HLS 14RS-389 ENGROSSED
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2014
HOUSE BILL NO. 351
BY REPRESENTATIVE BROADWATER
COMMERCIAL REGULATIONS: Provides relative to single business entities
AN ACT1
To enact R.S. 12:1702, relative to commercial regulations; provides relative to separate2
juridical personalities of a business organization; to provide for definitions; to3
provide for an exception; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 12:1702 is hereby enacted to read as follows: 6
ยง1702. Business organizations: juridical personalities7
A. The separate juridical personality of a business organization shall not be8
disregarded as between one business organization and another except on grounds that9
would justify disregarding the separate personality of a business organization as10
between the organization and a natural person.11
B. The separate juridical personalities of business organizations may not be12
disregarded merely because:13
(1) They control one another or are under the common control of the same14
person.15
(2) They have common directors, officers, members, managers, partners, or16
employees.17
(3) They have common offices.18
(4) They are subject to unified administrative control.19
(5) They utilize a centralized accounting system.20
(6) One organization finances, incorporates, or organizes another.21
(7) One organization makes properly-documented payments on behalf of22
another or makes properly-documented use of the property of another.23 HLS 14RS-389 ENGROSSED
HB NO. 351
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(8) The employees of one organization provide properly-documented1
services for another.2
(9) One organization receives no business other than that given to it by3
another.4
C. For purposes of this Section, the term "business organization" means a5
business corporation, nonprofit corporation, limited liability company, partnership,6
or other form of business organization that is treated as a juridical person or legal7
entity pursuant to the laws of the state or country under which it is incorporated or8
organized.9
D. This Section shall not affect any law or administrative rule that permits10
or requires a group of business organizations to be consolidated, unified, or11
disregarded for the purposes provided in such law or administrative rule.12
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Broadwater HB No. 351
Abstract: Provides relative to single business entities and affiliated juridical personalities.
Proposed law provides that a separate juridical personality of an affiliated business
organization shall not be disregarded between one business organization and another, except
on grounds that would justify a disregard of the separate personality of a business
organization, as between the organization and a natural person.
Proposed law provides that the separate juridical personalities of business organizations may
not be disregarded merely because the following circumstances exist for business
organizations:
(1)Control of one another or under common control of the same person.
(2)Common directors, officers, members, managers, partners, or employees.
(3)Common offices.
(4)Subjection to unified administrative control.
(5)Utilization of a centralized accounting system.
(6)One organization finances, incorporates, or organizes another.
(7)One organization makes properly-documented payments on behalf of another or
makes properly-documented use of the property of another. HLS 14RS-389 ENGROSSED
HB NO. 351
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are additions.
(8)Employees of one organization provide properly-documented services for another.
(9)One organization receives no business other than that given to it by another.
Proposed law defines "business organization" as a business corporation, nonprofit
corporation, limited liability company, partnership, or other form of business organization
that is treated as a juridical person or legal entity under the laws of the state or country under
which it is incorporated or organized.
The provisions of proposed law do not affect any law or administrative rule that permits or
requires a group of business organizations to be consolidated, unified, or disregarded for the
purposes provided in such law or administrative rule.
(Adds R.S. 12:1702)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made technical changes.
2. Added provisions under which the separate juridical personality of a business
organization may not be disregarded.
3. Clarified that the provisions of proposed law shall not affect any law or
administrative rule that permits or requires a group of business organizations to
be consolidated, unified, or disregarded for the purposes provided in such law or
administrative rule.