71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1875
Senate Bill 824
Sponsored by COMMITTEE ON JUDICIARY
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Specifies additional conditions under which corporation may be
dissolved and authority of foreign corporation revoked.
Specifies conditions under which board of directors may be
replaced by board of trustees. Directs Secretary of State to
adopt corporate code of conduct. Prohibits corporation from
holding Green Permit if corporation engages in certain
activities.
A BILL FOR AN ACT
Relating to corporations; creating new provisions; and amending
ORS 60.001, 60.204, 60.647, 60.661, 60.737 and 468.516.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 60.647 is amended to read:
60.647. The Secretary of State may commence a proceeding under
ORS 60.651 to administratively dissolve a corporation if:
(1) The corporation does not pay when due any fees imposed by
this chapter;
(2) The corporation does not deliver its annual report to the
Secretary of State when due;
(3) The corporation is without a registered agent or registered
office in this state;
(4) The corporation does not notify the Secretary of State that
its registered agent or registered office has been changed, that
its registered agent has resigned or that its registered office
has been discontinued; { - or - }
(5) The corporation's period of duration stated in its articles
of incorporation expires { + ;
(6) The corporation has exceeded the authority conferred upon
it by law;
(7) The corporation has violated any provision of its articles
of incorporation or bylaws; or
(8) The corporation has transacted its business in a manner
that is contrary to the public policy of this state, as defined
in ORS 60.001 + }.
SECTION 2. ORS 60.661 is amended to read:
60.661. The circuit courts may dissolve a corporation:
(1) In a proceeding by the Attorney General if it is
established that:
(a) The corporation obtained its articles of incorporation
through fraud; { - or - }
{ + (b) The corporation has exceeded or abused the authority
conferred upon it by law; + }
{ - (b) - } { + (c) + } The corporation has continued to
exceed or abuse the authority conferred upon it by law { + ; + }
{ - . - }
{ + (d) The corporation has violated any provision of its
articles of incorporation or bylaws; or
(e) The corporation has transacted its business in a manner
that is contrary to the public policy of this state, as defined
in ORS 60.001. + }
(2) In a proceeding by a shareholder if it is established that:
(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) The directors or those in control of the corporation have
acted, are acting or will act in a manner that is illegal,
oppressive or fraudulent;
(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; { - or - }
(d) The corporate assets are being misapplied or
wasted { + ; + } { - . - }
{ + (e) The corporation has exceeded the authority conferred
upon it by law;
(f) The corporation has violated any provision of its articles
of incorporation or bylaws; or
(g) The corporation has transacted its business in a manner
that is contrary to the public policy of this state, as defined
in ORS 60.001. + }
(3) In a proceeding by a creditor if it is established that:
(a) The creditor's claim has been reduced to judgment, the
execution on the judgment returned unsatisfied and the
corporation is insolvent; or
(b) The corporation has admitted in writing that the creditor's
claim is due and owing and the corporation is insolvent.
(4) In a proceeding by the corporation to have its voluntary
dissolution continued under court supervision.
SECTION 3. ORS 60.737 is amended to read:
60.737. The Secretary of State may commence a proceeding under
ORS 60.741 to revoke the authority of a foreign corporation to
transact business in this state if:
(1) The foreign corporation does not deliver its annual report
to the Secretary of State within the time prescribed by this
chapter;
(2) The foreign corporation does not pay within the time
prescribed by this chapter any fees imposed by this chapter;
(3) The foreign corporation has failed to appoint or maintain a
registered agent or registered office in this state as prescribed
by this chapter;
(4) The foreign corporation does not inform the Secretary of
State under ORS 60.724 or 60.727 that its registered agent or
registered office has changed, that its registered agent has
resigned or that its registered office has been discontinued;
(5) An incorporator, director, officer or agent of the foreign
corporation signed a document knowing it was false in any
material respect with intent that the document be delivered to
the office for filing; { - or - }
(6) The Secretary of State receives a duly authenticated
certificate from the official having custody of corporate records
in the state or country under whose law the foreign corporation
is incorporated stating that it has been dissolved or disappeared
as the result of a merger { + ;
(7) The foreign corporation has exceeded the authority
conferred upon it by law;
(8) The foreign corporation has violated any provision of its
articles of incorporation or bylaws;
(9) The foreign corporation has violated any provision of the
corporate code of conduct established under section 8 of this
2001 Act;
(10) The foreign corporation has violated any law of this
state; or
(11) The foreign corporation has transacted its business in a
manner that is contrary to the public policy of this state, as
defined in ORS 60.001 + }.
SECTION 4. { + Sections 5 to 8 of this 2001 Act are added to
and made a part of ORS chapter 60. + }
SECTION 5. { + The Secretary of State may commence a
proceeding under section 6 of this 2001 Act to remove the board
of directors of a corporation and replace the board of directors
with a board of trustees appointed by the Secretary of State if:
(1) The corporation has violated any provision of the corporate
code of conduct established under section 8 of this 2001 Act; or
(2) The corporation has violated any law of this state. + }
SECTION 6. { + (1) If the Secretary of State determines that
grounds exist under section 5 of this 2001 Act for removing the
board of directors, the Secretary of State shall give the
corporation written notice of the determination.
(2) If the corporation does not correct the grounds for removal
of the board of directors or demonstrate to the satisfaction of
the Secretary of State, within 45 days after notice is given,
that the grounds determined by the Secretary of State do not
exist, the Secretary of State shall remove the board of directors
and appoint a board of trustees.
(3) The board of trustees appointed by the Secretary of State
under subsection (2) of this section has the powers granted to a
board of directors under ORS chapter 60 and shall manage the
business and regulate the affairs of the corporation until the
Secretary of State determines that the grounds that caused the
removal of the board of directors no longer exist.
(4) A new board of directors shall be elected at a special
meeting of shareholders under ORS 60.204 after the Secretary of
State has determined that the grounds for removal under section 5
of this 2001 Act no longer exist. + }
SECTION 7. { + (1) The circuit courts may remove a board of
directors and appoint a board of trustees:
(a) In a proceeding by the Attorney General if it is
established that:
(A) The corporation has violated any provision of the corporate
code of conduct established under section 8 of this 2001 Act; or
(B) The corporation has violated any law of this state.
(b) In a proceeding by a shareholder if it is established that:
(A) The corporation has violated any provision of the corporate
code of conduct established under section 8 of this 2001 Act; or
(B) The corporation has violated any law of this state.
(2) The board of trustees appointed by a circuit court under
this section has the powers granted to a board of directors under
ORS chapter 60 and shall manage the business and regulate the
affairs of the corporation until the circuit court determines
that the grounds that caused the removal of the board of
directors no longer exist.
(3) A new board of directors shall be elected at a special
meeting of shareholders under ORS 60.204 after the circuit court
has determined that the grounds for removal established under
this section no longer exist. + }
SECTION 8. { + The Secretary of State by rule shall adopt a
corporate code of conduct for responsible business practices for
corporations subject to the provisions of this chapter. The code
shall prohibit conduct that the secretary determines is contrary
to public policy or the laws of this state. The Secretary of
State shall consider the following practices or conduct when
establishing a corporate code of conduct:
(1) Adherence to principles of nondiscrimination and respect
for human rights and individual freedoms;
(2) Recognition that decisions on hiring, salary, benefits,
advancement, termination or retirement are based solely on the
ability of an individual to do the job;
(3) Achievement of compatibility between the environment and
the processes and products of a corporation;
(4) Promotion of high standards for workplace safety and
occupational health;
(5) Forbearance from the offer or receipt of improper payments
to government officials, political parties or candidates for
political office;
(6) Adherence to proper recording of financial transactions in
corporate books of account;
(7) Equitable and fair conduct in financial and commercial
transactions; and
(8) Balance of interests of shareholders, employees, customers,
suppliers, governments and the public. + }
SECTION 9. { + Section 10 of this 2001 Act is added to and
made a part of ORS 468.501 to 468.521. + }
SECTION 10. { + In addition to the provisions of ORS 468.501
to 468.521, a sponsor that is a corporation subject to the
provisions of ORS chapter 60 is not eligible to receive or
maintain a Green Permit if the corporation:
(1) Has exceeded the authority conferred upon it by law;
(2) Has violated any provision of its articles of incorporation
or bylaws;
(3) Has violated any provision of the corporate code of conduct
established under section 8 of this 2001 Act;
(4) Has violated any law of this state; or
(5) Has transacted its business in a manner that is contrary to
the public policy of this state, as defined in ORS 60.001. + }
SECTION 11. ORS 468.516 is amended to read:
468.516. { + (1) + }If a sponsor operating a facility under a
Green Permit fails to perform any term or condition in the Green
Permit, { + or if the sponsor is ineligible to hold a Green
Permit under section 10 of this 2001 Act, + } the agency may,
after written notice to the permittee, terminate the Green Permit
in whole or in part.
{ + (2) + }The permittee may appeal the agency's decision to
terminate a Green Permit to the Environmental Quality Commission.
The commission's decision on appeal shall be an order in other
than a contested case.
SECTION 12. ORS 60.001 is amended to read:
60.001. As used in this chapter:
(1) 'Anniversary' means that day each year exactly one or more
years after:
(a) The date of filing by the Secretary of State of the
articles of incorporation in the case of a domestic corporation.
(b) The date of filing by the Secretary of State of an
application for authority to transact business in the case of a
foreign corporation.
(2) 'Articles of incorporation' include amended and restated
articles of incorporation, articles of conversion and articles of
merger.
(3) 'Authorized shares' means the shares of all classes a
domestic or foreign corporation is authorized to issue.
(4) 'Conspicuous' means so written that a reasonable person
against whom the writing is to operate should have noticed it.
For example, printing in italics, boldface or contrasting color,
typing in capitals or underlined is conspicuous.
(5) 'Corporation' or 'domestic corporation' means a corporation
for profit, which is not a foreign corporation, incorporated
under or subject to the provisions of this chapter.
(6) 'Distribution' means a direct or indirect transfer of money
or other property, except of a corporation's 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 the form of a declaration or payment of a
dividend, a purchase, redemption or other acquisition of shares,
a distribution of indebtedness, or otherwise.
(7) 'Employee' includes an officer but not a director. A
director may accept duties that make the director also an
employee.
(8) 'Entity' includes a corporation, foreign corporation,
nonprofit corporation, profit and nonprofit unincorporated
association, business trust, estate, partnership, trust, two or
more persons having a joint or common economic interest, any
state, the United States and any foreign government.
(9) 'Foreign corporation' means a corporation for profit
incorporated under a law other than the law of this state.
(10) 'Governmental subdivision' includes an authority, county,
district and municipality.
(11) 'Includes' denotes a partial definition.
(12) 'Individual' means a natural person.
(13) 'Means' denotes an exhaustive definition.
(14) 'Office,' when used to refer to the administrative unit
directed by the Secretary of State, means the office of the
Secretary of State.
(15) 'Person' includes individual and entity.
(16) 'Principal office' means the office, in or out of this
state, where the principal executive offices of a domestic or
foreign corporation are located and designated in the annual
report or application for authority to transact business in this
state.
(17) 'Proceeding' includes civil, criminal, administrative and
investigatory action.
(18)(a) 'Proxy' means a written authorization signed or an
electronic transmission authorized by a shareholder or the
shareholder's attorney in fact giving another person or persons
power to vote with respect to the shares of the shareholder.
(b) As used in this subsection, 'signed' means the placing of
the shareholder's name or other authorization on the proxy,
whether by manual signature, typewriting, telegraphic or
electronic transmission or otherwise, by the shareholder or the
shareholder's attorney in fact. A proxy may be transmitted by an
oral telephonic communication if it is submitted with information
from which it may be determined that the proxy was authorized by
the shareholder or the shareholder's attorney in fact.
{ + (19) 'Public policy of this state' includes, but is not
limited to, the policy of conserving and protecting the natural
resources and beauty of this state. + }
{ - (19) - } { + (20) + } 'Record date' means the date
established under 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.
{ - (20) - } { + (21) + } 'Share' means the units into
which the proprietary interest in a corporation are divided.
{ - (21) - } { + (22) + } 'Shareholder' means the person in
whose name shares are registered in the records of a corporation
or the beneficial owner of shares to the extent of the rights
granted by a nominee certificate on file with a corporation.
{ - (22) - } { + (23) + } 'State,' when referring to a part
of the United States, includes a state, commonwealth, territory
and insular possession of the United States and its agencies and
governmental subdivisions.
{ - (23) - } { + (24) + } 'Subscriber' means a person who
subscribes for shares in a corporation, whether before or after
incorporation.
{ - (24) - } { + (25) + } 'United States' includes a
district, authority, bureau, commission, department and any other
agency of the United States.
{ - (25) - } { + (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.
SECTION 13. ORS 60.204 is amended to read:
60.204. (1) A corporation shall hold a special meeting of
shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the articles of incorporation or bylaws;
{ - or - }
(b) If the holders of at least 10 percent of all votes entitled
to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the corporation's
secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held { + ; or
(c) On call of a board of trustees appointed under section 6 or
7 of this 2001 Act + }.
(2) If not otherwise fixed under ORS 60.207 or 60.221, the
record date for determining shareholders entitled to demand a
special meeting is the date the first shareholder signs the
demand.
(3) Special shareholders' meetings may be held in or out of
this state at the place stated in or fixed in accordance with the
bylaws. If no place is stated or fixed in accordance with the
bylaws, special meetings shall be held at the corporation's
principal office.
(4) Only business within the purpose or purposes described in
the meeting notice required by ORS 60.214 (3) may be conducted at
a special shareholders' meeting.
SECTION 14. { + Sections 5 to 8 and 10 of this 2001 Act and
the amendments to ORS 60.001, 60.204, 60.647, 60.661, 60.737 and
468.516 by sections 1, 2, 3, 11, 12 and 13 of this 2001 Act apply
only to activities occurring on or after the effective date of
this 2001 Act. + }
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