S*1194 Session 107 (1987-1988)
S*1194(Rat #0779, Act #0659 of 1988) General Bill, By T.E. Smith, Bryan,
H.U. Fielding and J.C. Hayes
A Bill to amend Section 62-1-108, Code of Laws of South Carolina, 1976,
relating to acts by a holder of a general power of appointment, so as to
define the term "presently exercisable general power of appointment"; to amend
Section 62-1-302, as amended, relating to the subject matter of jurisdiction
of the probate courts, so as to revise certain aspects of this jurisdiction;
to amend Section 62-1-306, relating to jury trials in the probate court, so as
to further provide for the situations when jury trials may be demanded and the
manner in which these trials may be waived; to amend Section 62-5-102,
relating to jurisdiction of persons under disability and their property, so as
to clarify that the probate court has jurisdiction of certain protective
proceedings and guardianship proceedings; to amend Section 62-5-402, relating
to protective proceedings, so as to further provide for the jurisdiction of
the probate court and other courts with regard to certain claims and issues in
these proceedings; to amend Section 62-5-411, relating to bonds in protective
proceedings, so as to further provide for these bonding requirements; to amend
Section 62-5-424, relating to powers of a conservator, so as to revise his
authority to pay, contest, or settle certain claims; to amend the 1976 Code by
adding Section 62-5-433 so as provide for the jurisdiction of specified courts
in regard to certain claims in favor of or against a minor or incapacitated
person, and to provide the procedures to be followed in settling these claims;
to amend the 1976 Code by adding Section 62-7-211 so as to allow the Court to
consolidate or divide trusts under certain conditions; to amend Section
62-7-302, relating to a trustee's standard of care, so as to further provide
for this standard of care; to amend Section 62-7-418, relating to charges
which must be made against principal, so as to further provide for these
charges; to amend the 1976 Code by adding Section 15-72-10 so as to conform
the jurisdiction of the circuit court to the provisions of Section 62-5-433;
to amend the 1976 Code by adding Section 62-3-1202A so as to permit certain
estates under ten thousand dollars not to be administered; to amend Section
62-2-503, as amended, relating to attestation and self-proving of a will, so
as to further provide for this attestation and self-proving; to amend Section
62-3-406, as amended, relating to testimony of attesting witnesses to a will
in contested cases, so as to further provide for the presumptions of
compliance with signature requirements for execution if the will is
self-proved; to amend Section 62-3-603, as amended, relating to bonds of
personal representatives, so as to further provide for when these bonds may be
waived and are required; to amend Section 14-23-650, as amended, relating to a
description of lands devised, so as to delete a reference to where these
descriptions must be enterd; to amend Section 62-3-806, as amended, relating
to allowance of claims, so as to provide that it is the responsiblity of the
personal representative to notify the claimant if a claim is disallowed; to
amend Section 62-5-103, relating to the manner in which a person under a duty
to pay or deliver money or personal property under ten thousand dollars to a
minor must perform this duty, so as to make these provisions also applicable
to incapacitated persons; to amend the 1976 Code by adding Section 62-5-434 so
as to provide that the settlement of any claim involving a minor completed
between July 1, 1987, and September 24, 1987, is presumed facially valid
whether effectuated with or without court approval; to make legislative
findings regarding the procedures to be followed for the settlement of claims
of minors; to amend Sections 33-14-200, 33-14-210, 33-14-220, and 33-14-230,
relating to administrative dissolution of corporations under the South
Carolina Business Corporation Act of 1988, so as to further provide for this
administrative dissolution; to amend Sections 33-15-300, 33-15-310, and
33-15-320, relating to revocation of a foreign corporation's certificate of
authority to transact business, so as to further provide for this revocation;
to amend Section 33-1-280, as amended, relating to the Secretary of State
furnishing certificates of existence for corporations, so as to revise the
contents of the certificate of existence as it relates to a corporation's
dissolution or revocation of authority to do business; to amend Section
12-7-1675, relating to administrative dissolution of a domestic corporation or
revocation of the certificate of authority of a foreign corporation to
transact business for failure to file certain tax returns, so as to further
provide for this dissolution or revocation; and to repeal Chapter 29 of Title
33 relating to fees and taxes payable by corporations.-amended title
02/11/88 Senate Introduced and read first time SJ-11
02/11/88 Senate Referred to Committee on Judiciary SJ-12
03/02/88 Senate Committee report: Favorable with amendment
Judiciary SJ-21
03/09/88 Senate Read second time SJ-36
03/09/88 Senate Ordered to third reading with notice of
amendments SJ-38
04/19/88 Senate Amended SJ-43
04/19/88 Senate Read third time and sent to House SJ-50
04/20/88 House Introduced and read first time HJ-3069
04/20/88 House Referred to Committee on Judiciary HJ-3071
05/18/88 House Committee report: Favorable with amendment
Judiciary HJ-3827
05/31/88 House Special order, set for immediately (Under H 4337)
HJ-4428
05/31/88 House Amended HJ-4429
05/31/88 House Read second time HJ-4434
06/01/88 House Read third time HJ-4547
06/01/88 House Returned HJ-4547
06/01/88 Senate House amendment amended SJ-106
06/01/88 Senate Returned SJ-126
06/02/88 House Concurred in Senate amendment and enrolled HJ-4655
06/20/88 Ratified R 779
07/13/88 Signed By Governor
07/13/88 Effective date 07/13/88
07/13/88 Act No. 659
08/01/88 Copies available
(A659, R779, S1194)
AN ACT TO AMEND SECTION 62-1-108, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO ACTS BY A HOLDER OF A GENERAL POWER OF APPOINTMENT, SO AS TO DEFINE
THE TERM "PRESENTLY EXERCISABLE GENERAL POWER OF APPOINTMENT"; TO AMEND
SECTION 62-1-302, AS AMENDED, RELATING TO THE SUBJECT MATTER OF JURISDICTION OF
THE PROBATE COURTS, SO AS TO REVISE CERTAIN ASPECTS OF THIS JURISDICTION; TO
AMEND SECTION 62-1-306, RELATING TO JURY TRIALS IN THE PROBATE COURT, SO AS TO
FURTHER PROVIDE FOR THE SITUATIONS WHEN JURY TRIALS MAY BE DEMANDED AND THE
MANNER IN WHICH THESE TRIALS MAY BE WAIVED; TO AMEND SECTION 62-5-102, RELATING
TO JURISDICTION OF PERSONS UNDER DISABILITY AND THEIR PROPERTY, SO AS TO CLARIFY
THAT THE PROBATE COURT HAS JURISDICTION OF CERTAIN PROTECTIVE PROCEEDINGS AND
GUARDIANSHIP PROCEEDINGS; TO AMEND SECTION 62-5-402, RELATING TO PROTECTIVE
PROCEEDINGS, SO AS TO FURTHER PROVIDE FOR THE JURISDICTION OF THE PROBATE COURT
AND OTHER COURTS WITH REGARD TO CERTAIN CLAIMS AND ISSUES IN THESE PROCEEDINGS;
TO AMEND SECTION 62-5-411, RELATING TO BONDS IN PROTECTIVE PROCEEDINGS, SO AS TO
FURTHER PROVIDE FOR THESE BONDING REQUIREMENTS; TO AMEND SECTION 62-5-424,
RELATING TO POWERS OF A CONSERVATOR, SO AS TO REVISE HIS AUTHORITY TO PAY,
CONTEST, OR SETTLE CERTAIN CLAIMS; TO AMEND THE 1976 CODE BY ADDING SECTION
62-5-433 SO AS TO PROVIDE FOR THE JURISDICTION OF SPECIFIED COURTS IN REGARD TO
CERTAIN CLAIMS IN FAVOR OF OR AGAINST A MINOR OR INCAPACITATED PERSON, AND TO
PROVIDE THE PROCEDURES TO BE FOLLOWED IN SETTLING THESE CLAIMS; TO AMEND THE 1976
CODE BY ADDING SECTION 62-7-211 SO AS TO ALLOW THE COURT TO CONSOLIDATE OR DIVIDE
TRUSTS UNDER CERTAIN CONDITIONS; TO AMEND SECTION 62-7-302, RELATING TO A
TRUSTEE'S STANDARD OF CARE, SO AS TO FURTHER PROVIDE FOR THIS STANDARD OF CARE;
TO AMEND SECTION 62-7-418, RELATING TO CHARGES WHICH MUST BE MADE AGAINST
PRINCIPAL, SO AS TO FURTHER PROVIDE FOR THESE CHARGES; TO AMEND THE 1976 CODE BY
ADDING SECTION 15-72-10 SO AS TO CONFORM THE JURISDICTION OF THE CIRCUIT COURT
TO THE PROVISIONS OF SECTION 62-5-433; TO AMEND THE 1976 CODE BY ADDING SECTION
62-3-1202A SO AS TO PERMIT CERTAIN ESTATES UNDER TEN THOUSAND DOLLARS NOT TO BE
ADMINISTERED; TO AMEND SECTION 62-2-503, AS AMENDED, RELATING TO ATTESTATION AND
SELF-PROVING OF A WILL, SO AS TO FURTHER PROVIDE FOR THIS ATTESTATION AND
SELF-PROVING; TO AMEND SECTION 62-3-406, AS AMENDED, RELATING TO TESTIMONY OF
ATTESTING WITNESSES TO A WILL IN CONTESTED CASES, SO AS TO FURTHER PROVIDE FOR
THE PRESUMPTIONS OF COMPLIANCE WITH SIGNATURE REQUIREMENTS FOR EXECUTION IF THE
WILL IS SELF-PROVED; TO AMEND SECTION 62-3-603, AS AMENDED, RELATING TO BONDS OF
PERSONAL REPRESENTATIVES, SO AS TO FURTHER PROVIDE FOR WHEN THESE BONDS MAY BE
WAIVED AND ARE REQUIRED; TO AMEND SECTION 14-23-650, AS AMENDED, RELATING TO A
DESCRIPTION OF LANDS DEVISED, SO AS TO DELETE A REFERENCE TO WHERE THESE
DESCRIPTIONS MUST BE ENTERED; TO AMEND SECTION 62-3-806, AS AMENDED, RELATING TO
ALLOWANCE OF CLAIMS, SO AS TO PROVIDE THAT IT IS THE RESPONSIBILITY OF THE
PERSONAL REPRESENTATIVE TO NOTIFY THE CLAIMANT IF A CLAIM IS DISALLOWED; TO AMEND
SECTION 62-5-103, RELATING TO THE MANNER IN WHICH A PERSON UNDER A DUTY TO PAY
OR DELIVER MONEY OR PERSONAL PROPERTY UNDER TEN THOUSAND DOLLARS TO A MINOR MUST
PERFORM THIS DUTY, SO AS TO MAKE THESE PROVISIONS ALSO APPLICABLE TO
INCAPACITATED PERSONS; TO AMEND THE 1976 CODE BY ADDING SECTION 62-5-434 SO AS
TO PROVIDE THAT THE SETTLEMENT OF ANY CLAIM INVOLVING A MINOR COMPLETED BETWEEN
JULY 1, 1987, AND SEPTEMBER 24, 1987, IS PRESUMED FACIALLY VALID WHETHER
EFFECTUATED WITH OR WITHOUT COURT APPROVAL; TO MAKE LEGISLATIVE FINDINGS
REGARDING THE PROCEDURES TO BE FOLLOWED FOR THE SETTLEMENT OF CLAIMS OF MINORS;
TO AMEND SECTIONS 33-14-200, 33-14-210, 33-14-220, AND 33-14-230, RELATING TO
ADMINISTRATIVE DISSOLUTION OF CORPORATIONS UNDER THE SOUTH CAROLINA BUSINESS
CORPORATION ACT OF 1988, SO AS TO FURTHER PROVIDE FOR THIS ADMINISTRATIVE
DISSOLUTION; TO AMEND SECTIONS 33-15-300, 33-15-310, AND 33-15-320, RELATING TO
REVOCATION OF A FOREIGN CORPORATION'S CERTIFICATE OF AUTHORITY TO TRANSACT
BUSINESS, SO AS TO FURTHER PROVIDE FOR THIS REVOCATION; TO AMEND SECTION
33-1-280, AS AMENDED, RELATING TO THE SECRETARY OF STATE FURNISHING CERTIFICATES
OF EXISTENCE FOR CORPORATIONS, SO AS TO REVISE THE CONTENTS OF THE CERTIFICATE
OF EXISTENCE AS IT RELATES TO A CORPORATION'S DISSOLUTION OR REVOCATION OF
AUTHORITY TO DO BUSINESS; TO AMEND SECTION 12-7-1675, RELATING TO ADMINISTRATIVE
DISSOLUTION OF A DOMESTIC CORPORATION OR REVOCATION OF THE CERTIFICATE OF
AUTHORITY OF A FOREIGN CORPORATION TO TRANSACT BUSINESS FOR FAILURE TO FILE
CERTAIN TAX RETURNS, SO AS TO FURTHER PROVIDE FOR THIS DISSOLUTION OR REVOCATION;
AND TO REPEAL CHAPTER 29 OF TITLE 33 RELATING TO FEES AND TAXES PAYABLE BY
CORPORATIONS.
Be it enacted by the General Assembly of the State of South Carolina:
Definition of "presently exercisable general power of appointment"
SECTION 1. Section 62-1-108 of the 1976 Code is amended to read:
"Section 62-1-108. For the purpose of granting consent or approval with
regard to the acts or accounts of a personal representative or trustee, including
relief from liability or penalty for failure to post bond, or to perform other
duties, and for purposes of consenting to modification or termination of a trust
or to deviation from its terms, the sole holder or all co-holders of a presently
exercisable general power of appointment, including one in the form of a power
of amendment or revocation, are deemed to act for beneficiaries to the extent
their interests (as objects, takers in default, or otherwise) are subject to the
power. The term 'presently exercisable general power of appointment' includes
a testamentary general power of appointment having no conditions precedent to its
exercise other than the death of the holder, the validity of the holder's last
will and testament, and the inclusion of a provision in the will sufficient to
exercise this power."
Jurisdiction revised
SECTION 2. Section 62-1-302(a)(2) of the 1976 Code, as last amended by Act 171
of 1987, is further amended to read:
"(2) protection of minors and incapacitated persons, including the
mortgage and sale of personal and real property owned by minors or incapacitated
persons, except that jurisdiction for approval of settlements of claims in favor
of or against minors or incapacitated persons is governed by Section
62-5-433."
Jurisdiction revised
SECTION 3. Section 62-1-302(c) of the 1976 Code, as last amended by Act 171 of
1987, is further amended to read:
"(c) Notwithstanding the exclusive jurisdiction of the probate court over
the foregoing matters, any action or proceeding filed in the probate court and
relating to the following subject matters, on motion of any party, or by the
court on its own motion, must
be removed, not later than ten days following the date on which all responsive
pleadings must be filed, to the circuit court and in such cases the circuit court
shall proceed upon the matter de novo:
(1) formal proceedings for the probate of wills and for the appointment of
personal representatives named in wills;
(2) construction of wills;
(3) actions to try title;
(4) trusts; and
(5) actions in which a party has a right to trial by jury and which involve
an amount in controversy of at least five thousand dollars in value."
Revision of jury trial provisions
SECTION 4. Section 62-1-306(a) of the 1976 Code is amended to read:
"(a) If duly demanded, a party is entitled to trial by jury in any
proceeding involving an issue of fact in an action for the recovery of money only
or of specific real or personal property, unless waived as provided in the rules
of civil procedure for the courts of this State. The right to trial by jury
exists in, but is not limited to, formal proceedings in favor of the probate of
a will or contesting the probate of a will."
Jurisdiction provisions clarified
SECTION 5. Section 62-5-102(a) of the 1976 Code is amended to read:
"(a) The probate court has jurisdiction over protective proceedings and
guardianship proceedings."
Jurisdiction revised
SECTION 6. Section 62-5-402 of the 1976 Code is amended to read:
"Section 62-5-402. After the service of notice in a proceeding seeking
the appointment of a conservator or other protective order and until termination
of the proceeding, the probate court in which the petition is filed has:
(1) exclusive jurisdiction to determine the need for a conservator or other
protective order until the proceedings are terminated;
(2) exclusive jurisdiction to determine how the estate of the protected person
which is subject to the laws of this State must be managed, expended, or
distributed to or for the use of the protected person or any of his dependents;
and
(3) concurrent jurisdiction to determine the validity of claims for or against
the person or estate of the protected person except as limited by Section
62-5-433."
Bonding requirements revised
SECTION 7. Section 62-5-411 of the 1976 Code is amended to read:
"Section 62-5-411. The court shall, unless for good cause stated, require
a conservator to furnish a bond conditioned upon faithful discharge of all duties
of the trust according to law and will approve all sureties. If bond is
required, the person qualifying shall file a statement under oath with the court
indicating his best estimate of the value of the personal estate of the protected
person and of the income expected from the personal estate during the next year,
and he shall execute and file a bond with the court, or give other suitable
security, in an amount not less than the estimate. The court shall determine
that the bond is duly executed by a corporate surety, or one or more individual
sureties whose performance is secured by pledge of personal property, mortgage
on real property, or other adequate security. The court may permit the amount
of the bond to be reduced by the value of assets of the estate deposited with a
domestic financial institution, as defined in Section 62-6-101, in a manner that
prevents their unauthorized disposition. On petition of the conservator or
another interested person, the court may increase or reduce the amount of the
bond, release sureties, dispense with security or securities, or permit the
substitution of another bond with the same or different sureties."
Conservation powers revised
SECTION 8. Section 62-5-424(c)(12) of the 1976 Code is amended to read:
"(12) pay or contest any claim except as limited by Section 62-5-433; to
settle a claim by or against the estate of the protected person by compromise,
arbitration, or otherwise except as limited by Section 62-5-433; and to release,
in whole or in part, any claim belonging to the estate to the extent that the
claim is uncollectible;".
Jurisdiction and procedures for claims for and against minors and incapacitated
persons
SECTION 9. The 1976 Code is amended by adding:
"Section 62-5-433. (A)(1) For purposes of this section and for any claim
exceeding ten thousand dollars in favor of or against any minor or incapacitated
person, 'court' means the circuit court of the county in which the minor or
incapacitated person resides. For purposes of this section and for any claim not
exceeding ten thousand dollars in favor of or against any minor or incapacitated
person, 'court' means either the circuit court or the probate court of the county
in which the minor or incapacitated person resides.
(2) 'Claim' means the net or actual amount accruing to or paid by the minor
or incapacitated person as a result of the settlement.
(3) 'Petitioner' means either a conservator appointed by the probate court
for the minor or incapacitated person or the guardian or guardian ad litem of the
minor or incapacitated person if a conservator has not been appointed.
(B) The settlement of any claim over two thousand, five hundred dollars in
favor of or against any minor incapacitated person for the payment of money or
the possession of personal property must be effected on his behalf in the
following manner:
(1) The petitioner shall file with the court a verified petition setting
forth all of the pertinent facts concerning the claim, payment, attorney's fees,
and expenses, if any, and the reasons why, in the opinion of the petitioner, the
proposed settlement should be approved. For all claims that exceed ten thousand
dollars, the verified petition must include a statement by the petitioner that,
in his opinion, the proposed settlement is in the best interests of the minor or
incapacitated person.
(2) If, upon consideration of the petition and after hearing the testimony
as it may require concerning the matter, the court concludes that the proposed
settlement is proper and in the best interests of the minor or incapacitated
person, the court shall issue its order approving the settlement and authorizing
the petitioner to consummate it and, if the settlement requires the payment of
money or the delivery of property for the benefit of the minor or incapacitated
person, to receive the money or property and execute a proper receipt and release
or covenant not to sue therefor, which is binding upon the minor or incapacitated
person.
(3) The order authorizing the settlement must require that payment or
delivery of the money or property be made through the conservator. If a
conservator has not been appointed, the petitioner shall, upon receiving the
money or property, pay and deliver it to the court pending the appointment and
qualification of a duly appointed conservator. If a party subject to the court
order fails or refuses to pay the money or deliver the property as required by
the order, he is liable and punishable as for contempt of court, but failure or
refusal does not affect the validity or conclusiveness of the settlement.
(C) The settlement of any claim that does not exceed two thousand, five
hundred dollars in favor of or against a minor or incapacitated person for the
payment of money or the possession of personal property may be effected in any
of the following manners:
(1) If a conservator has been appointed, he may settle the claim as provided
in Section 62-5-424, or he may petition the court for approval as provided in
subsection (B) above. If the settlement requires the payment of money or the
delivery of property for the benefit of the minor or incapacitated person, the
conservator shall receive the money or property and execute a proper receipt and
release or covenant not to sue therefor, which is binding upon the minor or
incapacitated person. The payment or delivery of money or personal property to
a minor or incapacitated person must be made in accordance with Section 62-5-103.
(2) If a conservator has not been appointed, the guardian must petition the
court for approval of the settlement as provided in
subsection (B) above. The payment or delivery of money or personal property to
a minor or incapacitated person must be made in accordance with Section 62-5-103.
(D) The settlement of any claim that does not exceed one thousand dollars in
favor of or against any minor or incapacitated person for the payment of money
or the possession of personal property may be effected by the parent or guardian
of the minor or incapacitated person without court approval of the settlement and
without the appointment of a conservator. If the settlement requires the payment
of money or the delivery of property for the benefit of the minor or
incapacitated person, the parent or guardian shall receive the money or property
and execute a proper receipt and release or covenant not to sue therefor, which
is binding upon the minor or incapacitated person. The payment or delivery of
money or personal property to a minor or incapacitated person must be made in
accordance with Section 62-5-103."
Consolidation or division of trusts
SECTION 10. The 1976 Code is amended by adding:
"Section 62-7-211. Upon petition by a trustee, beneficiary, or any
interested party for good cause shown, the court, after a hearing on notice to
all interested parties, in that manner as the court may direct, may divide a
trust into two or more single trusts or consolidate two or more trusts into a
single trust, upon those terms and conditions as it considers appropriate,
provided the consolidation or division satisfies the court that:
(1) consolidation or division is not inconsistent with the intent of the
trustor with regard to any trust to be consolidated or divided;
(2) consolidation or division would facilitate administration of the trusts;
and
(3) consolidation or division would be in the best interests of all
beneficiaries and not materially impair their respective interests.
This section applies to all trusts whenever created, whether inter vivos or
testamentary, created by the same or different instruments, by the same or
different persons and regardless of where created or administered.
This section does not limit the right of a trustee acting in accordance with
the applicable provisions of the governing instrument to divide or consolidate
trusts."
Trustee's standard of care revised
SECTION 11. Section 62-7-302(a) of the 1976 Code is amended to read:
"(a) Except as otherwise provided by the terms or limitations set forth
in any will, agreement, court order, or other instrument creating or defining the
fiduciary's duties and powers (the term 'legal investment' or 'authorized
investment' or words of similar import, as used in any such instrument being
taken, however, to mean any investment which is permitted by the terms of this
section), in acquiring, investing, reinvesting, exchanging, retaining, selling,
and managing property for the benefit of another, a fiduciary shall exercise the
judgment and care under the circumstances then prevailing, which men of prudence,
discretion, and intelligence exercise in the management of their own affairs, not
in regard to speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable safety of their
capital. Within the limitations of the foregoing standard, a fiduciary is
authorized to: (1) acquire and retain every kind of property and every kind of
investment, specifically including, but not by way of limitation, bonds,
debentures, and other corporate obligations, and stocks, preferred or common, and
securities of any open-end or closed-end management-type investment company or
investment trust registered under the Federal Investment Company Act of 1940, as
amended; (2) retain property properly acquired, without limitation as to time and
without regard to its suitability for original purchase; (3) retain the property
received by such fiduciary on the creation of the estate, guardianship, or trust
(including, in the case of a corporate fiduciary, stock, or other securities of
its own issue) without regard to its suitability for original purchase; (4)
retain the securities into which corporate securities owned by the fiduciary may
be converted or which may be derived therefrom as a result of merger,
consolidation, stock dividends, splits, liquidations, and similar procedures (and
may exercise by purchase or otherwise any rights, warrants, or conversion
features attaching to any such securities); and (5) purchase or otherwise acquire
and retain any security underwritten by a syndicate, even if the fiduciary or its
affiliate (defined as any entity which owns or is owned by, in whole or in part,
the fiduciary or is owned by the same entity that owns the fiduciary)
participates or has participated as a member of the syndicate, provided the
fiduciary does not purchase the security from itself, its affiliate, or from
another member of the underwriting syndicate or its affiliate pursuant to an
implied or express reciprocal agreement between the fiduciary or its affiliate,
and such other member or its affiliate, to purchase all or part of each other's
underwriting participation commitment within the syndicate."
Charges against principal provisions revised
SECTION 12. Section 62-7-418(2) of the 1976 Code is amended to read:
"(2) charges not provided for in Section 62-7-417(a) including the cost
of investing and reinvesting principal, the payments on principal of an
indebtedness (including a mortgage amortized by periodic payments of principal),
expenses for preparation of property for rental or sale, and, unless the court
directs otherwise, expenses incurred in maintaining or defending any action to
protect or construe the trust or the property or assure the title of any trust
property;".
Jurisdiction conformed
SECTION 13. Title 15 of the 1976 Code is amended by adding:
"Section 15-72-10. Subject to the provisions of Section 62-5-433 the
circuit court has:
(1) exclusive jurisdiction to approve the settlement of any claim that
exceeds ten thousand dollars in favor of or against any minor or incapacitated
person; and
(2) concurrent jurisdiction with the probate court to approve the settlement
of any claim not exceeding ten thousand dollars in favor of or against any minor
or incapacitated person."
Administration of certain estates not required
SECTION 14. The 1976 Code is amended by adding:
"Section 62-3-1202A. When any person in this State dies leaving an estate
with a value, less liens and encumbrances, not exceeding ten thousand dollars and
exempt property, reasonable funeral expenses, and reasonable and necessary
medical and hospital expenses of the last illness of the decedent, the probate
judge may receive such estate and pay these creditors as may present their duly
attested claims in the priority set forth in Section 62-3-805 and the residue,
if any, to the distributee or distributees of the estate without the requirement
of an administration."
Attestation and self-proving provisions revised
SECTION 15. Section 62-2-503 of the 1976 Code, as amended by Act 171 of 1987,
is further amended to read:
"Section 62-2-503. (a) Any will may be simultaneously executed, attested,
and made self-proved. The self-proof shall be effective upon the acknowledgment
by the testator and the affidavit of at least one witness, each made before an
officer authorized to administer oaths under the laws of the state where
execution occurs and evidenced by the officer's certificate, under official seal,
in the following form or in a similar form showing the same intent:
I, ________________ , the testator, sign my name to this instrument this _____
day of _______ , 19__ , and being first duly sworn, do hereby declare to the
undersigned authority that I sign and execute this instrument as my last will and
that I sign it willingly (or willingly direct another to sign for me), that I
execute it as my free and voluntary act for the purposes therein expressed, and
that I am eighteen years of age or older, of sound mind, and under no constraint
or undue influence.
_________________________________
(Testator)
We, _______________ and ____________________ , the witnesses, sign our names
to this instrument, and at least one of us, being first duly sworn, does hereby
declare, generally and to the undersigned authority, that the testator signs and
executes this instrument as his last will and that he signs it willingly (or
willingly directs another to sign for him), and that each of us, in the presence
and hearing of the testator, hereby signs this will as witness to the testator's
signing, and that to the best of our knowledge the testator is eighteen years of
age or older, of sound mind, and under no constraint or undue influence.
________________________________________
Witness
________________________________________
Witness
The State of ______________________
County of ______________________
Subscribed, sworn to, and acknowledged before me by_______________ , the
testator, and subscribed and sworn to before me by ____________ , witness,
this___________ day of____.
(Seal)__________________
(Signed)_______________________
(Official capacity of officer)
(b) An attested will may at any time subsequent to its execution be made
self-proved by the acknowledgment thereof by the testator and the affidavit of
at least one witness, each made before an officer authorized to administer oaths
under the laws of the state where the acknowledgment occurs and evidenced by the
officer's certificate, under the official seal, attached, or annexed to the will
in the following form or in a similar form showing the same intent:
The State of__________________
County of ______________________
We,__________________ and_____________________ , the testator and at least one
of the witnesses, respectively, whose names are signed to the attached or
foregoing instrument, being first duly sworn, do hereby declare to the
undersigned authority that the testator signed and executed the instrument as his
last will and that he had signed willingly (or willingly directed another to sign
for him), and that he executed it as his free and voluntary act for the purposes
therein expressed, and that each of the witnesses, in the presence and hearing
of the testator, signed the will as witness and to the best of his knowledge the
testator was at that time eighteen years of age or older, of sound mind, and
under no constraint or undue influence.
___________________________________________________
Testator
____________________________________________________
Witness
Subscribed, sworn to, and acknowledged before me by _________, the testator, and
subscribed and sworn to before me by ____________ , witness, this__________ day
of ____________.
____________________
(Seal)
____________________
(Signed)
___________________________
(Official capacity of officer)
(c) A witness to any will who is also an officer authorized to administer
oaths under the laws of this State may notarize the signature of the other
witness of the will in the manner provided by this section."
Presumptions in self-proved wills
SECTION 16. Section 62-3-406(b) of the 1976 Code is amended to read:
"(b) If the will is self-proved, compliance with signature requirements
for execution and other requirements of execution are presumed subject to
rebuttal, without the testimony of any witness upon filing the will and the
acknowledgment and affidavits annexed or attached thereto, unless there is proof
of fraud or forgery affecting the acknowledgment or affidavit."
Bond requirements of personal representatives revised
SECTION 17. Section 62-3-603 of the 1976 Code is amended to read:
"Section 62-3-603. No bond is required of a personal representative who
is named in a will and the will expressly waives the bond. Bond will be required
in the following cases: (1) upon the appointment of a special administrator; (2)
upon the appointment of a personal representative of an intestate estate unless
that personal representative is a banking corporation or trust company qualified
under Section 34-15-10; (3) upon appointment of a nonresident personal
representative unless bond is expressly excused in the will; (4) when a personal
representative is appointed to administer an estate under a will which does not
expressly waive the requirement of bond; or (5)
when bond is required under Section 62-3-605. No bond is required of any banking
corporation or trust company qualified under Section 34-15-10 when it is
appointed to act as a personal representative except under item (4) above."
Description of lands reference deleted
SECTION 18. Section 14-23-650 of the 1976 Code is amended to read:
"Section 14-23-650. Description of lands devised; fees. Whenever a will
omits to set forth a description of the lands thereby devised, the person
offering such will for probate is required to furnish to the judge of probate of
every county where the decedent owned real estate a sufficient description of
such lands. The judge of probate, in addition to his charges for probate of
wills allowed by law, is entitled to charge one dollar for each index of devises
of real estate made by him, to be paid by the executor or party probating the
will."
Notification of claim disallowance required
SECTION 19. Section 62-3-806 of the 1976 Code is amended to read:
"Section 62-3-806. (a) As to claims presented in the manner described in
Section 62-3-804 within the time limit prescribed in Section 62-3-803, the
personal representative may mail a notice to any claimant stating that the claim
has been disallowed. If, after allowing or disallowing a claim, the personal
representative changes his decision concerning the claim, he shall notify the
claimant. The personal representative may not change a disallowance of a claim
after the time for the claimant to file a petition for allowance or to commence
a proceeding on the claim has run and the claim has been barred. Every claim
which is disallowed in whole or in part by the personal representative is barred
so far as not allowed unless the claimant files a petition for allowance in the
court or commences a proceeding against the personal representative not later
than thirty days after the mailing of the notice of disallowance or partial
allowance if the notice warns the claimant of the impending bar. It is the
responsibility of the personal representative to notify the claimant if a claim
is disallowed."
Provisions made applicable to incapacitated persons
SECTION 20. Section 62-5-103 of the 1976 Code is amended to read:
"Section 62-5-103. Any person under a duty to pay or deliver money or
personal property to a minor or incapacitated person may perform this duty in
amounts not exceeding ten thousand dollars per annum, by paying or delivering the
money or property to: (1) the minor or incapacitated person if he is married; (2)
any person having the care and custody of the minor or incapacitated person with
whom the minor or incapacitated person resides; (3) a guardian of the minor or
incapacitated person; or (4) a financial institution incident to a deposit in a
federally insured savings account in the sole name of the minor or incapacitated
person and giving notice of the deposit to the minor or incapacitated person.
This section does not apply if the person making payment or delivery has actual
knowledge that a conservator has been appointed or proceedings for appointment
of a conservator of the estate of the minor or incapacitated person are pending.
The persons, other than the minor or incapacitated person or any financial
institution under (4) above, receiving money or property for a minor or
incapacitated person, are obligated to apply the money to the support and
education of the minor or incapacitated person, but may not pay themselves except
by way of reimbursement for out-of-pocket expenses for goods and services
necessary for the minor's or incapacitated person's support. Any excess sums
must be preserved for future support of the minor or incapacitated person, and
any balance not so used and any property received for the minor or incapacitated
person must be turned over to the minor when he attains majority or to the
incapacitated person when he is no longer incapacitated. Persons who pay or
deliver in accordance with provisions of this section are not responsible for the
proper application thereof."
Settlement of certain minor claims presumed valid
SECTION 21. (A) Provisions of the South Carolina Probate Code which became
effective July 1, 1987, superceded the minor settlement provisions of former
Sections 15-71-10 through 15-71-30 of the 1976 Code which had required court
approval of the settlement. On September 24, 1987, the South Carolina Supreme
Court issued an administrative order reinstituting a court approval procedure for
the settlement of minor claims. It is the intent of the General Assembly that
the settlement of any claim involving a minor completed between July 1, 1987, and
September 24, 1987, is presumed facially valid, and the General Assembly has
therefore determined to enact the provisions of Section 62-5-434 herein. Neither
the court which may have approved a settlement nor a person who completed the
settlement of a minor's claim but did not seek court approval during this time
period is liable for their good faith exercise of discretion in approving or
completing the settlement.
(B) The 1976 Code is amended by adding:
"Section 62-5-434. The settlement of any claim involving a minor
completed between July 1, 1987, and September 24, 1987, is presumed facially
valid whether effectuated with or without court approval."
Contents of certificate of existence revised
SECTION 22. (A) Section 33-1-280 of the 1976 Code, as amended by an act of 1988
bearing ratification number 490, is further amended to read:
"Section 33-1-280. Certificate of existence.
(a) Anyone may apply to the Secretary of State to furnish a certificate of
existence for a domestic corporation or a certificate of authorization for a
foreign corporation.
(b) A certificate of existence or authorization sets forth:
(1) the domestic corporation's corporate name or the foreign corporation's
corporate name used in this State;
(2) that (i) the domestic corporation is duly incorporated under the law
of this State, the date of its incorporation, and the period of its duration if
less than perpetual; or (ii) the foreign corporation is authorized to transact
business in this State;
(3) that all fees, taxes, and penalties owed to the Secretary of State
have been paid;
(4) that the Secretary of State has not mailed notice to the corporation
pursuant to either Section 33-14-210 or 33-15-310 that the corporation is subject
to being dissolved or its authority revoked;
(5) that articles of dissolution have not been filed; and
(6) other facts of record in the office of the Secretary of State that may
be requested by the applicant.
(c) Subject to any qualification stated in the certificate, a certificate
of existence or authorization issued by the Secretary of State may be relied upon
as conclusive evidence that the domestic or foreign corporation is in existence
or is authorized to transact business in this State."
(B) The South Carolina Reporters' Comments to Section 33-1-280 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
Although the 1981 South Carolina Business Corporation Act did not explicitly
provide for the Secretary of State to issue a certificate of existence or
authorization, it has been current policy for the Secretary to issue a
certificate of good standing.
1. Warning -- Tax certificate must also be obtained
The granting of the certificate of existence gives very limited protection.
It only assures that the corporation has not been dissolved and that the
Secretary of State has not brought an action to administratively dissolve the
company. It does not warn the lawyer that the company may be dissolved the very
next day because it has failed to file a tax return. Nor does it disclose that
other grounds may then exist which give the Secretary of State the right to begin
dissolution proceedings.
If the Tax Commission has notified a corporation that it has failed to file a
required tax return and the corporation does not
file within sixty days of this notice, the Tax Commission will then so advise the
Secretary of State and he will immediately dissolve the company (see Sections
33-14-210(c) and 33-15-310(c)). However, the Secretary of State will have no
knowledge of this delinquency notice while it is pending and will issue a
certificate of existence (good standing) even though the company is in the
process of being dissolved for failure to file a tax return. Most administrative
dissolutions will occur in this manner.
The only way that the lawyer can be certain that the company is not about to
be dissolved for failure to file a tax return is to obtain a separate certificate
of compliance from the Tax Commission. In most situations it will be necessary
to obtain this certificate.
There may be other existing grounds for the Secretary of State to
administratively dissolve the company. They, likewise, will not be disclosed by
the certificate.
2. Differences from Model Act
Section 1.28(b)(3) of the 1987 Model Act Official Text requires the Secretary
of State to provide information on unpaid taxes, fees, and penalties only if such
information is available in the Secretary's records. Since the Secretary of
State does not routinely have access to current tax information, subsection
(b)(3) has been revised. The South Carolina version specifies that the Secretary
of State will only certify the payment of any taxes and fees owed to him.
Subsection (b)(4) differs from the Model Act Official Text in two respects.
First, since the annual report is filed with the Tax Commission (see Sections
33-16-220 and 12-19-20), the Secretary of State will not certify whether the
annual report has been filed. Lawyers and others desiring to know whether the
corporation has filed its annual report will have to obtain this information from
the Tax Commission. Second, subsection (b)(4) has been amended to require the
Secretary of State to certify that he has not mailed notice to the corporation
that it is subject to being dissolved. This does not assure that the Tax
Commission has not mailed such a notice.
3. Certificate does not negate the possibility that other actions are pending
to dissolve the company.
The Attorney General has authority pursuant to Section 12-37-2270 to bring an
action to vacate the corporation's charter for failure to pay property taxes or
for other stated causes. Technically, the charter may be automatically
'forfeited or annulled' without the actual court action if property taxes have
not been paid. The Attorney General also has the power to bring an action to
dissolve a corporation for obtaining articles by fraud or abusing its authority
(see Section 33-14-300). A shareholder has the continuing right to bring an
action to dissolve the company (see Section 33-14-300(2)). The certificate of
existence will not negate the possibility of any of these events or any others
not within the jurisdiction of the Secretary of State. However, if an action has
been brought under any of these sections, the corporation (or its officers or
directors) will receive notice of the proceeding.
4. Other changes to prior law
Section 33-1-280 additionally provides for disclosure:
(1) that no articles of dissolution have been filed (subsection (b)(5)); and
(2) of other facts of record in the Secretary of State's office requested
by the applicant (subsection (b)(6)).
It is clear also that any person, regardless of his relationship with the
corporation, has the right to obtain a certificate of existence (subsection
(a))."
Administrative dissolution provisions revised
SECTION 23. (A) Section 33-14-200 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-14-200. Grounds for administrative dissolution.
(a) The Secretary of State shall commence a proceeding under Section
33-14-210(a) to dissolve a corporation administratively if: (1) the
corporation does not pay when they are due any franchise taxes, taxes payable
under Chapter 7 of Title 12, or penalties imposed by law;
(2) the corporation does not deliver its annual report to the Tax
Commission when it is 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.
(b) The Secretary of State shall dissolve a corporation under Section
33-14-210(c) if he is notified by the Tax Commission that the corporation has
failed to file a required tax return within sixty days of the notice required by
Section 12-7-1675."
(B) The South Carolina Reporters' Comments to Section 33-14-200 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
Section 14.20 of the Model Act has been adopted with several technical changes.
First, this provision reflects that the annual report required by Section
33-16-220 is to be filed with the Tax Commission, not the Secretary of State.
Second, the failure to file a tax return within sixty days after the Tax
Commission has notified the corporation of its delinquency is added as a ground
for dissolution by the Secretary of State. He dissolves the corporation upon
notification by the Tax Commission. Third, the sixty-day grace period contained
in the Model Act section is not included here. However, new Section 12-7-1675
requires the Tax Commission to give sixty-day notice of failure to file a return
before requesting the Secretary of State to administratively dissolve a
delinquent corporation, and under Section 33-14-210(b) the corporation has sixty
days to correct any other failure after notification by the Secretary of State.
It was decided that one such sixty-day period was sufficient.
This section also adds failure to file income tax returns to the Model Act
grounds for administrative dissolution. Finally, it adds expiration of the
period of duration stated in the corporation's articles to the grounds for
administrative dissolution; the special procedures of former Section 33-21-40 for
dissolution (and reinstatement) of a corporation whose period of duration has
expired are not continued."
Administrative dissolution provisions revised
SECTION 24. (A) Section 33-14-210 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-14-210. Procedure for and effect of administrative
dissolution.
(a) If the Secretary of State determines that grounds exist under Section
33-14-200(a) for dissolving a corporation, he shall mail written notice of his
determination to the corporation.
(b) If the corporation does not correct each ground for dissolution or
demonstrate to the reasonable satisfaction of the Secretary of State that each
ground determined by the Secretary of State does not exist within sixty days
after the notice required by subsection (a) was mailed, the Secretary of State
shall dissolve the corporation administratively by signing a certificate of
dissolution that recites the grounds for dissolution and its effective date. The
Secretary of State shall file the original of the certificate and send a copy to
the corporation by registered or certified mail addressed to its registered agent
at its registered office or to the office of the secretary of the corporation at
its principal office.
(c) If the Secretary of State is notified by the Tax Commission that the
corporation has failed to file a required tax return within sixty days of the
notice required by Section 12-7-1675, the Secretary of State shall dissolve the
corporation administratively by signing a certificate of dissolution that recites
the grounds for dissolution and its effective date. The Secretary of State shall
file the original of the certificate and send a copy to the corporation by
registered or certified mail addressed to its registered agent at its registered
office or to the office of the secretary of the corporation at its principal
office.
(d) A corporation dissolved administratively continues its corporate
existence but may not carry on any business except that necessary to wind up and
liquidate its business and affairs under Section 33-14-105 and notify claimants
under Sections 33-14-106 and 33-14-107.
(e) The administrative dissolution of a corporation does not terminate the
authority of its registered agent."
(B) The South Carolina Reporters' Comments to Section 33-14-210 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
Section 14.21 of the 1984 Model Act has been adopted with several changes. The
Model Act requires that the notices specified by this section be served upon the
corporation, either by service upon its registered agent or, if the corporation
has no registered agent or he cannot be served, by certified (or registered)
mail, return receipt requested, addressed to the corporation's secretary at its
principal office. The new provision requires that the first notice be mailed to
the corporation. This should be done in accordance with Section 33-1-410(d).
The new provision further requires that the notice of dissolution be sent by
certified (or registered) mail to the registered agent or the corporation's
secretary; a return receipt need not be requested by the Secretary of State at
the time of mailing. Thus, the method of notification has been simplified, while
still assuring actual notice to the corporation. Requiring a return receipt
would merely add to the cost and recordkeeping burdens of the Secretary of
State's office without any benefit, since the United States Postal Service keeps
records of delivery of all registered and certified mail and this information can
be obtained later if the fact or date of delivery is at issue.
A new subsection (c) has been added to provide for administrative dissolution
by the Secretary of State if a corporation fails to file a tax return within
sixty days after notification of delinquency by the Tax Commission. Since the
Tax Commission is responsible for the collection of taxes and keeps track of the
filing of returns, it should give the initial notice that dissolution is imminent
if the corporation does not file its overdue return with the Commission. Under
subsection (c) the Secretary of State dissolves the corporation without giving
another sixty-day advance notice.
This provision follows the Model Act in reducing the period for the corporation
to respond to the Secretary of State's notice of determination that grounds for
administrative dissolution exist from ninety to sixty days, but otherwise the
procedure is similar to that under the 1981 South Carolina Business Corporation
Act."
Administrative dissolution provisions revised
SECTION 25. (A) Section 33-14-220 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-14-220. Reinstatement following administrative dissolution.
(a) A corporation dissolved administratively under Section 33-14-210 may
apply to the Secretary of State for reinstatement within two years after the
effective date of dissolution. The application must:
(1) recite the name of the corporation and the effective date of its
administrative dissolution;
(2) state that the grounds for dissolution either did not exist or have
been eliminated;
(3) state that the corporation's name satisfies the requirements of
Section 33-4-101; and
(4) contain a certificate from the South Carolina Tax Commission reciting
that all taxes owed by the corporation have been paid.
(b) If the Secretary of State determines that the application contains the
information required by subsection (a) and that the information is correct, he
shall cancel the certificate of dissolution and prepare a certificate of
reinstatement that recites his determination and the effective date of
reinstatement, file the original of the certificate, and send a copy to the
corporation.
(c) When the reinstatement is effective, it relates back to and takes effect
as of the effective date of the administrative dissolution and the corporation
resumes carrying on its business as if the administrative dissolution had never
occurred."
(B) The South Carolina Reporters' Comments to Section 33-14-220 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
Section 14.22 of the 1984 Model Act has been adopted with one change. The
Model Act requires that the Secretary of State serve the notice of reinstatement
upon the corporation. It was decided that formal service is purposeless, so this
provision merely requires that the Secretary of State send the notice of
reinstatement to the corporation.
This provision follows the Model Act in reducing the period for reinstatement
from five years to two years, and it deletes the requirement of the 1981 South
Carolina Business Corporation Act that all outstanding judgments against the
corporation be paid before reinstatement. Otherwise, the procedure is similar
to that under prior South Carolina law."
Administrative dissolution provisions revised
SECTION 26. (A) Section 33-14-230 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-14-230. Appeal from denial of reinstatement.
(a) If the Secretary of State denies a corporation's application for
reinstatement following administrative dissolution, he shall send a written
notice that explains the reasons for denial to the corporation by registered or
certified mail addressed to its registered agent at its registered office or to
the office of the secretary of the corporation at its principal office.
(b) The corporation may appeal the denial of reinstatement to the circuit
court for Richland County within thirty days after the notice of denial was
received. The corporation appeals by petitioning the court to set aside the
dissolution and attaching to the petition copies of the Secretary of State's
certificate of dissolution, the corporation's application for reinstatement, and
the Secretary of State's notice of denial.
(c) The court may summarily order the Secretary of State to reinstate the
dissolved corporation or may take other action the court considers appropriate.
(d) The court's final decision may be appealed as in other civil
proceedings."
(B) The South Carolina Reporters' Comments to Section 33-14-230 of the 1976
Code, as these
comments are contained in an act of 1988 bearing ratification number 490, are
amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
Section 14.23 of the 1984 Model Act has been adopted with only a few technical
changes. The Model Act requires that the notice of denial be served upon the
corporation, either by service upon its registered agent or, if the corporation
has no registered agent or he cannot be served, by certified (or registered)
mail, return receipt requested, addressed to the corporation's secretary at its
principal office. The new provision requires that the notice be sent by
certified (or registered) mail to the registered agent or the corporation's
secretary but does not require that a return receipt be requested at the time of
mailing. Thus, the method of notification is simplified, while still assuring
actual notice to the corporation. A conforming change has been made to
subsection (b) to start the thirty-day period for appeal from receipt, rather
than service, of the notice. This is when the notice would be effective under
the general provisions of Section 33-1-410(e). If a dispute arises about the date
or fact of receipt, the Secretary of State can obtain from the United States
Postal Service a record of delivery of the notice since the notice has to be sent
registered or certified mail.
There was no similar provision in the 1981 South Carolina Business Corporation
Act."
Provisions relating to revocation of foreign corporation's certificate of
authority revised
SECTION 27. (A) Section 33-15-300 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-15-300. Grounds for revocation.
(a) The Secretary of State shall commence a proceeding under Section
33-15-310 to revoke the certificate of authority of a foreign corporation
authorized to transact business in this State if:
(1) the foreign corporation does not deliver its annual report to the Tax
Commission when due;
(2) the foreign corporation does not pay, when they are due, any franchise
taxes or penalties imposed by this act or other law;
(3) the foreign corporation is without a registered agent or registered
office in this State;
(4) the foreign corporation does not inform the Secretary of State under
Section 33-15-108 or 33-15-109 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 he knew was false in any material respect with
intent that the document be delivered to the Secretary of State for filing;
(6) the Secretary of State receives a duly authenticated certificate from
the secretary of state or other 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.
(b) The Secretary of State shall proceed under Section 33-15-310(c) to revoke
the certificate of authority of a foreign corporation authorized to transact
business in this State if he is notified by the Tax Commission that the
corporation has failed to file a required tax return within sixty days of the
notice required by Section 12-7-1675."
(B) The South Carolina Reporters' Comments to Section 33-15-300 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
The grounds whereby the Secretary of State can revoke the foreign corporation's
qualification are almost identical to those in Sections 33-23-100 and 33-23-110
of the 1981 South Carolina Business Corporation Act. There are only two
differences.
The prior law allowed cancelation if the company failed to make any required
filing. Now cancelation is specified only for failure to file the annual report.
Second, under the prior law (Section 33-23-100 of the 1981 South Carolina
Business Corporation Act), if the company went out of business, it or its trustee
was required to file notice of its dissolution with South Carolina. If the
company failed to make this filing, then the Secretary of State of South Carolina
could move to cancel the qualification. Under item (6) of this section, there is
no expressed duty for the corporation to notify South Carolina. However, the
Secretary of State will likely know when a company goes out of business since it
will no longer be sending annual reports. Thus, the Secretary can cancel the
qualification because of either the failure to file or lack of existing charter.
The Attorney General in 1965 Op. S.C. Att'y Gen. 13 (#1780) held that the
Secretary of State could not cancel a foreign corporation's qualification for its
failure to pay the then annual license fee. The annual license fee was collected
by the Tax Commissioner, and the Secretary of State could only cancel for failure
to pay those fees he collected. A different result will exist under this statute
since the Secretary of State has the power to terminate a foreign corporation's
qualification for failure to pay any franchise taxes prescribed by the law of
South Carolina. It is irrelevant who collects the tax.
This provision adds to those contained in Model Act Section 15.30, the failure
to file an income tax return or corporate license tax return within sixty days
after the Tax Commission has notified the corporation of its delinquency under
Section 12-7-675. The Secretary of State revokes the certificate of authority
of the foreign corporation upon notification by the Tax Commission.
In South Carolina the annual report is filed with the Tax Commission rather
than with the Secretary of State (as is the procedure in most states). See
Sections 33-16-220 and 12-19-20. Subsection (a)(1) has been appropriately worded
to specify that the foreign corporation is in default if the annual report is not
filed with the Tax Commission.
Sections 15.30 and 15.40 of the 1984 Model Act Official Text generally give a
delinquent foreign corporation two sixty-day grace periods before the Secretary
of State can revoke its authority. For example, if the company does not file its
annual report within sixty days after it is due, the Secretary of State is only
then (after the sixty-day grace period) empowered to send a notice of the failure
to file. If the foreign corporation does not do anything about this, then, after
the expiration of a second sixty-day period, the Secretary of State can revoke
the foreign corporation's authority to do business. In keeping with prior law,
and in accordance with the procedure to dissolve administratively a domestic
corporation, the Model Act language has been amended to empower the Secretary of
State to send a sixty-day final notice as soon as the company fails to file its
annual report. If the company fails to cure its problem within sixty days of the
deficiency notice, the Secretary of State then can revoke the authority without
any further delay.
Although the language of the new section varies from the prior law, except as
noted, the content of the provisions remains the same."
Provisions relating to revocation of foreign corporation's certificate of
authority revised.
SECTION 28. (A) Section 33-15-310 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-15-310. Procedure for and effect of revocation.
(a) If the Secretary of State determines that grounds exist under Section
33-15-300(a) for revocation of a certificate of authority, he shall mail written
notice of his determination to the foreign corporation.
(b) If the foreign corporation does not correct each ground for revocation
or demonstrate to the reasonable satisfaction of the Secretary of State that each
ground determined by the Secretary of State does not exist within sixty days
after the notice required by subsection (a) was mailed, the Secretary of State
shall revoke the foreign corporation's certificate of authority by signing a
certificate of revocation that recites the grounds for revocation and its
effective date. The Secretary of State shall file the original of the
certificate and send a copy to the foreign corporation by registered or certified
mail addressed to its registered agent at its registered office or to the office
of the secretary of the corporation at its principal office.
(c) If the Secretary of State is notified by the Tax Commission that the
foreign corporation has failed to file a required tax return within sixty days
of the notice required by Section 12-7-1675, the Secretary of State shall revoke
the foreign corporation's certificate of authority by signing a certificate of
revocation that recites the grounds for revocation and its effective date. The
Secretary of State shall file the original of the certificate and send a copy to
the foreign corporation by registered or certified mail addressed to its
registered agent at its registered office or to the office of the secretary of
the corporation at its principal office.
(d) The authority of a foreign corporation to transact business in this
State ceases on the date shown on the certificate revoking its certificate of
authority.
(e) The Secretary of State's revocation of a foreign corporation's
certificate of authority appoints the Secretary of State as the foreign
corporation's agent for service of process in any proceeding based on a cause of
action which arose during the time the foreign corporation was authorized to
transact business in this State. Service of process on the Secretary of State
under this subsection is service on the foreign corporation. Upon receipt of
process, the Secretary of State shall mail a copy of the process to the secretary
of the foreign corporation at its principal office shown in its most recent
annual report or in any subsequent communication received from the corporation
stating the current mailing address of its principal office or, if none is on
file, in its application for a certificate of authority.
(f) Revocation of a foreign corporation's certificate of authority does not
terminate the authority of the registered agent of the corporation."
(B) The South Carolina Reporters' Comments to Section 33-15-310 of the 1976
Code, as these
comments are contained in an act of 1988 bearing ratification number 490, are
amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
This section establishes more precision in the method to be used in revoking
a foreign company's qualification than the 1981 South Carolina Business
Corporation Act. It grants the corporation sixty days to cure its default.
Prior South Carolina practice was to allow ninety days. This provision provides
for mailing of the notices to the foreign corporation, rather than service upon
it as required by Section 15.31 of the 1984 Model Act. See the South Carolina
Reporters' Comments to Section 33-14-210. If the ground for revocation is the
failure to file an income tax return or license tax return, the initial notice
is given by the Tax Commission rather than the Secretary of State. If the return
is not filed within the sixty-day period following the notice, the Tax Commission
notifies the Secretary of State, who then revokes the certificate of authority.
As was previously specified in Section 33-23-100 of the 1981 South Carolina
Business Corporation Act, if the qualification is revoked, service of process is
proper on the Secretary of State. See State v. Ford Motor Co. 208 S.C. 379, 38
S.E.2d 242 (1946), upholding the propriety of serving the Secretary of State in
situations where a corporation was exempt from qualifying but was conducting
interstate business in South Carolina. Subsection (f) also allows service of
process to be made on the company's agent, if the company or agent has not
revoked this appointment. See also, Section 33-15-110, which permits service
also to be made on the company's secretary. Except as mentioned above, the
provisions of this section are comparable to Section 33-23-110(b) and (c) of the
1981 South Carolina Business Corporation Act."
Provisions relating to revocation of foreign corporation's certificate of
authority revised
SECTION 29. (A) Section 33-15-320 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 33-15-320. Appeal from revocation.
(a) A foreign corporation may appeal the Secretary of State's revocation of
its certificate of authority to the Richland County Circuit Court within thirty
days after the certificate of revocation was received. The foreign corporation
appeals by petitioning the court to set aside the revocation and attaching to the
petition copies of its certificate of authority and the Secretary of State's
certificate of revocation.
(b) The court may summarily order the Secretary of State to reinstate the
certificate of authority or may take any other action the court considers
appropriate.
(c) The court's final decision may be appealed as in other civil
proceedings."
(B) The South Carolina Reporters' Comments to Section 33-15-320 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
This section has no counterpart in the 1981 South Carolina Business Corporation
Act. Because of convenience, the Circuit Court of Richland County is designated
to hear any appeal. As noted in the South Carolina Reporters' Comments to
Section 33-1-260, the provisions of the Administrative Procedures Act (as
guaranteed by Article I, Section 22, of the Constitution of South Carolina, 1895)
specify the appropriate procedures for reviewing the Secretary of State's
revocation of a foreign corporation's certificate of authority. See specifically
Section 1-23-380 of the 1976 Code.
A change has been made to subsection (a) to conform it to the procedure for
mailing the notice of revocation under Section 33-15-310(b) and (c). The
thirty-day period for appeal starts to run upon receipt, rather than service, of
the notice. This is when the notice would be effective under the general
provisions of Section 33-1-410(e). If a dispute arises about the date or fact
of receipt, the Secretary of State can obtain from the United States Postal
Service a record of delivery of the notice since the notice has to be sent
registered or certified mail."
Dissolution and revocation provisions for failure to file certain tax returns
revised
SECTION 30. (A) Section 12-7-1675 of the 1976 Code, as amended by an act of
1988 bearing ratification number 490, is further amended to read:
"Section 12-7-1675. Notwithstanding the provisions of Sections 12-7-1650
and 12-7-1670, the Commission shall notify any domestic or foreign corporation
of its failure to comply with the provisions of Chapters 7 and 19 of this title
requiring the filing of returns. If the taxpayer fails to file the required
return within sixty days of the notice, the Commission may provide the Secretary
of State the name of the taxpayer failing to file a return and the Secretary of
State shall administratively dissolve the corporation if it is a domestic
corporation and shall revoke its certificate of authority if it is a foreign
corporation authorized to transact business in this State. The Commission may
not make an assessment or issue any warrant against a taxpayer which it refers
to the Secretary of State for administrative dissolution."
(B) The South Carolina Reporters' Comments to Section 12-7-1675 of the 1976
Code, as these comments are contained in an act of 1988 bearing ratification
number 490, are amended to read:
"SOUTH CAROLINA REPORTERS' COMMENTS
This new section makes technical changes to the Tax Commission procedures to
coordinate them with Sections 33-14-200 and 33-14-210 providing for
administrative dissolution for failure to file franchise or income tax returns
when they are due and with Sections 33-15-300 and 33-15-310 providing for
revocation of a foreign corporation's certificate of authority to transact
business in this State for failure to timely file such returns. See the South
Carolina Reporters' Comments to those sections."
Repeal
SECTION 31. Chapter 29, Title 33 of the 1976 Code is repealed.
Effective date for certain provisions
SECTION 32. The amendments to Sections 33-1-280, 33-14-200, 33-14-210,
33-14-220, 33-14-230, 33-15-300, 33-15-310, 33-15-320, and 12-7-1675 of the 1976
Code, and the repeal of Chapter 29 of Title 33 of the 1976 Code, as contained in
this act, take effect January 1, 1989.
Time effective
SECTION 33. This act takes effect upon approval by the Governor. |