S*400 Session 106 (1985-1986)
S*0400(Rat #0113, Act #0072 of 1985) General Bill, By J.M. Waddell, Leatherman,
I.E. Lourie and N.A. Theodore
Similar(H 2669)
A Bill to amend Section 12-19-70, Code of Laws of South Carolina, 1976,
relating to the annual corporation license tax, so as to raise the minimum
annual fee from ten to fifteen dollars, to amend Section 33-1-20, as amended,
relating to definitions for purposes of the South Carolina Business
Corporation Act, so as to define "distribution", to amend Section 33-21-100,
as amended, relating to articles of dissolution for a corporation, so as to
delete the requirement that the articles be accompanied by a certificate that
there are no unpaid fees or franchise taxes, to amend Section 33-23-90, as
amended, relating to surrender of a foreign corporation's authority to do
business in this State, so as to delete the requirement for a certificate of
the South Carolina Tax Commission that there are no unpaid fees or franchise
taxes due from the corporation, to amend Section 33-29-10, as amended,
relating to filing fees under the South Carolina Business Corporation Act, so
as to delete the fee for the annual report of a foreign or domestic
corporation, to amend Section 33-31-50, as amended, relating to fees for
insurance of a certificate of incorporation, so as to require the filing of
the first report of corporations with the Secretary of State when an
application for a certificate of incorporation is filed and to provide a fee,
to amend the 1976 Code by adding Section 33-9-260, so as to provide for
distributions to corporate shareholders, and to repeal Section 33-25-10,
relating to annual reports of domestic and foreign corporations.-amended title
03/26/85 Senate Introduced and read first time SJ-1006
03/26/85 Senate Referred to Committee on Finance SJ-1007
04/04/85 Senate Committee report: Favorable with amendment
Finance SJ-1330
04/09/85 Senate Amended SJ-1412
04/09/85 Senate Read second time SJ-1412
04/09/85 Senate Ordered to third reading with notice of
amendments SJ-1412
04/10/85 Senate Amended SJ-1449
04/10/85 Senate Read third time and sent to House SJ-1451
04/11/85 House Introduced and read first time HJ-2331
04/11/85 House Referred to Committee on Ways and Means HJ-2331
04/30/85 House Committee report: Favorable Ways and Means HJ-2734
04/30/85 House Read second time HJ-2735
05/01/85 House Read third time and enrolled HJ-2780
05/02/85 Ratified R 113
05/02/85 Signed By Governor
05/02/85 Effective date 05/02/85
05/02/85 Act No. 72
05/14/85 Copies available
(A72, R113, S400)
AN ACT TO AMEND SECTION 12-19-70, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO THE ANNUAL CORPORATION LICENSE TAX, SO AS TO RAISE THE MINIMUM ANNUAL
FEE FROM TEN TO FIFTEEN DOLLARS, TO AMEND SECTION 33-1-20, AS AMENDED, RELATING
TO DEFINITIONS FOR PURPOSES OF THE SOUTH CAROLINA BUSINESS CORPORATION ACT, SO
AS TO DEFINE "DISTRIBUTION", TO AMEND SECTION 33-21-100, AS AMENDED,
RELATING TO ARTICLES OF DISSOLUTION FOR A CORPORATION, SO AS TO DELETE THE
REQUIREMENT THAT THE ARTICLES BE ACCOMPANIED BY A CERTIFICATE THAT THERE ARE NO
UNPAID FEES OR FRANCHISE TAXES, TO AMEND SECTION 33-23-90, AS AMENDED, RELATING
TO SURRENDER OF A FOREIGN CORPORATION'S AUTHORITY TO DO BUSINESS IN THIS STATE,
SO AS TO DELETE THE REQUIREMENT FOR A CERTIFICATE OF THE SOUTH CAROLINA TAX
COMMISSION THAT THERE ARE NO UNPAID FEES OR FRANCHISE TAXES DUE FROM THE
CORPORATION, TO AMEND SECTION 33-29-10, AS AMENDED, RELATING TO FILING FEES UNDER
THE SOUTH CAROLINA BUSINESS CORPORATION ACT, SO AS TO DELETE THE FEE FOR THE
ANNUAL REPORT OF A FOREIGN OR DOMESTIC CORPORATION, TO AMEND SECTION 33-31-50,
AS AMENDED, RELATING TO FEES FOR INSURANCE OF A CERTIFICATE OF INCORPORATION, SO
AS TO REQUIRE THE FILING OF THE FIRST REPORT OF CORPORATIONS WITH THE SECRETARY
OF STATE WHEN AN APPLICATION FOR A CERTIFICATE OF INCORPORATION IS FILED AND TO
PROVIDE A FEE, TO AMEND THE 1976 CODE BY ADDING SECTION 33-9-260, SO AS TO
PROVIDE FOR DISTRIBUTIONS TO CORPORATE SHAREHOLDERS, AND TO REPEAL SECTION
33-25-10, RELATING TO ANNUAL REPORTS OF DOMESTIC AND FOREIGN CORPORATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Fee
SECTION 1. Section 12-19-70 of the 1976 Code is amended to read:
"Section 12-19-70. In addition to all other license taxes or fees or taxes
of whatever kind, every corporation required to file the report by Section
12-19-20, except the corporations enumerated in Section 12-19-100, shall pay to
the Commission at the time of filing the report required by Section 12-19-20 an
annual license fee of five dollars plus one mill on each dollar paid to the
capital stock and paid in as surplus of the corporation as shown by the records
of the corporation on the first day of the income year next preceding the date
of filing the report. In no case may the license fee provided by this section
be less than fifteen dollars. The license fee provided for by this section must
be paid at the time of filing the report pursuant to the provisions of Section
12-19-20. The phrase 'paid in as surplus' for the purposes of Chapter 19, Title
12, shall mean the entire surplus of a corporation other than its earned surplus
as defined in Title 33, Chapter 1, Section 33-1-20 (q), and shall include any
charges against earned surplus reflected in the balance sheet except charges for
reserves."
Subsection deleted
SECTION 2. Section 33-21-100 of the 1976 Code, as amended by Act 146 of 1981,
is further amended by deleting subsection (b).
Further
SECTION 3. Section 33-23-90 of the 1976 Code, as amended by Act 146 of 1981, is
further amended by deleting item (8) in subsection (a).
Further
SECTION 4. Section 33-29-10 of the 1976 Code, as amended by Act 146 of 1981, is
further amended by deleting item (39).
Fee
SECTION 5. Section 33-31-50 of the 1976 Code, as amended by Act 364 of 1980, is
further amended to read:
"Section 33-31-50. Upon the filing of the above declaration, accompanied
by the First Report of Corporations and the initial license fee of ten dollars,
and the payment of a charter fee of fifteen dollars the Secretary of State shall
issue to the proposed corporation a certificate of incorporation for the term
that may be fixed in the declaration or, in the absence of the limitation, in
perpetuity. Provided, that churches, religious organizations, religious
societies, religious institutions, and volunteer fire departments shall pay a
charter fee of three dollars."
Distributions to shareholders
SECTION 6. The 1976 Code is amended by adding:
"Section 33-9-260. Distributions to Shareholders.
(a) Without the vote of the shareholders, 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).
(b) If the board of directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a repurchase
or reacquisition of shares), it is the date the board of directors authorizes the
distribution.
(c) No distribution may be made if, after giving it effect:
(1) the corporation would not be able to pay its debts as they become due in
the usual course of business; or
(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) 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) The effect of a distribution under subsection (c) is measured:
(1) in the case of distribution by purchase, redemption, or other acquisition
of the corporation's shares, as of the earlier of (i) the date money or other
property is transferred or debt incurred by the corporation or (ii) 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 (i) the date the distribution is authorized if
the payment occurs within 120 days after the date of authorization or (ii) the
date the payment is made if it occurs more than 120 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) In circumstances to which this section is applicable, it shall supercede
the applicability of any other provisions or statutes of this State with respect
to the legality of distributions."
Definition
SECTION 7. Section 33-1-20 of the 1976 Code, as last amended by Act 146 of 1981,
is further amended by adding a new item (10) and renumbering remaining items to
conform:
"(10) '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 the form of a declaration or payment of a dividend, a
purchase, redemption, or other acquisition of shares, a distribution of
indebtedness, or otherwise."
Repeal
SECTION 8. Section 33-25-10 of the 1976 Code is repealed.
Time effective
SECTION 9. This act shall take effect upon approval by the Governor. |