind up the limited liability company's affairs. The windup of the limited liability company's affairs may be conducted by appointment of one or more liquidators to conduct the windup and liquidation. However, such appointment shall not be operative until both of the following occur:

(1) Notice of authorization of the dissolution, stating that the limited liability company is to be liquidated out of court and giving the name and post office address of each liquidator, has been published at least once in a newspaper of general circulation in the parish in which the limited liability company's registered office is located, and a copy of such notice, with the affidavit of the publisher of the newspaper to the fact of such publication attached, has been filed with the secretary of state.

(2) Articles of dissolution have been filed with the secretary of state in accordance with R.S. 12:1339.

B. However, any court of competent jurisdiction may wind up the limited liability company's affairs on application of any member or his legal representative or assignee or of any liquidator.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1337 Distribution of assets

A. Upon the winding up of a limited liability company, any assets remaining after paying or adequately providing for the payment of all debts and liabilities of the limited liability company, including all costs and expenses of the liquidation and any and all contingent liabilities of which the members or liquidator has knowledge, shall be distributed as follows:

(1) Except as provided in the articles of organization or a written operating agreement, to members or former members in satisfaction of liabilities for distributions under R.S. 12:1324 or 1325.

(2) Except as provided in the articles of organization or a written operating agreement, to members and former members, first, for the return of their capital contributions, and secondly, respecting their membership interests, in the proportions in which the members share in distributions.

B. In the event that there are contingent liabilities for which provision has been made as above, the members conducting the dissolution or liquidator shall not be dismissed until the contingent liabilities and debts have been paid or settled in full.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1338 Claims against limited liability company in liquidation; peremption

A. A limited liability company may have the benefit of Subsections C, D, and E of this Section by following the procedure set forth in Subsection B of this Section.

B.(1) After the proceeding for dissolution has taken effect, notice thereof shall be:

(a) Given by registered or certified mail to all known creditors of, to all persons believed to have valid and subsisting claims, excluding prescribed and time-barred claims, against, and to all persons having unfulfilled contracts with, the limited liability company.

(b) Published once a week for two successive weeks in a newspaper of general circulation in the parish in which the limited liability company's registered office is located.

(2) Such notice shall call on the addressees to present their claims in writing and in detail, at a specified place and by a specified date not less than six months after the notice was mailed. The giving and publication of such notice shall not be deemed an acknowledgment of the validity of any claim against the limited liability company, waiver of any defense or setoff to any such claim, interruption of prescription on or tolling of any statute of limitation applicable to any such claim, or revival of any claim which has been barred by any prescription, peremption, or statute of limitations.

C. If any addressee of such notice shall not present his claim or claims as prescribed in the notice, such of his claims as would be enforceable against the limited liability company except for the provisions of this Subsection shall, unless suit has been entered thereon in a court of competent jurisdiction before the final date prescribed in the notice for presentation thereof, be perpetually and peremptorily barred, except to the extent, if any, that the court may allow them against any remaining undistributed assets of the limited liability company on a finding that the claimant had some valid excuse for his failure so to present his claim.

D. All claims which would be enforceable by suit against the limited liability company except for the provisions of this Subsection, on which suit has not been filed in a court of competent jurisdiction before the expiration of three years after the proceeding for dissolution takes effect, or, if the notice prescribed in Subsection B of this Section was not given and publication thereof commenced within one month after the proceeding takes effect, before the expiration of three years after the giving or completion of publication of the notice, whichever is later, shall be barred perpetually and peremptorily.

E. The time limits provided in Subsections C and D of this Section shall not be subject to suspension on any ground or to interruption except by timely presentation of the claim as to Subsection C or timely suit as to Subsection D.

F. The provisions of Subsections C and D of this Section shall not preclude the enforcement at any time, without regard to whether a claim has been presented or a suit filed timely as prescribed in said Subsections, of any valid and subsisting lien securing any claim against, or indebtedness of, the limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1339 Articles of dissolution

A. Upon dissolution and the commencement of winding up of the limited liability company:

(1) Articles of dissolution shall be filed in the office of the secretary of state and set forth the following:

(a) The name of the limited liability company.

(b) The date of filing of its articles of organization and all amendments thereto.

(c) The reason for filing the articles of dissolution.

(d) The effective date, which shall be a date certain, of the articles of dissolution if they are not to be effective upon filing.

(e) Any other information which the members or managers filing the certificate determine.

(2) If the notice provided for by R.S. 12:1336(A)(1) has not been published, a notice of authorization of the dissolution, stating that the limited liability company is to be liquidated out of court, shall be published at least once in a newspaper of general circulation in the parish in which the limited liability company's registered office is located. A copy of such notice, with the affidavit of the publisher of the newspaper attesting to the fact of such publication attached, shall be filed with the secretary of state.

B.(1) The articles of dissolution shall be signed by one or more managers, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or one or more members, if management of the limited liability company is reserved to the members, acknowledged by one of the persons executing the articles and filed with the secretary of state, who, after all fees and charges have been paid as required by law, shall record the same in his office and endorse thereon the date of filing thereof with him.

(2) The secretary of state may prescribe and furnish forms for filing the articles of dissolution.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1340 Certificate of dissolution; assets omitted from liquidation; post-dissolution proceedings

A. When a limited liability company has been liquidated completely:

(1) One or more members or the liquidator shall sign and acknowledge a certificate stating that the limited liability company has been liquidated and is dissolved. The secretary of state may prescribe and furnish forms for filing the certificate.

(2) If the proceeding is subject to the supervision of the court, the court shall make an order declaring the limited liability company to be dissolved.

B. The certificate of the members or liquidator or the order shall be filed with the secretary of state who, after all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law, shall record the same in his office and shall issue a certificate of dissolution of the limited liability company effective as of the date, which shall be stated therein, of filing of the certificate of the members or liquidator or the order.

C. Upon issuance of the certificate of dissolution, the separate existence shall cease as of the effective date stated in the certificate, except for the sole purpose of any action or suit commenced theretofore by, or commenced timely against, the limited liability company.

D. Any movable or immovable property inadvertently or otherwise omitted from the liquidation shall vest in the members conducting the liquidation or liquidator, for the benefit of the persons entitled thereto, and be distributed accordingly.

E. Following cessation of the separate existence, the members conducting the liquidation or liquidator shall still have power to take all action required to preserve the interests of the limited liability company, its creditors, and members. The court shall have power, on application by any interested party, to appoint, ex parte or on such notice as the court may order, a liquidator or new liquidator for any proper purpose in case of the death, disability, or unwillingness to serve of the last previous liquidator or last member.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1341 Liability of members of dissolved limited liability companies

A. A member of a dissolved limited liability company, which has followed the procedures set forth in R.S. 12:1338, shall not be liable for any claim against the limited liability company in an amount in excess of such member's pro rata share of the claim or the amount so distributed to him, whichever is less.

B. A member of a dissolved limited liability company, which has followed the procedures set forth in R.S. 12:1338, shall not be liable for any claim against the limited liability company on which an action, suit, or proceeding has not begun prior to the expiration of the periods described in R.S. 12:1338(C) and (D).

C. The aggregate liability of any member of a dissolved limited liability company for claims against the dissolved limited liability company shall not exceed the amount distributed to him in dissolution.

Acts 1992, No. 780, §2, eff. July 7, 1992.

PART VIII FOREIGN LIMITED LIABILITY COMPANIES

§ 12:1342 Admission of foreign limited liability company

No foreign limited liability company shall have the right to transact business in this state until it shall have procured a certificate of authority to do so from the secretary of state. A foreign limited liability company shall not be denied a certificate of authority because the laws of the state or other jurisdiction under which such limited liability company is organized differ from the laws of this state. However, no foreign limited liability company shall be entitled to procure a certificate of authority to transact in this state any business that a limited liability company organized under this Chapter is not permitted to transact. The laws of the state or other jurisdiction under which a foreign limited liability company is organized shall govern its organization, its internal affairs, and the liability of its managers and members that arise solely out of their positions as managers and members.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1343 Transactions not constituting transacting business

Without excluding other activities that may not constitute transacting business in this state, a foreign limited liability company shall not be considered to be transacting business in this state for the purpose of being required to procure a certificate of authority pursuant to this Chapter by conducting any one or more of the following activities:

(1) Maintaining, defending, or settling any proceeding.

(2) Holding meetings of its managers or members or carrying on any other activities concerning its internal affairs.

(3) Maintaining bank accounts.

(4) Maintaining offices or agencies for the transfer, exchange, and registration of the foreign limited liability company's own membership interests, or appointing or maintaining trustees or depositories with respect to those membership interests.

(5) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts, including all preliminary incidents thereto.

(6) Creating evidences of debt, mortgages, or liens.

(7) Securing or collecting debts or enforcing any rights in property securing the debts.

(8) Transacting any business in interstate or foreign commerce.

(9) Conducting an isolated transaction completed within thirty days, and not in the course of repeated transactions of like nature.

(10) Acquiring or disposing of property or a property interest, not as a part of any regular business activity.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1344 Name of authorized foreign limited company

A certificate of authority shall not be issued to a foreign limited liability company unless the name of such company satisfies the requirements of R.S. 12:1306. If the name of a foreign limited liability company does not satisfy the requirements of R.S. 12:1306(A)(1), to obtain or maintain a certificate of authority, the foreign limited liability company may add the words "limited liability company" or the abbreviation "L.L.C." or "L.C." to its name for use in this state. If its real name is unavailable, the foreign limited liability company may add a distinguishing term upon the records of the secretary of state to its name for use in this state.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:1345 Application for certificate of authority

A. Application by a foreign limited liability company to procure a certificate of authority shall be made to the secretary of state and shall set forth the following:

(1) The name of the limited liability company and the state or other jurisdiction under the laws of which it is organized.

(2) If the name of the limited liability company does not conform with the requirements of R.S. 12:1344, then the name of the limited liability company with the word, abbreviation, or distinguishing term upon the records of the secretary of state that it elects to add for use in this state.

(3) The date of organization and the period of duration, if any, of the limited liability company.

(4) The address of the registered office of the limited liability company in the state or other jurisdiction under the laws of which it is organized and the address or intended address of its principal business office outside of this state.

(5) The address of the principal business establishment in this state, the address of the registered office in this state, and the name and address of its registered agent in this state. If the company does not have a principal place of business establishment in this state, the address of its registered agent in this state shall be deemed to be the address of its principal place of business establishment in this state.

(6) The nature of the business that the limited liability company proposes to transact in this state and a statement that it is empowered to transact such business under the laws under which it is organized.

(7) Such additional information as may be prescribed by the secretary of state as necessary or appropriate in order to enable the secretary of state to determine whether such limited liability company is entitled to a certificate of authority to transact business in this state, and to determine and assess the fees and taxes prescribed by the laws of this state.

B. The application shall be made on a form prescribed and furnished by the secretary of state and shall be executed in duplicate in the limited liability company's name by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company. The application shall be acknowledged by the person who signed it or may be executed by authentic act.

C. Duplicate applications for a certificate of authority shall be delivered to the secretary of state, together with a certificate of existence or a certificate of good standing, not a certified copy of the articles of organization or certificate of organization of the limited liability company, from an authorized official of the jurisdiction of its organization bearing an original signature and dated within ninety days of its submission for a certificate of authority and a notarized affidavit of acknowledgment and acceptance signed by each registered agent. The failure to attach a notarized affidavit of acknowledgment and acceptance as required by this Section shall not be a defense to proper service of process on the limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995; Acts 1999, No. 342, §5; Acts 2001, No. 543, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

§ 12:1346 Issuance of certificate of authority

If the secretary of state finds that the application for the certificate of authority conforms to law, that the nature of the business is lawful for a limited liability company in this state, and that all requisite fees have been paid, he shall do the following:

(1) Endorse on the application the word "Filed" and the date of the filing.

(2) File in his office an application.

(3) Issue a certificate of authority to transact business in this state to which he shall affix the other application, which shall be returned to the limited liability company or its representative.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1999, No. 342, §5.

§ 12:1347 Effect of certificate of authority

A foreign limited liability company which receives a certificate of authority shall, until a certificate of revocation or a withdrawal shall have been issued as provided in this Chapter:

(1) Be authorized to transact business in this state, subject to such limitations as may be recited in the certificate of authority.

(2) Enjoy the same, but no greater, rights and privileges as a limited liability company organized under the laws of this state to transact the business that such foreign limited liability company is authorized to transact in this state.

(3) Except as otherwise provided in this Chapter, be subject to the same duties, restrictions, penalties, and liabilities as are imposed upon limited liability companies organized under the laws of this state.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1348 Amended certificate of authority

A. A foreign limited liability company authorized to transact business in this state shall, by making application therefor to the secretary of state, procure an amended certificate of authority if thereafter it changes its name or proposes to transact business in this state other than that set forth in its prior application. The provisions in respect to the form and contents of such application, the manner of its execution and filing, and the issuance of an amended certificate of authority and the effect thereof shall be the same as in the case of an original application for a certificate of authority.

B. If a foreign limited liability company changes its name, it shall include, with its application for an amended certificate of authority, a certificate or a certified copy of the amendment in the case that the authorized official of the jurisdiction of organization does not provide such certificate evidencing such change issued by the authorized official of the jurisdiction of organization of such limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995; Acts 2023, No. 26, §2.

§ 12:1349 Certificate of correction by a foreign limited liability company

A. Whenever the original application for a certificate of authority or an application for an amended certificate of authority filed with the secretary of state under any provision of this Chapter is an inaccurate record of the action therein referred to, or is defectively or erroneously executed or acknowledged, such instrument may be corrected by filing with the secretary of state a certificate of correction.

B. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth that portion of the instrument in corrected form.

C. A certificate of correction shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company. The certificate of correction shall be acknowledged by the person who signed it or may be executed by authentic act.

D. The secretary of state may prescribe and furnish forms for filing the certificate of correction.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2019, No. 19, §2, eff. May 28, 2019; Acts 2023, No. 26, §2.

§ 12:1350 Registered agent; registered office; principal business establishment; keeping of records by foreign limited liability company

A. Each foreign limited liability company authorized to transact business in this state shall have and continuously maintain in this state:

(1) At least one registered agent, which agent shall be one of the following:

(a) An individual resident in this state whose business office is identical to the limited liability company's registered office.

(b) An individual attorney or a partnership which is authorized to practice law in this state with an office in this state.

(c) A domestic corporation, domestic limited liability company, foreign corporation, or foreign limited liability company authorized to transact business in this state, which has a business office identical to such registered office, and which is authorized by its articles or certificate of incorporation or organization to act as an agent of a limited liability company for service of process, and which has on file with the secretary of state a certificate setting forth the names of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent.

(2) A registered office which may, but need not, be the same as its business office in this state.

B.(1) A foreign limited liability company authorized to transact business in this state may change its registered office or its registered agent upon filing in the office of the secretary of state a statement setting forth the following:

(a) The name of the limited liability company.

(b) If the address of its registered office is to be changed, the address to which the registered office is to be changed.

(c) If its registered agent is to be changed, the name of its successor registered agent. Attached thereto shall be a notarized affidavit of acknowledgment and acceptance signed by the successor registered agent.

(d) If the address of its principal business establishment is to be changed, the address to which the principal business establishment is to be changed.

(2) If its registered agent is an individual or a corporation, the address of its registered office and the address of the business office of its registered agent, as changed, shall be identical.

(3) The statement shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company, by authentic act or acknowledged by him and delivered to the secretary of state. If only the address of the registered office is changed, the statement need only be executed by the registered agent. If the secretary of state finds that the statement conforms to the provisions of this Chapter, he shall file the statement in his office and, upon such filing, the change of address of the registered office or the appointment of a new registered agent, as the case may be, shall become effective.

C. A similar statement executed by the registered agent shall be filed in like manner within thirty days after any change in the name of a corporation or partnership which is the registered agent.

D. Any registered agent of a foreign limited liability company may resign as such agent upon filing a written notice of his resignation, executed in duplicate, with the secretary of state, who shall forthwith mail a copy thereof to the limited liability company at its principal business office address. The appointment of such agent shall terminate upon the expiration of thirty days after receipt of such notice by the secretary of state. If the registered agent resigns, or if for any other reason the limited liability company ceases to maintain a registered agent, a successor agent shall be appointed under the procedure set forth in Subsection B of this Section within thirty days after termination of the tenure of the former agent.

E. If the limited liability company's registered office should be vacated, a new office shall be designated under the procedure set forth in Subsection B of this Section within thirty days. If such designation is not made, the office of the secretary of state may thereafter be treated as the registered office of the limited liability company by any person other than the limited liability company itself.

F. Each limited liability company shall keep at its principal place of business, in or outside the state, records in written form, or in any other form capable of being converted into written form within a reasonable time, showing correct accounts of its properties and business transactions in this state. These records shall include accounts of its assets and liabilities, receipts and disbursements, and gains and losses and, if the limited liability company is engaged in this state in a business that will subject it to liability for state severance taxes, a complete account of all severance produced from its operations in this state.

G. The secretary of state may prescribe and furnish forms for filing the statement of change and agent resignation.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995; Acts 2003, No. 368, §1; Acts 2017, No. 367, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1350.1 Annual report

A. On or before the anniversary date of its qualification, each foreign limited liability company authorized to transact business in this state shall file an annual report each year with the secretary of state, signed by a member or manager, stating:

(1) The address of the registered office in the jurisdiction of organization and the address of its principal business office outside of this state.

(2) The address of the principal business establishment in this state, the address of the registered office in this state, and the name and address of its registered agent in this state.

B. The secretary of state may prescribe and furnish forms for filing the annual report.

C. The provisions of this Section shall apply to any foreign limited liability company qualified on or after July 7, 1992.

Acts 2001, No. 1186, §2; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1351 Withdrawal

A. A foreign limited liability company authorized to transact business in this state may withdraw from this state upon procuring from the secretary of state a certificate of withdrawal. In order to procure such certificate, the limited liability company shall deliver to the secretary of state an application for withdrawal which shall set forth the following:

(1) The name of the limited liability company and the state or other jurisdiction under the laws of which it is organized.

(2) That the limited liability company is not transacting business in this state.

(3) That the limited liability company surrenders its authority to transact business in this state.

(4) That the limited liability company revokes the authority of its registered agent in this state to accept service of process and consents that the service of process in any action or proceeding based on any cause of action arising out of, resulting from, or connected with any business transacted by it in this state during the time the limited liability company was authorized to transact business in this state, shall be made on the limited liability company by service thereof on the secretary of state or on a person in his office designated to receive service of process on limited liability companies.

(5) An address to which the secretary of state may mail a copy of any process that may be so served on the limited liability company.

(6) Such additional information as may be prescribed by the secretary of state as necessary or appropriate to the determination and assessment of any unpaid fees or taxes payable by the limited liability company as prescribed in this Chapter.

B. The application of withdrawal shall be made on a form prescribed and furnished by the secretary of state and shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company. The application shall be acknowledged by the person who signed it or may be executed by authentic act.

C. Duplicate applications for withdrawal shall be delivered to the secretary of state. If the secretary of state finds that such application conforms to the provisions of this Chapter, he shall, when all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law and evidenced by certificates of the secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law, do the following:

(1) Endorse on each application the word "Filed" and the date of the filing thereof.

(2) File an application in his office.

(3) Issue a certificate of withdrawal to which he shall affix the other application.

D. The certificate of withdrawal, together with an application for withdrawal affixed thereto by the secretary of state, shall be returned to the limited liability company or its representative. Upon the issuance of such certificate of withdrawal, the authority of the limited liability company to transact business in this state shall cease.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 1999, No. 342, §5.

§ 12:1352 Termination of withdrawal proceedings

At any time before the certificate of withdrawal is issued by the secretary of state pursuant to R.S. 12:1351, withdrawal proceedings may be terminated by delivering to the secretary of state a request that withdrawal proceedings be terminated. The request shall be signed by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members. The secretary of state may prescribe and furnish forms for filing the request to terminate withdrawal proceedings. After all fees and charges have been paid as required by law, the secretary of state shall place the request to terminate withdrawal proceedings on file in his office and shall acknowledge receipt of the request by returning the application for withdrawal forms to the limited liability company or its representative. The secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law shall be notified by the secretary of state of the termination of withdrawal proceedings.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1997, No. 1172, §1, eff. June 30, 1997; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1353 Revocation or suspension of certificate of authority; limitation on authority to do business with the state

A. The certificate of authority of a foreign limited liability company to transact business in this state may be revoked by the secretary of state when any of the following occur:

(1) The limited liability company has failed to pay any fees, taxes, or penalties prescribed by law when they have become due and payable.

(2) The limited liability company has failed to maintain a registered agent or a registered office in this state or to maintain records as required by this Chapter.

(3) The limited liability company has failed, after change of its registered office or registered agent or of the name of a corporate or partnership agent, to file in the office of the secretary of state a statement of such change as required by this Chapter.

(4) The limited liability company has failed to file in the office of the secretary of state any certificate of name change or any amendment of its certificate of authority under R.S. 12:1348.

(5) A misrepresentation has been made of any material matter in any application, report, or other document filed by the limited liability company pursuant to this Chapter.

(6) The limited liability company has exercised in this state authority not conferred upon it by the laws of this state or has abused authority conferred upon it.

(7) The limited liability company has done or omitted any act that amounts to a surrender of its right to do business.

(8) The limited liability company has been dissolved.

(9) The limited liability company is delinquent in filing the annual report required by R.S. 12:1350.1.

B. No certificate of authority of a foreign limited liability company shall be revoked by the secretary of state unless both of the following have occurred:

(1) The secretary of state shall have given the limited liability company not less than sixty days' notice in writing of the grounds on which such proposed revocation is based.

(2) The limited liability company has failed, neglected, or refused to correct the same within such sixty-day period.

C. Upon revocation, the authority of the limited liability company to transact business in this state shall cease, but the authority of its registered agent in this state to accept service of process shall continue.

D.(1) The certificate of authority of a foreign limited liability company to transact business in this state may be suspended by the secretary of state when, according to the records of his office, such foreign limited liability company is not in compliance with a requirement of this Chapter or other relevant law as stated in Paragraphs (A)(1) through (4) of this Section. The secretary of state is authorized to revoke the suspension when any such failure to comply has been remedied by compliance.

(2) The secretary of state shall give the limited liability company at least sixty days written notice of the secretary's intention to suspend the limited liability company's certificate of authority. The notice shall be mailed to the limited liability company's last known address by United States Postal Service mail. In the event any such limited liability company thereafter complies with any such requirement, or shows that it was already in compliance with same, the secretary of state is authorized to revoke any suspension issued by him in respect to such limited liability company, to restore same to good standing, and to record same in the archives of his office. If a limited liability company's certificate of authority is suspended for failure to file its annual report within the time required by this Chapter as referenced in Paragraph (A)(9) of this Section, and has been suspended for six months or more, the secretary of state shall revoke the suspension only if the required annual report is accompanied by a certificate of existence or a certificate of good standing, not a certified copy of the limited liability company's articles or certificate of organization, from an authorized official of the jurisdiction of its organization bearing an original signature and dated within ninety days of its submission.

E.(1) As used in this Subsection, the term "not in good standing" means that a foreign limited liability company is delinquent in filing its annual report.

(2) Each foreign limited liability company which is not in good standing shall be prohibited from engaging in commercial business operations with the state or its boards, agencies, departments, or commissions. Any contract between the state or its boards, agencies, departments, or commissions and a foreign limited liability company which is not in good standing may be declared null and void by the board, agency, department, commission, or the division of administration.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2001, No. 1186, §2; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1354 Transacting business without authority

A. No foreign limited liability company transacting business in this state shall be permitted to present any judicial demand before any court of this state unless it has been authorized to transact such business, if required by and as provided in, this Chapter. The burden of proof shall rest upon the limited liability company to establish that it has been so authorized, and the only legal evidence thereof shall be the certificate of the secretary of state or a duly authenticated copy thereof.

B. The failure of a foreign limited liability company to obtain a certificate of authority to transact business in this state shall not cause the members or managers of the foreign limited liability company to become liable for the obligations of the foreign limited liability company, shall not impair the validity of any contract or act of such limited liability company, and shall not prevent such limited liability company from defending any action, suit, or proceeding in any court of this state.

C. A foreign limited liability company that transacts business in this state without a certificate of authority shall be liable to this state, for the years or parts thereof during which it transacted business in this state without a certificate of authority, in an amount equal to all fees and taxes that would have been imposed by law upon such limited liability company had it duly applied for and received a certificate of authority to transact business in this state, as required by this Chapter, and had thereafter filed all reports required by this Chapter, plus all penalties imposed by this Chapter for failure to pay such fees. The attorney general shall bring proceedings to recover all amounts due this state under this Section.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1355 Authority to investigate; penalty

A. The secretary of state may investigate any foreign limited liability company transacting business in this state which does not have a certificate of authority to transact business in this state.

B. The secretary of state may impose a penalty of not more than one thousand dollars per violation against any foreign limited liability company transacting business in this state without a valid certificate of authority.

C. The secretary of state shall adopt a schedule of penalties to be imposed under the provisions of this Section in accordance with the provisions of the Administrative Procedure Act.

D. If a penalty imposed under the provisions of this Section is not timely paid by a foreign limited liability company, the attorney general shall institute proceedings against the foreign limited liability company to collect such penalty.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1356 Repealed by Acts 2017, No. 367, §3.

Repealed by Acts 2017, No. 367, §3.

PART IX MERGER

§ 12:1357 Merger or consolidation

Any one or more domestic limited liability companies may merge or consolidate with or into a domestic limited liability company, partnership in commendam, partnership, or business or nonprofit corporation. Any one or more domestic limited liability companies, partnerships in commendam, partnerships, or business or nonprofit corporations may merge or consolidate with or into a domestic limited liability company.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995.

§ 12:1358 Agreement of merger or consolidation

A. Each constituent entity shall enter into a written agreement of merger or consolidation, which shall be approved in accordance with R.S. 12:1359.

B. The agreement of merger or consolidation shall set forth the following:

(1) The name and state or country of organization of each limited liability company, corporation, partnership, or partnership in commendam which is a constituent entity in the merger or consolidation and the name of the surviving entity into which each other constituent entity proposes to merge or the new entity into which each constituent entity proposes to consolidate.

(2) The terms and conditions of the proposed merger or consolidation.

(3) The manner and basis of converting the membership interests in each limited liability company, the shares of stock or other interests in each corporation, and the interests in each partnership in commendam or partnership which is a constituent entity in the merger or consolidation into membership interests, shares, interests, or other securities or obligations, as the case may be, of the surviving entity or the new entity, or of any other limited liability company, corporation, partnership, partnership in commendam, or other entity, or, in whole or in part, into cash or other property, including obligations or securities of any other person.

(4) In the case of a merger, such amendments to the articles of organization, articles of incorporation, or articles or agreement of partnership or partnership in commendam, as the case may be, of the surviving entity, as are desired to be effected by the merger, or that no such changes are desired.

(5) In the case of a consolidation, all of the statements required to be set forth in articles of organization, articles of incorporation, or articles or agreement of partnership or partnership in commendam, as the case may be, of the new entity.

(6) Such other provisions relating to the proposed merger or consolidation as are deemed necessary or desirable.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1359 Approval of merger or consolidation

A. A proposed agreement of merger or consolidation complying with the requirements of R.S. 12:1358 shall be authorized and approved in the manner provided by this Section:

(1) A domestic limited liability company party to a proposed merger or consolidation shall have the agreement of merger or consolidation authorized and approved by the vote of the members in accordance with R.S. 12:1318.

(2) A domestic corporation party to a proposed merger or consolidation shall have the agreement of merger or consolidation approved, adopted, and certified in the manner and by the vote of the shareholders or members in accordance with Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of 1950.

(3) A domestic partnership or partnership in commendam party to a proposed merger or consolidation shall have the agreement of merger or consolidation authorized and approved in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of 1950.

(4) Each constituent entity formed under the laws of a jurisdiction other than this state shall have the agreement of merger or consolidation approved in accordance with the laws of such other jurisdiction.

B. The fact that the agreement has been authorized and approved in accordance with this Section shall be certified in the agreement on behalf of each constituent entity:

(1) In the case of a domestic limited liability company, by any member, if management is reserved to the members, or by any manager, if management is vested in one or more managers pursuant to R.S. 12:1312.

(2) In the case of a domestic corporation, in the manner provided in Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of 1950.

(3) In the case of a domestic partnership or partnership in commendam, in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of 1950.

(4) In the case of any constituent entity formed under the laws of any jurisdiction other than this state, in accordance with the laws of such other jurisdiction.

C. After a merger or consolidation is authorized and approved, unless the agreement of merger or consolidation provides otherwise, and at any time before an agreement or certificate of merger or consolidation, as provided for in R.S. 12:1360 is filed, the agreement of merger or consolidation may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the agreement of merger or consolidation or, if none is set forth, as follows:

(1) By the majority vote of the members of each domestic limited liability company that is a constituent entity, unless the articles of organization of any such limited liability company provide otherwise.

(2) By each domestic corporation that is a constituent entity in the manner provided in Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of 1950.

(3) By each domestic partnership or partnership in commendam that is a constituent entity in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of 1950.

(4) By each constituent entity formed under the laws of any jurisdiction other than this state in accordance with the laws of such other jurisdiction.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1360 Certificate of merger or consolidation

A. After an agreement of merger or consolidation is authorized, approved, and certified as provided in R.S. 12:1359, the surviving entity or new entity shall file the agreement with the secretary of state or, in lieu thereof, may file a certificate of merger or consolidation duly executed, setting forth the following:

(1) The name and state or country of organization of each constituent entity.

(2) The effective date, and time if desired, of the merger or consolidation if later than the date of filing of the certificate of merger or consolidation.

(3) The name of the surviving entity or new entity.

(4) A statement that the agreement of merger was duly authorized and approved by each constituent entity in accordance with R.S. 12:1359.

(5) In the case of a merger, such amendments to the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity as are desired to be effected by the merger. If no such amendments are desired, a statement that the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity shall be its articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be.

(6) In the case of a consolidation, that the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the new entity shall be as set forth in an attachment to the certificate.

(7) That the executed agreement of merger or consolidation is on file at the principal place of business of the surviving or new entity, stating the address thereof.

(8) That a copy of the agreement of merger or consolidation will be furnished by the new or surviving entity, on request and without cost, to any member, shareholder, or partner, as the case may be, of any constituent entity.

B.(1) The secretary of state may prescribe and furnish forms for filing the agreement and certificate of merger.

(2) The secretary of state, after all taxes, fees, and charges have been paid as required by law, shall record the agreement, or certificate in lieu thereof, in his office, endorse thereon the date and, if requested the hour of filing thereof with him, and issue a certificate of merger or consolidation, which shall recite the names of all of the merging and consolidating constituent entities, the name of the state or country under the laws of which each was formed, whether a merger or consolidation is involved, the name of the surviving or new entity, the name of the state or country under the laws of which the new entity is formed, the date, and, if endorsed on the agreement or certificate, the hour of filing of the agreement or certificate with him, and the effective date, and time, of the merger or consolidation, if stated in the agreement or certificate.

(3) The agreement or certificate may be delivered to the secretary of state in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. A duplicate original of the certificate of merger or consolidation issued by the secretary of state shall, within thirty days after issuance of the certificate, be filed for record in the conveyance records of each parish in this state in which any of the constituent entities has immovable property, title to which will be transferred as a result of the merger or consolidation.

C. A merger or consolidation shall be effective when the agreement or certificate of merger or consolidation has been recorded by the secretary of state and when the requirements for effectiveness of the laws under which any constituent entity was formed have been met, as of the time of filing of the agreement or certificate with the secretary of state. However, if the certificate was filed within five days, exclusive of legal holidays, after acknowledgment thereof, the merger or consolidation shall be effective as of the time of such acknowledgment, and the merger or consolidation may be made effective as of any later effective date, and time if desired, not later than thirty days after the date of such filing, stated in the agreement or certificate of merger or consolidation.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1361 Effects of merger or consolidation

A. Consummation of a merger or consolidation has the effects provided in this Section:

(1) The constituent entities party to the agreement of merger or consolidation shall be a single entity which, in the case of a merger, shall be the entity designated in the agreement of merger as the surviving entity and, in the case of a consolidation, shall be the new entity provided for in the agreement of consolidation.

(2) The separate existence of each constituent entity, except the surviving entity or the new entity, shall cease.

(3) The surviving entity or the new entity shall thereupon and thereafter possess all the rights, privileges, immunities, powers, and franchises of each constituent entity and shall be subject to all the restrictions, disabilities, and duties of each of such constituent entities to the extent such rights, privileges, immunities, powers, franchises, restrictions, disabilities, and duties are applicable to the form of existence of the surviving entity or the new entity.

(4) All property, movable, immovable, and mixed, and all debts due on whatever account, including promises to make capital contributions, subscriptions for shares, and all other choses in action, and all and every other interest of or belonging to or due to each of the constituent entities shall be vested in the surviving entity or the new entity without further act or deed.

(5) The title to all immovables and any interest therein vested in any such constituent entity shall not revert or be in any way impaired by reason of such merger or consolidation.

(6) The surviving entity or the new entity shall thenceforth be responsible and liable for all liabilities and obligations of each of the constituent entities so merged or consolidated. Any claim existing or action or proceeding pending by or against any such constituent entity may be prosecuted as if such merger or consolidation had not taken place, or the surviving entity or the new entity may be substituted in the action.

(7) Neither the rights of creditors nor any liens on the property of any constituent entity shall be impaired by the merger or consolidation.

(8) In the case of a merger, the articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity shall be amended to the extent provided in the certificate of merger.

(9) In the case of a consolidation, the statements set forth in the certificate of consolidation and which are required or permitted to be set forth in the articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the new entity shall be deemed to be the original articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership of the new entity.

(10) The membership interests in a limited liability company, shares or other interests in a corporation, or interests in a partnership, limited partnership, or partnership in commendam that is a constituent entity, as the case may be, which are to be converted or exchanged into interests, shares, other securities, cash, obligations, or other property under the terms of the agreement of merger or consolidation shall be so converted. The former holders thereof shall be entitled only to the rights provided in the agreement of merger or consolidation or the rights otherwise provided by law.

B. Nothing in this Chapter shall abridge or impair any dissenter's or appraisal rights that may otherwise be available to the members, shareholders, or other holders of an interest in any constituent entity.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1362 Merger or consolidation with foreign entity

A. Any one or more domestic limited liability companies may merge or consolidate with or into a foreign limited liability company, foreign corporation, foreign partnership, or foreign limited partnership, and any one or more foreign limited liability companies, foreign corporations, foreign partnerships, or foreign limited partnerships may merge or consolidate with or into a domestic limited liability company, if:

(1) The merger or consolidation is permitted by the law of the state or country under whose laws each foreign constituent entity is organized or formed and each foreign constituent entity complies with that law in effecting the merger or consolidation.

(2) The foreign constituent entity complies with R.S. 12:1360 if it is the surviving entity or the new entity.

(3) Each domestic limited liability company complies with the applicable provisions of R.S. 12:1358 and 1359 and, if it is the surviving entity or the new entity, with R.S. 12:1360.

B. If the surviving entity or new entity is to be governed by the laws of any state other than this state or of a foreign country, then upon the effectiveness of a merger or consolidation the surviving entity or new entity shall be subject to service of process in this state in any proceeding for enforcement of any obligation of any constituent entity party to the merger or consolidation that was organized under the laws of this state and for enforcement of any obligation of the surviving entity or new entity arising from the merger or consolidation.

C. The effect of such merger or consolidation shall be as provided in R.S. 12:1361, if the surviving entity or new entity is to be governed by the laws of this state. If the surviving entity or new entity is to be governed by the laws of any jurisdiction other than this state, the effect of such merger or consolidation shall be the same as provided in R.S. 12:1361, except insofar as the laws of such other jurisdiction provide otherwise.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1995, No. 847, §3, eff. June 27, 1995.

PART X MISCELLANEOUS

§ 12:1363 Revocation and reinstatement of articles; limitation on authority to do business within the state

A. If a limited liability company has failed to designate and maintain a registered office or to designate and maintain a registered agent pursuant to the provisions of R.S. 12:1308 for a period of ninety consecutive days, the secretary of state may revoke the articles of organization of such limited liability company.

B. Nothing contained in this Section shall be construed to prevent the state, through the office of the attorney general, from asserting a cause of action to revoke the articles of organization of a limited liability company on any of the following grounds:

(1) The limited liability company's articles of organization were procured through fraud practiced upon the state.

(2) The limited liability company has continued to abuse authority conferred upon it.

(3) The limited liability company should not have been formed under this Chapter or has been formed hereunder without substantial compliance with the conditions precedent to organization prescribed by this Chapter.

C. If the secretary of state revokes the articles of organization of a limited liability company, as authorized in Subsection A of this Section, the secretary of state shall cause notice of such revocation to be published in the official journal of the state of Louisiana. The revocation shall become effective thirty days after publication, unless the limited liability company designates and maintains a registered office and registered agent prior to that date.

D. At least thirty days prior to revoking the articles of organization, as authorized by Subsection A of this Section, the secretary of state shall give notice to the affected limited liability company of his intention to revoke the articles of organization by directing notice of such intention to the last designated registered agent of such limited liability company, as shown on the records of his office. Such notice shall be in writing and sent to said registered agent by certified United States mail at said agent's last known address. If there is no registered agent of record, the notice shall be directed to the limited liability company at its registered office.

E.(1) The articles of organization shall be reinstated provided that:

(a) A suit for liquidation or receivership of the limited liability company has not been filed at the time reinstatement is applied for.

(b) If a suit for liquidation or receivership of the limited liability company has been so filed, a unanimous written consent to the reinstatement by the members is filed with the secretary of state with the application for reinstatement.

(c) An application for reinstatement signed and acknowledged by a manager, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by a member, if management of the limited liability company is reserved to the members, and the reinstatement fee are filed with the secretary of state within three years from the effective date of the revocation.

(2) The secretary of state shall furnish a certificate of reinstatement upon payment of the reinstatement fee, and filing the unanimous written consent of the members so certified if a suit for liquidation or receivership has been filed, the certificate of reinstatement and articles of organization shall be retroactive, and the certificate and articles of organization shall continue in existence as though the revocation had never occurred.

F. Any revocation of a limited liability company's articles of organization under the provisions of this Section shall not affect any cause of action against such limited liability company or the right to proceed against any property owned by the limited liability company, nor shall such revocation prohibit a limited liability company from selling property belonging to it in the same manner as if the revocation had not occurred.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1364 Filing, service, and copying fees

A. The secretary of state shall be paid fees as provided in R.S. 49:222 in advance for the following, for the use and benefit of the state, by every domestic limited liability company:

(1) For filing and recording articles of organization, amended articles of organization, articles of dissolution, reinstatement proceedings, merger proceedings for domestic limited liability companies, and certificates of correction.

(2) For additional certified copies, additional certificates, and issuing and sealing any other certificate required or permitted by this Chapter.

(3) For supplemental initial reports, certified copies with amendments, copies with amendments, agent resignation, appointment of registered agent, appointment of new agent, change of agent or address, or reservation of limited liability company name.

(4) For filing an annual report.

B. The secretary of state shall be paid fees as provided in R.S. 49:222 in advance for the following, for the use and benefit of the state, by every foreign limited liability company:

(1) For filing and recording certificates of authority, amended certificates, withdrawal proceedings, termination of withdrawal proceedings, reinstatement proceedings, certificates of correction, and merger proceedings for foreign corporations.

(2) For additional certified copies, additional certificates, and issuing and sealing any other certificate required or permitted by this Chapter.

(3) For certified copies with amendments, agent resignations, appointments of registered agents, changes of domicile, appointments of new agents, or changes of agent or address.

(4) For filing an annual report.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2001, No. 1186, §2; Acts 2002, 1st Ex. Sess., No. 79, §1, eff. April 18, 2002; Acts 2008, No. 913, §2.

§ 12:1365 Derivative actions

A limited liability company shall be treated as an unincorporated association under Chapter 5 of Title II of Book I of the Louisiana Code of Civil Procedure.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1366 Applicability of provisions to foreign and interstate commerce

A. Whenever a conflict arises between the law of this state and the laws of any other state with regard to the liability of members of a limited liability company organized and existing under this Chapter for the debts, obligations, and liabilities of the limited liability company, or for the acts or omissions of other members, managers, employees, or agents of the limited liability company, the laws of this state shall be deemed to govern in determining such liability.

B. It is the intention of the legislature by the enactment of this Chapter that the legal existence of limited liability companies formed under this Chapter be recognized beyond the limits of this state and that, subject to any reasonable registration requirements, any such limited liability company transacting business outside this state be granted the protection of full faith and credit under Article IV of the Constitution of the United States.

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1367 Rules of construction

A. The rules that statutes in derogation of the common law are to be strictly construed shall have no application to this Chapter.

B. It is the policy of this Chapter to give maximum effect to the principle of freedom of contract.

C. Neither this Chapter nor any amendment shall be construed so as to impair the obligations of any contract existing when this Chapter or any amendment goes into effect, nor to affect any action or proceedings begun or right accrued before this Chapter or any amendment takes effect.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 1993, No. 475, §4, eff. June 9, 1993.

§ 12:1368 Taxation

A limited liability company created under this Chapter or entering the state pursuant to this Chapter shall pay such taxes as are imposed by the laws of this state or any political subdivision thereof on domestic and foreign limited partnerships on an identical basis therewith. For state income and franchise tax purposes, a limited liability company shall be treated and taxed in the same manner that it is treated and taxed for federal income tax purposes.

Acts 1992, No. 780, §2, eff. July 7, 1992; Acts 2016 1ES, No. 12, §1, eff. March 10, 2016.

§ 12:1369 Short title

This Chapter shall be known and may be cited as the "Limited Liability Company Law".

Acts 1992, No. 780, §2, eff. July 7, 1992.

§ 12:1370 Voting trusts

A. One or more members of a limited liability company may, pursuant to an agreement in writing, transfer voting shares to any one or more persons or company having authority to act as trustees, for the purpose of vesting in the transferees, as trustees, for a period not exceeding fifteen years and upon the terms and conditions stated in the agreement, all voting or other rights pertaining to such shares. The voting trust agreement may stipulate that the time of the agreement may be extended under the same terms and conditions for an additional period, not to exceed ten years from the date of expiration of the original agreement. When the original agreement contains such a stipulation, it shall provide for the manner, method, time, and place for a meeting of all of the depositing members to vote on the extension. At least a majority in interest of all depositing members, and a larger percentage if stipulated, must vote for extension if the original agreement is to remain effective beyond its original expiration date.

B. Unless the agreement provides otherwise, any other member may at any time transfer his voting shares to the same trustee or trustees upon the terms and conditions stated in the agreement, and thereupon shall be bound by, and shall have the benefits of, all of the provisions of the voting trust agreement.

C. The certificates of voting shares transferred to a trustee or trustees shall be surrendered and cancelled, and new certificates therefor issued in the name of the trustee or trustees. In the new certificates it shall appear that they are issued pursuant to the voting trust agreement. In the entry of transfer on the records of the limited liability company, it shall be noted that the transfer is made pursuant to the agreement.

D. The trustee or trustees shall execute and deliver voting trust certificates to the transferors. Such voting trust certificates shall be transferable in the same manner and with the same effect as a membership interest under the provisions of R.S. 12:1330.

E. The trustee or trustees shall possess all voting and other rights pertaining to the shares transferred and registered in his or their names, subject to the terms and conditions of, and for the period specified in, the agreement.

F. Unless otherwise provided in the agreement, the following shall apply:

(1) The trustee or trustees may vote in person or by proxy.

(2) If there are two or more trustees, the manner of voting shall be determined by the will of the majority of the trustees, unless the voting trust agreement appointing the trustees directs that the shares shall be voted in some other way. When, in any case, the trustees are equally divided as to the manner of voting shares transferred jointly in their names, any court of competent jurisdiction may, upon petition filed by any of the trustees or by any member, appoint an additional person to act with the trustees in determining the manner in which the shares shall be voted on the particular questions as to which the trustees are divided.

(3) Vacancies among the trustees shall be filled by the remaining trustee or trustees.

(4) A trustee shall incur no responsibility as trustee except for his individual neglect or malfeasance.

G. The trustee or trustees shall keep at a place available to holders of voting trust certificates, correct and complete books and records of account relating to the trust, and a record containing the names and addresses of all persons who are holders of voting trust certificates, the number of shares represented by each certificate held by them, and the dates when they became the owners of the shares. The record may be in written form or in any other form capable of being converted into written form within a reasonable time.

H. A duplicate of every voting trust agreement shall be filed in the registered office of the limited liability company. The duplicate and the record of voting trust certificate holders shall be subject to the same right of inspection by a member or a holder of a voting trust certificate, in person or by agent or attorney, as are the records of the limited liability company under R.S. 12:1319.

Acts 2014, No. 261, §1.

CHAPTER 23 PROFESSIONAL SOCIAL WORK CORPORATIONS

§ 12:1400 Terms defined

As used in this Chapter:

(1) "Professional social work corporation" means a corporation organized pursuant to this Chapter for the practice of social work.

(2) All terms used both in this Chapter and in Chapter 1 of this Title shall have the same meaning when used in this Chapter, as when used in Chapter 1.

Acts 1997, No. 1169, §1.

§ 12:1401 Professional corporations

One or more natural persons, of full age and duly licensed to practice social work in this state, may form a corporation under Chapter 1 of this Title for the purpose of practicing social work. Such corporations shall be subject to all of the provisions of Chapter 1, as the same may from time to time be amended, except to the extent that such provisions are inconsistent with the provisions of this Chapter.

Acts 1997, No. 1169, §1.

§ 12:1402 The corporate name

The corporate name may consist of the full or last name or names of one or more voting shareholders, former voting shareholders, or members of a predecessor social work partnership, or it may consist of any other name approved by the secretary of state. The name shall end with one of the phrases, which may be in parentheses, "A Professional Social Work Corporation", "A Professional Corporation" or "A Social Work Corporation". The name may include "Limited" or "Ltd.". The name need not contain "Incorporated" or "Inc.".

Acts 1997, No. 1169, §1.

§ 12:1403 Corporate authority

A professional social work corporation shall engage in no business other than the practice of social work, but may hold property for investment or in connection with its social work practice.

Acts 1997, No. 1169, §1.

§ 12:1404 Shares

A. There shall be only one class of shares of a professional social work corporation, denominated common shares, which shall be either with or without par value.

B. Either a shareholder who is a natural person duly licensed to practice social work in this state, and who holds his shares in his own right, or another professional social work corporation, shall be entitled to vote such shares, and to participate in the corporation's earnings. Any other shareholder shall have no voting rights for any purpose whatever, shall not participate in the corporation's earnings, and shall have no access to any records or communications pertaining to social work services rendered by, or any other affairs of, the corporation, except as provided in R.S. 12:1412.

C. R.S. 12:33 shall not apply to professional social work corporations.

Acts 1997, No. 1169, §1.

§ 12:1405 Certificate of stock

A. Each certificate of stock shall contain the corporation's full name and the following statement: "Except when held in his own right by a natural person duly licensed to practice social work or another professional social work corporation in the state of Louisiana, the shares represented by this certificate are not entitled to be voted or to participate in the earnings of the corporation, and the holder is not entitled to participate in the management of, or in the rendition of social work services by, the corporation, or to have access to any records or communications pertaining to social work services rendered by, or any other affairs of, the corporation."

B. Each certificate of stock shall contain a reference to any and all agreements among the corporation's voting shareholders made pursuant to R.S. 12:1408.

C. There shall be no provision for compulsory offer of shares for purchase or by sale to the corporation, and, except as provided in R.S. 12:71, no restriction upon the transfer of shares, unless, in either event, such provision or restriction is stated or summarized on the certificate representing the shares.

Acts 1997, No. 1169, §1.

§ 12:1406 Liability of incorporators, subscribers, shareholders, directors, officers and agents

A. A subscriber to, or holder of, shares of a professional social work corporation shall be under no liability to the corporation with respect to such shares, other than the obligation of complying with the terms of the subscription therefor, and said obligation shall continue whether or not his rights or shares have been assigned or transferred.

B. A shareholder shall not be personally liable for any debt or liability of the corporation.

C. Nothing in this Chapter shall be construed as in derogation of any rights which any person may by law have against an incorporator, subscriber, shareholder, director, officer or agent of the corporation because of any fraud practiced upon him, or because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the corporation may have against any of such persons because of any fraud practiced upon it by him.

Acts 1997, No. 1169, §1.

§ 12:1407 Action of shareholders

Any action by, or requiring the assent of, the shareholders of a professional social work corporation may be taken on the affirmative vote of a majority, or such greater proportion as the articles of incorporation may specify, in interest of the voting shareholders present or represented at a meeting duly called and held on due notice at which a quorum is present or represented.

Acts 1997, No. 1169, §1.

§ 12:1408 Shareholders' agreements

A. Any lawful provision regulating the affairs of a professional social work corporation or the rights and liabilities of its shareholders, which is not required to be set forth in the articles of incorporation, may be set forth in an agreement among all of the voting shareholders, and such agreement shall be binding on the corporation and all persons who are at the time such agreement is made, or who thereafter become, shareholders of the corporation. Such agreement may be terminated at any time by a majority in interest of the voting shareholders.

B. A duplicate copy of such agreement shall be filed in the corporation's registered office which shall be open daily during business hours to the inspection of any shareholder or his attorney or legal representative.

Acts 1997, No. 1169, §1.

§ 12:1409 Directors

Only voting shareholders, or voting shareholders of another professional social work corporation, may be directors. If there are fewer than three voting shareholders, there need be only as many directors as voting shareholders. The office of a director shall become vacant if he ceases to be a voting shareholder.

Acts 1997, No. 1169, §1.

§ 12:1410 Officers and agents

A. Only voting shareholders, or voting shareholders of another professional social work corporation, may be officers. If there is only one voting shareholder, all officers may be combined in his person. The office or offices held by an officer shall become vacant if he ceases to be a voting shareholder.

B. Only natural persons duly licensed to practice social work in this state may render social work services on behalf of a professional social work corporation.

Acts 1997, No. 1169, §1.

§ 12:1411 Merger and consolidation

Professional social work corporations may be merged into or consolidated only with other professional social work corporations.

Acts 1997, No. 1169, §1.

§ 12:1412 Dissolution

A. The fact that it has no voting shareholders shall be an additional ground for involuntary dissolution of a professional social work corporation.

B. In the event of the death of a shareholder of a professional social work corporation, said shareholder's succession representative, or those placed in possession of the shares of said shareholder if there be no administration of the succession, as the case may be, shall be entitled to vote the shares of said shareholder and to be elected a director and officer of the corporation for the purpose of effectuating a voluntary dissolution and liquidation of the corporation, in or out of court, pursuant to the Louisiana Business Corporation Law.

Acts 1997, No. 1169, §1.

§ 12:1413 Regulation by the Louisiana State Board of Social Work Examiners

Professional social work corporations shall be subject to the discipline of the Louisiana State Board of Social Work Examiners and to its authority to adopt rules and regulations governing the practice of social work.

Acts 1997, No. 1169, §1; Acts 2012, No. 811, §2, eff. July 1, 2012.

§ 12:1414 Short title

This Chapter shall be known and may be referred to as the "Professional Social Work Corporations Act".

Acts 1997, No. 1169, §1.

CHAPTER 24 PRESCRIPTIVE PERIODS APPLICABLE TO BUSINESS ORGANIZATIONS

§ 12:1501 Applicability

The provisions of this Chapter shall be applicable to all business organizations defined in R.S. 12:1502(B).

Acts 2001, No. 1126, §1, eff. June 28, 2001; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1502 Actions against persons who control business organizations

A. The provisions of this Section shall apply to all business organizations formed under the laws of this state and shall be applicable to actions against any officer, director, shareholder, member, manager, general partner, limited partner, managing partner, or other person similarly situated. The provisions of this Section shall not apply to actions governed by R.S. 12:1-622, 1-833, 1-1407, or 1328(C).

B. The term "business organization" includes any entity formed under the laws of this state engaged in any trade, occupation, profession, or other commercial activity including but not limited to professions licensed by a state or other governmental agency. This Section shall apply without limitation to corporations, incorporated or unincorporated associations, partnerships, limited liability partnerships, partnerships in commendam, limited liability companies, or cooperative associations or other entities formed under the laws of this state.

C. No action for damages against any person described in Subsection A of this Section for an unlawful distribution, return of an unlawful distribution, or for breach of fiduciary duty, including without limitation an action for gross negligence, but excluding any action covered by the provisions of Subsection D of this Section, shall be brought unless it is filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered, but in no event shall an action covered by the provisions of this Subsection be brought more than three years from the date of the alleged act, omission, or neglect.

D. No action for damages against any person listed in Subsection A of this Section for intentional tortious misconduct, or for an intentional breach of a duty of loyalty, or for an intentional unlawful distribution, or for acts or omissions in bad faith, or involving fraud, or a knowing and intentional violation of law, shall be brought unless it is filed in a court of competent jurisdiction and proper venue within two years from the date of the alleged act or omission, or within two years from the date the alleged act or omission is discovered or should have been discovered, but in no event shall an action covered by the provisions of this Subsection be brought more than three years from the date of the alleged act or omission.

E. The time limitations provided in this Section shall not be subject to suspension on any grounds or interruption except by timely suit filed in a court of competent jurisdiction and proper venue.

F. This Section shall be applied both retrospectively and prospectively as to claims to which a vested right has not attached; however, as to any alleged act, omission, or neglect for which the time period for bringing an action would otherwise be shortened by Subsection C of this Section, such action shall be filed in a court of competent jurisdiction and proper venue on or before the earlier of the end of the time period for bringing such action prior to June 28, 2001, or September 1, 2002. Any claim or alleged act or omission for which the time period for bringing an action would otherwise be shortened by Subsection D of this Section shall be filed in a court of competent jurisdiction and proper venue on or before the earlier of the end of the time period for bringing such action prior to June 28, 2001, or September 1, 2002, in any case without regard to the date of discovery of the alleged act or omission.

Acts 2001, No. 1126, §1, eff. June 28, 2001; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

CHAPTER 25 CONVERSIONS OF BUSINESS ORGANIZATIONS

§ 12:1601 Conversion of domestic business entities

One form of domestic business entity may convert to another form of domestic business entity as provided in the Business Corporation Act. This authorization of domestic entity conversions does not limit the other forms of transaction authorized by the Business Corporation Act.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1602 Definitions

Terms that are defined in the Business Corporation Act have the same meaning in this Chapter as in that Act. As used in this Chapter:

(1) "Allowed update rule" means a rule of a licensing body allowed by R.S.12:1604(B) or (C).

(2) "Business entity" means any of the following business organizations: business corporation, limited liability company, partnership, partnership in commendam, and registered limited liability partnership.

(3) "Converting entity" means a domestic business corporation or domestic unincorporated entity as it exists before the effective date of an entity conversion under the Business Corporation Act.

(4) "Domestic business entity" means a business entity that is incorporated, organized, or formed under the laws of this state.

(5) "License" means any license, permit, or certificate issued by any board, commission, or agency of the state or any of its political subdivisions.

(6) "Licensing body" means the board, commission, or agency of the state or any of its political subdivisions that issues a license.

(7) "Publicly traded entity" means a business entity that is the issuer of shares, ownership interests, or other securities that are listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national securities association.

(8) "Surviving entity" means a domestic business corporation or domestic unincorporated entity as it exists immediately after the consummation of an entity conversion under the Business Corporation Act.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1603 Tax filing requirements

Short period tax returns shall be filed for the converting entity as required by Title 47 of the Revised Statutes if the surviving entity's tax classification is different from the converting entity's tax classification.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1604 Continuation and updating of professional or other license

A. A converting entity that holds a license immediately before a nonprofit conversion or entity conversion continues to hold the license as a surviving entity unless the surviving entity fails to comply with an allowed update rule, or is not a form of business entity that may hold that kind of license. The continued holding of a license under this Subsection does not affect the expiration date or any of the terms or conditions of the license. The license continues to be held, and may be suspended, restricted, or revoked, as if the conversion had not occurred.

B. The rules of a licensing body may require a surviving entity to update its licensing information by delivering a copy of any of the following documents to the licensing body within ninety days after the effective date of the conversion, or by a later date set by those rules:

(1) The articles of entity conversion, acknowledged as filed by the secretary of state as provided in the Business Corporation Act.

(2) The license being updated.

(3) A bond or certificate of insurance in the name of the surviving entity for any coverage required for the issuance of the kind of license being updated.

(4) An amendment or amended version of any contract or other agreement required for the issuance of the kind of license being updated, naming the surviving entity as a party to the required contract or agreement.

C. The rules of a licensing body may require the surviving entity to pay a fee of up to twenty-five dollars to update the license.

D. An updated license shall be issued by the licensing body within thirty days of its receipt of the documents and fee required by its allowed update rules, but if a surviving entity has complied with the allowed update rules of the licensing body, a failure by the licensing body to issue an updated license does not affect the continued holding of the license as provided in Subsection A of this Section.

E. A license held by a converting entity terminates on the effective date of the conversion if the surviving entity in the conversion is a form of business entity that may not hold the license.

F. If a surviving entity fails to comply with an allowed update rule concerning a license, the license terminates at the end of the ninetieth day after the effective date of the conversion or, if a later date for compliance is set by the allowed update rule, at the end of the later date.

G. Except for publicly traded entities, the provisions of this Section shall not apply to a surviving entity seeking an updated license that has any change in ownership interests or has changed ownership by including an individual or entity that did not have an ownership interest in the surviving entity immediately prior to the conversion.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1605 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:1606 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2006, No. 153, §1, eff. June 2, 2006; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

§ 12:1607 Repealed by Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

Acts 2007, No. 63, §1; Acts 2012, No. 434, §1; Acts 2014, No. 328, §5, eff. Jan. 1, 2015.

CHAPTER 26 PROVISIONS APPLICABLE TO MORE THAN ONE KIND OF BUSINESS ORGANIZATION

§ 12:1701 Filing methods

A.(1) The secretary of state may accept any filing authorized by this Title by electronic, online, or facsimile transmission. All online filings authorized by this Title shall include an electronic signature.

(2) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.

(3) "Online" means through the secretary of state's commercial online computer system.

B. Filing by facsimile. The process of transmitting printed documents by electronic method to the secretary of state, is deemed to be properly signed when the document received by a facsimile machine or document image attachment in e-mail in the commercial division, office of the secretary of state, purports to be a copy of the original document, and contains the signatures required by this Section.

C.(1) Online filing. The secretary of state is authorized to implement and establish procedures and systems for secure online form filing for the filing of any instrument required under this Title.

(2) Any requirement that an instrument filed under this Title shall be subscribed or acknowledged before a notary public may be dispensed with if the instrument is filed and signed electronically as provided in Paragraph (A)(2) of this Section by a person authorized to sign the instrument.

D.(1) Notwithstanding the provisions of this Section, any filing authorized by this Title that the secretary of state has the capability to accept online shall be filed only online.

(2) Notwithstanding any contrary provision of this Title, until the secretary of state has the capability to accept filings online, any filing with the secretary of state pursuant to this Title which has the effect of changing the name of a designated or registered agent or changing the name of a principal officer of the corporation shall be accompanied by a resolution signed by each member of the corporation's board of directors in order for the change to be deemed validly filed.

(3) Notwithstanding the provisions of this Section, any filing filed by an individual from a parish with a population of one hundred thousand or less according to the latest federal decennial census may be filed by facsimile transmission or mail.

Acts 2012, No. 791, §1; Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2016, No. 554, §2, eff. Jan. 1, 2018.

§ 12:1702 Confidentiality of information

A. Any electronic mail address, internet protocol address number, or short message service number submitted to or captured by the secretary of state pursuant to the provisions of this Title shall be confidential and shall not be disclosed by the secretary of state or any employee or official of the Department of State.

B. Computer system or program information, including software, related menus, flow charts, network diagrams, user names, non-public uniform resource locators, database object names, computer names, device identifiers and materials, prompts, dialogues, operating and instruction manuals, programming materials or instructions, any other computer operating or support materials relating to the secretary of state's computer systems and equipment, and any information contained within the secretary of state's computer systems which if disclosed may impair the security of the secretary of state's information technology infrastructure shall be confidential and shall not be disclosed by the secretary of state or any employee or official of the Department of State.

C. The provisions of Subsection A of this Section shall not prohibit the disclosure of electronic mail addresses, internet protocol address numbers, or short message service numbers by the secretary of state or any employee or official of the Department of State to an agency, official, or employee of state government or of a political subdivision of the state in the course of the interaction of the agency, official, or employee with the Department of State. An agency, official, or employee that receives electronic mail addresses, internet protocol address numbers, or short message service numbers pursuant to this Subsection shall use the electronic mail addresses, internet protocol address numbers, or short message service numbers only for the governmental purposes for which the information was submitted or captured, shall not disclose the electronic mail addresses, internet protocol address numbers, or short message service numbers, and shall maintain the confidentiality of the electronic mail addresses, internet protocol address numbers, and short message service numbers.

Acts 2014, No. 162, §1; Acts 2014, No. 328, §1, eff. Jan. 1, 2015; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1703 Electronic notification of status changes

The secretary of state shall notify any person who subscribes to the secretary of state's electronic mail or short message notification service and who is an officer of a corporation, member or manager of a limited liability company, or partner in a partnership, or any agent thereof, when a filing has occurred that purports to remove that person's name from documents and records of that entity held by the secretary of state.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1704 Judicial review; removal of officers, members, managers, and partners

A. Should any officer, member, manager, or partner of any corporation, limited liability company, or partnership have his name removed from any document or record filed with the secretary of state in violation of state law or in contravention of any document of creation, organization, or management of such business entity, the aggrieved party may file suit against the party who caused the aggrieved party's name to be removed from such document or record.

B. Such suit shall be filed in the district court of the parish where the business entity is domiciled.

C. The secretary of state shall be made a party to the suit.

D. The court shall conduct a hearing within ten days after service of process of the suit on all parties.

E. Should the court find that the name of the aggrieved party was improperly or fraudulently removed from the documents and records of the secretary of state, the court shall order the secretary of state to restore the name of the aggrieved party in all appropriate documents and records of the secretary of state.

F. Nothing in this Section shall be construed to supersede or conflict with the provisions of R.S. 12:208.

Acts 2014, No. 328, §1, eff. Jan. 1, 2015.

§ 12:1705 Business organizations; juridical personalities

A. The separate juridical personality of a business organization shall not be disregarded as between one business organization and another except on grounds that would justify disregarding the separate personality of a business organization as between the business organization and a natural person.

B. Notwithstanding Subsection A of this Section, the separate juridical personality of a business organization may not be disregarded merely because one or more of the following circumstances exist:

(1) They control one another or are under the common control of the same person or business organization.

(2) They have common directors, officers, shareholders, members, managers, partners, or employees.

(3) They have common offices.

(4) They are subject to unified administrative control.

(5) They utilize a centralized accounting system.

(6) One business organization finances, incorporates, or organizes another.

(7) One business organization makes properly documented payments on behalf of another or makes properly documented use of the property of another.

(8) The employees of one business organization provide properly documented services for another.

(9) One business organization receives no business other than that given to it by another.

C. For purposes of this Section, the term "business organization" means a business corporation, nonprofit corporation, limited liability company, partnership, trust, or other form of business organization that is treated as a juridical person or legal entity pursuant to the laws of the state or country under which it is incorporated or organized.

D.(1) This Section shall not affect any legal or regulatory action taken by the commissioner of insurance pursuant to the Louisiana Insurance Code, Chapter 9 of Title 22 of the Louisiana Revised Statutes of 1950.

(2) This Section shall not affect any law or administrative rule that permits or requires a group of business organizations to be consolidated, unified, or disregarded for the purposes provided in the applicable law or administrative rule.

Acts 2024, No. 277, §1.

CHAPTER 27 BENEFIT CORPORATIONS

PART I PRELIMINARY PROVISIONS

§ 12:1801 Short title

This Chapter shall be known and may be cited as the "Benefit Corporations Law".

Acts 2012, No. 442, §1.

§ 12:1802 Application and effect of Chapter

A. This Chapter shall apply to all benefit corporations.

B. The existence of a provision of this Chapter shall not of itself create an implication that a contrary or different rule of law is applicable to a business corporation that is not a benefit corporation. This Chapter shall not affect a statute or rule of law that is applicable to a business corporation that is not a benefit corporation.

C. Except as otherwise provided in this Chapter, the Business Corporation Law, R.S. 12:1 et seq., shall be generally applicable to all benefit corporations. The specific provisions of this Chapter shall control over the general provisions of the Business Corporation Law. A benefit corporation may be simultaneously subject to this Chapter and one or more other Chapters within this Title.

D. A provision of the articles or bylaws of a benefit corporation shall not relax, be inconsistent with, or supersede a provision of this Chapter.

Acts 2012, No. 442, §1.

§ 12:1803 Definitions

A. As used in this Chapter, the following terms and phrases shall have the meaning ascribed to them in this Section, unless the context clearly indicates otherwise:

(1) "Affiliate" means, in relation to a person, a subsidiary of the person or an entity which owns beneficially or of record a majority of the outstanding equity interests of the person.

(2) "Benefit corporation" means a business corporation which has elected to become subject to this Chapter and whose status as a benefit corporation has not been terminated.

(3) "Benefit director" means the director designated as the benefit director of a benefit corporation pursuant to R.S. 12:1822.

(4) "Benefit enforcement proceeding" means any claim or action for one or both of the following:

(a) Failure of a benefit corporation to pursue or create general public benefit or a specific public benefit set forth in its articles.

(b) Violation of any obligation, duty, or standard of conduct pursuant to this Chapter.

(5) "Benefit officer" means the individual designated as the benefit officer of a benefit corporation pursuant to R.S. 12:1824.

(6) "General public benefit" means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation.

(7) "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation.

(8) "Material relationship" means the relationship between a person and a benefit corporation or any of its subsidiaries if any of the following apply:

(a) The person is, or has been within the last three years, an employee, other than a benefit officer, of the benefit corporation, or an affiliate of the benefit corporation.

(b) An immediate family member of the person is, or has been within the last three years, an employee, officer, or director of the benefit corporation, or an affiliate of the benefit corporation.

(c) There is beneficial or record ownership of five percent or more of the outstanding shares of the benefit corporation by either the person or an entity of which the person is a director, an officer, or a manager, or in which the person owns beneficially or of record five percent or more of the outstanding equity interests.

(9) "Minimum vote" means:

(a) In the case of a business corporation, the approval by holders of two-thirds of the shares present and voting of each class or series and any other approval or vote required under the Business Corporation Law or the articles.

(b) In the case of a domestic entity other than a business corporation, the approval by holders of two-thirds of each class or series of equity interests entitled to vote on any issue and any other approval or vote required under the law governing the internal affairs of the entity or its constituent documents.

(10) "Specific public benefit" means any of the following:

(a) Serving low-income or underserved individuals or communities.

(b) Promoting economic opportunity for low-income or underserved individuals or communities.

(c) Preserving the environment, promoting positive impacts on the environment, or reducing negative impacts on the environment.

(d) Improving human health.

(e) Promoting the arts, sciences, or advancement of knowledge.

(f) Increasing the flow of capital to entities with a purpose listed in this Paragraph.

(g) Historic preservation.

(h) Urban beautification.

(11) "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record fifty percent or more of the outstanding equity interests.

(12) "Third-party standard" means a recognized standard for defining, reporting, and assessing the performance of corporations in producing general public benefit and specific public benefits which is all of the following:

(a) Comprehensive in that it assesses the effect of the corporation and its operations in producing general public benefit and any specific public benefit specified in the articles.

(b) Transparent because the following information about the standard is publicly available:

(i) The criteria considered when measuring the overall social and environmental performance of a business.

(ii) The relative weightings, if any, of those criteria.

(iii) The identity of the directors, officers, material owners, and the governing body of the organization that developed and controls revisions to the standard.

(iv) The process by which revisions to the standard and changes to the membership of the governing body are made.

(v) An accounting of the sources of financial support for the organization, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.

B. Terms not otherwise defined in Subsection A of this Section shall have the meanings given to them in the Business Corporation Law.

C. For purposes of the definitions in this Section, a percentage of ownership in an entity shall be calculated as if all outstanding rights to acquire equity interests in the association have been exercised.

Acts 2012, No. 442, §1.

§ 12:1804 Election of status; corporate name

A. A business corporation incorporated in accordance with R.S. 12:1-201 et seq., may elect to be a benefit corporation under this Chapter by stating in its articles that it is a benefit corporation subject to this Chapter.

B. Any amendment to the articles of an existing business corporation to add a statement that it is a benefit corporation subject to this Chapter shall be adopted by at least the minimum vote. The notice of the meeting of shareholders to approve the amendment shall state the specific public benefits, if any, to be included in the purposes of the benefit corporation and shall explain the anticipated impact on shareholders of becoming a benefit corporation.

C. If an entity that is not a benefit corporation is a party to a merger or consolidation, and the surviving or new entity in the merger or consolidation is to be a benefit corporation, then the plan of merger or consolidation shall be adopted by at least the minimum vote.

D. The corporate name of a benefit corporation shall end with the following phrase, which may be in parentheses, "A Benefit Corporation".

Acts 2012, No. 442, §1; Acts 2019, No. 19, §2, eff. May 28, 2019.

§ 12:1805 Termination of status

A. A benefit corporation may terminate its status as such and cease to be subject to this Chapter by amending its articles to delete the provision required by R.S. 12:1804 to be stated in the articles of a benefit corporation. In order to be effective, the amendment shall be adopted by at least the minimum vote.

B. If a merger or consolidation of a benefit corporation would have the effect of terminating the status of a business corporation as a benefit corporation, in order to be effective, the plan of merger or consolidation shall be adopted by at least the minimum vote of the benefit corporation. Any sale, lease, exchange, or other disposition of all or substantially all of the assets of a benefit corporation, unless the transaction is in the usual and regular course of business, shall not be effective unless the transaction is approved by at least the minimum vote.

Acts 2012, No. 442, §1.

PART II CORPORATE PURPOSES

§ 12:1811 Corporate purposes

A. A benefit corporation shall have a purpose of creating a general public benefit. This purpose is in addition to its purpose as described in R.S. 12:1-201 et seq.

B. The articles of a benefit corporation may identify one or more specific public benefits that it is the purpose of the benefit corporation to create in addition to its purposes under R.S. 12:1-201 et seq. and Subsection A of this Section. The identification of a specific public benefit under this Subsection shall not limit the obligation of a benefit corporation under Subsection A of this Section.

C. The creation of a general public benefit and specific public benefit under Subsections A and B of this Section is in the best interests of the benefit corporation.

D. A benefit corporation may amend its articles to add, amend, or delete the identification of a specific public benefit that it is the purpose of the benefit corporation to create. In order to be effective, the amendment shall be adopted by at least the minimum vote.

E. A professional corporation that is a benefit corporation shall not be deemed in violation of R.S. 12:804, 904, 984, 1054, 1074, 1089, 1113, 1133, 1154, 1193, or 1403 by having the purpose to create general public benefit or a specific public benefit.

Acts 2012, No. 442, §1; Acts 2018, No. 560, §2, eff. May 28, 2018.

PART III ACCOUNTABILITY

§ 12:1821 Standard of conduct for directors

A. In discharging the duties of their respective positions and in considering the best interests of the benefit corporation, the board of directors, committees of the board, and individual directors of a benefit corporation:

(1) Shall consider the effects of any action or inaction upon all of the following:

(a) The shareholders of the benefit corporation.

(b) The employees and work force of the benefit corporation, its subsidiaries, and its suppliers.

(c) The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation.

(d) Community and societal factors, including those of each community in which offices or facilities of the benefit corporation, its subsidiaries, or its suppliers are located.

(e) The local and global environment.

(f) The short-term and long-term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long-term plans and the possibility that these interests may be best served by the continued independence of the benefit corporation.

(g) The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose.

(2) May consider other pertinent factors or the interests of any other group that they deem appropriate.

(3) Shall not be required to give priority to the interests of a particular person or group referred to in Paragraph (1) or (2) of this Subsection over the interests of any other person or group unless the benefit corporation has stated in its articles the intention to give priority to certain interests related to the accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in the articles.

B. The consideration of interests and factors in the manner required by Subsection A of this Section shall not constitute a violation of R.S. 12:91.

C. A director shall not be personally liable for monetary damages for any of the following:

(1) Any act or omission covered by a provision in the articles of incorporation that eliminates or limits the liability of the director as authorized in R.S. 12:24(C)(4).

(2) Any act or omission as a director if the director performed the duties of office pursuant to R.S. 12:91.

(3) Failure of the benefit corporation to pursue or create a general public benefit or specific public benefit.

D. A director shall not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

Acts 2012, No. 442, §1.

§ 12:1822 Benefit director

A. The board of directors of a benefit corporation shall include a director who shall be designated the benefit director and who shall have, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided for in this Part.

B. The benefit director shall be elected, and may be removed, pursuant to R.S. 12:81, and shall be an individual who is independent. The benefit director may serve as the benefit officer at the same time as serving as the benefit director. The articles or bylaws of a benefit corporation may prescribe additional qualifications or duties of the benefit director not inconsistent with this Subsection.

C. The benefit director shall be responsible for the preparation of an annual benefit report submitted to shareholders as required by R.S. 12:1831. The benefit director may retain an independent third party to audit the annual benefit report or conduct any other assessment of the corporation's pursuit of its general public benefit purpose and any specific public benefit purpose. The annual benefit report shall include a statement of the benefit director, in the opinion of the benefit director, on all of the following:

(1) Whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the report.

(2) Whether the directors and officers complied with R.S. 12:1821(A) and 1823(A), respectively.

(3) If, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to comply with R.S. 12:1821(A) and 1823(A), a description of the ways in which the benefit corporation or its directors or officers failed to comply.

D. The act or inaction of an individual in the capacity of a benefit director shall constitute for all purposes an act or inaction of that individual in the capacity of a director of the benefit corporation.

E. Regardless of whether the bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by R.S. 12:24(C)(4), a benefit director shall not be personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing, willful misconduct, or a knowing violation of law.

F. The benefit director of a professional corporation shall not be required to be independent.

Acts 2012, No. 442, §1.

§ 12:1823 Standard of conduct for officers

A. Each officer of a benefit corporation shall consider the interests and factors described in R.S. 12:1821 in the manner provided in that Section if all of the following applies:

(1) The officer has discretion to act with respect to the matter.

(2) It reasonably appears to the officer that the matter may have a material effect on the creation by the benefit corporation of a general public benefit or a specific public benefit identified in the articles of the benefit corporation.

B. The consideration of interests and factors pursuant to Subsection A of this Section shall not constitute a violation of R.S. 12:91.

C. An officer shall not be personally liable for monetary damages for either of the following:

(1) An action or omission as an officer if the officer performed the duties of the position pursuant to R.S. 12:91.

(2) Failure of the benefit corporation to pursue or create general public benefit or specific public benefit.

D. An officer shall not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

Acts 2012, No. 442, §1.

§ 12:1824 Benefit officer

A. A benefit corporation may have an officer designated as the benefit officer.

B. A benefit officer shall have all of the following:

(1) The powers and duties relating to the purpose of the corporation to create a general public benefit or specific public benefit provided by the bylaws or, absent controlling provisions in the bylaws, by resolutions or orders of the board of directors.

(2) The duty to prepare the benefit report required by R.S. 12:1831.

C. An officer shall not be personally liable for monetary damages for any of the following:

(1) Any act or omission covered by a provision in the articles of incorporation that eliminates or limits the liability of the officer as authorized in R.S. 12:24(C)(4).

(2) Any act or omission as an officer if the officer performed the duties of office pursuant to R.S. 12:91.

(3) Failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

Acts 2012, No. 442, §1.

§ 12:1825 Right of action

A. The duties of directors and officers under this Chapter and the general public benefit purpose and any specific public benefit purpose of a benefit corporation may be enforced only in accordance with this Section in a benefit enforcement proceeding, and no person shall bring an action or assert a claim against a benefit corporation.

B. A benefit enforcement proceeding shall be commenced or maintained only directly by the benefit corporation or derivatively by one of the following parties:

(1) A shareholder.

(2) A benefit director.

(3) Other persons as specified in the articles or bylaws of the benefit corporation.

Acts 2012, No. 442, §1.

PART IV TRANSPARENCY

§ 12:1831 Annual benefit report

A. A benefit corporation shall prepare an annual benefit report including all of the following:

(1) A narrative description of all of the following:

(a) The ways in which the benefit corporation pursued a general public benefit during the year and the extent to which the general public benefit was created.

(b) The ways in which the benefit corporation pursued a specific public benefit that the articles state it is the purpose of the benefit corporation to create and the extent to which that specific public benefit was created.

(c) Any circumstances that have hindered the creation by the benefit corporation of a general public benefit or specific public benefit.

(d) The process and rationale for selecting or changing the third-party standard used to prepare the benefit report.

(2) An assessment of the performance of the benefit corporation in pursuing the creation of general public benefit against a third-party standard which is either applied consistently with any application of that standard in prior benefit reports or accompanied by an explanation of the reasons for any inconsistent application. The assessment shall not be required to be performed, audited, or certified by a third-party standards provider.

(3) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed.

(4) The compensation paid by the benefit corporation during the year to each director in the capacity of a director.

(5) The name of each person that owns five percent or more of the outstanding shares of the benefit corporation.

(6) The statement of the benefit director pursuant to R.S. 12:1822(C).

(7) A statement of any connection between the organization that established the third-party standard, or its directors, officers, or any holder of five percent or more of the governance interests in the organization, and the benefit corporation or its directors, officers, or any holder of five percent or more of the outstanding shares of the benefit corporation, including any financial or governance relationship which might materially affect the credibility of the use of the third-party standard.

B. A benefit corporation shall annually send a benefit report to each shareholder either:

(1) Within one hundred twenty days following the end of the fiscal year of the benefit corporation.

(2) At the same time that the benefit corporation delivers any other annual report to its shareholders.

C. A benefit corporation shall post all of its benefit reports on the public portion of its Internet website, if any. The compensation paid to directors and financial or proprietary information included in the benefit reports may be omitted from the benefit reports as posted.

D. If a benefit corporation does not have an Internet website, the benefit corporation shall provide a copy of its most recent benefit report, without charge, to any person that requests a copy, but the compensation paid to directors and financial or proprietary information included in the benefit report may be omitted from the copy of the benefit report provided.

Acts 2012, No. 442, §1.

§ 12:1832 Stock certificates

All certificates representing shares in a benefit corporation shall contain, in addition to any other statements required by the Business Corporation Law, the following conspicuous language on the face of the certificate: "This corporation is a benefit corporation subject to the Benefit Corporations Law, R.S. 12:1801 et seq."

Acts 2012, No. 442, §1.

CHAPTER 28 LOUISIANA CHURCHES AND NONPROFIT RELIGIOUS ORGANIZATIONS SELF-INSURED FUND

§ 12:1851 Legislative finding; public purpose

A. Louisiana is currently experiencing a crisis in the availability and affordability of insurance for churches and nonprofit religious organizations. Louisiana property owners and their insurers sustained catastrophic losses in 2020 and 2021 from hurricanes Laura, Delta, Zeta, and Ida. As the result of their losses and their assessment of the risk of loss from future storms, many insurers, including the largest insurer of churches, have substantially reduced their participation in the voluntary market for property insurance. With fewer insurers in the voluntary market, competitive pressure on premium rates is reduced. Current underwriting practices have resulted in a substantial increase in the number of Louisiana churches that are forced to obtain their property insurance coverage or their wind and hail coverage from Louisiana Citizens Property Insurance Corporation, if they can indeed find coverage.

B. Increased premiums and assessments make property insurance coverage unaffordable for some churches and nonprofit religious organizations. Due to the fact that property insurance is often unavailable or unaffordable, many churches and nonprofit religious organizations are being forced to sell or abandon their churches and religious buildings or are prevented from restoring storm-damaged properties.

C. Throughout Louisiana, churches and other religious organizations are the bedrock that holds many communities together. In addition to providing spiritual and emotional support for their membership in times of crisis, churches and other nonprofit religious organizations provide services to the needy such as soup kitchens, food pantries, orphanages, adoption services, and foster care. Churches and other nonprofit religious organizations provide mentorship for the youth, assistance to the elderly, and disaster relief services when hurricanes and tornadoes strike. Churches and other nonprofit religious organizations also provide much-needed hope, help, and services for those individuals in addiction recovery. Church-supported nonviolent offender programs at places such as the Louisiana State Penitentiary at Angola have greatly reduced violence in these facilities and greatly reduced recidivism rates in the state. This voluminous list of services, most of which are provided free of charge to the community, results in the savings of untold millions of dollars each year to state and local taxpayers.

D. The availability of property insurance for churches and other nonprofit religious organizations at a reasonable cost is essential to the well-being of the state. Churches and other religious organizations cannot invest in, and lenders will not finance, the construction and ownership of churches and religious buildings without adequate property insurance protection. The state has a vital interest in fostering the availability of property insurance at reasonable costs for churches and other religious organizations.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1852 Creation of fund

The Louisiana Churches and Nonprofit Religious Organizations Self-Insured Fund is hereby created for the purpose of allowing churches, religious organizations, and religious denominations to band together and self-insure, thereby increasing the availability of property insurance for local churches and religious buildings, increasing competitive pressure on insurance rates, and reducing the volume of business written by the Louisiana Citizens Property Insurance Corporation by offering a less expensive alternative to its policyholders and reducing the exposure and potential assessments to policyholders by the Louisiana Citizens Property Insurance Corporation.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1853 Authorization; requirements; regulation

A. Two or more churches or nonprofit religious organizations or one or more religious denominations may agree to pool their liabilities for the purposes of providing property coverage for their buildings and properties, so long as they have a positive net worth, are financially solvent, and are capable of assuming the obligations set forth in this Chapter.

B. The department shall promulgate necessary rules in accordance with the Administrative Procedure Act to implement and regulate the activities authorized in this Chapter.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1854 Definitions

Wherever used in this Chapter, unless a different meaning clearly appears in the context, the following terms, whether used in the singular or plural, shall have the following meanings:

(1) "Church" means a nonprofit religious organization made up of a group of religious believers.

(2) "Department" means the Department of Insurance.

(3) "Fund" means the self-insurance fund established pursuant to this Chapter to provide property insurance for churches and nonprofit religious organizations and shall be known as the Louisiana Churches and Nonprofit Religious Organizations Self-Insured Fund.

(4) "Hazardous financial condition" means a condition in which, based upon its present or reasonably anticipated financial condition, the fund, although not yet financially impaired or insolvent, is unlikely to be able to:

(a) Meet obligations with respect to known claims and reasonably anticipated claims.

(b) Pay other obligations in the normal course of business.

(5) "Insolvency" means the condition existing when the fund's liabilities are greater than the fund's assets as determined in accordance with generally accepted accounting principles as delineated in the fund's financial statement audited by an independent certified public accountant and calculated before a member's distribution is payable or before a dividend is declared.

(6) "Nonprofit religious organization" means an active corporation or other entity organized under the United States Internal Revenue Code as a nonprofit organization defined as any one of the following:

(a) A church or religious house of worship.

(b) An organization formed for religious purposes.

(c) A nonprofit institution affiliated with a faith-based organization.

(d) An integrated auxiliary organization of a church.

(7) "Property coverage" means coverage for the damage or loss of a structure or building and may include any or all of the following:

(a) Premises liability coverage.

(b) Contents coverage for furniture or equipment.

(c) Wind and hail coverage.

(d) Loss of use coverage.

(e) Medical payments coverage.

(8) "Religious denomination" means a group of individual churches or houses of worship who are called or identified using the same terms and a particular set of beliefs or spiritual or religious values.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1855 Agreement to pool liabilities; initial financial requirements

A.(1) Any arrangement authorized pursuant to this Chapter shall not be deemed to be an insurer or insurance and shall not be subject to the Louisiana Insurance Code unless specifically referenced in this Chapter. The members of the arrangement shall not be insurers or be subject to the Louisiana Insurance Code.

(2) An agreement to pool liabilities pursuant to this Chapter shall be set forth in an indemnity agreement signed by the members and fund representatives acknowledging and agreeing to the assumption of the liabilities as set forth in this Chapter.

(3) The arrangement shall not be considered a member insurer of the Louisiana Insurance Guaranty Association, nor shall the Louisiana Insurance Guaranty Association be liable for any claim, or increments of any claim, made against the arrangement.

(4) The arrangement may include establishment of a trust fund and shall be for the purpose of serving as the group self-insurance fund for participating Louisiana churches and nonprofit religious organizations, and such arrangement shall be governed by a board of trustees.

(5)(a) The arrangement shall be domiciled in this state. All books, records, documents, accounts, and vouchers of the arrangement shall be kept in a manner that its financial condition, affairs, and operations can be ascertained so that financial statements filed with the department are readily verified and determined whether to be in compliance. Any or all books, records, documents, original indemnity agreements, accounts, and vouchers may be photographed or reproduced on film. Any photographs, microphotographs, optical imaging, or film reproductions of any original books, records, documents, original indemnity agreements, accounts, and vouchers shall for all purposes, including but not limited to admission into evidence in any court or adjudicatory proceeding, be considered the same as the originals, and a transcript, exemplification, or certified copy of any photograph, microphotograph, optical imaging, or film reproduction shall be deemed to be a transcript, exemplification, or certified original. Any original considered reproduced may thereafter be disposed of or destroyed, as provided for in Subparagraph (b) of this Paragraph, provided provisions are made for preserving and examining the reproduction.

(b) Except as otherwise provided in Subparagraph (a) of this Paragraph, original books, records, documents, accounts, and vouchers, or reproductions thereof, shall be preserved and kept in this state for the purpose of examination and until the authority to destroy or otherwise dispose of the records is secured from the department. All original records or certified reproductions shall be maintained for the period commencing on the first day following the last period examined by the department through the subsequent examination period, or five years, whichever is longer, except that any original or certified reproduction in which the member agrees to or acknowledges the members' solidary liability for liabilities of the fund shall be permanently maintained.

(6)(a) In order to maintain financial stability in the fund, the department shall, at times that necessitate, require two or more members of the fund to maintain a minimum combined net worth of one million dollars and a current assets to current liabilities ratio of at least one-to-one.

(b) After the fund has been operating for three years and has a total surplus of three million dollars, the department may waive the requirements of Subparagraph (a) of this Paragraph.

(7)(a) To maintain the financial stability of the fund, the fund shall assess each member an amount which equals to a certain percentage of the premium dollars owed by the member, and the percentage paid shall be known as a reserve payment. The percentage amount to be paid by all members shall be approved by the department.

(b) All reserve payments shall be deposited into a separate account known as the reserve account and shall be maintained at all times while the fund is in operation. No payment may be paid out of the reserve account unless approved by the department.

B.(1) The fund shall submit to the department an application, on an application form prescribed and furnished by the department, for authority to act as a group self-insurance fund for property coverage. Each application shall include evidence of the fund's inception, which establishes financial strength and liquidity of the members to pay claims promptly and support the financial ability of the fund to satisfy its obligations upon the establishment of the fund, including all of the following:

(a) Financial statements, dated not less than one year prior to the application, audited by an independent certified public accountant, showing at the inception of the fund a combined net worth of those members of not less than the amount required by Subsection A of this Section. In lieu of an audited financial statement, the department may require that the fund submit necessary financial documents in a form and manner approved by the department to verify the combined net worth of those members or principals as required in Subsection A of this Section.

(b) Current financial documents of all other members dated not less than one year prior to the application.

(c) Schedules of the entire membership showing the following items:

(i) The ratio of current assets to current liabilities of all members combined to be greater than one-to-one.

(ii) The working capital of all members combined to be of an amount establishing the financial strength and liquidity of the members to pay claims promptly.

(iii) The net worth of all members combined to be not less than the amount required by Subsection A of this Section.

(d) Other financial information and documents as required by the department.

(2) The application shall be in writing, on a form provided by the department, and shall comply with all of the following:

(a) Applications shall be submitted to the department at least ninety days prior to the effective date of the establishment of a fund. Any application submitted with fewer than ninety days remaining before the desired effective date, or which does not contain answers to all questions, or which is not sworn to and subscribed before a notary public, or which does not contain all required documents, statements, reports, and required information, may be returned without review by the department.

(b) All applications shall be accompanied by the following items:

(i) The properly completed indemnity agreement in a form acceptable to the department pursuant to Paragraph (A)(2) of this Section.

(ii) Security as required by this Chapter.

(iii) Copies of acceptable excess insurance or reinsurance, as required by this Chapter. All excess insurance or reinsurance shall be approved by the department prior to use.

(iv) A bond covering each third-party administrator as provided by this Chapter. If the fund employs its own administrator, the fund shall be required to purchase a bond, errors and omissions insurance, directors' and officers' liability insurance, or other security approved by the department for the administration of the fund.

(v) A certification from a designated depository attesting to the amount of monies on hand.

(vi) Copies of fund bylaws and any trust agreement or other governance documents.

(vii) Individual application of each member of the fund applying for membership in the fund on the effective date of the fund and copies of each member's executed indemnity agreements.

(viii) Evidence of financial strength and liquidity of the members dated as of the date of the filing of the application to satisfy the financial strength and liquidity requirements of this Chapter.

(ix) Proof that the fund shall have the minimum annual earned normal premium required by this Chapter.

(x) The current annual report or financial statement of any casualty insurance company providing excess or reinsurance coverage for the fund meeting the requirements of this Chapter, if the statement is not already on file with the department.

(xi) The name, address, and telephone number of each attorney representing the fund, each qualified actuary for the fund, and each certified public accountant who will be auditing the annual financial statements of the fund, as well as evidence of appointment of each by the fund.

(xii) The domicile address in this state where the books and records of the fund will be maintained, and the state from which the fund will be administered.

(xiii) Proof of advance payment to the fund by each initial member of the fund of not less than twenty-five percent of that member's first year estimated annually earned normal premiums.

(xiv) A feasibility study or other analysis prepared by a qualified actuary utilizing actual loss history of the initial members of the fund.

(xv) Pro forma financial statements projecting the first three years of operations of the fund based upon a feasibility study or other analysis prepared by a qualified actuary. The pro forma financial statements shall include a pro forma balance sheet, income statement, and statement of cash flow, each of which shall be prepared in accordance with generally accepted accounting principles.

(xvi) A copy of the fund's premium billing policy indicating whether the premium payments to the fund are to be paid by members annually, monthly, quarterly, or any combination thereof.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1856 Requirements; excess insurance; administrative and service companies; status; liability; refunds

A. The fund established pursuant to this Chapter shall comply with all of the following items:

(1) File rates in accordance with R.S. 12:1860 and maintain at least seven hundred fifty thousand dollars in earned premiums in the first fund year. In the second and each subsequent year, the fund shall maintain at least two million dollars in earned premiums. The amounts maintained shall be documented on the fund's audited financial statement prepared in accordance with generally accepted accounting principles.

(2)(a) During the first fund year, the fund shall deposit with the department a safekeeping receipt or trust receipt from a bank doing business in this state or from a savings and loan association chartered to do business in the state indicating that the fund has deposited and pledged one hundred thousand dollars in money or bonds of the United States, the state of Louisiana, or any political subdivision of the state, having a par value of one hundred thousand dollars, or post a surety bond issued by a corporate surety authorized to do business in this state, in the amount of one hundred thousand dollars, to secure the obligations of the fund as required by this Chapter.

(b) In the second and subsequent fund years, the fund shall deposit with the department a safekeeping receipt or trust receipt from a bank doing business in this state or from a savings and loan association chartered to do business in this state indicating that the fund has deposited and pledged two hundred fifty thousand dollars in money or bonds of the United States, the state of Louisiana, or any political subdivision of the state, having a par value of two hundred fifty thousand dollars, or post a surety bond issued by a corporate surety authorized to do business in this state, in the amount of two hundred fifty thousand dollars, to secure the obligations of the fund as required by this Chapter.

(3) Provide property coverage as required by this Chapter.

(4)(a) Maintain, on a fund-year basis, a contract or contracts of specific excess insurance or reinsurance of not less than an amount that is actuarially sound and approved by the department. The maximum retention under the excess insurance or reinsurance contracts shall not exceed amounts as may be provided by the department.

(b) For purposes of authorizing the purchase of reinsurance as required by this Subsection, the fund shall be deemed an insurer. The excess insurance or reinsurance shall be purchased only from a company having a rating of A- by A.M. Best Rating Services, Inc., A- by Fitch Ratings, A by Weiss Ratings, A- by S&P Global Ratings, or A3 by Moody's Investors Service, or better, and this reinsurance may be purchased from admitted or nonadmitted companies, provided that the provisions of R.S. 22:651 through 661, and Financial Accounting Standard Number 113 as promulgated and updated by the Financial Accounting Standards Board. The department shall approve all excess insurance policies or reinsurance agreements prior to use by the fund.

(5) File with the department financial statements and financial reports, including financial statements audited by an independent certified public accountant and actuarial reports, as may be required by the department under rules promulgated pursuant to the Administrative Procedure Act.

B. In order for a casualty insurance company to be eligible to write excess coverage for the fund, the company shall have on file with the department its current financial statement showing assets, including any surplus to policyholders, at least equal to the current requirements by the department for admission of a new company to do business in this state. Contracts or policies for excess insurance coverage written by active underwriters of Lloyd's of London are acceptable upon prior approval by the department.

C. Any fund administrator contracted by the fund and whose acts are not covered by the fund's bond, errors and omissions insurance, directors' and officers' liability insurance, or other security approved by the department, and any person, including an individual, partnership, corporation, and other entity contracting, either directly or indirectly, with a fund to provide claims adjusting, underwriting, safety engineering, loss control, marketing, investment advisory, or administrative services to the fund or its membership, other than bookkeeping, or auditing, or claims investigation services to the fund, shall comply with all of the following:

(1) Post a surety bond with the department issued by a corporate surety authorized to do business in this state of not less than fifty thousand dollars or deposit with the department a safekeeping receipt or trust receipt from a bank doing business in this state or from a savings and loan association chartered to do business in this state indicating that the deposit of fifty thousand dollars in money or bonds of the United States, the state of Louisiana, or any political subdivision of the state, having a par value of fifty thousand dollars, to secure the performance of its obligations under the contract and pursuant to this Chapter.

(2) Place all terms, agreements, fee arrangements, and any other conditions in a written agreement, which constitute the entire agreement between the parties, signed by the person and the fund.

D. A fund created pursuant to this Chapter shall not be considered a partnership under the laws of this state.

E. All members of the fund are solidarily liable for liabilities of the fund incurred by the fund after the inception of the fund year in which the operator becomes a member of the fund, to the extent required by this Chapter.

F. The board of trustees may declare, as refundable to fund members, any monies in excess of amounts necessary to fulfill obligations of the fund. The board of trustees may distribute the refund at its discretion, in accordance with the agreement establishing the fund and the following conditions:

(1) The amount of the distribution shall not exceed the members' distributions payable and recorded on the balance sheet as indicated by the most recently completed audited financial statements of the fund.

(2) The fund shall provide written notification to the department at least ten days before the payment of a distribution.

G. Each application for membership in the fund shall contain written notice that the fund is not covered by the Louisiana Guaranty Insurance Association.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1857 Investments

A. Only a security or other investment that is interest-bearing or interest-accruing or dividend-paying or income-paying and which is not then in default may be purchased or acquired by the fund, and the fund shall receive for its exclusive account and benefit the interest or income accruing on the security.

B. The board of trustees may invest amounts not needed for current obligations in any or all of the following items:

(1) Deposits in federally insured banks or savings and loan associations when any one of the following applies:

(a) The deposits are insured by the Federal Deposit Insurance Corporation.

(b) The deposits are collateralized by direct obligations of the United States government.

(2) Bonds or securities not in default as to principal or interest, which are obligations of the United States government or of any agency of the United States government, without limitation.

(3) Pass-through mortgage-backed securities and collateralized mortgage obligations issued by the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Federal Housing Administration, without limitation, provided that the collateralized mortgage obligations have a minimum rating of A by Moody's Investors Service, S&P Global Ratings, or Fitch Ratings.

(4) Obligations of this state or its subdivisions having a minimum rating of A by Moody's Investors Service, S&P Global Ratings, or Fitch Ratings. Not more than five percent of the fund's assets may be invested in any particular issue, and the type of investment shall not exceed fifteen percent of the fund's assets in the aggregate.

(5) Obligations of any state or its subdivisions having a minimum rating of A by Moody's Investors Service, S&P Global Ratings, or Fitch Ratings. Not more than five percent of the fund's assets may be invested in any particular issue, and the type of investment shall not exceed fifteen percent of the fund's assets in the aggregate.

(6) Commercial mortgage-backed securities with purchases having a minimum rating of Aaa by Moody's Investors Service, AAA by S&P Global Ratings, or AAA by Fitch Ratings. Not more than two percent of the fund's assets may be invested in one issue, and this type of investment shall not exceed ten percent of the fund's assets in the aggregate.

(7) Asset-backed securities with purchases having a minimum rating of Aa by Moody's Investors Service, AA by S&P Global Ratings, or AA by Fitch Ratings. No more than five percent of the fund's assets may be invested in one issue, and this type of investment shall not exceed ten percent of the fund's assets in the aggregate.

(8) Repurchase agreements, without limitation, when the collateral for the agreement is a direct obligation of the United States government, provided that the repurchase agreement shall meet all of the following specifications:

(a) Be in writing.

(b) Have a specific maturity date.

(c) Adequately identify each security to which the agreement applies.

(d) State that in the event of default by the party agreeing to repurchase the securities described in the agreement at the term contained in the agreement, title to the described securities shall pass immediately to the fund without recourse.

(9) Corporate bonds, subject to the following limitations:

(a) The bonds shall have a minimum rating of Baa by Moody's Investors Service, BBB by S&P Global Ratings, or BBB by Fitch Ratings.

(b) Except as provided in Subparagraph (d) of this Paragraph, not more than five percent of the fund's assets may be invested in corporate bonds of any particular issue or issuer.

(c) Except as provided in Subparagraph (d) of this Paragraph, not more than fifty percent of the fund's assets may be invested in corporate bonds of all types.

(d) The five-percent and fifty-percent limitations specified in Subparagraphs (b) and (c) of this Paragraph, respectively, may be exceeded up to an additional ten percent of the fund's assets if the financial circumstances are acceptable to the department, such as an increase in market value after initial purchase of a corporate bond, provided that the following occur:

(i) The initial purchase of corporate bonds was within the limitations specified in Subparagraphs (b) and (c) of this Paragraph.

(ii) In determining the financial condition of the fund, the department shall not include as assets of the fund those corporate bonds which exceed fifty percent of the fund's total assets.

(10) Mutual or trust fund institutions registered with the Securities and Exchange Commission under the Securities Act of 1933 and the Investment Company Act of 1940 which have underlying investments consisting solely of securities approved for investment as set forth in this Subsection. This investment shall not exceed fifty percent of the fund's assets in the aggregate.

(11)(a) Equities subject to all of the following limitations:

(i) The equity sector shall not exceed fifteen percent of the overall investment fund.

(ii) A minimum of five different issues shall be held in the equity sector to provide for diversification.

(iii) No single issue may represent more than five percent, at cost, of the overall investment fund.

(iv) Market capitalization of each issue shall be at least one billion dollars.

(v) Each eligible issue shall be paying a cash dividend.

(vi) Except as provided in Subparagraph (b) of this Paragraph, equity holdings are restricted to high quality, readily marketable securities corporations that are domiciled in the United States and that are actively traded on the major United States exchanges, including the New York Stock Exchange and the National Association of Securities Dealers Automated Quotation Stock Market, LLC.

(b) Foreign domiciled corporations are eligible if they trade American Depositary Receipts on the major United States exchanges.

(c) In lieu of individual securities, investment in a mutual fund or exchange-traded fund which pays a dividend and consists of securities which have an average market capitalization of at least one billion dollars is permitted. The same general quality constraints shall be met, and the aggregate total of the funds, plus any individual securities, may not exceed fifteen percent of the overall investment fund.

C. The fund shall not invest in rental assets, which assets shall include, without limitation, all of the following:

(1) Any item which is not, in fact, actually owned by the fund.

(2) Any item of which the ownership is subject to resolution, rescission, or revocation upon the fund's insolvency, receivership, bankruptcy, statutory supervision, rehabilitation, liquidation, or upon the occurrence of any other contingency.

(3) Any item for which the fund pays a regular or periodic fee for the right to carry the item as an asset, whether the fee is characterized as a rental, a management fee, or a dividend not previously approved by the department, or other periodic payment for such right. This provision does not apply to leases capitalized under generally accepted accounting principles.

(4) Any asset purchased for investment by the fund on credit in which the interest rate paid by the fund on its credit instrument is greater than the interest rate or yield generated by the purchased asset.

(5) Any asset on the fund's balance sheet subject to a mortgage, lien, privilege, preference, pledge, charge, or other encumbrance which is not accurately reflected in the liability section of the fund's balance sheet.

(6) Any asset received by the fund as a contribution to capital or surplus from any person that meets any of the criteria set forth in Paragraphs (1) through (5) of this Subsection while in the hands of that contributing person, or at the moment of the contribution to capital, or thereafter.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1858 Authority of department

A. No fund shall become operative until it is issued a certificate of authority by the department. Except for the certificate of authority, the department shall keep confidential all documents and records associated with the provisions of this Section.

B. The certificate of authority shall be continuous until revoked or suspended by the department, or until it is voluntarily surrendered by the fund.

C.(1) The department may examine the affairs, books, transactions, work papers, files, accounts, records, assets, and liabilities of the fund to determine compliance with this Chapter and pursuant to any rules and regulations promulgated by the department or orders and directives issued by the department. In addition, to the extent necessary and material to the examination of the fund, the department may examine the affairs, books, transactions, work papers, files, accounts, and records of the fund's administrator, service company, certified public accountant, or actuary generated in the course of transacting business on behalf of the group self-insurance fund being examined. All examinations shall be conducted in accordance with the provisions of this Chapter. The reasonable expenses of the examinations shall be paid by the fund.

(2) Upon the request of the department, the group self-insurance fund established pursuant to this Chapter shall cause a rate review to be conducted by a national independent actuarial firm, provided that the department shall not make more than two requests in any calendar year for a rate review pursuant to the provisions of this Subsection. The firm shall report its findings to the department.

(3) All work papers, recorded information, documents, information, and copies thereof produced by, obtained by, or disclosed to the department or any other person, in accordance with the authority of the department pursuant to this Chapter, shall be given confidential treatment and are not subject to subpoena, except in the following circumstances:

(a) The information sought has been provided pursuant to an examination, as authorized by R.S. 12:1863(C), or provided in examination reports, as required by R.S. 12:1864(I).

(b) The documents sought are audited financial statements or financial documents which have been filed with the department.

D. The department may issue cease and desist orders and suspend or revoke the certificate of authority of the fund which the department determines is not in compliance with this Chapter, any rule promulgated by the department in accordance with the Administrative Procedure Act, or any order or directive issued by the department. A cease and desist order may include a prohibition on writing or incurring any new or renewal business by the fund.

E. If the department determines that the fund or any trustee, member, officer, director, or employee of the fund failed to comply with the provisions of this Chapter, any applicable laws relating to the fund, any rule promulgated by the department, or any order or directive issued by the department, the department may levy a fine not to exceed two thousand dollars for each violation. If the conduct for which a previous fine was levied by the department is committed again, the department may levy a fine not to exceed four thousand dollars. The enforcement of any fine and any appeal from a fine shall be conducted in accordance with the Administrative Procedure Act.

F. The division of administrative law shall conduct a hearing in accordance with R.S. 22:2191.

G. The provisions of this Section do not prohibit the legislative auditor from reviewing records and conducting an audit in accordance with R.S. 24:513.

H.(1) The department may order that the group self-insurance fund submit a corrective action plan to the department for its approval to remediate any noncompliance or financial issues affecting the fund.

(2) The corrective action plan shall be submitted by the fund to the department for its approval and include standards, time frames, and other parameters acceptable to the department. Any corrective action plan that is submitted to the department by the fund shall be kept confidential by the department.

(3) The corrective action plan may include any of the following:

(a) Mandatory training.

(b) Onsite or offsite monitoring and supervision of the activities of the fund for a specified period of time to determine progress regarding correction of deficiencies.

(c) The submission of written progress reports.

(d) The institution of measures to conserve or generate additional funding for the fund.

(e) The imposition of fines and penalties for any misconduct which contributed to the need for the imposition of the corrective action plan.

(4) Failure by the group self-insurance fund to comply with a corrective action plan approved by the department may result in any of the following:

(a) The imposition of fines and penalties.

(b) Revocation of the fund's certificate of authority.

(c) Placement of the fund into administrative supervision pursuant to R.S. 22:731 et seq.

(d) Placement of the fund into receivership pursuant to R.S. 22:2001 et seq.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1859 Licensing of agents; claims against insurance agents

A. Any person soliciting membership for the fund shall be licensed by the department as a property and casualty insurance producer pursuant to R.S. 22:1541 et seq. No employee of the fund, religious denomination, or association of nonprofit religious organizations shall be required to be licensed as an agent if the solicitation of membership for the fund is not the primary duty of the employee.

B. No action shall lie against an insurance producer or other person involved in the marketing, selling, or solicitation of participation in the fund for claims arising out of the insolvency of the fund or the inability of the fund to pay claims as they become due unless the claimant first exhausts all remedies available to him against the members of the fund as provided by this Chapter.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1860 Rates; filing; review of rate determination

A. The fund shall file rates on an actuarially justified basis with the department and may use the rates ninety days after the date of the filing, unless the department disapproves the use of these rates within the ninety-day period.

B. The fund shall provide a reasonable procedure for any member aggrieved by the fund to request in written form a review of the application of the rating system for the coverage afforded by the fund. The fund may grant or deny the request in written form within thirty days after receipt of the request. If the fund rejects a request or fails to grant or reject a request within the thirty-day period, the member may appeal to the division of administrative law for a hearing in accordance with the provisions of the Administrative Procedure Act within thirty days after expiration of the thirty-day period. After the hearing, the administrative law judge may affirm, modify, or reverse the action taken by the fund.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1861 Consecutive net losses

If the fund has three years of consecutive net losses on the audited financial statements of the fund, or two years of consecutive net losses on the audited financial statements of the fund in excess of five hundred thousand dollars or five percent of the premium of the latest audited financial statement, whichever is greater, an authorized representative of the fund shall do all of the following:

(1) Attend a meeting with the department, the administrator of the fund, any third-party administrator contracted or performing services for the fund, and the fund's board of trustees to discuss the financial condition of the fund and to advise the department of the course of action the fund will take to obtain net incomes on subsequent audited financial statements.

(2) File with the department a written and signed plan from the fund's board of trustees describing the actions the fund will take to generate net incomes on subsequent audited financial statements.

(3) Obtain an actuarial rate analysis, if an actuarial rate analysis was not performed for the previous fund year.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1862 Insolvencies

A. If the fund is insolvent, in addition to any other provision of law or rule, the department shall require that the fund files a written plan within sixty days from the date the fund becomes aware of the insolvency, and the plan shall be signed by the board of trustees. In determining the fund's insolvency, assets shall not include intangible property, such as patents, trade names, or goodwill. The plan submitted by the fund to eliminate the insolvency shall set forth in detail the means by which the fund intends to eliminate the insolvency and may include an assessment of the members of the fund including the timetable for implementation of the plan and requirements for reporting to the department. The department shall review the plan submitted by the fund and notify the fund of the plan's approval or disapproval within thirty days of the department's receipt of the plan.

B. If the department determines that a plan submitted by the fund is disapproved or, once a plan has been approved by the department, that the fund is not implementing a plan in accordance with the terms of the plan, the department shall give written notification to the fund of its determination.

C. If administrative supervision becomes necessary, the provisions of Subpart H of Part III of Chapter 2 of Title 22 of the Louisiana Revised Statutes of 1950 shall apply to the fund, and the department shall have administrative supervision over the fund in the same manner as if the fund were an insurance company.

D.(1) In addition to any other powers of the department, if the group self-insurance fund is insolvent, operating in a hazardous financial condition, or operating in violation of the requirements of this Chapter, the department may institute delinquency proceedings against the fund, including entering an order for injunctive relief or placing the fund into administrative supervision pursuant to R.S. 22:731 et seq. or into receivership pursuant to R.S. 22:2001 et seq.

(2) The department shall promulgate rules and regulations in accordance with the Administrative Procedure Act providing for the grounds, conduct, and procedures applicable to the delinquency proceedings.

E. The distribution of general assets from the estate of the fund shall be prioritized as follows:

(1) The department's costs and expenses of administration.

(2) Payment of claims to third parties and insureds arising out of and within the coverage of agreements or evidences of coverage issued by the fund, up to the policy limits.

(3) Payment of claims by the federal government other than those claims otherwise prioritized within this Subsection.

(4) Payment of compensation owed to employees of the fund shall be paid in accordance with the applicable provisions of administrative supervision pursuant to R.S. 22:731 et seq. or receivership pursuant to R.S. 22:2001 et seq.

(5) Payment of claims for unearned premiums or other premium refunds and claims of general creditors, including claims of any ceding and assuming company in their capacity as such.

(6) Payment of all other claims.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1863 Examination

A. The department shall, at least once every five years, conduct an examination of the group self-insurance fund and at such other times as the department deems it necessary.

B. If an examination is needed, the department shall appoint one or more examiners to perform the examination and instruct them as to the scope of the examination. In performing its examination, the examiner or examiners shall observe the guidelines and procedures deemed appropriate by the department.

C. The provisions of this Chapter shall not be construed to limit the department's authority to use any final or preliminary examination report, any examiner or fund work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the department may consider appropriate.

D. The provisions of this Chapter shall not be construed to limit the authority of the department to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the applicable laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.

E. In conducting its examination, the department shall examine the affairs, transactions, accounts, records, documents, and assets of the authorized group self-insurance fund. For the purpose of ascertaining its condition or compliance with this Chapter, the department may examine the accounts, records, documents, and transactions of all of the following persons:

(1) Any insurance agent, solicitor, or broker, but only insofar as the accounts, records, documents, and transactions relate to group self-insurance funds.

(2) Any person having a contract under which the person enjoys, in fact, the exclusive or dominant right to manage or control the group self-insurance fund.

F. The group self-insurance fund being examined, and its officers, trustees, employees, administrators, and representatives, shall produce and make freely accessible to the department the accounts, records, documents, and files in its possession or control relating to the subject of the examination and shall otherwise facilitate the examination.

G. The department may take depositions, subpoena witnesses or documentary evidence, administer oaths, and examine under oath any individual relative to the affairs of the group self-insurance fund being examined. Any person who testifies falsely or makes any false affidavit during the course of an examination shall be guilty of perjury.

H. If the department conducts an examination or investigation pursuant to this Chapter, all expenses incurred by the department, including the expenses and fees of examiners, auditors, accountants, actuaries, attorneys, or clerical or other assistants who are employed by the department to make the examination, shall be paid by the group self-insurance fund.

I. The department may recover all expenses incurred from time to time for the examination or investigation of any person or entity acting as an administrator or third-party administrator in this state for the group self-insurance fund.

J. The department shall employ the examiners, auditors, accountants, actuaries, attorneys, and clerical or other assistants as are necessary to conduct the examination and to compile and prepare a report thereon, and the compensation for such examination shall be fixed according to the time actually devoted to the work, including conducting the examination and compiling the report thereon, as required by law. Compensation paid pursuant to this Subsection shall be reasonable and commensurate with the value of the services performed.

K. Upon completion of the examination of the group self-insurance fund or at stated periods during an examination, the department shall forward to the group self-insurance fund a statement showing the amount of expenses incurred in the examination to the date of the statement. Upon receipt, the group self-insurance fund shall pay the amount of expenses to the department.

L. After the receipt of the billing, if the group self-insurance fund considers the amount of expenses billed to it unreasonable or contrary to the provisions of this Chapter, the fund, within fifteen days, may file a rule to show cause in a court of competent jurisdiction upon the department as to the reasonableness and legality of the amount of expenses billed to it by the department. The rule to show cause shall be tried in court by preference as to scheduling and, upon appeal, shall be given preference in the appellate court as provided by the law in the same manner as that given to the state for other state cases.

M. If the group self-insurance fund fails or refuses to pay the expenses of examination as billed by the department after fifteen days from the receipt of the billing or after final judgment of the court where a rule has been filed as provided in this Chapter, then the department may suspend or revoke the certificate of authority of such group self-insurance fund to do business in this state until the full amount of the bill is paid.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1864 Examination reports

A. All examination reports shall be comprised only of facts appearing upon the books, records, or other documents of the group self-insurance fund or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and any conclusions and recommendations the examiners find reasonably warranted from the facts. The department shall keep confidential all documents and records associated with the provisions of this Section.

B. Not later than sixty days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the fund examined, together with a notice which shall afford the fund examined a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to any matters contained in the examination report.

C. Within thirty days of the end of the period allowed for the receipt of written submissions or rebuttals, the department shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's work papers, and enter an order for one of the following:

(1) Adoption of the examination report as filed or with modifications or corrections. If the examination report reveals that the group self-insurance fund is operating in violation of any law, rule, regulation, or prior order or directive of the department, the department may order the fund to take any action the department determines is necessary and appropriate to cure the violation.

(2) Rejection of the examination report with direction to the examiners to reopen the examination for purposes of obtaining additional documentation, data, information, and testimony.

D. Within thirty days of rejection by the department of an examination report in accordance with Paragraph (C)(2) of this Section, unless the department extends the time for reasonable cause, the examiner in charge shall refile with the department a verified written report of examination, as may be modified or corrected, under oath. Upon receipt of the refiled verified report, the department shall transmit the refiled report to the fund examined, together with a notice similar to the notice provided for in Subsection B of this Section, except the notice shall indicate that the report is a refiled report.

E. Within thirty days of the end of the period allowed for the receipt of written submissions or rebuttals, as provided for in Subsections B and D of this Section, the department shall fully consider and review the refiled report, together with any written submissions or rebuttals and any relevant portions of the work papers of the examiner, and enter an order for one of the following:

(1) Adoption of the examination report as refiled or with modification or corrections. If the refiled examination report reveals that the group self-insurance fund is operating in violation of any law, rule, regulation, or prior order or directive of the department, the department may order the fund to take any action the department considers necessary and appropriate to cure the violation.

(2) Rejection of the examination report and referral of the matter for hearing before an administrative law judge within the division of administrative law in accordance with the provisions of the Administrative Procedure Act, for purposes of obtaining additional documentation, data, information, and testimony.

F. All orders entered pursuant to Paragraph (C)(1) or (E)(1) of this Section shall be accompanied by findings and conclusions resulting from consideration by the department and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. Any order shall be served upon the fund by certified mail, together with a copy of the adopted examination report. Within thirty days of the issuance of the adopted report, the trustees of the group self-insurance fund shall state, under oath, that they have received a copy of the adopted report and related orders.

G. Within thirty days after receipt of notification of the department's order pursuant to Subsection F of this Section, the fund may make written demand for an administrative law hearing in accordance with the provisions of the Administrative Procedure Act.

H.(1) At the conclusion of a hearing initiated pursuant to Subsection G of this Section, the administrative law judge shall enter an order adopting the examination report as filed, or subsequently filed again with modifications or corrections, and may order the fund to take any action that the department considers necessary and appropriate to cure any violation of any law, regulation, or prior order or directive of the department.

(2) The division of administrative law shall issue the order within thirty days after the conclusion of the hearing and shall give a copy of the order to each person to whom notice of the hearing was given or required to be given.

I.(1) Upon the adoption of the examination report prescribed in Paragraph (C)(1) or (E)(1) or Subsection H of this Section, the department shall continue to hold the content of the examination report as private and confidential information for a period not to exceed thirty consecutive days, unless the provisions of R.S. 12:1863(C) and Subsection B of this Section apply. Thereafter, the department may open the report for public inspection provided no court of competent jurisdiction has stayed its publication.

(2) Notwithstanding any provision of law to the contrary, nothing shall prevent or be construed to prohibit the department from disclosing the content of an examination report, a preliminary examination report or results, or any matter relating thereto, to another office of the department or to the insurance department of any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, provided the agency or office receiving the report or matters relating thereto agrees, in writing, to hold it confidential and in a manner consistent with this Chapter.

(3) If the department determines that regulatory action is appropriate as a result of any examination, it may initiate any proceedings or actions as provided by law.

J. All work papers, recorded information, and documents, as well as all copies thereof produced by, obtained by, or disclosed to the department, or any other person, in the course of an examination made pursuant to this Chapter, or in accordance with the authority of the commissioner pursuant to this Chapter, shall be given confidential treatment and are not subject to subpoena and may not be made public by the department or any other person, unless the provisions of R.S. 12:1863(C) and Subsection I of this Section apply. The parties shall agree, in writing prior to receiving the information, to provide to it the same confidential treatment as required by this Section, unless the prior written consent of the fund has been obtained.

K.(1) No examiner may be appointed by the department if that examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person or entity subject to examination pursuant to this Chapter.

(2) Notwithstanding the requirements of this Section, the department may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though those persons may from time to time be similarly employed or retained by persons subject to examination pursuant to this Chapter.

L.(1) No cause of action shall arise nor shall any liability be imposed against the department, the authorized representative of the department, or any examiner appointed by the department for any statement made or conduct performed in good faith while carrying out the provisions of this Chapter.

(2) No cause of action shall arise nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the department, or the authorized representative of the department, or an examiner, as part of an examination made pursuant to this Chapter, if that act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.

M.(1) In addition to those examinations performed pursuant to R.S. 12:1863, the department shall conduct financial reviews of the group self-insurance fund. The reviews shall include the audited financial statements of the group self-insurance fund rendered pursuant to generally acceptable accounting principles, results of prior examinations and office reviews, management changes, consumer complaints, and any other relevant information as from time to time may be required by the department.

(2) Failure by the group self-insurance fund to supply information requested by the department during the course of a financial review shall subject the group self-insurance fund to revocation or suspension of its license or a fine not to exceed ten thousand dollars per occurrence.

(3) All work papers, recorded information, and documents as well as all copies thereof produced by, obtained by, or disclosed to the department or any other person in the course of conducting a financial review, shall be given confidential treatment and are not subject to subpoena and may not be made public by the department or any other person, except that any access may be granted to insurance departments of other states; international, federal, or state law enforcement agencies; or international, federal, or state regulatory agencies with statutory oversight over the financial services industry, if the recipient agrees to maintain the confidentiality of those documents which are confidential under the laws of this state.

(4) In conducting financial reviews, the examiner or examiners shall observe those guidelines and procedures as the department may deem appropriate.

(5) Nothing contained in this Chapter shall be construed to limit the department's authority to use any final or preliminary analysis findings, any department or fund work papers or other documents, or any other information discovered or developed during the course of any analysis in the furtherance of any legal or regulatory action.

(6) The group self-insurance fund against whom a fine has been levied shall be given ten days' notice of imposition of the fine. Upon receipt of this notice, the aggrieved party may apply for and is entitled to an administrative hearing pursuant to the Administrative Procedure Act.

N. The provisions of this Section shall not be construed to prohibit the legislative auditor from reviewing records and conducting an audit in accordance with R.S. 24:513.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1865 Authorization of the department to employ investigators

The department may employ investigators to investigate complaints received against the group self-insurance fund authorized to do business in this state and against any unauthorized group self-insurance fund that is reported to be operating in this state.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1866 Disclosure

A. It is unlawful for any person who is an officer, trustee, employee, administrator, agent, or representative of the group self-insurance fund, as well as any person, partnership, corporation, banking corporation, or any other legal entity which performs any service for the group self-insurance fund, or prepares any report, audit, financial statement or report for, or makes any representation on behalf of, for, or with regard to the group self-insurance fund, in connection with any investigation or examination authorized by this Chapter, to act with the specific intent to do any of the following items:

(1) Represent falsely, directly or indirectly, to the department or any employee, trustee, or administrator of the department that an asset of the group self-insurance fund is unencumbered, or misrepresent any other material fact pertaining to the status of any asset or liability of the group self-insurance fund.

(2) Materially misrepresent to the department, or any employee, trustee, or administrator of the department, the value of any asset or the amount of any liability of the group self-insurance fund, or any affiliate, subsidiary, or holding fund associated therewith, provided that with regard to a material misrepresentation of the value of any asset or liability, any deviation from the actual value of assets or liability which results from utilization of and compliance with generally accepted insurance accounting and reporting procedures shall not be deemed a violation of this Section.

(3) Fail to disclose to the department the existence of any liability of the group self-insurance fund, or affiliate, subsidiary, or holding company associated therewith, when such disclosure is properly requested or required in writing by an examiner or administrator of the department.

(4) Materially misrepresent, withhold, deny access to, or otherwise preclude the obtainment of any information properly requested in writing and in accordance with provisions of law affecting dissemination or disclosure of information by specific institutions by an examiner or administrator of the department, which is material and relevant to an examination properly conducted by the department and examiners and administrators of the department.

B. Whoever violates any provision of this Section, upon conviction, shall be fined by the court not more than fifty thousand dollars or subject to the penalties provided in R.S. 22:1924.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1867 Departmental complaint directives; failure to comply; fines; hearing

A. Any person subject to the regulatory authority of the department who fails to comply with any directive issued by the department in connection with a consumer complaint filed pursuant to this Chapter shall be fined an amount not to exceed two hundred fifty dollars for each occurrence.

B. Any person against whom a fine has been levied shall be given ten days' notice of the action. Upon receipt of this notice, the person aggrieved may apply for and may have an administrative hearing conducted in accordance with the provisions of the Administrative Procedure Act.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1868 Dissolution

A. If the fund elects to dissolve, it shall apply to the department for authority to dissolve. An application for dissolution shall be made on a form prescribed by the department and shall be approved or disapproved by the department within sixty days of receipt.

B. The dissolution of the fund without authorization is prohibited and shall not absolve or release the fund, a member, or any person or entity which has executed an indemnity agreement from the fund's or person's obligations incurred or entered into prior to the dissolution of the fund.

C. Applications to dissolve shall be granted if either of the following conditions are met:

(1) The fund has no outstanding liabilities including incurred but not reported liabilities.

(2) The fund is covered by an irrevocable commitment from a licensed insurer which provides for payment of all outstanding liabilities and related services, including payment of claims, preparation of reports, and administration of transactions associated with the period during which the plan provided coverage.

D. Upon the dissolution of the fund and after payment of all outstanding liabilities and indebtedness, the assets of the fund shall be distributed to all members participating in the fund pursuant to a distribution plan submitted by the fund to the department and approved by the department.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1869 Exclusive use of information

A.(1) Except as otherwise provided in this Section, for purposes of soliciting, selling, or negotiating the renewal or sale of group self-insurance coverage, products, or insurance services, an insurance agent or insurance broker shall have the exclusive use of expirations, records, or other written or electronic information directly related to the group self-insurance application submitted by the member or the group self-insurance policy written through an insurance agent or insurance broker. The group self-insurance fund shall not use expirations, records, or other written or electronic information to solicit, sell, or negotiate the renewal or sale of insurance coverage, insurance products, or insurance services to the insured, either directly or by providing such information to others, without the express written consent of the insurance agent or insurance broker.

(2) The expirations, records, or other written or electronic information may be used to review the group self-insurance application, to issue a policy, or for any other purpose necessary for placing such business through the insurance producer. The expirations, records, or other written or electronic information may also be used for any other purpose which does not involve the soliciting, selling, or negotiating the renewal or sale of group self-insurance coverage, products, or services.

B. This Section shall not apply in any of the following circumstances:

(1) When the member of the fund requests, individually or through an insurance producer, that the group self-insurance fund renew the policy or write other insurance business.

(2) When the insurance agent has, by contract, agreed to act exclusively for one member or a group of affiliated members, in which case the rights of the agent shall be determined by the terms of the agent's contract with that member or affiliated group.

(3) When the insurance producer is in default for nonpayment of premiums under the insurance agent's or insurance broker's contract or other agreement with the group self-insurer, unless there is a legitimate dispute as to monies owed.

(4) When the agency contract is terminated and the insurance company is required by law to continue coverage for the insured, in which event the insurance company shall continue to pay the insurance agent or the insurance broker commissions on such policies that the company is required to renew during the thirty-six-month period following the effective date of the termination. The commission shall be at the insurer's prevailing commission rates in effect on the date of renewal for that class or line of business in effect on the date of renewal for brokers or agents whose contracts are not terminated.

C. The insurance producer and insurer may, in a written agreement separate from the agency contract, mutually agree to terms different from the provisions set forth in this Section. The terms of the agreement shall be negotiated in good faith between the parties.

D.(1) The department may adopt rules, in accordance with the Administrative Procedure Act, to enforce the provisions of this Section, and any violation of this Section or the rules adopted pursuant to this Section shall be subject to regulation by the department pursuant to R.S. 12:1858.

(2) In addition, the insurance producer may have a claim for lost commissions. The claim shall be resolved in accordance with the dispute resolution terms in the applicable contract or agreement. In the absence of any dispute resolution terms, the parties shall attempt to resolve their dispute through mediation. If the claim is not resolved through mediation, the claim may be resolved through binding arbitration if the parties agree. In the absence of an agreement to resolve the claim through binding arbitration, the insurance producer may maintain an action for lost commissions.

(3) Except as provided in Subsection B of this Section, nothing in this Section shall be interpreted as impairing any rights in law or contract currently enjoyed by any party.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.

§ 12:1870 Jurisdiction

The Nineteenth Judicial District Court shall have exclusive jurisdiction over any proceeding instituted pursuant to this Chapter.

Acts 2023, No. 259, §§1, 3A, eff. June 12, 2023.