Pennsylvania House Bill HB1716

Pennsylvania 2023-2024 Regular Session

• Introduced: 9/26/23
• Refer: 9/26/23
• Refer: 10/31/23
• Report Pass: 11/13/23
• Engrossed: 11/13/23
• Refer: 11/28/23
• Refer: 7/2/24
• Report Pass: 7/2/24
• Enrolled: 7/9/24
• Chaptered: 7/15/24
• Passed: 7/15/24

Caption

In entities generally, further providing for requirements for names generally and providing for registration of name of domestic nonfiling association; in entity transactions, further providing for nature of transactions and for approval by limited liability company; in foreign associations, further providing for foreign registration statement; in general provisions, further providing for definitions; in corporate powers, duties and safeguards, further providing for certain specifically authorized debt terms; in officers, directors and shareholders, further providing for derivative action; in foreign business corporations, further providing for application of article; in general provisions, further providing for definitions; in corporate powers, duties and safeguards, further providing for certain specifically authorized debt terms; in officers, directors and members, further providing for derivative action; in general partnerships, further providing for contents of partnership agreement; in limited partnerships, further providing for contents of partnership agreement and for derivative action; and, in limited liability companies, further providing for contents of operating agreement and for derivative action.

Impact

The passage of HB 1716 is expected to have a significant impact on the state's business landscape by facilitating more streamlined operations for various business entities. By providing clearer guidelines and requirements, the bill may encourage both new and existing businesses to better understand their obligations and rights, potentially leading to improved compliance and protection against legal challenges. Additionally, the bill addresses the interaction between domestic and foreign entities, thus providing businesses better tools to navigate cross-border operations.

Summary

House Bill 1716 aims to update the regulations surrounding various types of business structures in the state, such as limited liability companies (LLCs) and partnerships. The legislation seeks to clarify several provisions within existing laws that govern the registration and operation of these entities. Notably, the bill introduces new requirements for the names of domestic non-filing associations and outlines necessary approvals for transactions involving limited liability companies. It further specifies adjustments in definitions, corporate powers, and obligations of officers and directors, particularly concerning derivative actions within these entities.

Sentiment

Overall, the sentiment surrounding HB 1716 appears to be largely positive, particularly among business advocacy groups who view the clarifications as beneficial. Supporters argue that the proposed changes would eliminate ambiguity in the law, making it easier for businesses to operate without facing unnecessary regulatory burdens. However, there are also voices of caution, voicing concerns that the definitions and new requirements might impose additional complexities on smaller entities or those less familiar with legal jargon. This division illustrates the balance between enhancing regulatory clarity while avoiding operational hurdles.

Contention

While there are only minor points of contention regarding HB 1716, some opponents express concern over the potential for increased administrative burdens on smaller entities, fearing that the new requirements could inadvertently complicate the establishment and operational processes. Additionally, there are discussions about whether the updates appropriately address the needs of diverse business models, as some stakeholders believe that the bill may not fully account for the unique challenges faced by non-traditional business structures.