2021 -- S 0337

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LC000717

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATION ACT

     Introduced By: Senators Raptakis, Anderson, Paolino, Morgan, and de la Cruz

     Date Introduced: February 25, 2021

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 7-1.2-1415 and 7-1.2-1416 of the General Laws in Chapter 7-1.2

entitled "Rhode Island Business Corporation Act" are hereby amended to read as follows:

     7-1.2-1415. Issuance of certificate of revocation.

     (a) Upon revoking any certificate of authority, the secretary of state shall:

     (1) Issue a certificate of revocation.

     (2) File the certificate in his or her office.

     (3) Send to the corporation by regular mail the certificate of revocation, addressed to the

registered office of the corporation in this state on file with the secretary of state's office; provided,

however, that if a prior mailing addressed to the registered agent of the corporation in this state

currently on file with the secretary of state's office has been returned to the secretary of state as

undeliverable by the United States Postal Service for any reason, or if the revocation certificate is

returned as undeliverable to the secretary of state's office by the United States Postal Service for

any reason, the secretary of state shall give notice as follows:

     (i) To the corporation at its principal office of record as shown in its most recent annual

report, and no further notice is required; or

     (ii) In the case of a foreign corporation that has not yet filed an annual report then to the

corporation at its principal office shown in its application for certificate of authority, and no further

notice is required.

     (4) Send to the Rhode Island division of taxation a copy of the certificate of revocation.

     (b) Upon the issuance of the certificate of revocation, the authority of the corporation to

transact business in this state ceases.

     7-1.2-1416. Withdrawal of certificate of revocation.

     (a) Within ten (10) years after issuing a certificate of revocation as provided in § 7-1.2-

1415, the secretary of state may withdraw the certificate of revocation and retroactively reinstate

the corporation in good standing as if its certificate of incorporation had not been revoked, except

as subsequently provided:

     (1) Upon the filing by the corporation of the documents it had previously failed to file as

set forth in subsections (a)(1) -- (a)(4) of § 7-1.2-1414.

     (2) Upon the payment by the corporation of a penalty for each year or part of a year that

has elapsed since the issuance of the certificate of revocation; and

     (3) Upon the filing by the corporation of a certificate of good standing from the Rhode

Island division of taxation.

     (b) If, as permitted by the provisions of this title, another corporation, whether business or

nonprofit limited partnership, limited-liability partnership or limited-liability company, or domestic

or foreign, qualified to transact business in this state, bears or has filed a fictitious business name

statement with respect to or reserved or registered a name which is not distinguishable upon the

records of the secretary of state from the name of a corporation with respect to which the certificate

of revocation is proposed to be withdrawn, then the secretary of state shall condition the withdrawal

of the certificate of revocation upon the reinstated corporation's amending its articles of

incorporation or otherwise complying with the provisions of this chapter with respect to the use of

a name available to it under the laws of this state so as to designate a name which is distinguishable

upon the records of the secretary of state from its former name.

     (c) Upon the withdrawal of the certificate of revocation and reinstatement of the

corporation in good standing as provided in subsection (a), title to any real estate, or any interest in

real estate, held by the corporation at the time of the issuance of the certificate of revocation and

not conveyed subsequent to the revocation of its certificate of incorporation, shall be deemed to be

revested in the corporation without further act or deed.

     (d) Upon reinstatement of the corporation in good standing as provided in subsection (a)

of this section, the secretary of state shall send written notice of the reinstatement to the division of

taxation.

     SECTION 2. Sections 7-6-57 and 7-6-58 of the General Laws in Chapter 7-6 entitled

"Rhode Island Nonprofit Corporation Act" are hereby amended to read as follows:

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     7-6-57. Issuance of certificate of revocation.

     (a) Upon revoking any certificate of incorporation, the secretary of state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state's office;

     (3) Send to the corporation by regular mail a certificate of revocation, addressed to the

registered office of the corporation in this state on file with the secretary of state's office; provided,

however, that if a prior mailing addressed to the registered office of the corporation in this state

currently on file with the secretary of state's office has been returned to the secretary of state as

undeliverable by the United States Postal Service for any reason, or if the certificate of revocation

is returned as undeliverable to the secretary of state's office by the United States Postal Service for

any reason, the secretary of state shall give notice as follows:

     (i) To the corporation at its principal office of record as shown in its most recent annual

report, and no further notice shall be required; or

     (ii) In the case of a domestic corporation that has not yet filed an annual report, then to any

one of the incorporators listed on the articles of incorporation, and no further notice shall be

required.

     (4) Send to the Rhode Island division of taxation a copy of the certificate of revocation.

     (b) Upon the issuance of the certificate of revocation, the authority of the corporation to

transact business in this state ceases.

     7-6-58. Withdrawal of certificate of revocation.

     (a) Within ten (10) years after issuing a certificate of revocation as provided in § 7-6-57,

the secretary of state may withdraw the certificate of revocation and reinstate the corporation in

good standing:

     (1) Upon filing by the corporation of the documents it had previously failed to file as set

forth in § 7-6-56(a)(3) -- (a)(6); and

     (2) Upon the payment by the corporation of a penalty in the amount of twenty-five dollars

($25.00) for each year or part of a year that has elapsed since the issuance of the certificate of

revocation.

     (b) If as permitted by § 7-6-11(b)(2) another corporation, whether business or nonprofit, or

domestic or foreign qualified to transact business in this state, bears or has filed a fictitious business

name statement with respect to or reserved or registered in a name that is the same as the name of

a corporation regarding which the certificate of revocation is proposed to be withdrawn, the

secretary of state shall condition the withdrawal of the certificate of revocation upon the reinstated

corporation's amending its articles of incorporation so as to designate a name that is distinguishable

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upon the records of the secretary of state from its former name.

     (c) Upon the withdrawal of the certificate of revocation and reinstatement of the

corporation in good standing as provided in subsection (a), title to any real estate, or any interest in

real estate, held by the corporation at the time of the issuance of the certificate of revocation and

not conveyed subsequent to the revocation of its certificate of incorporation shall be deemed to be

re-vested in the corporation without further act or deed.

     (d) Upon reinstatement of the corporation in good standing as provided in subsection (a)

of this section, the secretary of state shall send written notice of the reinstatement to the division of

taxation.

     SECTION 3. Sections 7-16-42 and 7-16-43 of the General Laws in Chapter 7-16 entitled

"The Rhode Island Limited-Liability Company Act" are hereby amended to read as follows:

     7-16-42. Issuance of certificates of revocation.

     (a) Upon revoking any such certificate of organization or certificate of registration of the

limited-liability company, the secretary of state shall:

     (1) Issue a certificate of revocation in duplicate;

     (2) File one of the certificates in the secretary of state's office;

     (3) Send to the limited-liability company by regular mail a certificate of revocation,

addressed to the resident agent of the limited-liability company in this state on file with the secretary

of state's office; provided, however, that if a prior mailing addressed to the address of the resident

agent of the limited-liability company in this state currently on file with the secretary of state's

office has been returned to the secretary of state as undeliverable by the United States Postal Service

for any reason, or if the revocation certificate is returned as undeliverable to the secretary of state's

office by the United States Postal Service for any reason, the secretary of state shall give notice as

follows:

     (i) To the limited-liability company, domestic or foreign, at its principal office of record as

shown in its most recent annual report, and no further notice shall be required; or

     (ii) In the case of a limited-liability company that has not yet filed an annual report, then

to the domestic limited-liability company at the principal office in the articles of organization or to

the authorized person listed on the articles of organization, or to the foreign limited-liability

company at the office required to be maintained by the limited-liability company in its state of

organization, and no further notice shall be required.

     (4) Send to the Rhode Island division of taxation a copy of the certificate of revocation.

     (b) Upon the issuance of the certificate of revocation, the authority of the limited-liability

company to transact business in this state ceases.

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     7-16-43. Withdrawal of certificate of revocation.

     (a) Within ten (10) years after issuing a certificate of revocation as provided in § 7-16-42,

the secretary of state may withdraw the certificate of revocation and retroactively reinstate the

limited-liability company in good standing as if its certificate of organization or certificate of

registration had not been revoked except as subsequently provided:

     (1) On the filing by the limited-liability company of the documents it had previously failed

to file as set forth in subdivisions (3) -- (6) of § 7-16-41(a);

     (2) On the payment by the limited-liability company of a penalty in the amount of fifty

dollars ($50.00) for each year or part of year that has elapsed since the issuance of the certificate

of revocation; and

     (3) Upon the filing by the limited-liability company of a certificate of good standing from

the Rhode Island division of taxation.

     (b) If, as permitted by the provisions of this chapter or chapters 1.2, 6, 12, or 13 of this title,

another limited-liability company, business or nonprofit corporation, registered limited liability

partnership or a limited partnership, or in each case domestic or foreign, authorized and qualified

to transact business in this state, bears or has filed a fictitious business name statement as to or

reserved or registered a name that is the same as, the name of the limited-liability company with

respect to which the certificate of revocation is proposed to be withdrawn, then the secretary of

state shall condition the withdrawal of the certificate of revocation on the reinstated limited-liability

company's amending its articles of organization or certificate of registration so as to designate a

name that is not the same as its former name.

     (c) Upon reinstatement of the limited-liability company in good standing as provided in

subsection (a) of this section, the secretary of state shall send written notice of the reinstatement to

the division of taxation.

     SECTION 4. Section 44-11-2 of the General Laws in Chapter 44-11 entitled "Business

Corporation Tax" is hereby amended to read as follows:

     44-11-2. Imposition of tax.

     (a) Each corporation shall annually pay to the state a tax equal to nine percent (9%) of net

income, as defined in § 44-11-11, qualified in § 44-11-12, and apportioned to this state as provided

in §§ 44-11-13 -- 44-11-15, for the taxable year. For tax years beginning on or after January 1,

2015, each corporation shall annually pay to the state a tax equal to seven percent (7.0%) of net

income, as defined in § 44-11-13 -- 44-11-15, for the taxable year.

     (b) A corporation shall pay the amount of any tax as computed in accordance with

subsection (a) after deducting from "net income," as used in this section, fifty percent (50%) of the

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excess of capital gains over capital losses realized during the taxable year, if for the taxable year:

     (1) The corporation is engaged in buying, selling, dealing in, or holding securities on its

own behalf and not as a broker, underwriter, or distributor;

     (2) Its gross receipts derived from these activities during the taxable year amounted to at

least ninety percent (90%) of its total gross receipts derived from all of its activities during the year.

"Gross receipts" means all receipts, whether in the form of money, credits, or other valuable

consideration, received during the taxable year in connection with the conduct of the taxpayer's

activities.

     (c) A corporation shall not pay the amount of the tax computed on the basis of its net

income under subsection (a), but shall annually pay to the state a tax equal to ten cents ($.10) for

each one hundred dollars ($100) of gross income for the taxable year or a tax of one hundred dollars

($100), whichever tax shall be the greater, if for the taxable year the corporation is either a "personal

holding company" registered under the federal Investment Company Act of 1940, 15 U.S.C. § 80a-

1 et seq., "regulated investment company," or a "real estate investment trust" as defined in the

federal income tax law applicable to the taxable year. "Gross income" means gross income as

defined in the federal income tax law applicable to the taxable year, plus:

     (1) Any interest not included in the federal gross income; minus

     (2) Interest on obligations of the United States or its possessions, and other interest exempt

from taxation by this state; and minus

     (3) Fifty percent (50%) of the excess of capital gains over capital losses realized during the

taxable year.

     (d)(1) A small business corporation having an election in effect under subchapter S, 26

U.S.C. § 1361 et seq., shall not be subject to the Rhode Island income tax on corporations, except

that the corporation shall be subject to the provisions of subsection (a), to the extent of the income

that is subjected to federal tax under subchapter S. Effective for tax years beginning on or after

January 1, 2015, a small business corporation having an election in effect under subchapter S, 26

U.S.C. § 1361 et seq., shall be subject to the minimum tax under § 44-11-2(e).

     (2) The shareholders of the corporation who are residents of Rhode Island shall include in

their income their proportionate share of the corporation's federal taxable income.

     (3) ¤Deleted by P.L. 2004, ch. 595, art. 29, § 1.ó

     (4) ¤Deleted by P.L. 2004, ch. 595, art. 29, § 1.ó

     (e) Minimum tax. The tax imposed upon any corporation under this section, including a

small business corporation having an election in effect under subchapter S, 26 U.S.C. § 1361 et

seq., shall not be less than four hundred fifty dollars ($450). For tax years beginning on or after

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January 1, 2017, the tax imposed shall not be less than four hundred dollars ($400).

     (f) Upon receipt by the division of taxation of a copy of a certificate of revocation from the

secretary of state, the division of taxation shall not impose the minimum tax required by subsection

(e) of this section for the tax year in which the copy of the certificate was received until the tax year

in which the certificate of revocation is withdrawn as reported to the tax division by the secretary

of state.

     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- RHODE

ISLAND BUSINESS CORPORATION ACT

***

     This act would suspend the imposition of the minimum tax upon corporations, nonprofit

corporations, and limited liability companies in tax years in which the corporate charter, certificate

of organization or certificate of registration is revoked by the secretary of state until the tax year in

which corporations or limited liability companies are reinstated in good standing.

     This act would take effect upon passage.

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