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Arkansas Senate Bill SB205

Arkansas 2023 Regular Session

Arkansas Senate Bill SB205 Compare Versions

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11 Stricken language would be deleted from and underlined language would be added to present law.
2-Act 256 of the Regular Session
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54 State of Arkansas 1
65 94th General Assembly A Bill 2
76 Regular Session, 2023 SENATE BILL 205 3
87 4
98 By: Senator C. Penzo 5
109 By: Representative Lundstrum 6
1110 7
1211 For An Act To Be Entitled 8
1312 AN ACT TO ASSIST SMA LL BUSINESS OWNERS T O FORM A 9
1413 LEGAL ENTITY IN THIS STATE; TO CLARIFY TH E PROCEDURES 10
1514 AND STANDARDS USED F OR NAME AVAILABILITY FOR CERTAIN 11
1615 CORPORATIONS AND LIM ITED LIABILITY COMPA NIES; AND FOR 12
1716 OTHER PURPOSES. 13
1817 14
1918 15
2019 Subtitle 16
2120 TO ASSIST SMALL BUSINESS OWNERS TO FORM A 17
2221 LEGAL ENTITY IN THIS STATE; AND TO 18
2322 CLARIFY THE PROCEDURES AND STANDARDS USED 19
2423 FOR NAME AVAILABILITY FOR CERTAIN 20
2524 CORPORATIONS AND LIMITED LIABILITY 21
2625 COMPANIES. 22
2726 23
2827 24
2928 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 25
3029 26
3130 SECTION 1. DO NOT CODIFY. Legislative intent. 27
3231 It is the intent of the General Assembly that this act shall: 28
3332 (1) Confirm that the standard to be used for name availability 29
3433 for a corporation or legal entity in this state is that the name is 30
3534 distinguishable and that the standard shall not be whether or not the name is 31
3635 confusingly similar; and 32
3736 (2) Provide the only factors that the Secretary of State may use 33
3837 in determining whether or not a corporate or legal entity name is 34
3938 distinguishable. 35
4039 36 SB205
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4443
4544 SECTION 2. Arkansas Code § 4 -26-401(3), concerning the standard for 1
4645 corporate name availability, is amended to read as follows: 2
4746 (3)(A) Shall not be the same as or confusingly similar to be 3
4847 distinguishable from the name of any domestic corp oration existing under the 4
4948 laws of this state or any foreign corporation authorized to transact business 5
5049 in this state, or a name the exclusive right to which is, at the time, 6
5150 reserved under § 4-26-402, or the name of a corporation which has in effect a 7
5251 registration of its corporate name under § 4 -26-403. 8
5352 (B) No A foreign corporation may shall not be admitted to 9
5453 this state if its corporate name is identical with or confusingly similar to 10
5554 not distinguishable from the name of any domestic corporation, or the name of 11
5655 any foreign corporation then admitted to this state, or any name then 12
5756 reserved or registered under § 4 -26-402 or § 4-26-403. 13
5857 14
5958 SECTION 3. Arkansas Code § 4 -26-401, concerning corporate name 15
6059 requirements, is amended to add an additional subdivi sion to read as follows: 16
6160 (4) In determining whether or not a corporate name is 17
6261 distinguishable under subdivision (3)(A) of this section, a corporate name 18
6362 that is different from the name of another entity or filing is 19
6463 distinguishable unless the only diff erence is one (1) or more of the 20
6564 following: 21
6665 (A) A suffix; 22
6766 (B) A definite or indefinite article; 23
6867 (C) The word "and" and the symbol "&"; 24
6968 (D) The singular, plural, or possessive form of a word; or 25
7069 (E) A punctuation mark or a symbol. 26
7170 27
7271 SECTION 4. Arkansas Code § 4 -26-405(b)(3), concerning acceptance of a 28
7372 proposed fictitious name of a corporation, is amended to read as follows: 29
7473 (3) However, the Secretary of State shall not accept such filing 30
7574 if the proposed fictitious name is not distinguishable under § 4-26-401 from 31
7675 the same as or confusingly similar to the name of any domestic corporation, 32
7776 or any foreign corporation admitted to this state, or any name reserved or 33
7877 registered under §§ 4 -26-402 and 4-26-403. 34
7978 35
8079 SECTION 5. Arkansas Code § 4-27-401 is amended to read as follows: 36 SB205
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8584 4-27-401. Corporate name. 1
8685 (a) A corporate name: 2
8786 (1) must contain the word “corporation,” “incorporated,” 3
8887 “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or 4
8988 “ltd.,” or words or abbreviations of like import in another language; and 5
9089 (2) may not contain language stating or implying that the 6
9190 corporation is organized for a purpose other than that permitted by § 4 -27-7
9291 301 and its articles of incorporation. 8
9392 (b) Except as authorized by subsection s (c) and (d) of this section, a 9
9493 corporate name must be distinguishable upon the records of the Secretary of 10
9594 State from: 11
9695 (1) the corporate name of a corporation incorporated or 12
9796 authorized to transact business in this state; 13
9897 (2) a corporate name reser ved or registered under § 4 -27-402 or 14
9998 §4-27-403; 15
10099 (3) the fictitious name adopted by a foreign corporation 16
101100 authorized to transact business in this state because its real name is 17
102101 unavailable; and 18
103102 (4) the corporate name of a not -for-profit corporation 19
104103 incorporated or authorized to transact business in this state. 20
105104 (c) In determining whether or not a corporate name is distinguishable 21
106105 under subsection (b) of this section, a corporate name that is different from 22
107106 the name of another entity or filing is dist inguishable unless the only 23
108107 difference is one (1) or more of the following: 24
109108 (1) A suffix; 25
110109 (2) A definite or indefinite article; 26
111110 (3) The word "and" and the symbol "&"; 27
112111 (4) The singular, plural, or possessive form of a word; or 28
113112 (5) A punctuation mark or a symbol. 29
114113 (d) A corporation may apply to the Secretary of State for 30
115114 authorization to use a name that is not distinguishable upon his records from 31
116115 one (1) or more of the names described in subsection (b) of this section. The 32
117116 Secretary of State shall authorize use of the name applied for if: 33
118117 (1) the other corporation consents to the use in writing and 34
119118 submits an undertaking in form satisfactory to the Secretary of State to 35
120119 change its name to a name that is distinguishable upon the records of t he 36 SB205
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125124 Secretary of State from the name of the applying corporation; or 1
126125 (2) the applicant delivers to the Secretary of State a certified 2
127126 copy of the final judgment of a court of competent jurisdiction establishing 3
128127 the applicant's right to use the name appli ed for in this state. 4
129128 (d)(e) A corporation may use the name of another domestic or foreign 5
130129 corporation that is used in this state if the corporation is incorporated or 6
131130 authorized to transact business in this state and the proposed user 7
132131 corporation: 8
133132 (1) has merged with the other corporation; 9
134133 (2) has been formed by reorganization of the other corporation; 10
135134 or 11
136135 (3) has acquired all or substantially all of the assets, 12
137136 including the corporate name, of the other corporation. 13
138137 14
139138 SECTION 6. Arkansas Code § 4-27-404(b), concerning the use of a 15
140139 fictitious name under the Arkansas Business Corporation Act of 1987, is 16
141140 amended to read as follows: 17
142141 (b) Each such form shall be executed (without verification) in 18
143142 duplicate and filed with the Secretary of State. The Secretary of State 19
144143 shall retain one (1) counterpart; and the other counterpart, bearing the file 20
145144 marks of the Secretary of State, shall be returned to the corporation and, 21
146145 unless its registered office is in Pulaski County, filed by it with the 22
147146 county clerk. An index of such filings shall be maintained in each office. 23
148147 However, the Secretary of State shall not accept such filing unless the 24
149148 proposed fictitious name is distinguishable under § 4-27-401 upon the records 25
150149 of the Secretary of State from the name of any domestic corporation, or any 26
151150 foreign corporation authorized to do business in the state or any name 27
152151 reserved or registered under §§ 4 -27-402 and 4-27-403. 28
153152 29
154153 SECTION 7. Arkansas Code § 4 -33-401 is amended to read as follows: 30
155154 4-33-401. Corporate name. 31
156155 (a) A corporate name may not contain language stating or implying that 32
157156 the corporation is organized for a purpose other than that permitted by § 4 -33
158157 33-301 and its articles of incorporation. 34
159158 (b) Except as authorized by subsections (c) , and (d), and (e) of this 35
160159 section, a corporate name must be distinguishable upon the records of the 36 SB205
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165164 Secretary of State from: 1
166165 (1) the corporate name of a nonprofit or business corporation 2
167166 incorporated or authorized to do business in this state; 3
168167 (2) a corporate name reserved or registered under § 4 -33-402 or 4
169168 § 4-33-403 of this chapter or § 4 -26-402 or § 4-27-402; or 5
170169 (3) the fictitious name of a foreign business or nonprofit 6
171170 corporation authorized to transact business in this state because its real 7
172171 name is unavailable; 8
173172 (c) In determining whether or not a corporate name is distinguishable 9
174173 under subsection (b) of this section, a corporate name that is different from 10
175174 the name of another entity or filing is distinguishable unless the only 11
176175 difference is one (1) or more of the following: 12
177176 (1) a suffix; 13
178177 (2) a definite or indefinite article; 14
179178 (3) the word "and" and the symbol "&"; 15
180179 (4) the singular, plural, or possessive form of a word; or 16
181180 (5) a punctuation mark or a symbol. 17
182181 (d) A corporation may apply to the Secretary of State for 18
183182 authorization to use a name that is not distinguishable upon the Secretary of 19
184183 State's records from one (1) or more of the names described in subsection (b) 20
185184 of this section. The Secretary of State shall authorize use of the name 21
186185 applied for if: 22
187186 (1) the other corporation consents to the use in writing and 23
188187 submits an undertaking in form satisfactory to the Secretary of State to 24
189188 change its name to a name that is distinguishable upon the records of the 25
190189 Secretary of State from the name of the applying corporation; or 26
191190 (2) the applicant delivers to the Secretary of State a certified 27
192191 copy of a final judgment of a court of competent jurisdiction establishing 28
193192 the applicant's right to use the name applied for in this state. 29
194193 (d)(e) A corporation may use the name (including the fictitious name) 30
195194 of another domestic or foreign business or nonprofit corporation that is used 31
196195 in this state if the other corporation is incorporated or authorized to do 32
197196 business in this state and the proposed us er corporation: 33
198197 (1) has merged with the other corporation; 34
199198 (2) has been formed by reorganization of the other corporation; 35
200199 or 36 SB205
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205204 (3) has acquired all or substantially all of the assets, 1
206205 including the corporate name, of the other corporation. 2
207206 (e)(f) This chapter does not control the use of fictitious names. 3
208207 4
209208 SECTION 8. Arkansas Code § 4 -38-112 is amended to read as follows: 5
210209 4-38-112. Permitted names. 6
211210 (a) The name of a limited liability company must contain the phrase 7
212211 “limited liability company” or “limited company” or the abbreviation 8
213212 “L.L.C.”, “LLC”, “L.C.”, or “LC”. “Limited” may be abbreviated as “Ltd.”, and 9
214213 “company” may be abbreviated as “Co.”. 10
215214 (b) Except as otherwise provided in subsection (d)(e), the name of a 11
216215 limited liability company, and the name under which a foreign limited 12
217216 liability company may register to do business in this state, must be 13
218217 distinguishable on the records of the Secretary of State from any: 14
219218 (1) name of an existing person whose formation required the 15
220219 filing of a record by the Secretary of State and which is not at the time 16
221220 administratively dissolved; 17
222221 (2) name of a limited liability partnership whose statement of 18
223222 qualification is in effect; 19
224223 (3) name under which a person is registered to do business in 20
225224 this state by the filing of a record by the Secretary of State; 21
226225 (4) name reserved under § 4 -38-113 or other law of this state 22
227226 providing for the reservation of a name by the filing of a record by the 23
228227 Secretary of State; 24
229228 (5) name registered under § 4 -38-114 or other law of this state 25
230229 providing for the registration of a name by the filing of a record by the 26
231230 Secretary of State; and 27
232231 (6) name registered under § 4 -26-405, § 4-27-404, § 4-38-122, 28
233232 and § 4-42-707. 29
234233 (c) In determining whether or not a limited liability company name is 30
235234 distinguishable under subsection (b) of this section, a limited liability 31
236235 company name that is different from the name of another entity or filing is 32
237236 distinguishable unless the only difference is one (1) or more of the 33
238237 following: 34
239238 (1) a suffix; 35
240239 (2) a definite or indefinite article; 36 SB205
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245244 (3) the word "and" and the symbol "&"; 1
246245 (4) the singular, plural, or possessive form of a word; or 2
247246 (5) a punctuation mark or a symbol. 3
248247 (d) If a person consents in a record to the use of it s name and 4
249248 submits an undertaking in a form satisfactory to the Secretary of State to 5
250249 change its name to a name that is distinguishable on the records of the 6
251250 Secretary of State from any name in any category of names in subsection (b), 7
252251 the name of the conse nting person may be used by the person to which the 8
253252 consent was given. 9
254253 (d)(e) Except as otherwise provided in subsection (e)(f), in 10
255254 determining whether a name is the same as or not distinguishable on the 11
256255 records of the Secretary of State from the name of another person, words, 12
257256 phrases, or abbreviations indicating a type of person, such as “corporation”, 13
258257 “corp.”, “incorporated”, “Inc.”, “professional corporation”, “P.C.”, “PC”, 14
259258 “professional association”, “P.A.”, “PA”, “Limited”, “Ltd.”, “limited 15
260259 partnership”, “L.P.”, “LP”, “limited liability partnership”, “L.L.P.”, “LLP”, 16
261260 “registered limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited 17
262261 liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered limited 18
263262 liability limited partnership”, “R.L.L.L.P .”, “RLLLP”, “limited liability 19
264263 company”, “L.L.C.”, “LLC”, “limited cooperative association”, “limited 20
265264 cooperative”, or “L.C.A.”, or “LCA” may not be taken into account. 21
266265 (e)(f) A person may consent in a record that is satisfactory to the 22
267266 Secretary of State to the use of a name that is not distinguishable on the 23
268267 records of the Secretary of State from its name except for the addition of a 24
269268 word, phrase, or abbreviation indicating the type of person as provided in 25
270269 subsection (d)(e). In such a case, the perso n need not change its name 26
271270 pursuant to subsection (c)(d). 27
272271 (f)(g) The name of a limited liability company or foreign limited 28
273272 liability company may not contain the name of any person who is not a member, 29
274273 except that the name of a former member or member of a predecessor 30
275274 organization may continue to be included in the name. 31
276275 (g)(h) A limited liability company or foreign limited liability 32
277276 company may use a name that is not distinguishable from a name described in 33
278277 subsections (b)(1) through (6) if the company delivers to the Secretary of 34
279278 State a certified copy of a final judgment of a court of competent 35
280279 jurisdiction establishing the right of the company to use the name in this 36 SB205
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285284 state. 1
286285 2
287286 SECTION 9. Arkansas Code § 4 -38-122(c), concerning the acceptability 3
288287 of a proposed fictitious name under the Uniform Limited Liability Company 4
289288 Act, is amended to read as follows: 5
290289 (c) The Secretary of State shall not accept a filing if the proposed 6
291290 fictitious name is the same as, or confusingly similar to, not 7
292291 distinguishable under § 4-38-112 from the name of any domestic corporation, 8
293292 limited liability company, limited partnership, limited liability partnership 9
294293 or any other entity registered with the Secretary of State, or any foreign 10
295294 entity authorized to do business in the stat e or any name reserved or 11
296295 registered under §§ 4 -27-402, 4-27-403, 4-38-113, or 4-47-109. 12
297296 13
298297 SECTION 10. Arkansas Code § 4 -42-707(b), concerning the acceptability 14
299298 and use of fictitious names under the Uniform Partnership Act, is amended to 15
300299 read as follows: 16
301300 (b) Each such form shall be executed, without verification, in 17
302301 duplicate and filed with the Secretary of State. The Secretary of State 18
303302 shall retain one (1) counterpart and the other counterpart, bearing the file 19
304303 marks of the Secretary of State, shall be returned to the registered limited 20
305304 liability partnership. However, the Secretary of State shall not accept such 21
306305 filing if the proposed fictitious name is the same as, or confusingly similar 22
307306 to, not distinguishable from the name of any domestic corporatio n, limited 23
308307 liability company, limited partnership, limited liability partnership, or any 24
309308 other entity registered with the Secretary of State, or any such foreign 25
310309 entity authorized to do business in the state or any name reserved or 26
311310 registered under § 4 -27-402, § 4-27-403, § 4-38-113, § 4-38-114, or § 4-47-27
312311 109. 28
313312 29
314313 SECTION 11. Arkansas Code § 4 -47-108 is amended to read as follows: 30
315314 4-47-108. Name. 31
316315 (a) The name of a limited partnership may contain the name of any 32
317316 partner. 33
318317 (b) The name of a limited partner ship that is not a limited liability 34
319318 limited partnership must contain the phrase “limited partnership” or the 35
320319 abbreviation “L.P.” or “LP” and may not contain the phrase “limited liability 36 SB205
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325324 limited partnership” or the abbreviation “LLLP” or “L.L.L.P.”. 1
326325 (c) The name of a limited liability limited partnership must contain 2
327326 the phrase “limited liability limited partnership” or the abbreviation “LLLP” 3
328327 or “L.L.L.P.” and must not contain the abbreviation “L.P.” or “LP.” 4
329328 (d) Unless authorized by subsection (e), t he name of a limited 5
330329 partnership must be distinguishable in the records of the Secretary of State 6
331330 from: 7
332331 (1) the name of each person other than an individual 8
333332 incorporated, organized, or authorized to transact business in this State; 9
334333 and 10
335334 (2) each name reserved under § 4-47-109 or other state laws 11
336335 allowing the reservation or registration of business names, including 12
337336 fictitious name statutes. 13
338337 (e) In determining whether or not a limited liability partnership name 14
339338 is distinguishable under subsection (d) o f this section, a limited liability 15
340339 partnership name that is different from the name of another entity or filing 16
341340 is distinguishable unless the only difference is one (1) or more of the 17
342341 following: 18
343342 (1) a suffix; 19
344343 (2) a definite or indefinite article; 20
345344 (3) the word "and" and the symbol "&"; 21
346345 (4) the singular, plural, or possessive form of a word; or 22
347346 (5) a punctuation mark or a symbol. 23
348347 (f) A limited partnership may apply to the Secretary of State for 24
349348 authorization to use a name that does not compl y with subsection (d). The 25
350349 Secretary of State shall authorize use of the name applied for if, as to each 26
351350 conflicting name: 27
352351 (1) the present user, registrant, or owner of the conflicting 28
353352 name consents in a signed record to the use and submits an undertak ing in a 29
354353 form satisfactory to the Secretary of State to change the conflicting name to 30
355354 a name that complies with subsection (d) and is distinguishable in the 31
356355 records of the Secretary of State from the name applied for; 32
357356 (2) the applicant delivers to the Secretary of State a certified 33
358357 copy of the final judgment of a court of competent jurisdiction establishing 34
359358 the applicant's right to use in this State the name applied for; or 35
360359 (3) the applicant delivers to the Secretary of State proof 36 SB205
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365364 satisfactory to the Secretary of State that the present user, registrant, or 1
366365 owner of the conflicting name: 2
367366 (A) has merged into the applicant; 3
368367 (B) has been converted into the applicant; or 4
369368 (C) has transferred substantially all of its assets, 5
370369 including the confli cting name, to the applicant. 6
371370 (f)(g) Subject to § 4-47-905, this section applies to any foreign 7
372371 limited partnership transacting business in this State, having a certificate 8
373372 of authority to transact business in this State, or applying for a 9
374373 certificate of authority. 10
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377-APPROVED: 3/9/23 13
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