Update Business Entity Laws

Business entities - updates to governing law - appropriation. The act makes the following changes to the "Colorado Business Corporation Act" (CBCA) and conforming changes to the "Colorado Corporations and Associations Act" (CCAA):

• Deletes definitions in the CCAA that are no longer necessary (section 1);
• Updates provisions in the CCAA to clarify conversions and mergers of entities and exchanges of owners' interests in entities (sections 2 through 18);
• Updates provisions in the CCAA addressing the requirements for the name of an entity formed under Colorado law or qualified to do business in Colorado as a foreign entity (sections 19 through 21);
• Updates provisions in the CCAA regarding court proceedings that may be filed by a dissolved Colorado entity for a determination of the amount and form of security to be provided for payment of claims that are contingent or unknown or that arose from events occurring after dissolution (sections 22 through 24);
• Adds definitions to and updates definitions in the CBCA (section 25);
• Reorganizes certain provisions that are optional to include in the articles of incorporation of a Colorado corporation so that they appear in a single location to avoid confusion (section 28);
• Adds an optional forum selection provision similar to that found in other states and the "Model Business Corporation Act" (section 29);
• Updates provisions for proxies and treatment for voting purposes of shares held by intermediaries and nominees (sections 31 and 32);
• Updates provisions for the general standards of conduct for directors and officers and standards of liabilities for directors (section 35);
• Updates provisions dealing with conflicting interest transactions and corporate opportunities (section 36);
• Updates provisions dealing with indemnification of directors, officers, employees, fiduciaries, and agents and advancement of expenses (sections 38 through 46);
• Updates provisions dealing with corporate mergers, conversions, and exchanges by reference to the updated provisions in the CCAA (sections 47 through 55);
• Repeals and reenacts, with amendments, former article 113 of title 7, Colorado Revised Statutes, relating to dissenters' rights and substitutes provisions to define the procedure to obtain appraisal rights in lieu of dissenters' rights (section 56); and
• Updates the provisions establishing the grounds and procedures for seeking judicial dissolution and providing for an election by one or more shareholders to purchase shares owned by the petitioning shareholders in lieu of proceeding with judicial dissolution (sections 57 through 60).

The act also updates certain provisions of articles 55 and 56 of title 7, Colorado Revised Statutes, regarding various forms of cooperatives, as well as articles 41 (domestic associations organized as savings and loan associations) and 103 (state banks) of title 11, Colorado Revised Statutes, to be consistent with changes made in the CBCA (sections 63 through 65, 68, and 69).

$59,360 is appropriated from the department of state cash fund to the department of state to implement the act.

(Note: This summary applies to this bill as enacted.)