Corporate law changes touted at Concord press conference

Few people care that the New Hampshire Legislature is rewriting laws governing corporations and limited liability companies, but they should, said supporters Tuesday at a sparsely attended press conference in Concord.The current law in New Hampshire, one of the few states that hasn’t updated its statutes in almost two decades, are both complicated and vague on everything from ethics to split-ups.”Without these bills, New Hampshire will lag behind most of the nation,” said state Sen. Jim Luther, R-Hollis, prime sponsor of Senate Bill 205. Only Rhode Island is in the same situation, he said.This might not be such a big deal for larger companies, who have lawyers who draw up their corporate agreements, but many LLCs don’t, or try to come up with agreements themselves, thus falling back on state law as the company’s default rules of operation.SB 205 and SB 203 are a complete rewrite of corporate and LLC law, respectively, based on model legislation proposed by American Bar Association but tailored to New Hampshire, which is among the reasons the bills are so lengthy, said proponents.Backed by the Business and Industry Association of New Hampshire, a cadre of corporate lawyers and legislative leadership, the bill would create jobs by putting an “open for business” sign up in the state, said House Majority Leader D.J. Bettencourt, R-Salem, who also criticized the press for not paying more attention to the issue.Supporters say the bills would simplify things for business, prevent litigation and hopefully reduce costs.SB 505, which would govern corporations, proposes numerous changes in corporate law that bring things into the modern world, such as legitimizing communication by email. But it also spells out some crucial details, such as what constitutes the sale of a “substantial amount of assets” to trigger the need for stockholder approval.One of the big changes included in SB 203 — the LLC rewrite — is that the default setup (without a partnership agreement) would be changed from one member, one vote to proportional voting based on the capital contributed.The press conference and the committee meeting are the launch of a long process, with numerous work sessions expected. Sen. Ray White, R-Bedford, said he is worried about the potential costs in converting an organization and wants a fiscal note attached to the bill.”We don’t to want to have unintended consequences,” said White. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW