HCS SB 288 -- REGULATED BUSINESS PROCEDURES

SPONSOR:  Klarich (Monaco)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Judiciary
by a vote of 17 to 1.

This substitute makes several changes to the general and
business corporations laws and substantially revises Article 9
of the Uniform Commercial Code regulating secured transactions.
In its main provisions, the substitute:

(1)  Allows corrections to corporations' annual registration
reports to be filed with the Secretary of State in between
report due dates;

(2)  Changes notice requirements for postponed shareholder
meetings, making public notice optional rather than required;

(3)  Allows summary articles of merger or consolidation to be
filed and lists their required contents;

(4)  Requires certain documentation before a consolidation or
merger of a foreign corporation becomes effective in this state;

(5)  Expands the scope of Article 9 to include additional kinds
of property in which a security interest can be taken,
additional kinds of collateral that may be pledged, and
nonpossessory, statutory agricultural liens;

(6)  Clarifies that filing a financing statement perfects a
security interest, even if another method of perfection exists;

(7)  Expands the types of property for which creditor control
may be used as a method of perfection;

(8)  Increases automatic perfection for a purchase money
security interest (PMSI) from the current 10 days to 20 days.
Attachment of a PMSI is perfection for the duration of the
20-day period, then another method is necessary to continue the
perfected security interest.  A PMSI in consumer goods, however,
remains perfected automatically for the duration of the security
interest;

(9)  Changes the choice of law rule as to which state's law
governs perfection, its effect, and a creditor's priority from
where the collateral is found to the location of the debtor.
Entity debtors now are deemed located where created by
registration, rather than where the entity has its chief
executive office;

(10)  Allows the transition from paper filing to electronic
filing.  The only local filing of financing statements occurs in
the real estate records for fixtures; all other filings are
centralized with the Secretary of State's office;

(11)  Changes certain aspects of enforcing security interests
included in consumer transactions; and

(12)  Provides new rules for guarantors, for the interests of
subordinate creditors with security interests in the same
property, and for aspects of enforcement when the debtor is a
consumer debtor.

The substitute has an emergency clause.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$22,647 in FY 2002, $23,214 in FY 2003, and $23,794 in FY 2004.
Loss to Unemployment Compensation Trust Fund of Unknown in FY
2002, FY 2003, and FY 2004.  Oversight assumes cost could exceed
$100,000.  Estimated Net Effect to Statutory County Recorder's
Fund of $0 in FY 2002, FY 2003, and FY 2004.

PROPONENTS:  Supporters say that the original bill cleans up and
simplifies some business procedures and filing requirements,
thus making it easier for corporations doing business in
Missouri.

Testifying for the bill were Senator Klarich; and Bryan Cave,
LLP.

OPPONENTS:  Those who oppose the original bill say that proposed
Section 351.247, RSMo, would allow general business corporations
to operate as close corporations without the safeguards and
restrictions in the Close Corporation Act.

Testifying against the bill was Jonathon Cope.

Julie Jinkens McNitt, Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:47 am