Chapter 1. General Provisions Relative to Corporations

Editor’s Notes —

For text of the Mississippi Business Corporation Act, which became effective January 1, 1988, see §§ 79-4-1.01 et seq.

§79-1-1. Automatic extension of corporate charters for certain corporations under certain circumstances.

    1. If a business corporation was created (i) for a limited period of existence, and (ii) before April 18, 1988, the life of the business corporation shall be perpetual if the business corporation continues to do business for thirty (30) days after March 14, 2011.
    2. If a nonprofit corporation was created (i) for a limited period of existence, and (ii) before January 1, 1988, the life of the nonprofit corporation shall be perpetual if the nonprofit corporation continues to do business for thirty (30) days after March 14, 2011.
  1. If a business or nonprofit corporation (a) has a limited period of existence that expired before March 14, 2011, and (b) the business or nonprofit corporation continues to do business for thirty (30) days after March 14, 2011, the life of that corporation shall be perpetual. The corporation’s charter and articles of incorporation shall be deemed to have been automatically amended before the end of the limited period of existence to state that the corporation’s life shall be perpetual. No further action on the part of the corporation is necessary to execute the provisions of this subsection.
  2. Any corporation may, after March 14, 2011, amend its articles of incorporation to provide for a limited period of existence.

HISTORY: Codes, 1942, § 5325.5; Laws, 1950, ch. 308, §§ 3, 4; Laws, 1956, ch. 174, § 1; Laws, 2011, ch. 391, § 1, eff from and after passage (approved Mar. 14, 2011.).

Amendment Notes —

The 2011 amendment rewrote the section.

Cross References —

Business corporations, see §§ 79-4-1.01 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 74 et seq.

CJS.

18 C.J.S., Corporations § 111.

Practice References.

Mississippi Business Organizations Laws Annotated, 2004 Edition (Michie).

§79-1-3. Gifts and donations.

In addition to all other powers granted by law, every corporation organized or existing under the laws of this state shall have power, from its earnings, to make gifts, donations, or contributions for the public welfare or for charitable, scientific, religious, or educational purposes, which gifts, donations, or contributions shall be charged by such corporation to operating expenses. The specific grant of such power by this section shall not be construed as raising any presumption or implication that such power has not heretofore existed.

HISTORY: Codes, 1942, § 5325.7; Laws, 1952, ch 227.

Cross References —

Power of business corporations to make gifts and donations, see § 79-4-3.02.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1801 et seq.

CJS.

19 C.J.S., Corporations § 1041.

§79-1-5. Execution of proxies by fiduciary without order or direction of court.

Without obtaining the order or direction of any court or the judge thereof, in vacation, any fiduciary, including those acting as executor, administrator, guardian, agent or trustee, owning corporate stock registered in the name of the fiduciary, as such, or in the name of another for the convenience of the fiduciary, or in the names of more than one fiduciary, whether the corporation issuing such stock is foreign or domestic, may, in addition to the voting rights now vested in such fiduciary, execute and deliver, or cause to be executed and delivered, a proxy or proxies to others for the voting of such corporate stock, and may waive notice of and give consent to any meeting of stockholders of any corporation, regular or special, or a meeting of property owners, or cause such to be done, and may authorize in writing any action which could be taken by stockholders in meeting assembled, where such consent is authorized by statute, charter or certificate of incorporation, or bylaws, or cause such written consent to be given, but subject always to the following limitations:

In granting any proxy, reasonable care must be exercised in deciding who shall act as proxy and whether or not instructions as to the voting of said stock shall be given to such proxy.

If there are two or more fiduciaries acting, the proxy shall be executed by, and voting instructions shall be issued by, agreement of all fiduciaries or a majority of them.

In the event the manner or method of voting, or the purposes to be accomplished, are fixed by the instrument or instruments appointing said fiduciaries, the directions contained therein shall govern.

HISTORY: Codes, 1942, § 5326.5; Laws, 1956, ch. 178.

RESEARCH REFERENCES

ALR.

Misrepresentation in proxy solicitation-state cases. 20 A.L.R.4th 1287.

§79-1-7. Defective organization not a defense.

It shall not be a defense to any suit against a corporation that there was a defect or informality in its organization.

HISTORY: Codes, 1892, § 841; 1906, § 906; Hemingway’s 1917, § 4078; 1930, § 4154; 1942, § 5333.

Cross References —

As to defense of ultra vires, see § 79-4-3.04.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 188 et seq.

CJS.

18 C.J.S., Corporations § 125.

§79-1-9. Social, civil and political rights of employees protected.

Any corporation doing business in this state shall be liable to a penalty of Two Hundred Fifty Dollars ($250.00) for every unlawful interference with the social, civil, or political rights of any of its agents or employees, and the same may be recovered by suit, to be brought by the injured party.

HISTORY: Codes, 1892, § 840; 1906, § 905; Hemingway’s 1917, § 4077; 1930, § 4156; 1942, § 5335.

Cross References —

Constitutional provision for protection of social, civil, or political rights of corporate agents and employees, see Miss. Const. § 191.

RESEARCH REFERENCES

ALR.

Right of corporation to discharge employee who asserts rights as stockholder. 84 A.L.R.3d 1107.

Right to discharge allegedly “at will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 A.L.R.4th 120.

Liability for discharge of at-will employee for in-plant complaints or efforts relating to working conditions affecting health or safety. 35 A.L.R.4th 1031.

Validity, construction, and effect of state statutes restricting political activities of public officers or employees. 51 A.L.R.4th 702.

Application of state law to age discrimination in employment. 51 A.L.R.5th 1.

Prohibiting public employee from running for elective office as violation of employee’s federal constitutional rights. 44 A.L.R. Fed. 306.

Dissemination of adverse employment references by former employer as unlawful employment practice under Title VII of Civil Rights Act of 1964 (42 USCS § 2000e-2(a)(1)). 50 A.L.R. Fed. 722.

Circumstances in Title VII employment discrimination cases (42 USCS §§ 2000e et seq.) which warrant finding of “constructive discharge” of discriminatee who resigns employment. 55 A.L.R. Fed. 418.

Propriety, under unfair labor practice provisions of National Labor Relations Act (29 USCS § 158(a)), of employer’s selective discipline of employees who are union officials and who participated in unauthorized strike. 66 A.L.R. Fed. 801.

Propriety of treating separate entities as one for determining number of employees required by Title VII of Civil Rights Act of 1964 (42 U.S.C.S. § 2000e(b)) for action against “employer.” 160 A.L.R. Fed. 441.

§79-1-11. May execute bond in suits.

Any corporation, under the signature of its president or other authorized officer, agent, or attorney, may execute, without affixing the corporate seal, all bonds which shall be necessary at the commencement or during the progress of any case to a final determination, and such bonds shall be binding on the corporation.

HISTORY: Codes, 1857, ch. 35, art. 7; 1871, § 2411; 1880, § 1035; 1892, § 842; 1906, § 907; Hemingway’s 1917, § 4079; 1930, § 4157; 1942, § 5336.

§79-1-13. Property and franchise of corporation salable under judgment.

When judgment shall be rendered against any corporation, all its property, real and personal, and its franchise shall be liable to be seized and sold in satisfaction thereof; and the sale shall vest the title to the franchise in the purchaser, with all privileges and immunities; and the officer making the sale shall immediately put him in possession; and the purchaser may recover any penalties imposed for injuries to the franchise, and shall also discharge all the duties imposed by the charter on the corporate body, and be liable to like penalties as the original stockholders which may accrue after his purchase of the franchise.

HISTORY: Codes, 1857, ch. 35, art. 10; 1871, § 2414; 1880, § 1038; 1892, § 845; 1906, § 910; Hemingway’s 1917, § 4082; 1930, § 4158; 1942, § 5337.

Cross References —

Sales of property in quo warranto proceedings, see § 11-39-33.

Executions generally, see §§ 13-3-111 et seq.

RESEARCH REFERENCES

Am. Jur.

39 Am. Jur. Proof of Facts 2d 699, Franchisor’s Liability for Acts of Franchisee.

CJS.

19 C.J.S., Corporations §§ 1342 et seq.

JUDICIAL DECISIONS

1. In general.

2. What may be sold.

3. Miscellaneous.

1. In general.

This section [Code 1942, § 5337] does not refer to primary franchise of corporation, but to its secondary or special franchise. Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158, 1926 Miss. LEXIS 488 (Miss. 1926).

Franchise is special privilege conferred by governmental authority, and which does not belong to citizens of the country generally as matter of common right. Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158, 1926 Miss. LEXIS 488 (Miss. 1926).

2. What may be sold.

Primary franchise of corporation cannot be sold under execution on judgment, but its special and secondary franchises may be so sold. Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158, 1926 Miss. LEXIS 488 (Miss. 1926).

3. Miscellaneous.

A corporation cannot defeat the right of its creditors to sell the equity of redemption by executing a deed of trust with long time to run, etc.; this would palpably violate the section [Code 1942, § 5337]. Vicksburg & M. R. Co. v. McCutchen, 52 Miss. 645, 1876 Miss. LEXIS 270 (Miss. 1876).

§79-1-15. Franchise redeemable within six months.

Those persons who were stockholders at the time of the sale of the franchise of a corporation may redeem the franchise which has been sold under execution at any time within six (6) months from the date of sale, by paying or tendering to the purchaser the amount paid by him, with ten per centum thereon; but shall not be entitled to any allowance for the profits received by the purchaser in the meantime.

HISTORY: Codes, 1857, ch. 35, art. 11; 1871, § 2415; 1880, § 1039; 1892, § 846; 1906, § 911; Hemingway’s 1917, § 4083; 1930, § 4159; 1942, § 5338.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 630.

CJS.

19 C.J.S., Corporations § 1343.

§79-1-17. On dissolution, assets vested in stockholders.

On the dissolution of any corporation, either by judgment or otherwise, all its real and personal estate shall be vested in the stockholders therein, in their respective proportions, who shall hold the same as tenants in common; but this section shall not extend to any property except that which the corporation might lawfully have held without forfeiting the same to the state. Debts due to and from the corporation shall not be extinguished by its dissolution, but debts due from the corporation shall be a charge upon its property.

HISTORY: Codes, 1857, ch. 35, art. 21; 1880, § 1040; 1892, § 847; 1906, § 912; Hemingway’s 1917, § 4084; 1930, § 4172; 1942, § 5354.

Cross References —

Administrative dissolution of business corporations, see §§ 79-4-14.20 et seq.

RESEARCH REFERENCES

ALR.

Preferred stockholders’ rights, upon liquidation or dissolution, to dividends. 25 A.L.R.2d 788.

CJS.

19 C.J.S., Corporations §§ 1638 et seq.

JUDICIAL DECISIONS

1. In general.

2. Transfer or sale of property.

3. Debts charged against corporate property.

4. Rights of creditors.

5. Actions.

6. Miscellaneous.

1. In general.

Upon the dissolution of a corporation, the property and assets of the corporation constitute a trust fund for the benefit of its creditors and stockholders. Franks v. Receiver of Booneville Banking Co., 202 Miss. 858, 32 So. 2d 859, 1947 Miss. LEXIS 349 (Miss. 1947).

2. Transfer or sale of property.

Automatic transfer or investing of ownership in stockholder upon dissolution of corporation is not a sale to the stockholder. Urschel v. Stone, 198 Miss. 105, 21 So. 2d 466, 1945 Miss. LEXIS 172 (Miss. 1945).

The provisions of this section [Code 1942, § 5354] do not deprive a corporation of its rights, in good faith, to dispose of its property, or create such a trust as affects this right when exercised in good faith. Sells v. Rosedale Grocery & Com. Co., 72 Miss. 590, 17 So. 236, 1895 Miss. LEXIS 9 (Miss. 1895).

3. Debts charged against corporate property.

Statute making “debts” due from corporation a charge upon its property after dissolution includes tort demands. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Where a corporation has transferred all its property to another and ceased to do business, its property may, in equity, be subjected to the demand of its creditors while in the hands of the purchasing corporation. Vicksburg & Y. C. Tel. Co. v. Citizens' Tel. Co., 79 Miss. 341, 30 So. 725, 1901 Miss. LEXIS 76 (Miss. 1901).

4. Rights of creditors.

Corporation’s existence as debtor is continued after dissolution only for purposes of suit against it for adjudication of debt or demand upon its merits, and creditor, upon obtaining judgment against corporation, may pursue stockholders to whom corporation’s assets have been distributed. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Failure of creditor of corporation receiving notice of dissolution thereof to file claim does not result in canceling or barring claim. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

5. Actions.

Express reservation by statute of rights of creditors of corporation after dissolution carries with it necessarily reasonable means for enforcement of rights so preserved. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Persons asserting claims against corporation after final decree for corporation’s liquidation was entered and liquidator discharged were not required to obtain permission of chancery court to sue corporation, and suit against liquidator was no longer proper. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Proceeding by stockholders of a corporation by bill in equity, averring its insolvency, with no party defendant, and praying for a receiver to collect its assets and distribute pro rata to its creditors, was absolutely void. Smith v. Ely & Walker Dry Goods Co., 79 Miss. 266, 30 So. 653, 1901 Miss. LEXIS 54 (Miss. 1901).

6. Miscellaneous.

Net book value of the assets at time of dissolution based on cost to the corporation, rather than the “liquidation value” of such asset, continues to represent the cost of the assets for purposes of computing depletion and depreciation allowances on a stockholder’s interest in such assets after dissolution, in determining the stockholder’s income tax. Urschel v. Stone, 198 Miss. 105, 21 So. 2d 466, 1945 Miss. LEXIS 172 (Miss. 1945).

An agreement between the existing members of a local lodge of a fraternal society to abandon the lodge as such and to discontinue its corporate functions, to divide up the personal property, together with an arrangement to rent the property and share in the rent thereof was effective to determine the status of the parties thereto as tenants in common as would have been their status after formal surrender, notwithstanding there was no legal dissolution. Woodville Lodge, Grand United Order of Odd Fellows v. Poole, 190 Miss. 798, 1 So. 2d 780, 1941 Miss. LEXIS 98 (Miss. 1941).

§§79-1-19 through79-1-27. Repealed.

Repealed by Laws, 1987, ch. 486, § 17.05, eff from and after January 1, 1988.

[Codes, 1906, §§ 915, 917-919; Hemingway’s 1917, §§ 4089, 4091-4093; 1930, §§ 4160, 4162, 4163, 4166; 1942, §§ 5339, 5341, 5342, 5345; Laws, 1908, ch. 123]

Editor’s Notes —

Former Sections 79-1-19 through 79-1-27 contained provisions applicable to foreign corporations. For present similar provisions of the Mississippi Business Corporation Act, which became effective January 1, 1988, see §§ 79-4-15.01 et seq.

§79-1-29. Repealed.

Repealed by Laws, 1991, ch. 573, § 141, eff from and after July 1, 1991.

[Codes, 1906, § 920; Hemingway’s 1917, § 4094; 1930, § 4167; 1942, § 5346; Laws, 1908, ch. 123; repealed, Laws, 1987, ch. 486, § 17.05, effective from and after January 1, 1988]

Editor’s Notes —

Section 79-1-29 was previously repealed by Laws, 1987, ch. 486, § 17.05, effective from and after January 1, 1988.

§79-1-31. Extent of the chapter.

The provisions of this chapter, when not limited by their terms, shall apply to all corporations whatever, where the subject matter is not elsewhere prescribed.

HISTORY: Codes, 1892, § 860; 1906, § 937; Hemingway’s 1917, § 4115; 1930, § 4177; 1942, § 5359.

JUDICIAL DECISIONS

1. In general.

The powers of a corporation created under general laws are derived from the statute and not from its charter provisions, and a corporation chartered under Code 1892, Chapter 25, can exercise only the powers therein prescribed. Woodbury v. McClurg, 78 Miss. 831, 29 So. 514, 1901 Miss. LEXIS 131 (Miss. 1901).

Editor’s Notes —

For text of the Mississippi Business Corporation Act, which became effective January 1, 1988, see §§ 79-4-1.01 et seq.

§§79-3-1 through79-3-293. Repealed.

Repealed by Laws, 1987, ch. 486, § 17.06, eff from and after January 1, 1988.

§§79-3-1 through79-3-11. [Codes, 1942, §§ 5309-01 through 5309-6; Laws, 1962, ch. 235, §§ 1-6]

§79-3-13. [Codes, 1942, § 5309-11; Laws, 1962, ch. 235, § 7]

§79-3-15. [Codes, 1942, § 5309-12; Laws, 1962, ch. 235, § 8; Laws, 1983, ch. 370]

§79-3-17. [Codes, 1942, § 5309-13; Laws, 1962, ch. 235, § 9]

§79-3-19. [Codes, 1942, § 5309-14; Laws, 1962, ch. 235, § 10]

§79-3-21. [Codes, 1942, § 5309-21; Laws, 1962, ch. 235, § 11]

§79-3-23. [Codes, 1942, § 5309-22; Laws, 1962, ch. 235, § 12]

§79-3-25. [Codes, 1942, § 5309-23; Laws, 1962, ch. 235, § 13; Laws, 1981, ch. 431, § 5]

§§79-3-27 through79-3-35. [Codes, 1942, §§ 5309-31 through 5309-35; Laws, 1962, ch. 235, §§ 14-18]

§79-3-37. [Codes, 1942, § 5309-36; Laws, 1962, ch. 235, § 19; Laws, 1980, ch. 404]

§79-3-39. [Codes, 1942, § 5309-23; Laws, 1962, ch. 235, § 13; Laws, 1981, ch. 431, § 5]

§79-3-41. [Codes, 1942, § 5309-38; Laws, 1962, ch. 235, § 21]

§79-3-43. [Codes, 1942, § 5309-39; Laws, 1962, ch. 235, § 22; Laws, 1966, ch. 285, § 1; 1968, ch. 273, § 1]

§§79-3-45 through79-3-53. [Codes, 1942, §§ 5309-40, 5309-51 through 5309-54; Laws, 1962, ch. 235, §§ 23-27]

§79-3-55. [Codes, 1942, § 5309-55; Laws, 1962, ch. 235, § 28; Laws, 1981, ch. 371, § 1]

§79-3-57. [Codes, 1942, § 5309-56; Laws, 1962, ch. 235, § 29; Laws, 1981, ch. 371, § 2]

§§79-3-59 through79-3-65. [Codes, 1942, §§ 5309-57 through 5309-60; Laws, 1962, ch. 235, §§ 30-33]

§79-3-67. [Codes, 1942, § 5309-71; Laws, 1962, ch. 235, § 34; Laws, 1981, ch. 387, § 1]

§§79-3-69 through79-3-81. [Codes, 1942, §§ 5309-72 through 5309-78; Laws, 1962, ch. 235, §§ 35-41]

§§79-3-83 through79-3-87. [Codes, 1942, §§ 5309-81 through 5309-83; Laws, 1962, ch. 235, §§ 42-4]

§§79-3-89 through79-3-105. [Codes, 1942, §§ 5309-91 through 5309-93, 5309-111, 5309-112, 5309-121, 5309-122; Laws, 1967, ch. 235, §§ 45-53]

§79-3-107. [Codes, 1942, § 5309-123; Laws, 1962, ch. 235, § 54; Laws, 1962, 2d Ex Sess, ch. 17; Laws, 1983, ch. 403, § 2]

§§79-3-109 through79-3-113. [Codes, 1942, §§ 5309-124 through 5309-126; Laws, 1962, ch. 235, §§ 55-57]

§§79-3-115 through79-3-121. [Codes, 1942, §§ 5309-131 through 5309-134; Laws, 1962, ch. 235, §§ 58-61]

§79-3-123. [Codes, 1942, § 5309-135; Laws, 1962, ch. 235, § 62; Laws, 1962, 2d Ex Sess. ch. 14; Laws, 1983, ch. 403, § 3]

§§79-3-125 through79-3-139. [Codes, 1942, §§ 5309-136 through 5309-145; Laws, 1962, ch. 235, §§ 63-70]

§79-3-141. [Codes, 1942, § 5309-151; Laws, 1962, ch. 235, § 71; Laws, 1981, ch. 334, § 1]

§79-3-142. [Laws, 1984, ch. 337]

§§79-3-143 and79-3-145. [Codes, 1942, §§ 5309-152, 5309-153; Laws, 1962, ch. 235, §§ 72, 73]

§§79-3-147 through79-3-149. [Codes, 1942, §§ 5309-154, 5309-155; Laws, 1962, ch. 235, §§ 74, 75; Laws, 1962, 2d Ex Sess. chs. 15, 16; Laws, 1983, ch. 403, §§ 4 and 5]

§§79-3-151 through79-3-157. [Codes, 1942, §§ 5309-156, 5309-157, 5309-161, 5309-162; Laws, 1962, ch. 235, §§ 76-79]

§79-3-159. [Codes, 1942, § 5309-171; Laws, 1962, ch. 235, § 80; Laws, 1985, ch. 449, § 3]

§79-3-161. [Codes, 1942, § 5309-172; Laws, 1962, ch. 235, § 81]

§79-3-163. [Codes, 1942, § 5309-181; Laws, 1962, ch. 235, § 82; Laws, 1962, 2d Ex Sess. ch. 13; Laws, 1983, ch. 403, § 6]

§§79-3-165 through79-3-247. [Codes, 1942, §§ 5309-182 through 5309-192, 5309-201 through 5309-239; Laws, 1962, ch. 235, §§ 83-124]

§79-3-249. [Codes, 1942, § 5309-251; Laws, 1962, ch. 235, § 125; Laws, 1971, ch. 365, § 1; Laws, 1975, ch. 467, § 9]

§79-3-253. [Codes, 1942, § 5309-261; Laws, 1962, ch. 235, § 127; Laws, 1975, ch. 467, § 11]

§79-3-255. [Codes, 1942, § 5309-262; Laws, 1962, ch. 235, § 128; Laws, 1963, 1st Ex Sess. ch. 14; Laws, 1981, ch. 431, § 2; Laws, 1985, ch. 381, § 13]

§79-3-257. [Codes, 1942, § 5309-263; Laws, 1962, ch. 235, § 129; Laws, 1970, ch. 307, § 1; Laws, 1981, ch. 431, § 6; Laws, 1985, ch. 381, § 14]

§79-3-259. [Codes, 1942, § 5309-271; Laws, 1962, ch. 235, § 130; Laws, 1975, ch. 467, § 12]

§79-3-261. [Codes, 1942, § 5309-272; Laws, 1962, ch. 235, § 131]

§79-3-263. [Codes, 1942, § 5309-273; Laws, 1962, ch. 235, § 132; Laws, 1985, ch. 381, § 15]

§§79-3-265 through79-3-293. [Codes, 1942, §§ 5309-281 through 5309-287, 5309-301 through 5309-304, 5309-311 through 5309-314; Laws, 1962, ch. 235, §§ 133-147]

Political contributions by corporation as criminal offense, see §§ 97-13-15, 97-13-17.

Recovery for discharge for employment in retaliation for filing workers’ compensation claim. 32 A.L.R.4th 1221.

Conduct or activities of employees during off-duty hours as misconduct barring unemployment compensation benefits. 35 A.L.R.4th 691.

Right of employee to injunction preventing employer from exposing employee to tobacco smoke in workplace. 37 A.L.R.4th 480.

Liability for discharge of employee from private employment on ground of political views or conduct. 38 A.L.R.5th 39.

What acts amount to violation of Hatch Act (5 USC §§ 1501-1503) prohibiting political activity of certain state and local employees. 8 A.L.R. Fed. 343.

Employer’s discharge of employee as unlawful employment practice in violation of § 704(a) of Civil Rights Act of 1964 (42 USCS § 2000e-3(a)) where basis for discharge is employee’s opposition to discriminatory conduct of co-worker. 49 A.L.R. Fed. 712.

What will be deemed a “written interpretation or opinion of the Commission” which employer can assert as defense under § 713(b) of the Equal Employment Opportunity Act (42 USCS § 2000e-12(b)(1)). 54 A.L.R. Fed. 868.

Prohibition of discrimination against, or discharge of, employee because of exercise of right afforded by Occupational Safety and Health Act, under § 11(c)(1) of the act (29 USCS § 660(c)(1)). 66 A.L.R. Fed. 650.

Dismissal of, or other adverse personnel action relating to, public employee for political patronage reasons as violative of First Amendment. 70 A.L.R. Fed. 371.

Preemption of state law wrongful discharge claim, not arising from whistleblowing, by § 541(A) of Employee Retirement Income Security Act of 1974 (29 U.S.C.S. § 1144(A)). 176 A.L.R. Fed. 433.

Franchises of corporation are (1) corporate or general franchises, which are franchises to exist as corporation; (2) special or secondary franchises, which are certain rights conferred on existing corporation. Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158, 1926 Miss. LEXIS 488 (Miss. 1926).

Term “corporate franchise” ordinarily refers to primary franchise of corporation; that is, right and privilege granted by state of being corporation and doing such things as are authorized by its charter. Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158, 1926 Miss. LEXIS 488 (Miss. 1926).

Stockholders’ rights to patent, copyright, or trademark owned by corporation on dissolution thereof. 30 A.L.R.2d 938.

Upon dissolution of oil corporation, all its assets became vested in the stockholders as tenants in common in proportion to their respective stockholdings. Urschel v. Stone, 198 Miss. 105, 21 So. 2d 466, 1945 Miss. LEXIS 172 (Miss. 1945).

A corporation, though insolvent, may prefer creditors by mortgage, sale or assignment, where there is no fraud. Sells v. Rosedale Grocery & Com. Co., 72 Miss. 590, 17 So. 236, 1895 Miss. LEXIS 9 (Miss. 1895).

Claimant who failed to assert tort claim against corporation pursuant to notice given creditors of corporation’s dissolution could, after dissolution distribution to stockholders of assets, and discharge of liquidator, sue corporation for adjudication of merits of claim, preliminary to taking steps against stockholders as distributees of corporation’s assets. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Chapter 3. Business Corporations [Repealed]

Chapter 4. Mississippi Business Corporation Act

Article 1. General Provisions.

Subarticle A. Short Title and Reservation of Power.

§79-4-1.01. Short title.

Sections 79-4-1.01 et seq. shall be known and may be cited as the “Mississippi Business Corporation Act.”

HISTORY: Laws, 1987, ch. 486, § 1.01, eff from and after January 1, 1988.

Cross References —

Formation of research corporation by universities pursuant to the Mississippi Business Corporation Act, see § 37-147-15.

Use of fictitious names not controlled by §§ 79-4-1.01 et seq., see § 79-4-4.01.

Application of Business Corporation Act to meeting of shareholders held to determine the voting rights to be accorded to shares acquired in control share acquisition, see § 79-27-9.

RESEARCH REFERENCES

Law Reviews.

Hamilton, The background of the new Mississippi Business Corporation Act. 12 Miss. C. L. Rev. 166, Fall, 1991.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-3-1.

12. Under former §79-3-5.

I. Under Current Law.

1. In general.

In a close corporation where a majority stockholder stands to benefit as a controlling stockholder, the majority’s action must be “intrinsically fair” to the minority interest. Thus, stockholders in close corporations must bear towards each other the same relationship of trust and confidence which prevails in partnerships, rather than resort to statutory defenses. This does not mean that directors, executive officers and stockholders are not required to adhere to the corporate statutes; rather, blind adherence to corporate statutes may not be used to circumvent the corporation’s by-laws, charter or various agreements, such as a stock redemption agreement, because of the “intrinsically fair” standard that is now adopted. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

2.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-3-1.

A corporation organized under the general corporation law of Mississippi, although possessing some of the features of a cooperative, is organized for profit, and all of its profits whether from member or non-member business constitute income to it, except to the extent that it was under obligation to make patronage dividends, refunds, or rebates, or any portion thereof, to patrons whether stockholders or not. Smith & Wiggins Gin, Inc. v. Commissioner, 341 F.2d 341, 1965 U.S. App. LEXIS 6609 (5th Cir. 1965).

12. Under former § 79-3-5.

Kings Daughters and Sons Circle, incorporated for purpose of constructing and operating hospital, held private corporation within Miss. Const., Art. 7, § 183. Brister v. Leflore County, 156 Miss. 240, 125 So. 816, 1930 Miss. LEXIS 159 (Miss. 1930).

Rule that corporation is separate entity from its stockholders will be disregarded when used to support an end subversive of the state’s policy. Southern Electric Sec. Co. v. State, 91 Miss. 195, 44 So. 785, 1907 Miss. LEXIS 136 (Miss. 1907).

The powers of a corporation created under general laws are derived from the statute and not from its charter provisions, and a corporation chartered under this chapter can only exercise the powers therein prescribed. Woodbury v. McClurg, 78 Miss. 831, 29 So. 514, 1901 Miss. LEXIS 131 (Miss. 1901).

§79-4-1.02. Reservation of power to amend or repeal.

The Mississippi Legislature has power to amend or repeal all or part of Sections 79-4-1.01 et seq. at any time and all domestic and foreign corporations subject to Sections 79-4-1.01 et seq. are governed by the amendment or repeal.

HISTORY: Laws, 1987, ch. 486, § 1.02, eff from and after January 1, 1988.

Definitions of terms used in the Mississippi Business Corporation Act, see § 79-4-1.40.

Application of Mississippi Business Corporation Act to professional corporations, see § 79-10-3.

Applicability of Mississippi Business Corporation Act to trust companies, see § 81-27-4.107.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss L. J. 271, August, 1987.

A mutual fire insurance company empowered by its charter to insure its members only, and having no capital stock, cannot be authorized to carry on the business of insurance. Farmers' Mut. Fire Ins. Co. v. Cole, 90 Miss. 508, 43 So. 949, 1907 Miss. LEXIS 96 (Miss. 1907).

Subarticle B. Filing Documents.

§79-4-1.20. Filing requirements.

A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.

Section 79-4-1.01 et seq. must require or permit filing the document in the Office of the Secretary of State.

The document must contain the information required by Section 79-4-1.01 et seq. It may contain other information as well.

The document must be typewritten or printed, or, if electronically transmitted, it must be in a format that can be retrieved or reproduced by the Secretary of State in typewritten or printed form.

The document must be in the English language. A corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of foreign corporations need not be in English if accompanied by a reasonably authenticated English translation.

The document must be executed:

  1. By the chairman of the board of directors of a domestic or foreign corporation, by its president, or by another of its officers;
  2. If directors have not been selected or the corporation has not been formed, by an incorporator; or
  3. If the corporation is in the hands of a receiver, trustee or other court-appointed fiduciary, by that fiduciary.
  4. The following provisions of a plan or filed document may not be made dependent on facts outside the plan or filed document:
  5. If a provision of a filed document is made dependent on a fact ascertainable outside of the filed document, and that fact is not ascertainable by reference to a source described in subsection (k)(2)(i) or a document that is a matter of public record, or the affected shareholders have not received notice of the fact from the corporation, then the corporation shall file with the Secretary of State articles of amendment setting forth the fact promptly after the time when the fact referred to is first ascertainable or thereafter changes. Articles of amendment under this subsection (k)(5) are deemed to be authorized by the authorization of the original filed document or plan to which they relate and may be filed by the corporation without further action by the board of directors or the shareholders.

The person executing the document shall sign it and state beneath or opposite his signature his name and the capacity in which he signs. The document may but need not contain a corporate seal, an attestation, acknowledgment or verification. A document required or permitted to be filed under this chapter which contains a copy of a signature, however made, is acceptable for filing.

If the Secretary of State has prescribed a mandatory form for the document under Section 79-4-1.21, the document must be in or on the prescribed form.

The document must be delivered to the Office of the Secretary of State for filing. Delivery may be made by electronic transmission if, to the extent and in the manner permitted by the Secretary of State. If it is filed in typewritten or printed form and not transmitted electronically, the Secretary of State may require one (1) exact or conformed copy to be delivered with the document.

When the document is delivered to the Office of the Secretary of State for filing, the correct filing fee, and any franchise tax, license fee, or penalty required to be paid therewith by this section or any other law must be paid or provision for payment made in a manner permitted by the Secretary of State.

Whenever a provision of this chapter permits any of the terms of a plan or a filed document to be dependent on facts objectively ascertainable outside the plan or filed document, the following provisions apply:

The manner in which the facts will operate upon the terms of the plan or filed document shall be set forth in the plan or filed document.

The facts may include, but are not limited to:

Any of the following that is available in a nationally recognized news or information medium either in print or electronically: statistical or market indices, market prices of any security or group of securities, interest rates, currency exchange rates, or similar economic or financial data;

A determination or action by any person or body, including the corporation or any other party to a plan or filed document; or

The terms of, or actions taken under, an agreement to which the corporation is a party, or any other agreement or document.

As used in this subsection:

“Filed document” means a document filed with the Secretary of State under any provision of this chapter except Article 15 or Section 79-4-16.21; and

“Plan” means a plan of domestication, nonprofit conversion, entity conversion, merger or share exchange.

The name and address of any person required in a filed document.

[Reserved]

The registered agent of any entity required in a filed document.

The number of authorized shares and designation of each class or series of shares.

The effective date of a filed document.

Any required statement in a filed document of the date on which the underlying transaction was approved or the manner in which that approval was given.

HISTORY: Laws, 1987, ch. 486, § 1.20; Laws, 1995, ch. 362, § 1; Laws, 1997, ch. 418, § 1; Laws, 2004, ch. 495, § 1; Laws, 2012, ch. 382, § 20, eff from and after Jan. 1, 2013.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, errors in two statutory references in (k)(3)(i) were corrected by substituting “Article 15” for “Chapter 15” and “Section 79-4-16.21” for “Section 16.21.”

Amendment Notes —

The 2004 amendment substituted “acknowledgment” for “acknowledgement” in (g); and added (k).

The 2012 amendment, effective January 1, 2013, deleted “except as provided in Sections 79-4-5.03 and 79-4-15.09.” from the end of (i); and made minor stylistic changes.

Cross References —

Filing service and copying fees, see § 79-4-1.22

Correcting a filed document, see § 79-4-1.24.

Penalty for signing false document, see § 79-4-1.29.

Copy of records to be maintained at principal office, see § 79-4-16.01.

§79-4-1.21. Forms.

The Secretary of State may prescribe and furnish on request forms for: (1) an application for a certificate of existence, (2) a foreign corporation’s application for a certificate of authority to transact business in this state, (3) a foreign corporation’s application for a certificate of withdrawal and (4) the annual report. If the Secretary of State so requires, use of these forms is mandatory.

The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by Sections 79-4-1.01 et seq. but their use is not mandatory.

HISTORY: Laws, 1987, ch. 486, § 1.21, eff from and after January 1, 1988.

Cross References —

Necessity that documents that Secretary of State has prescribed a mandatory form for under this section be filed in or on that prescribed form, see § 79-4-1.20.

Collection of filing fee greater than fee set out in § 79-4-1.22 authorized if prescribed form not used, see § 79-4-1.22.

§79-4-1.22. Filing service and copying fees; discounts; expedited filing service.

The Secretary of State shall collect the following fees when the documents described in this subsection are delivered to him for filing:

Document Fee (1) Articles of incorporation $ 50.00 (2) [Reserved] (3) Application for reserved name 25.00 (4) Notice of transfer or cancellation of reserved name 25.00 (5) [Reserved] (6) [Reserved] (7) [Reserved] (8) [Reserved] (9) [Reserved] (10) Amendment of articles of Incorporation 50.00 (11) Restatement of articles of incorporation 50.00 with amendment of articles 50.00 (12) Articles of merger or share exchange 50.00 (13) Articles of dissolution 25.00 (14) Articles of revocation of dissolution 25.00 (15) Certificate of administrative dissolution No fee (16) Application for reinstatement following administrative dissolution 50.00 (17) Certificate of reinstatement No fee (18) Certificate of judicial dissolution No fee (19) Application for certificate of authority 500.00 (20) Application for amended certificate of authority 50.00 (21) Application for certificate of withdrawal 25.00 (22) Certificate of revocation of authority to transact business No fee (23) Application for reinstatement following administrative revocation 100.00 (24) Certificate of reinstatement No fee (25) Annual report 25.00 (26) Articles of correction 50.00 (27) Application for certificate of existence or authorization 25.00 (28) Any other document required or permitted to be filed by et seq. 25.00 Section 79-4-1.01

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The Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) each time process is served on him under Section 79-4-1.01 et seq. The party to a proceeding causing service of process is entitled to recover this fee as costs if he prevails in the proceeding.

The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:

  1. One Dollar ($1.00) a page for copying; and
  2. Ten Dollars ($10.00) for the certificate.

The Secretary of State may collect a filing fee greater than the fee set out herein, not to exceed the actual costs of processing the filing, if the form for filing as prescribed by the Secretary of State has not been used.

The Secretary of State may promulgate rules to:

Reduce the filing fees prescribed in this section or provide for discounts of fees to encourage online filing of documents or for other reasons as determined by the Secretary of State; and

Provide for documents to be filed and accepted on an expedited basis upon the request of the applicant. The Secretary of State may promulgate rules to provide for an additional reasonable filing fee not to exceed Twenty-five Dollars ($25.00) to be paid by the applicant and collected by the Secretary of State for the expedited filing services.

HISTORY: Laws, 1987, ch. 486, § 1.22; Laws, 1991, ch. 509, § 6; Laws, 1994, ch. 536, § 1; Laws, 2009, ch. 530, § 1; Laws, 2010, ch. 375, § 1; Laws, 2012, ch. 382, § 21; Laws, 2012, ch. 481, § 1; Laws, 2014, ch. 468, § 5, eff from and after July 1, 2014.

Joint Legislative Committee Note —

Section 1 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 21 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 1 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-1.22 as amended by Laws of 2012, ch. 382.

Editor’s Notes —

Laws of 2010, ch. 375, § 2, provides:

Amendment Notes —

The 2009 amendment, substituted “costs of processing the filing, if the form for filing as prescribed” for “costs of processing such filing, if the form for such filing prescribed” in (d); and added (e).

The 2010 amendment, effective July 1, 2009, in (a)(10) through (a)(12), substituted “50.00” for “0.00”; and in (a)(13) and (a)(28), substituted “25.00” for “5.00.”

The second 2012 amendment (ch. 481) effective January 1, 2013, inserted “or cancellation” in (a)(4) and rewrote (a)(7), (8) and (9).

Cross References —

Definitions of terms used in the Mississippi Business Corporation Act, see § 79-4-1.40.

Filing fees for nonprofit corporation, see § 79-11-109.

§79-4-1.23. Effective time and date of document.

Except as provided in subsection (b) and Section 79-4-1.24(c), a document accepted for filing is effective:

  1. At the date and time of filing, as evidenced by such means as the Secretary of State may use for the purpose of recording the date and time of filing; or
  2. At the time specified in the document as its effective time on the date it is filed.

A document may specify a delayed effective time and date, and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date it is filed.

Notwithstanding subsections (a) and (b) of this section, any document that has a delayed effective time and date shall not become effective if, prior to the effective time and date, a statement of withdrawal is filed with the Secretary of State.

HISTORY: Laws, 1987, ch. 486, § 1.23; Laws, 1994, ch. 417 § 5; Laws, 1997, ch. 418, § 2, eff from and after July 1, 1997.

Cross References —

Effective date of articles of correction, see § 79-4-1.24.

Effective date of nonprofit corporations’s filed documents, see § 79-11-111.

§79-4-1.24. Correcting filed document.

A domestic or foreign corporation may correct a document filed by the Secretary of State if (1) the document contains an inaccuracy, or (2) the document was defectively executed, attested, sealed, verified or acknowledged, or (3) the electronic transmission was defective.

A document is corrected:

  1. By preparing articles of correction that (i) describe the document (including its filing date) or attach a copy of it to the articles, (ii) specify the inaccuracy or defect to be corrected, and (iii) correct the inaccuracy or defect; and
  2. By delivering the articles to the Secretary of State for filing.

Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

HISTORY: Laws, 1987, ch. 486, § 1.24; Laws, 1997, ch. 418, § 3, eff from and after July 1, 1997.

Cross References —

Fee for filing articles of correction, see § 79-4-1.22.

Effective time and date of documents accepted for filing other than articles of correction, see § 79-4-1.23.

§79-4-1.25. Duty of Secretary of State.

If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of Section 79-4-1.20, the Secretary of State shall file it.

The Secretary of State files a document by recording it as filed on the date and time of receipt. After filing a document, the Secretary of State shall deliver to the domestic or foreign corporation or its representative a copy of the document with an acknowledgment of the date and time of filing.

If the Secretary of State refuses to file a document, he shall return it to the domestic or foreign corporation or its representative within ten (10) days after the document was delivered, together with a brief, written explanation of the reason for his refusal.

The Secretary of State’s duty to file documents under this section is ministerial. His filing or refusing to file a document does not:

  1. Affect the validity or invalidity of the document, in whole or in part;
  2. Relate to the correctness or incorrectness of information contained in the document;
  3. Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

HISTORY: Laws, 1987, ch. 486, § 1.25; Laws, 1997, ch. 418, § 4; Laws, 2012, ch. 382, § 22; Laws, 2012, ch. 481, § 2, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 2 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 22 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 2 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-1.25 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The first 2012 amendment (ch. 382), deleted “except as provided in Sections 79-4-5.03 and 79-4-15.09” preceding “the Secretary of State shall deliver” in the last sentence of (b).

Cross References —

Filing service and copying fees, see § 79-4-1.22.

Appeal from Secretary of State’s refusal to file document, see § 79-4-1.25.

§79-4-1.26. Appeal from Secretary of State’s refusal to file document.

If the Secretary of State refuses to file a document delivered to his office for filing, the domestic or foreign corporation may appeal the refusal to the chancery court of the county where the corporation’s principal office is or will be located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State’s explanation of his refusal to file.

The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1987, ch. 486, § 1.26; Laws, 2012, ch. 382, § 23, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment , effective January 1, 2013, rewrote the first sentence in (a).

Cross References —

Duty of Secretary of State regarding filing of document, see § 79-4-1.25.

§79-4-1.27. Evidentiary effect of copy of filed document.

A certificate from the Secretary of State delivered with a copy of the document filed by the Secretary of State, is conclusive evidence that the original document is on file with the Secretary of State.

HISTORY: Laws, 1987, ch. 486, § 1.27; Laws, 1997, ch. 418, § 5, eff from and after July 1, 1997.

Cross References —

Evidentiary effect of certificate of existence or authorization, see § 79-4-1.28.

§79-4-1.28. Certificate of existence.

Anyone may apply to the Secretary of State to furnish a certificate of existence for a domestic corporation or a certificate of authorization for a foreign corporation.

A certificate of existence or authorization sets forth:

  1. The domestic corporation’s corporate name or the foreign corporation’s corporate name used in this state;
  2. That (i) the domestic corporation is duly incorporated under the law of this state, the date of its incorporation and the period of its duration, if less than perpetual; or (ii) that the foreign corporation is authorized to transact business in this state;
  3. That all fees, taxes and penalties owed to this state have been paid, if (i) payment is reflected in the records of the Secretary of State; and (ii) nonpayment affects the existence or authorization of the domestic or foreign corporation;
  4. That its most recent annual report required by Section 79-4-16.22 has been delivered to the Secretary of State;
  5. That articles of dissolution have not been filed; and
  6. Other facts of record in the office of the Secretary of State that may be requested by the applicant.

Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in existence or is authorized to transact business in this state.

HISTORY: Laws, 1987, ch. 486, § 1.28, eff from and after January 1, 1988.

Cross References —

Application for certificate of existence or authorization fee, see § 79-4-1.22.

Penalty for signing false document, see § 79-4-1.29.

§79-4-1.29. Penalty for signing false document.

A person commits an offense if he signs a document he knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.

An offense under this section is a misdemeanor punishable by a fine of not to exceed One Thousand Dollars ($1,000.00).

HISTORY: Laws, 1987, ch. 486, § 1.29; Laws, 2012, ch. 481, § 3, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “One Thousand Dollars ($1,000.00)” for “Five Hundred Dollars ($500.00).”

Cross References —

Penalty for signing false document, non profit corporation, see § 79-11-123.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1612 et seq., 1642, 1643.

CJS.

19 C.J.S., Corporations §§ 924, 977.

Section 79-4-16.21, referred to in (k)(3)(i), was repealed by Laws, 2012, ch. 481, § 48, effective January 1, 2013.

Requirement that Secretary of State file document that satisfies the requirements of this section, see § 79-4-1.25.

Definitions of certain terms used in this section, see § 79-4-1.40.

Requirements for filing documents by non profit corporation, see § 79-11-105.

Secretary of State may prescribe forms for use by nonprofit corporation, see § 79-11-107.

“SECTION 2. This act shall take effect and be in force from and after July 1, 2009.”

The first 2012 amendment (ch. 382), rewrote (a)(7) through (a)(9).

The 2014 amendment, in (2), substituted “[Reserved]” for “Application for use of indistinguishable name . . . 25.00”; in (5), substituted “[Reserved]” for “Application for registered name . . . 50.00”; and in (6), substituted “[Reserved]” for “Application for renewal of registered name . . . 50.00.”

The second 2012 amendment (ch. 481), effective January 1, 2013, deleted “except as provided in Sections 79-4-5.03 and 79-4-15.09” preceding “the Secretary of State shall deliver” in the last sentence of (b); substituted “ten (10)” for “five (5)” preceding “days after the document” in (c); and made minor stylistic changes.

Duty of Secretary of State to file nonprofit corporation documents, see § 79-11-115.

Appeal from Secretary of State’s refusal to file nonprofit corporation document, see § 79-11-117.

Evidentiary effect of copy of filed document, see § 79-4-1.27.

Application for and contents of certificate of existence for nonprofit corporation, see § 79-11-121.

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

Subarticle C. Secretary of State.

§79-4-1.30. Powers.

The Secretary of State has the power reasonably necessary to perform the duties required of him by Sections 79-4-1.01 et seq.

HISTORY: Laws, 1987, ch. 486, § 1.30, eff from and after January 1, 1988.

Cross References —

Duty of Secretary of State regarding filing of documents, see § 79-4-1.25.

Notice under the Mississippi Nonprofit Corporation Act, see § 79-11-129.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1612, 1613.

CJS.

19 C.J.S., Corporations § 979.

20 C.J.S., Corporations §§ 1819, 1820.

§79-4-1.40. Act definitions.

In Section 79-4-1.01 et seq.:

  1. “Articles of incorporation” means the original articles of incorporation, all amendments thereof, and any other documents permitted or required to be filed by a domestic business corporation with the Secretary of State under any provision of this chapter except Section 79-4-16.22. If an amendment of the articles or any other document filed under this chapter restates the articles in their entirety, thenceforth the “articles” shall not include any prior documents.
  2. “Authorized shares” means the shares of all classes a domestic or foreign corporation is authorized to issue.
  3. “Conspicuous” means so written, displayed, or presented that a reasonable person against whom the writing is to operate should have noticed it. For example, text in italics, boldface, contrasting color, capitals or underlined, is conspicuous.
  4. “Corporation” or “domestic corporation” means a corporation for profit, which is not a foreign corporation, incorporated under or subject to the provisions of Section 79-4-1.01 et seq.
  5. “Deliver” or “delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and, if authorized in accordance with Section 79-4-1.41, by electronic transmission.
  6. “Distribution” means a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of a declaration or payment of a dividend; a purchase, redemption or other acquisition of shares; a distribution of indebtedness; or otherwise.
  7. “Documents” means (i) any tangible medium on which information is inscribed, and includes any writing or written instruments, or (ii) an electronic record.
  8. “Domestic unincorporated entity” means an unincorporated entity whose internal affairs are governed by the laws of this state.
  9. “Effective date of notice” is defined in Section 79-4-1.41.
  10. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
  11. “Electronic record” means information that is stored in an electronic or other medium and is retrievable in paper form through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with Section 79-4-1.41(j).
  12. “Electronic transmission” or “electronically transmitted” means any form or process of communication, not directly involving the physical transfer of paper or another tangible medium, which (i) is suitable for the retention, retrieval and reproduction of information by the recipient, and (ii) is retrievable in paper form by the recipient through an automated process used in conventional commercial practice, unless otherwise authorized in accordance with Section 79-4-1.41(j).
  13. “Eligible entity” means a domestic or foreign unincorporated entity or a domestic or foreign nonprofit corporation.
  14. “Eligible interest” means interests or membership.
  15. “Employee” includes an officer but not a director. A director may accept duties that make him also an employee.
  16. “Expenses” means reasonable expenses of any kind that are incurred in connection with a matter.
  17. “Entity” includes domestic and foreign business corporation; domestic and foreign nonprofit corporation; estate; trust; business trust; domestic and foreign unincorporated entity; two (2) or more persons having a joint or common economic interest, and state, United States, and foreign government.
  18. “Facts objectively ascertainable” outside of a filed document or plan is defined in Section 79-4-1.20(k).
  19. “Filing entity” means another entity that is of a type that is created by filing a public organic document.
  20. “Foreign corporation” means a corporation incorporated under a law other than the law of this state, which would be a business corporation if incorporated under the laws of this state.
  21. “Foreign nonprofit corporation” means a corporation incorporated under a law other than the law of this state, which would be a nonprofit corporation if incorporated under the laws of this state.
  22. “Foreign unincorporated entity” means an unincorporated entity whose internal affairs are governed by an organic law of a jurisdiction other than this state.
  23. “Governmental subdivision” includes authority, county, district and municipality.
  24. “Includes” denotes a partial definition.
  25. “Individual” means a natural person, and includes the estate of an incompetent or deceased natural person.
  26. “Interest” means either or both of the following rights under the organic law of an unincorporated entity:
  27. “Means” denotes an exhaustive definition.
  28. “Membership” means the rights of a member in a domestic or foreign nonprofit corporation.
  29. “Nonprofit corporation” or “domestic nonprofit corporation” means a corporation incorporated under the laws of this state and subject to the provisions of Section 79-11-101 et seq.
  30. “Notice” is defined in Section 79-4-1.41.
  31. “Organic law” means the statute governing the internal affairs of a domestic or foreign business or nonprofit corporation or unincorporated entity.
  32. “Person” includes an individual and an entity.
  33. “Principal office” means the office (in or out of this state) so designated in the annual report where the principal executive offices of a domestic or foreign corporation are located.
  34. “Proceeding” includes civil suit and criminal, administrative and investigatory action.
  35. “Public corporation” means a corporation that has shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national securities association.
  36. “Qualified director” is defined in Section 79-4-1.43.
  37. “Record date” means the date established under Article 6 or 7 on which a corporation determines the identity of its shareholders and their shareholdings for purposes of Section 79-4-1.01 et seq. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.
  38. “Secretary” means the corporate officer to whom the board of directors has delegated responsibility under Section 79-4-8.40(c) for custody of the minutes of the meetings of the board of directors and of the shareholders and for authenticating records of the corporation.
  39. “Shares” means the unit into which the proprietary interests in a corporation are divided.
  40. “Shareholder” means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
  41. “Sign” or “signature” means, with present intent to authenticate or adopt a document:
  42. “State,” when referring to a part of the United States, includes a state and commonwealth (and their agencies and governmental subdivisions) and a territory, and insular possession (and their agencies and governmental subdivisions) of the United States.
  43. “Subscriber” means a person who subscribes for shares in a corporation, whether before or after incorporation.
  44. “Unincorporated entity” means an organization or artificial legal person that either has a separate legal existence or has the power to acquire an estate in real property in its own name and that is not any of the following: a domestic or foreign business or nonprofit corporation, an estate, a trust, a state, the United States, or a foreign government. The term includes a general partnership, limited liability company, limited partnership, business trust, joint-stock association and unincorporated nonprofit association.
  45. “United States” includes district, authority, bureau, commission, department and any other agency of the United States.
  46. “Voting group” means all shares of one or more classes or series that under the articles of incorporation or Section 79-4-1.01 et seq. are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or Section 79-4-1.01 et seq. to vote generally on the matter are for that purpose a single voting group.
  47. “Voting power” means the current power to vote in the election of directors.
  48. “Writing” or “written” means any information in the form of a document.

The right to receive distributions from the entity either in the ordinary course or upon liquidation; or

The right to receive notice or vote on issues involving its internal affairs, other than as an agent, assignee, proxy, or person responsible for managing its business and affairs.

To execute or adopt a tangible symbol to a document, and includes any manual, facsimile, or conformed signature; or

To attach to or logically associate with an electronic transmission an electronic sound, symbol, or process, and includes an electronic signature in an electronic transmission.

HISTORY: Laws, 1987, ch. 486, § 1.40; Laws, 1988, ch. 369, § 1; Laws, 1997, ch. 418, § 6; Laws, 2000, ch. 469, § 1; Laws, 2004, ch. 495, § 2; Laws, 2006, ch. 429, § 1; Laws, 2007, ch. 361, § 1; Laws, 2012, ch. 481, § 4, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (5) by substituting “Section 79-4-1.41” for “Section 79-7-1.41.” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Amendment Notes —

The 2000 amendment added (29).

The 2006 amendment added (22), and redesignated former (22) through (31) as present (23) through (32); and made a minor stylistic change.

The 2012 amendment, effective January 1, 2013, rewrote (1), (3), (5), (9), (12), (17), (20), (25), (41); added (7) and (8), (10), (11), (13), (14), (21), (22), (26), (28), (29), (31), (36), (44) and (48); and made minor stylistic changes throughout.

RESEARCH REFERENCES

Law Reviews.

Hamilton, The background of the new Mississippi Business Corporation Act. 12 Miss. C. L. Rev. 166, Fall, 1991.

§79-4-1.41. Notice.

Notice under Section 79-4-1.01 et seq. must be in writing unless oral notice is reasonable in the circumstances. Unless otherwise agreed between the sender and the recipient, words in a notice or other communication under this chapter must be in English.

A notice or other communication may be given or sent by any method of delivery, except that electronic transmissions must be in accordance with this section. If these methods of delivery are impracticable, a notice or other communication may be communicated by a newspaper of general circulation in the area where published, or by radio, television or other form of public broadcast communication.

Notice or other communication to a domestic or foreign corporation authorized to transact business in this state may be delivered to its registered agent or to the secretary of the corporation at its principal office shown in its most recent annual report or, in the case of a foreign corporation that has not yet delivered an annual report, in its application for a certificate of authority.

Notice or other communication may be delivered by electronic transmission if consented to by the recipient or if authorized by subsection (j) of this section.

Any consent under subsection (d) of this section may be revoked by the person who consented by written or electronic notice to the person to whom the consent was delivered. Any such consent is deemed revoked if (1) the corporation is unable to deliver two (2) consecutive electronic transmissions given by the corporation in accordance with such consent, and (2) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice or other communications; the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.

Unless otherwise agreed between the sender and the recipient, an electronic transmission is received when:

  1. It enters an information-processing system that the recipient has designated or uses for the purpose of receiving electronic transmissions or information of the type sent, and from which the recipient is able to retrieve the electronic transmission; and
  2. It is in a form capable of being processed by that system.
  3. If mailed by United States mail postage prepaid and correctly addressed to a recipient other than a shareholder, the earliest when it is actually received or:
  4. If an electronic transmission, when it is received as provided in subsection (f) of this section; and
  5. If oral, when communicated.

Receipt of an electronic acknowledgement from an information-processing system described in subsection (f)(1) of this section establishes that an electronic transmission was received but, by itself, does not establish that the content sent corresponds to the content received.

An electronic transmission is received under this section even if no individual is aware of its receipt.

Notice or other communication, if in a comprehensible form or manner, is effective at the earliest of the following:

If in physical form, the earliest of when it is actually received, or when it is left at:

A shareholder’s address shown on the corporation’s record of shareholders maintained by the corporation under Section 79-4-16.01(c);

A director’s residence or usual place of business; or

The corporation’s principal place of business;

If mailed postage prepaid and correctly addressed to a shareholder, upon deposit in the United States mail;

If sent by registered or certified mail, return receipt requested, the date shown on the return receipt signed by or on behalf of the addressee; or

Five (5) days after it is deposited in the United States mail;

A notice or other communication may be in the form of an electronic transmission that cannot be directly reproduced in paper form by the recipient through an automated process used in conventional commercial practice only if (1) the electronic transmission is otherwise retrievable in perceivable form, and (2) the sender and the recipient have consented in writing to the use of such form of electronic transmission.

If Section 79-4-1.01 et seq. prescribes requirements for notices or other communications in particular circumstances, those requirements govern. If articles of incorporation or bylaws prescribe requirements for notices or other communications, not inconsistent with this section or other provisions of Section 79-4-1.01 et seq., those requirements govern. The articles of incorporation or bylaws may authorize or require delivery of notices of meetings of directors by electronic transmission.

HISTORY: Laws, 1987, ch 486, § 1.41; Laws, 1997, ch. 418, § 7; Laws, 2007, ch. 361, § 2; Laws, 2012, ch. 382, § 24; Laws, 2012, ch. 481, § 5, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 5 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012) amended this section. Section 24 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012) also amended this section. As set out above, this section reflects the language of Section 5 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-1.41 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The 2007 amendment substituted “the secretary of the corporation” for “the corporation or its secretary” in (d).

The second 2012 amendment (ch. 481), effective January 1, 2013, rewrote the section.

Cross References —

Other definitions relative to the Mississippi Business Corporation Act,, see § 79-4-1.40.

§79-4-1.42. Number of shareholders.

For purposes of Sections 79-4-1.01 et seq., the following identified as a shareholder in a corporation’s current record of shareholders constitutes one (1) shareholder:

  1. Three (3) or fewer co-owners;
  2. A corporation, partnership, trust, estate or other entity;
  3. The trustees, guardians, custodians or other fiduciaries of a single trust, estate or account.

For purposes of Sections 79-4-1.01 et seq., shareholdings registered in substantially similar names constitute one (1) shareholder if it is reasonable to believe that the names represent the same person.

HISTORY: Laws, 1987, ch. 486, § 1.42, eff from and after January 1, 1988.

RESEARCH REFERENCES

ALR.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

Law Reviews.

1979 Mississippi Supreme Court Review: Corporate & Commercial Law. 50 Miss. L. J. 741.

§79-4-1.43. Qualified director.

A “qualified director” is a director who, at the time action is to be taken under:

  1. Section 79-4-7.44, does not have (i) a material interest in the outcome of the proceeding, or (ii) a material relationship with a person who has such an interest;
  2. Section 79-4-8.53 or 79-4-8.55, (i) is not a party to the proceeding, (ii) is not a director as to whom a transaction is a director’s conflicting interest transaction or who sought a disclaimer of the corporation’s interest in a business opportunity under Section 79-4-8.70, which transaction or disclaimer is challenged in the proceeding, and (iii) does not have a material relationship with a director described in either clause (i) or clause (ii) of this subsection (a)(2);
  3. Section 79-4-8.62, is not a director (i) as to whom the transaction is a director’s conflicting interest transaction, or (ii) who has a material relationship with another director as to whom the transaction is a director’s conflicting interest transaction; or
  4. Section 79-4-8.70, would be a qualified director under subsection (a)(3) if the business opportunity were a director’s conflicting interest transaction.

For purposes of this section:

“Material relationship” means a familial, financial, professional, employment or other relationship that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken; and

“Material interest” means an actual or potential benefit or detriment (other than one which would devolve on the corporation or the shareholders generally) that would reasonably be expected to impair the objectivity of the director’s judgment when participating in the action to be taken.

The presence of one or more of the following circumstances shall not automatically prevent a director from being a qualified director:

Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter (or by any person that has a material relationship with that director), acting alone or participating with others;

Service as a director of another corporation of which a director who is not a qualified director with respect to the matter (or any individual who has a material relationship with that director), is or was also a director; or

With respect to action to be taken under Section 79-4-7.44, status as a named defendant, as a director against whom action is demanded, or as a director who approved the conduct being challenged.

HISTORY: Laws, 2006, ch. 429, § 2, eff from and after July 1, 2006.

JUDICIAL DECISIONS

1. Special committee.

Because plaintiff did not allege with particularity facts establishing that the members of a special committee were not qualified, dismissal of plaintiff’s derivative action was appropriate. Burgess v. Patterson, 188 So.3d 537, 2016 Miss. LEXIS 154 (Miss. 2016).

§79-4-1.44. Householding.

A corporation has delivered written notice or any other report or statement under this chapter, the articles of incorporation or the bylaws to any shareholders who share a common address if:

  1. The corporation delivers one (1) copy of the notice, report or statement to the common address;
  2. The corporation addresses the notice, report or statement to those shareholders either as a group or to each of those shareholders individually or to the shareholders in a form to which each of those shareholders has consented; and
  3. Each of those shareholders consents to delivery of a single copy of such notice, report or statement to the shareholders’ common address.

    Any such consent shall be revocable by any of such shareholders who deliver written notice of revocation to the corporation.If such written notice of revocation is delivered, the corporation shall begin providing individual notices, reports or other statements to the revoking shareholder no later than thirty (30) days after delivery of the written notice of revocation.

Any shareholder who fails to object by written notice to the corporation, within sixty (60) days of written notice by the corporation of its intention to send single copies of notices, reports or statements to shareholders who share a common address as permitted by subsection (a), shall be deemed to have consented to receiving such single copy at the common address.

HISTORY: Laws, 2007, ch. 361, § 3, eff from and after July 1, 2007.

Cross References —

Notice under the Mississippi Business Corporation Act, see § 79-4-1.41.

Authority to commence proceeding to administratively dissolve corporation, see § 79-4-14.20.

36 Am. Jur. 2d, Foreign Corporations §§ 207, 288.

Subarticle D. Definitions.

The 2004 amendment inserted present (11) and (12), and redesignated former (11) through (29) accordingly.

The first 2012 amendment (ch. 382), deleted “at its registered office” preceding “or to the secretary of the corporation” in (d).

§79-4-1.50. Repealed.

Repealed by Laws, 1988, ch. 368, § 13, eff from and after passage (approved April 18, 1988).

[En Laws, 1987, ch. 486, § 1.50]

Editor’s Notes —

Former § 79-4-1.50 related to the recording of articles of incorporation.

The 2007 amendment added (9AA).

Subarticle E. Recording of Articles of Incorporation [Repealed].

Article 2. Incorporation.

§79-4-2.01. Incorporators.

One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.

HISTORY: Laws, 1987, ch. 486, § 201, eff from and after January 1, 1988.

Cross References —

Articles of incorporation, see § 79-4-202.

Revocation of dissolution, see § 79-4-14.04.

RESEARCH REFERENCES

ALR.

Rights and liabilities of promoters or incorporators inter se under their contracts for issuance of stock to them in return for services. 8 A.L.R.2d 722.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 161, 162.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:14 et seq.

CJS.

18 C.J.S., Corporations § 56.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

§79-4-2.02. Articles of incorporation.

The articles of incorporation must set forth:

  1. A corporate name for the corporation that satisfies the requirements of Section 79-4-4.01;
  2. The number of shares the corporation is authorized to issue and any information concerning the authorized shares as required by Section 79-4-6.01;
  3. The street address of the corporation’s initial registered office and the name of its initial registered agent at that office; and
  4. The name and address of each incorporator.
  5. A provision permitting or making obligatory indemnification of a director for liability as defined in Section 79-4-8.50(5) to any person for any action taken, or any failure to take any action, as a director, except liability for:
  6. A provision or reference to a provision in the corporation’s bylaws that requires derivative proceedings under Section 79-4-7.41(1) or any other internal corporate claim that is based upon a current or former director’s or officer’s violation of a duty to be brought in the appropriate court of the county where the corporation’s principal office is located, consistent with applicable law and jurisdictional requirements.

The articles of incorporation may set forth:

The names and addresses of the individuals who are to serve as the initial directors;

Provisions not inconsistent with law regarding:

The purpose or purposes for which the corporation is organized;

Managing the business and regulating the affairs of the corporation;

Defining, limiting and regulating the powers of the corporation, its board of directors and shareholders; and

A par value for authorized shares or classes of shares;

Any provision that under Section 79-4-1.01 et seq. is required or permitted to be set forth in the bylaws;

A provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages for any action taken, or any failure to take any action, as a director, except liability for:

The amount of a financial benefit received by a director to which he is not entitled;

An intentional infliction of harm on the corporation or the shareholders;

A violation of Section 79-4-8.33; or

An intentional violation of criminal law; and

Receipt of a financial benefit to which he is not entitled;

An intentional infliction of harm on the corporation or its shareholders;

A violation of Section 79-4-8.33; or

An intentional violation of criminal law.

The articles of incorporation need not set forth any of the corporate powers enumerated in Section 79-4-1.01 et seq.

For the purposes of this section, a “director” shall include any person vested with the discretion or powers of a director under Section 79-4-7.32.

Provisions of the articles of incorporation may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with Section 79-4-1.20(k).

HISTORY: Laws, 1987, ch. 486, § 202; Laws, 1991, ch. 509, § 1; Laws, 1994, ch. 417, § 1; Laws, 1996, ch. 459 § 1; Laws, 2004, ch. 495, § 3; Laws, 2012, ch. 382, § 25; Laws, 2016, ch. 435, § 1, eff from and after July 1, 2016.

Amendment Notes —

The 2004 amendment added (e).

The 2012 amendment, effective January 1, 2013, substituted “information required by Section 79-35-5(a)” for “street address of the corporation’s initial registered office and the name of its initial registered agent at that office” in (a)(3).

Cross References —

Fee for filing articles of incorporation, see § 79-4-1.22.

Absent specified delayed effective date, corporate existence begins upon filing articles of incorporation, see § 79-4-2.03.

Mandatory indemnification, see § 79-4-8.52.

Articles of amendment, see § 79-4-10.06.

Applicability of this section to amendment of articles of incorporation to carry out plan of reorganization ordered or decreed by court, see § 79-4-10.08.

Corporation’s obtaining its articles of incorporation through fraud as ground for judicial dissolution of corporation, see § 79-4-14.30.

Articles of incorporation under Mississippi Nonprofit Corporation Act, see § 79-11-137.

RESEARCH REFERENCES

ALR.

Construction and application of provisions of articles, bylaws, statutes, or agreements restricting alienation or transfer of corporate stock. 2 A.L.R.2d 745.

Validity, construction, and effect of articles of incorporation or stock certificates relating to call, redemption, or retirement of common stock. 48 A.L.R.2d 392.

Construction and effect of corporate bylaws or articles relating to change in number of directors. 3 A.L.R.3d 623.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 78 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:121 et seq., 74:189 et seq., 74:6121 et seq., 74:1271 et seq., 74:1312 et seq.

CJS.

18 C.J.S., Corporations §§ 101 et seq.

Law Reviews.

1979 Mississippi Supreme Court Review: Corporate & Commercial Law. 50 Miss. L. J. 741.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-105.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-105.

11. In general.

Shareholders in bank seeking to enforce an agreement wherein defendant shareholders and certain of the complainants had pledged “individually not to seek control (of the bank) through ownership or control of stock by ourselves or any other person, and by proxy or otherwise” were not entitled to injunction requiring defendant signatories to vote their stock for the reelection of the present bank directors because the usage of the word “individually” in the agreement appeared to conflict with the subsequent phrase “through ownership or control of stock by ourselves or any other person,” and it was not therefore discernable whether the agreement contemplated that no signatory would seek to acquire or hold 51 percent of stock in the corporation or whether the agreement referred to joint action of the signatories; nor was evidence sufficient to justify the issuance of an injunction where there was no proof of resulting injury to the complaining shareholders stemming from the nomination by defendant shareholders of persons other than the present directors; moreover, stipulation of counsel as to who held how many shares of stock in proxy did not indicate that defendants could have succeeded in electing their nominees. Crocker v. Farmers & Merchants Bank, 293 So. 2d 438, 1974 Miss. LEXIS 1794 (Miss. 1974).

A state chartered savings and loan association, by substantial compliance with the provisions of Code 1942, § 5310, obtained a charter amendment, which became effective prior to the effective date of Code 1942, §§ 5288-01 et seq., authorizing it to move its principal office or place of business from North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

Hospital with outstanding capital stock qualifies as a nonprofit corporation able to accept grant for aid from the state inasmuch as in all functions which are part of the state hospital plan, the hospital is in fact and by law, by charter and by its contract with state hospital commission a nonprofit institution under the supervision of the commission and also since the statute recognizes the possibility that there may be outstanding stock in a nonprofit corporation which does not allow any of its profits to inure to the benefit of any shareholder. Craig v. Mercy Hospital-Street Memorial, 209 Miss. 427, 47 So. 2d 867, 1950 Miss. LEXIS 409 (Miss. 1950).

Charter grant of right to stockholders of corporation to change domicile thereof held not violation of statutes or constitution nor inimical to public policy or private right, in view of statute authorizing service on secretary of state of process against corporations failing to file names of agents on whom process may be served. Estes v. Bank of Walnut Grove, 172 Miss. 499, 159 So. 104, 1935 Miss. LEXIS 107 (Miss. 1935).

State may forfeit charter of fraternal corporation soliciting members by falsely representing that they will be received into regular Masonic lodges throughout the United States, and may restrain receiving members by such means pending trial of forfeiture proceedings. Cuney v. State, 142 Miss. 894, 108 So. 298, 1926 Miss. LEXIS 143 (Miss. 1926).

Corporations may be dealt with in a different manner from individuals, their charters being held at the legislative will, subject to amendment or repeal. State v. Jackson Cotton Oil Co., 95 Miss. 6, 48 So. 300, 1909 Miss. LEXIS 209 (Miss. 1909).

The words of a charter are to be considered rather as those of the incorporators than of the state. State ex rel. District Attorney v. Simmons, 70 Miss. 485, 12 So. 477, 1892 Miss. LEXIS 130 (Miss. 1892), limited, Barnes v. Jones, 139 Miss. 675, 103 So. 773, 1925 Miss. LEXIS 115 (Miss. 1925).

§79-4-2.03. Incorporation.

Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.

The Secretary of State’s filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

HISTORY: Laws, 1987, ch. 486, § 2.03, eff from and after January 1, 1988.

Cross References —

Articles of incorporation content, see § 79-4-2.02.

Unless otherwise provided in articles of incorporation, corporation has perpetual duration and succession in its corporate name, see § 79-4-302.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 74.

CJS.

18 C.J.S., Corporations § 109.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-3-107.

12. Under former §79-3-109.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-3-107.

An agricultural co-operative association organized under the act of Congress ( 7 USCS §§ 291, 292) authorizing the formation of such associations for the sole purpose of providing marketing facilities and sales services to growers of cotton, is not a “corporation for profit,” within the meaning of the state statute, where the association, the stock of which is owned exclusively by regional and state co-operative associations, itself derives no profit from its activities, and in fact is expressly referred to in the act of Congress as being “not for profit,” and, although it is authorized to pay dividends on its preferred stock, this stock is simply for use in borrowing money from a governmental agency. American Cotton Co-op. Ass'n v. Union Compress & Warehouse Co., 193 Miss. 43, 7 So. 2d 537, 1942 Miss. LEXIS 81 (Miss. 1942).

12. Under former § 79-3-109.

Incorporators who, following the issuance of a certificate of incorporation but prior to the payment into the treasury of the corporation of the required $1,000 as consideration for the issuance of shares, executed, as officers of the corporation, its note for $25,000, were not individually on the corporation’s note. In re Estate of Hardin, 218 So. 2d 889, 1969 Miss. LEXIS 1634 (Miss. 1969).

§79-4-2.04. Liability of preincorporation transactions.

All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under Sections 79-4-1.01 et seq., are jointly and severally liable for all liabilities created while so acting.

HISTORY: Laws, 1987, ch. 486, § 2.04, eff from and after January 1, 1988.

Cross References —

Liability for purporting to act for corporation prior to incorporation under Mississippi Nonprofit Corporation Act, see § 79-11-141.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 187.

CJS.

18 C.J.S., Corporations §§ 95-98.

§79-4-2.05. Organization of corporation.

After incorporation:

  1. If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting.
  2. If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:

To elect directors and complete the organization of the corporation; or

To elect a board of directors who shall complete the organization of the corporation.

Action required or permitted by Sections 79-4-1.01 et seq. to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.

An organizational meeting may be held in or out of this state.

HISTORY: Laws, 1987, ch. 486, § 2.05, eff from and after January 1, 1988.

Cross References —

Bylaws, see § 79-4-2.06.

Organization of corporation under Mississippi Nonprofit Corporation Act, see § 79-11-143.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 184 et seq.

CJS.

19 C.J.S., Corporations § 828-833.

§79-4-2.06. Bylaws.

The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.

The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

HISTORY: Laws, 1987, ch. 486, § 2.06, eff from and after January 1, 1988.

Cross References —

Articles of incorporation content, see § 79-4-2.02.

Power to amend bylaws, see § 79-4-302.

Copy of bylaws or restated bylaws and all amendments to them currently in effect to be maintained at corporation’s principal office, see § 79-4-16.01.

RESEARCH REFERENCES

ALR.

Construction and application of provisions of articles, bylaws, statutes, or agreements restricting alienation or transfer of corporate stock. 2 A.L.R.2d 745.

Construction and effect of corporate articles, charter, or bylaws limiting duration or maturity of its indebtedness. 55 A.L.R.2d 949.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 258 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:796-74:798, 74:984 et seq.

CJS.

18 C.J.S., Corporations §§ 244 et seq.

§79-4-2.07. Emergency bylaws.

Unless the articles of incorporation provide otherwise, the board of directors of a corporation may adopt bylaws to be effective only in an emergency defined in subsection (d). The emergency bylaws, which are subject to amendment or repeal by the shareholders, may make all provisions necessary for managing the corporation during the emergency, including:

  1. Procedures for calling a meeting of the board of directors;
  2. Quorum requirements for the meeting; and
  3. Designation of additional or substitute directors.

All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.

Corporate action taken in good faith in accordance with the emergency bylaws:

Binds the corporation; and

May not be used to impose liability on a corporate director, officer, employee or agent.

An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event.

HISTORY: Laws, 1987, ch. 486, § 207; Laws, 1988, ch. 368, § 1, eff from and after passage (approved April 18, 1988).

Cross References —

Articles of incorporation content, see § 79-4-2.02.

Emergency powers of board of directors of corporation, see § 79-4-3.03.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1267.

§79-4-3.01. Purposes.

Every corporation incorporated under Sections 79-4-1.01 et seq. has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of incorporation.

A corporation engaging in a business that is subject to regulation under another statute of this state may incorporate under Sections 79-4-1.01 et seq. only if permitted by, and subject to all limitations of the other statute.

HISTORY: Laws, 1987, ch. 486, § 301, eff from and after January 1, 1988.

Cross References —

General powers of corporation, see § 79-4-3.02.

Applicability of this section to permissible corporate names, see § 79-4-4.01.

RESEARCH REFERENCES

ALR.

Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation. 9 A.L.R.2d 1306.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 164 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:191 et seq.

CJS.

18 C.J.S., Corporations §§ 21 et seq.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

§79-4-3.02. General powers.

Unless its articles of incorporation provide otherwise, every corporation has perpetual duration and succession in its corporate name and has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation power:

  1. To sue and be sued, complain and defend in its corporate name;
  2. To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it;
  3. To make and amend bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for managing the business and regulating the affairs of the corporation;
  4. To purchase, receive, lease or otherwise acquire, and own, hold, improve, use and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;
  5. To sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of all or any part of its property;
  6. To purchase, receive, subscribe for, or otherwise acquire; own, hold, vote, use, sell, mortgage, lend, pledge or otherwise dispose of; and deal in and with shares or other interests in, or obligations of, any other entity;
  7. To make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds and other obligations (which may be convertible into or include the option to purchase other securities of the corporation), and secure any of its obligations by mortgage or pledge of any of its property, franchises or income, and make contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of (a) a corporation all of the outstanding stock of which is owned, directly or indirectly, by the contracting corporation, or (b) a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, or (c) a corporation all of the outstanding stock of which is owned, directly or indirectly, by a corporation which owns, directly or indirectly, all of the outstanding stock of the contracting corporation, which contracts of guaranty and suretyship shall be deemed to be necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation, and make other contracts of guaranty and suretyship which are necessary or convenient to the conduct, promotion or attainment of the business of the contracting corporation;
  8. To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;
  9. To be a promoter, partner, member, associate or manager of any partnership, joint venture, trust or other entity;
  10. To conduct its business, locate offices and exercise the powers granted by Section 79-4-1.01 et seq. within or without this state;
  11. To elect directors and appoint officers, employees and agents of the corporation, define their duties, fix their compensation and lend them money and credit;
  12. To pay pensions and establish pension plans, pension trusts, profit sharing plans, share bonus plans, share option plans and benefit or incentive plans for any or all of its current or former directors, officers, employees and agents;
  13. To make donations for the public welfare or for charitable, scientific or educational purposes;
  14. To transact any lawful business that will aid governmental policy;
  15. To make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the corporation.

HISTORY: Laws, 1987, ch. 486, § 3.02; Laws, 1988, ch. 368, § 2; Laws, 1993, ch. 368, § 16, eff from and after July 1, 1993.

Cross References —

Gifts and donations by corporations for public welfare or charitable or educational purposes to be changed to operation expenses, see § 79-1-3.

Lack of necessity that articles of incorporation set forth any corporate powers enumerated in §§ 79-4-1.01 et seq., see § 79-4-2.02.

Disposition of assets not requiring shareholder apparel, see § 79-4-12.01.

Dissolution of corporation generally, see § 79-4-14.01 et seq.

General powers of corporation under Mississippi Nonprofit Corporation Act, see § 79-11-151.

RESEARCH REFERENCES

ALR.

Power of president of corporation to have litigation instituted by it where board of directors has failed or refused to grant permission. 10 A.L.R.2d 701.

Acts of employee, in procuring warrant or aiding prosecution, as within scope of employment so as to render employer liable for malicious prosecution. 18 A.L.R.2d 402.

Power of particular officer or agent of business corporation to bind it by a donation to a charity or similar institution. 50 A.L.R.2d 447.

Corporation’s power to enter into partnership or joint venture. 60 A.L.R.2d 917.

Statute denying defense of usury to corporation. 63 A.L.R.2d 924.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Communications by corporation as privileged in stockholders’ action. 34 A.L.R.3d 1106.

Fire insurance on corporate property as affected by its intentional destruction by a corporate officer, employee, or stockholder. 37 A.L.R.3d 1385.

Similarity of ownership or control as basis for charging corporation acquiring assets of another with liability for former owner’s debts. 49 A.L.R.3d 881.

Criminal liability of corporation for bribery or conspiracy to bribe public official. 52 A.L.R.3d 1274.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Power of corporation to make political contribution or expenditure under state law. 79 A.L.R.3d 491.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action. 23 A.L.R.5th 744.

Am. Jur.

18 Am. Jur. 2d, Corporations § 75.

18B Am. Jur. 2d, Corporations §§ 1715 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 43.1 (complaint, petition, or declaration – to collect on corporate debt – corporation the alter ego of individual).

CJS.

19 C.J.S., Corporations §§ 1018 et seq.

Law Reviews.

1984 Mississippi Supreme Court Review: Corporate, Contract and Commercial Law. 55 Miss. L. J. 65.

JUDICIAL DECISIONS

I. UNDER CURRENT LAW.

1. In general.

2. Suit by dissolved corporation.

3.-10. [Reserved for future use.]

II. UNDER FORMER LAW.

A. Former §79-3-7.

11. Powers in general.

12. —Acquisition and ownership of land.

13. —Conveyances.

14. —Sale of personality.

15. —Sale of entire assets.

16. —Contracts.

17. —Increase or reduction of capital stock.

18. —Miscellaneous.

19. Corporate seal.

20. Ultra vires actions.

21. Authority of officers and agents.

22. Compensation of directors, officers and agents.

23. Estoppel.

24. Liability.

25. Assignment for benefit of creditors.

26. Preference of creditors.

B. Former §79-3-285.

27. In general.

I. UNDER CURRENT LAW.

1. In general.

Just as a corporation’s negligent performance of contractual duties does not justify the disregard of the corporate entity, neither does the fact that the principal shareholder oversees the day-to-day operation. Gray v. Edgewater Landing, Inc., 541 So. 2d 1044, 1989 Miss. LEXIS 192 (Miss. 1989).

2. Suit by dissolved corporation.

In a property damage case, because there was no authority cited for the proposition that an action filed on behalf of a dissolved corporation should have been treated as being filed against a partnership, appellate review of the issue was precluded. In addressing the merits of the issue, it was determined that a dissolved corporation could not have been a real party in interest because it had been dissolved more than eight years before the alleged incident took place, and there was an opportunity given to substitute the real party in interest. Funderburg v. Pontotoc Elec. Power Ass'n, 6 So.3d 439, 2009 Miss. App. LEXIS 159 (Miss. Ct. App. 2009).

3.-10. [Reserved for future use.]

II. UNDER FORMER LAW.

A. Former § 79-3-7.

11. Powers in general.

Corporation has power to sue in corporate name only insofar as state grants that power, and when corporation is suspended it loses all rights acquired by form of organization. Where suspension had been set aside by time amended complaint was filed, and company was thus authorized to resume all activities as though suspension had not been imposed, claim that it lacked power to file suit was not applicable. Bryant Constr. Co. v. Cook Constr. Co., 518 So. 2d 625, 1987 Miss. LEXIS 2934 (Miss. 1987).

Corporation cannot delegate its duties to others with same freedom as individuals. Southern Electric Sec. Co. v. State, 91 Miss. 195, 44 So. 785, 1907 Miss. LEXIS 136 (Miss. 1907).

12. —Acquisition and ownership of land.

A corporation’s right to acquire and hold land, whether in violation of a charter or the laws or public policy of the state, can be questioned only by the state in which the land lies or the sovereignty from which the corporation received its charter. Federal Land Bank v. Cooper, 190 Miss. 490, 200 So. 729, 1941 Miss. LEXIS 73 (Miss. 1941).

Reservation in a deed to an individual by the Federal Land Bank of one-half of the mineral interest in the land conveyed thereby, whether in violation of this section [Code 1942, § 5329] or not, could only be questioned by the state and not by the grantee in such deed or those claiming through him. Federal Land Bank v. Cooper, 190 Miss. 490, 200 So. 729, 1941 Miss. LEXIS 73 (Miss. 1941).

Grantor of land sold to corporation could not attack its title under this section [Code 1942, § 5329]. Middleton v. Georgetown Mercantile Co., 117 Miss. 134, 77 So. 956, 1918 Miss. LEXIS 157 (Miss. 1918).

Corporation with power to acquire realty without limit as to value and quantity cannot be affected by this section [Code 1942, § 5329]. Southern Realty Co. v. Tchula Co-operative Stores, 114 Miss. 309, 75 So. 121, 1917 Miss. LEXIS 36 (Miss. 1917).

13. —Conveyances.

Corporation’s warranty of its right to cut timber from 16th section land, or that it would obtain such right held not void. Southern Plantations Co. v. Kennedy Heading Co., 104 Miss. 131, 61 So. 166, 1913 Miss. LEXIS 14 (Miss. 1913).

Corporation’s deed without seal will be enforced in equity. Southern Plantations Co. v. Kennedy Heading Co., 104 Miss. 131, 61 So. 166, 1913 Miss. LEXIS 14 (Miss. 1913).

Unsealed deed by corporation held not available in ejectment to support plaintiff’s title. Littelle v. Creek Lumber Co., 99 Miss. 241, 54 So. 841, 1911 Miss. LEXIS 199 (Miss. 1911).

14. —Sale of personality.

In making a sale of its personal property a private corporation may act without seal; agency for the corporation in this case may be proved, and authority to act for it implied, as in the case of natural persons. Cary-Halidy Lumber Co. v. Cain, 70 Miss. 628, 13 So. 239, 1893 Miss. LEXIS 56 (Miss. 1893).

15. —Sale of entire assets.

Corporation cannot give away its own assets to the prejudice of creditors, nor can it defeat creditors of another corporation by purchasing its assets unless it is a bona fide purchaser for value, in which case it is still liable for debts of selling corporation to the extent of assets received. Mahaffey Co. v. Russell & Butler, 100 Miss. 122, 54 So. 807, 1911 Miss. LEXIS 92 (Miss. 1911).

With an express enabling statute, the majority of the stockholders of an insolvent public corporation may sell all of its assets. Hinds County v. Natchez J. & C. R. Co., 85 Miss. 599, 38 So. 189, 1904 Miss. LEXIS 111 (Miss. 1904).

16. —Contracts.

A corporation is not liable on contracts made by its promoters unless it adopts the same or receives their benefits. Bank of Forest v. Orgill Bros. & Co., 82 Miss. 81, 34 So. 325, 1903 Miss. LEXIS 157 (Miss. 1903).

The execution of a written contract by a corporation, apparently signed by its proper officers, need not be proved in a suit upon such contract unless such execution be denied on oath. Wanita Woolen Mills v. Rollins, 75 Miss. 253, 22 So. 819, 1897 Miss. LEXIS 112 (Miss. 1897).

17. —Increase or reduction of capital stock.

Bank with authorized capital stock of $35,000 may by a majority vote of the stockholders, as provided for amendments, reduce its capital stock to $25,000. Perry v. Bank of Commerce, 116 Miss. 838, 77 So. 812, 1917 Miss. LEXIS 365 (Miss. 1917).

Such a reduction could do no injustice to a minority stockholder where he was to receive new stock equal in value to his old stock. Perry v. Bank of Commerce, 116 Miss. 838, 77 So. 812, 1917 Miss. LEXIS 365 (Miss. 1917).

18. —Miscellaneous.

Execution or endorsement of accommodation paper for the benefit of third persons is not within the authority of a corporation in the absence of special authorization so to do. Ketcham v. Mississippi Outdoor Displays, Inc., 203 Miss. 52, 33 So. 2d 300, 1948 Miss. LEXIS 231 (Miss. 1948).

Corporation with authority to operate mercantile business, borrow money, and receive and execute security therefor, can endorse a note. Gullege v. Woods, 108 Miss. 233, 66 So. 536, 1914 Miss. LEXIS 193 (Miss. 1914).

Where a warehouse company had no power to construct and maintain conduits across the street of a city and had contracted to furnish a railroad company with water through conduits, a subsequent agreement by which the railroad company having such power undertook to construct them is not an illegal evasion of the police power of the city. Mayor, etc., of Canton v. Canton Cotton Warehouse Co., 84 Miss. 268, 36 So. 266, 1904 Miss. LEXIS 39 (Miss. 1904).

A bona fide loan of money, jointly by a director and another to an insolvent corporation may be secured by a mortgage on the property of the corporation. Millsaps v. Chapman, 76 Miss. 942, 26 So. 369, 1899 Miss. LEXIS 29 (Miss. 1899).

19. Corporate seal.

Corporation’s warranty of its right to cut timber from 16th section land, or that it would obtain such right held not void. Southern Plantations Co. v. Kennedy Heading Co., 104 Miss. 131, 61 So. 166, 1913 Miss. LEXIS 14 (Miss. 1913).

Unsealed deed of corporation passes the equitable title. Hines v. Imperial Naval Store Co., 101 Miss. 802, 58 So. 650, 1911 Miss. LEXIS 176 (Miss. 1911).

The written appointment of a substituted trustee in a deed of trust executed by a corporation, the beneficiary in the deed, need not be under seal. Brown v. British American Mortg. Co., 86 Miss. 388, 38 So. 312, 1905 Miss. LEXIS 26 (Miss. 1905).

20. Ultra vires actions.

Law will not allow defense of ultra vires to defeat the ends of justice. National Surety Co. v. Hall-Miller Decorating Co., 104 Miss. 626, 61 So. 700, 1913 Miss. LEXIS 81 (Miss. 1913).

Corporation purchasing interest in another corporation from an individual cannot defeat payment of price by setting up that the transaction was ultra vires where it retains the property bought. Watts Mercantile Co. v. Buchanan, 92 Miss. 540, 46 So. 66, 1908 Miss. LEXIS 204 (Miss. 1908).

21. Authority of officers and agents.

Agency and authority to act for corporation may be implied as in case of natural persons. Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241, 1910 Miss. LEXIS 115 (Miss. 1910); Brown v. British American Mortg. Co., 86 Miss. 388, 38 So. 312, 1905 Miss. LEXIS 26 (Miss. 1905); Cary-Halidy Lumber Co. v. Cain, 70 Miss. 628, 13 So. 239, 1893 Miss. LEXIS 56 (Miss. 1893).

Corporation through acquiescence held estopped to claim it did not execute agreement signed by its president in his individual name, giving railroad license for a spur track over its land. Belzoni Oil Co. v. Yazoo & M. V. R. Co., 94 Miss. 58, 47 So. 468, 1908 Miss. LEXIS 6 (Miss. 1908).

Agency for the corporation in the case of a sale of its personal property without seal may be proved, and authority to act for it may be implied, as in the case of natural persons. Cary-Halidy Lumber Co. v. Cain, 70 Miss. 628, 13 So. 239, 1893 Miss. LEXIS 56 (Miss. 1893).

22. Compensation of directors, officers and agents.

A resolution by the board of directors fixing the president’s salary, which resolution was passed when the president cast the deciding vote in his own favor, was voidable at the suit of minority stockholders who established that the salary was clearly excessive and wasteful as against them. Landstreet v. Meyer, 201 Miss. 826, 29 So. 2d 653, 1947 Miss. LEXIS 452 (Miss. 1947).

Corporate salary awards may not, over the objections of minority stockholders, be based on services already rendered and concluded. Landstreet v. Meyer, 201 Miss. 826, 29 So. 2d 653, 1947 Miss. LEXIS 452 (Miss. 1947).

23. Estoppel.

Corporation’s estoppel in pais with respect to act of agent is governed by same principles as individuals. Metzger v. Southern Bank, 98 Miss. 108, 54 So. 241, 1910 Miss. LEXIS 115 (Miss. 1910).

Corporation through acquiescence held estopped to claim it did not execute agreement signed by its president in his individual name, giving railroad license for a spur track over its land. Belzoni Oil Co. v. Yazoo & M. V. R. Co., 94 Miss. 58, 47 So. 468, 1908 Miss. LEXIS 6 (Miss. 1908).

24. Liability.

A corporation executing through one of its officers an accommodation note is not liable when so to do is beyond the scope of its corporate authority. Ketcham v. Mississippi Outdoor Displays, Inc., 203 Miss. 52, 33 So. 2d 300, 1948 Miss. LEXIS 231 (Miss. 1948).

Where defendant purchased lumber from corporation through S and gave him a check therefor, endorsement and collection of the check by S for the corporation constituted valid payment, though S afterwards misappropriated the proceeds. Perry v. Sumrall Lumber Co., 95 Miss. 691, 49 So. 263, 1909 Miss. LEXIS 272 (Miss. 1909).

A corporation is not liable on contracts made by its promoters unless it adopts the same or received their benefits. Bank of Forest v. Orgill Bros. & Co., 82 Miss. 81, 34 So. 325, 1903 Miss. LEXIS 157 (Miss. 1903).

25. Assignment for benefit of creditors.

Where there was an immediate necessity for the execution by a corporation of an assignment for the benefit of its creditors and it executed such an instrument, acting through a quorum of its board of directors in pursuance of directions of stockholders given at a meeting in which a majority of stock and stockholders were represented, the same is not void or voidable at the suit of creditors (none of the stockholders objecting thereto) because proper notice was not given of the meeting. State Nat'l Bank v. Duncan, 83 Miss. 610, 35 So. 569 (Miss. 1904).

26. Preference of creditors.

An insolvent corporation which has ceased to be a going concern, and has no prospects of resuming business, cannot legally prefer a debt due to one of its directors, its secretary and its treasurer. King v. Wooldridge, 78 Miss. 179, 28 So. 824, 1900 Miss. LEXIS 94 (Miss. 1900).

An insolvent corporation may, in good faith, prefer creditors, but the directors of such a corporation cannot, by their own votes and acts, prefer themselves. Love Mfg. Co. v. Queen City Mfg. Co., 74 Miss. 290, 20 So. 146, 1896 Miss. LEXIS 103 (Miss. 1896).

B. Former § 79-3-285.

27. In general.

The wife of the deceased owner of a corporation was not personally liable for its business debts under § 79-3-285 [Repealed] since there was no proof that she exercised control and management over the corporation, even though she was one of the corporation’s original directors, regularly received funds from the corporate account for her personal and household expenses, and performed services for the corporation. Flanagan v. Jackson Wholesale Bldg. Supply Co., 461 So. 2d 761, 1984 Miss. LEXIS 2061 (Miss. 1984).

§79-4-3.03. Emergency powers.

In anticipation of or during an emergency defined in subsection (d), the board of directors of a corporation may:

  1. Modify lines of succession to accommodate the incapacity of any director, officer, employee or agent; and
  2. Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officers to do so.

During an emergency defined in subsection (d), unless emergency bylaws provide otherwise:

Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio; and

One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.

Corporate action taken in good faith during an emergency under this section to further the ordinary business affairs of the corporation:

Binds the corporation; and

May not be used to impose liability on a corporate director, officer, employee or agent.

An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event.

HISTORY: Laws, 1987, ch. 486, § 3.03; Laws, 1988, ch. 368, § 3, eff from and after passage (approved April 18, 1988).

Cross References —

Emergency bylaws, see § 79-4-2.07.

Corporation’s exceeding or abusing authority conferred upon it by law as grounds for judicial dissolution of corporation, see § 79-4-14.30.

§79-4-3.04. Ultra Vires.

Except as provided in subsection (b), the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.

A corporation’s power to act may be challenged:

  1. In a proceeding by a shareholder against the corporation to enjoin the act;
  2. In a proceeding by the corporation, directly, derivatively or through a receiver, trustee or other legal representative, against an incumbent or former director, officer, employee or agent of the corporation; or
  3. In a proceeding by the Attorney General under Section 79-4-14.30.

In a shareholder’s proceeding under subsection (b)(1) to enjoin an unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all affected persons are parties to the proceeding, and may award damages for loss (other than anticipated profits) suffered by the corporation or another party because of enjoining the unauthorized act.

HISTORY: Laws, 1987, ch. 486, § 3.04, eff from and after January 1, 1988.

Cross References —

Corporation’s exceeding or abusing authority conferred upon it by law as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Challenge to corporation’s power to act under Mississippi Nonprofit Corporation Act, see § 79-11-155.

RESEARCH REFERENCES

ALR.

Power of president of corporation to have litigation instituted by it where board of directors has failed or refused to grant permission. 10 A.L.R.2d 701.

Acts of employee in procuring warrant or aiding prosecution, as within scope of employment so as to render employer liable for malicious prosecution. 18 A.L.R.2d 402.

Validity of security for contemporaneous loan to corporation by officer, director, or stockholder. 31 A.L.R.2d 663.

Expenses incurred by competing factions within corporation in soliciting proxies as charged against corporation. 51 A.L.R.2d 873.

Corporation’s power to enter into partnership or joint venture. 60 A.L.R.2d 917.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Communications by corporation as privileged in stockholders’ action. 34 A.L.R.3d 1106.

Right of member, officer, agent, or director of private corporation or unincorporated association to assert personal privilege against self-incrimination with respect to production of corporate books or records. 52 A.L.R.3d 636.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1732 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 30, 31, 161 et seq. (stockholders’ derivative actions).

CJS.

19 C.J.S., Corporations §§ 965 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-11.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-11.

11. In general.

Defense of ultra vires raised by one party to contract against other party is prohibited by statute. Bryant Constr. Co. v. Cook Constr. Co., 518 So. 2d 625, 1987 Miss. LEXIS 2934 (Miss. 1987).

A corporation which accepts the benefits of a contract may not assert a defense of ultra vires in an action by the other party. Pendleton v. Williams, 198 So. 2d 235, 1967 Miss. LEXIS 1255 (Miss. 1967).

The principle that a stranger to the transaction, whose rights have not been invaded, may not collaterally attack the legality of action taken at a stockholders’ meeting on grounds of informality or irregularity in the meeting would seem to have been recognized by the legislature in the enactment of this section [Code 1942, § North Mississippi Sav. & Loan Asso. v. Confederate States Sav. & Loan Asso., 250 Miss. 463, 166 So. 2d 119, 1964 Miss. LEXIS 475 (Miss. 1964).

§79-4-4.01. Corporate name.

A corporate name:

  1. Must contain the word “corporation,” “incorporated,” “company” or “limited,” or the abbreviation “corp.,” “inc.,” “co.” or “ltd.” or words or abbreviations of like import in another language; and
  2. May not contain language stating or implying that the corporation is organized for a purpose other than that permitted by Section 79-4-3.01 and its articles of incorporation.
  3. The corporate name of a nonprofit corporation incorporated or authorized to transact business in this state;
  4. The name of a limited partnership, limited liability partnership or limited liability company that is organized or registered under the laws of this state and which has not been dissolved; and
  5. A name that is reserved or registered in the Office of the Secretary of State for any of the entities named in subsection (b) of this section which reservation or registration has not expired.

Except as authorized by subsections (c) and (d), a corporate name must be distinguishable upon the records of the Secretary of State from:

The corporate name of a corporation incorporated or authorized to transact business in this state;

The fictitious name adopted by a foreign corporation or foreign limited liability company authorized to transact business in this state because its real name is unavailable;

A corporation may apply to the Secretary of State for authorization to use a name that is not distinguishable upon his records from one or more of the names described in subsection (b). The Secretary of State shall authorize use of the name applied for if:

The other corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation; or

The applicant delivers to the Secretary of State a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.

A corporation may use the name (including the fictitious name) of another domestic or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and the proposed user corporation:

Has merged with the other corporation;

Has been formed by reorganization of the other corporation; or

Has acquired all or substantially all of the assets, including the corporate name, of the other corporation.

Section 79-4-1.01 et seq. does not control the use of fictitious names.

HISTORY: Laws, 1987, ch. 486, § 4.01; Laws, 2012, ch. 481, § 6, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted (b)(2), which formerly read “A corporate name reserved and registered under Section 79-4-4.02 or 79-4-4.03;” redesignated former (b)(3) as (b)(2) and inserted “or foreign limited liability company” preceding “authorized to transact business;” redesignated former (b)(4) as (b)(3) and substituted “nonprofit” for “not-for-profit;” added (b)(4) and (b)(5); and made minor stylistic changes.

Cross References —

Applicability of this section to mandatory provisions of articles of incorporation, see § 79-4-2.02.

Effect of an amendment to articles of incorporation changing corporation’s name on proceeding brought by or against the corporation in its former name, see § 79-4-10.09.

Requirement that any change of name of foreign corporation authorized to transact business satisfy requirements of this section to maintain its certificate of authority, see § 79-4-15.06.

Application by foreign corporation for reinstatement of certificate of authority, see § 79-4-15.32.

Corporate name under Mississippi Nonprofit Corporation Act, see § 79-11-157.

RESEARCH REFERENCES

ALR.

Construction and effect of statutes as doing business under an assumed or fictitious name or designation not showing the names of the persons interested. 42 A.L.R.2d 516.

Incorporation of company under particular name as creating exclusive right to such name. 68 A.L.R.3d 1168.

Validity and application of statute prohibiting use of name descriptive of engineering by business organization not practicing profession of engineering. 13 A.L.R.4th 676.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 228 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:105 et seq.

CJS.

18 C.J.S., Corporations §§ 223 et seq.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-13.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-13.

11. In general.

This section [Code 1942, § 5322] affords to corporation protection of its corporate name as soon as corporation comes into existence and this protection continues as long as corporation continues; and relief from encroachment may be had without necessity of showing actual use of name in business. Meridian Yellow Cab Co. v. City Yellow Cabs, 206 Miss. 812, 41 So. 2d 14, 1949 Miss. LEXIS 303 (Miss. 1949).

Parties organizing corporation must choose name at its peril, and use of name similar to one adopted by another corporation, if misleading and calculated to injure it in exercise of its corporate functions, regardless of intent, may be prevented by corporation having prior right, by suit for injunction against new corporation to prevent use of name. Meridian Yellow Cab Co. v. City Yellow Cabs, 206 Miss. 812, 41 So. 2d 14, 1949 Miss. LEXIS 303 (Miss. 1949).

§79-4-4.02. Reserved name.

A person may reserve the exclusive use of a legal corporate name that complies with Section 79-4-4.01, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the Secretary of State for filing. However, no person or corporation may reserve the name “In God We Trust” which name shall be reserved to the people of the State of Mississippi, as a symbol thereof. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the corporate name applied for is available, the Secretary of State shall reserve the name for the applicant’s exclusive use for a one-hundred-eighty-day period. The one-hundred-eighty-day period may be renewed once by the applicant by filing a renewal application within thirty (30) days before the expiration of the initial one-hundred-eighty-day period.

The owner of a reserved corporate name may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.

The reservation of a specified name may be cancelled by delivering to the Secretary of State a notice of cancellation, specifying the name of the reservation to be cancelled and the name and address of the owner or transferee.

Unless the Secretary of State finds that any application, notice of transfer, or notice of cancellation filed with the Secretary of State as required by this section does not conform to law, upon receipt of all filing fees required by law the Secretary of State shall prepare and return to the person who filed the instrument a copy of the filed instrument with a notation thereon of the action taken by the Secretary of State.

A fee as set forth in Section 79-4-1.22 of this chapter shall be paid at the time of the reservation of any name and at the time of the filing of a notice of the transfer or cancellation of any such reservation.

HISTORY: Laws, 1987, ch. 486, § 4.02; Laws, 2012, ch. 481, § 7; Laws, 2014, ch. 468, § 1, eff from and after July 1, 2014.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added (c) through (e).

The 2014 amendment, in (a), inserted “legal” following “the exclusive use of a” and “that complies with Section 79-4-4.01” following “corporate name” in the first sentence; added the second and last sentences; substituted “the Secretary of State” for “he” and deleted “nonrenewable” following “applicant’s exclusive use for a” in the third sentence; in (c), deleted “the Office of” following “cancelled by delivering to”; and in (e), deleted “(4)” near the beginning following “as set forth in Section 79-4-1.22.”

Cross References —

Fee for filing application for reserved name, see § 79-4-1.22.

Requirement that corporate name be distinguishable from corporate name reserved or registered under this section, see § 79-4-4.01.

Restrictions on corporate names, see § 79-11-157.

RESEARCH REFERENCES

ALR.

Incorporation of company under particular name as creating exclusive right to such name. 68 A.L.R.3d 1168.

Am. Jur.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:105-74:107.

§79-4-4.03. Repealed.

Repealed by Laws 2014, ch. 468, § 9, effective from and after July 1, 2014.

§79-4-4.03. [Laws, 1987, ch. 486, § 4.03, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-4.03 provided for the registration of corporate names.

§79-4-5.01. Repealed.

Repealed by Laws, 2012, ch. 382, § 123, effective January 1, 2013.

§79-4-5.01. [Laws, 1987, ch. 486, § 5.01, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-5.01 required that corporations maintain a registered office and registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-5.02. Repealed.

Repealed by Laws, 2012, ch. 382, § 124, effective January 1, 2013.

§79-4-5.02. [Laws, 1987, ch. 486, § 5.02, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-5.02 pertained to changing a registered office or registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-5.03. Repealed.

Repealed by Laws, 2012, ch. 382, § 125, effective January 1, 2013.

§79-4-5.03. [Laws, 1987, ch. 486, § 5.03, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-5.03 pertained to the resignation of a registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-5.04. Repealed.

Repealed by Laws, 2012, ch. 382, § 126, effective January 1, 2013.

§79-4-5.04. [Laws, 1987, ch. 486, § 5.04, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-5.04 pertained to service of process on corporations. For present provisions, see § 79-35-13.

Voluntary dissolution of corporation by incorporators, see § 79-4-14.01.

Incorporators under Mississippi Nonprofit Corporation Act, see § 79-11-135.

The 2016 amendment added (b)(6).

Articles of incorporation must set forth certain information regarding shares that the corporation is authorized to issue, see § 79-4-6.01.

Amendment of articles of incorporation generally, see §§ 79-4-10.01 et seq.

Restatement of articles of incorporation, see § 79-4-10.07.

Expiration of corporation’s period of duration stated in its articles of incorporation as ground for administrative dissolution, see § 79-4-14.20.

Copy of articles or restated articles of incorporation and all amendments to them currently in effect to be maintained at corporation’s principal office, see § 79-4-16.01.

Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation. 9 A.L.R.2d 1306.

Construction and effect of corporate articles, charter, or bylaws limiting duration or maturity of indebtedness. 55 A.L.R.2d 949.

Corporation: validity of charter provision for non-voting common stock. 52 A.L.R.3d 1131.

Charter restriction prohibiting the transfer of stock of a family corporation without consent of the shareholders was legitimate and reasonable insofar as it prohibited transfers of stock outside the family, but the prohibition against transfers within the family without the permission of each shareholder was unduly restrictive in that it served no reasonable purpose and was permissive to one dissenting shareholder thwarting the corporate business to the frustration of other shareholders by arbitrarily withholding consent, there being no charter or other provision for relief from such situation. Fayard v. Fayard, 293 So. 2d 421, 1974 Miss. LEXIS 1789 (Miss. 1974).

Evidence that a husband and wife, as majority stockholders, organized a corporation only a few days before the institution of an action against the husband, and the charter had neither been published in a newspaper nor recorded in the office of the chancery clerk, and no report of the corporation’s organization had been made to the secretary of state, and the husband and wife, after filing of the suit, transferred certain shares of stock to another as collateral for a loan, showed that the organization of the corporation was intended as a stand-by device to put the husband’s property beyond execution without the necessary good faith for the existence of a de facto corporation, so that the lien of the judgment creditor was superior to the corporation’s claim of ownership to an automobile, which had been transferred to it by the husband in exchange for stock shortly before the commencement of the suit. United Sewing Machine Distributors, Inc. v. Calhoun, 231 Miss. 390, 95 So. 2d 453, 1957 Miss. LEXIS 524 (Miss. 1957).

Change of corporation’s domicile from place stated in its charter by stockholders’ resolution, as authorized by charter, held matter of internal management not requiring charter amendment, in absence of statutory prohibition. Estes v. Bank of Walnut Grove, 172 Miss. 499, 159 So. 104, 1935 Miss. LEXIS 107 (Miss. 1935).

Chancery court of county from which domestic corporation, garnished as debtor of foreign bank in attachment suit against latter, moved its property, office, and place of stockholders’ meeting, as permitted by its charter, before issuance of process for it to sheriff of such county, had no territorial jurisdiction of such bank or garnishee. Estes v. Bank of Walnut Grove, 172 Miss. 499, 159 So. 104, 1935 Miss. LEXIS 107 (Miss. 1935).

Corporation advertising that it will make loans where its funds and its method of doing business made it impossible for it to comply with its promise, held to show an intention to defraud justifying revocation of its charter or an injunction against its doing business. Jackson Loan & Trust Co. v. State, 101 Miss. 440, 56 So. 293, 1911 Miss. LEXIS 93 (Miss. 1911).

The capital stock of a corporation, the charter not providing otherwise, may be paid for in property at its actual value. Ferguson v. Oxford Mercantile Co., 78 Miss. 65, 27 So. 877, 1900 Miss. LEXIS 68 (Miss. 1900).

Incorporation under Mississippi Nonprofit Corporation Act, see § 79-11-139.

This section [Code 1942, § 5343] does not require corporation authorized to do business by compliance with former statute to refile its charter and pay fees again. Power v. Calvert Mortg. Co., 112 Miss. 319, 73 So. 51, 1916 Miss. LEXIS 112 (Miss. 1916).

4 Am. Jur. Proof of Facts 1, Doing Business.

Emergency bylaws, see § 79-4-2.07.

Emergency bylaws, see § 79-4-2.07.

Amendment of bylaws, see §§ 79-4-10.20 et seq.

Bylaws under Mississippi Nonprofit Corporation Act, see § 79-11-145.

Conflict of laws as to validity and effect of corporate bylaw. 27 A.L.R.2d 435.

Construction and effect of corporate bylaws or articles relating to change in number of directors. 3 A.L.R.3d 623.

Bylaws, generally, see § 79-4-2.06.

Emergency bylaws under Mississippi Nonprofit Corporation Act, see § 79-11-147.

Article 3. Purposes and Powers.

Purposes for which corporations may be organized under Mississippi Nonprofit Corporation Act, see § 79-11-149.

Disposition of assets requiring shareholder approval, see § 79-4-12.02.

Estoppel of stockholder to recover back or to secure restoration of compensation of corporate officers claimed to be exorbitant or unauthorized. 16 A.L.R.2d 467.

Expenses incurred by competing factions within corporation in soliciting proxies as charge against corporation. 51 A.L.R.2d 873.

Practice by attorneys and physicians as corporate entities or associations under professional service corporation statutes. 4 A.L.R.3d 383.

Right of corporation to indemnity for civil or criminal liability incurred by employee’s violation of antitrust laws. 37 A.L.R.3d 1355.

Corporation: validity of charter provision for non-voting common stock. 52 A.L.R.3d 1131.

Construction and operation of statute restricting corporation’s right to purchase its own stock to purchase from surplus. 61 A.L.R.3d 1049.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:566 et seq., (board of directors – provision for corporate seal).

A constitution adopted by a corporation is in effect a mere bylaw, that may be repealed or modified by resolutions subsequently adopted by the corporation. Dornes v. Supreme Lodge, K. P., 75 Miss. 466, 23 So. 191, 1897 Miss. LEXIS 143 (Miss. 1898).

Rule that corporation’s power to own land in excess of the amount prescribed by its charter cannot be questioned collaterally does not apply where the corporation is seeking aid of the court to enable it to acquire land which it has no power to acquire and hold. Southern Realty Co. v. Tchula Co-operative Stores, 114 Miss. 309, 75 So. 121, 1917 Miss. LEXIS 36 (Miss. 1917).

Unsealed deed of corporation passes the equitable title. Hines v. Imperial Naval Store Co., 101 Miss. 802, 58 So. 650, 1911 Miss. LEXIS 176 (Miss. 1911).

A private corporation doing an unprofitable business may sell its entire assets upon a vote of the majority of its stockholders even in the absence of an express enabling statute. Hinds County v. Natchez J. & C. R. Co., 85 Miss. 599, 38 So. 189, 1904 Miss. LEXIS 111 (Miss. 1904).

Such reduction will not release liability of certain officers and stockholders, to the stockholders, for assets squandered by them. Perry v. Bank of Commerce, 116 Miss. 838, 77 So. 812, 1917 Miss. LEXIS 365 (Miss. 1917).

The legislature may divest a municipality of control over its streets and authorize their use by a corporation without compensating the municipality. Mayor, etc., of Canton v. Canton Cotton Warehouse Co., 84 Miss. 268, 36 So. 266, 1904 Miss. LEXIS 39 (Miss. 1904).

Where a corporation having authority to do so sells its franchise to another corporation, the stockholders of the seller cannot avoid the sale for want of power in the purchaser to buy. Hinds County v. Natchez J. & C. R. Co., 85 Miss. 599, 38 So. 189, 1904 Miss. LEXIS 111 (Miss. 1904).

A director is not entitled to compensation for services rendered as secretary to the promoters prior to the organization of the corporation, in the absence of any understanding looking to any such compensation. West Point Tel. & Tel. Co. v. Rose, 76 Miss. 61, 23 So. 629, 1898 Miss. LEXIS 65 (Miss. 1898).

A private corporation, through its officers or agents, may incur liability for a reward offered for the arrest of persons unlawfully interfering with its property or business. Norwood & Butterfield Co. v. Andrews, 71 Miss. 641, 16 So. 262, 1893 Miss. LEXIS 89 (Miss. 1893).

The owner and operator of an incorporated sole proprietorship was personally liable, under § 79-3-285 [Repealed], for corporate debts to a creditor who dealt with the corporation as a sole proprietorship which were incurred while the corporation was suspended from doing business, pursuant to § 79-3-189 [Repealed], for failing to file an annual report. Carolina Transformer Co. v. Anderson, 341 So. 2d 1327, 1977 Miss. LEXIS 2303 (Miss. 1977).

Power of corporation or its officers with respect to payment of remuneration, bonus, and the like, to widow or family of deceased father. 29 A.L.R.2d 1262.

Authority of president to subordinate corporation’s claim, assignment, lien, or the like. 53 A.L.R.2d 1421.

Liability of corporate directors or negligence in permitting mismanagement or defalcations by officers or employees. 25 A.L.R.3d 941.

Test in stockholders’ actions as to reasonableness of compensation of corporate officers who as directors determine own compensation. 53 A.L.R.3d 358.

The law looks with disfavor upon the defense of ultra vires, and holds that the doctrine should not be allowed to prevail where it would defeat the ends of justice, or work a legal wrong. Pendleton v. Williams, 198 So. 2d 235, 1967 Miss. LEXIS 1255 (Miss. 1967).

Emergency powers of board of directors of corporation, see § 79-4-3.03.

Corporation’s exceeding or abusing authority conferred upon it by law as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Power of corporation or its officers with respect to payment of remuneration, bonus, and the like, to widow or family of deceased officer. 29 A.L.R.2d 1262.

Authority of corporate officers to mortgage or pledge corporate personal property. 62 A.L.R.2d 712.

Discovery and inspection: compelling party to disclose information in hands of affiliated or subsidiary corporation, or independent contractor, not made party to suit. 19 A.L.R.3d 1134.

Criminal liability of corporation for extortion, false pretenses or similar offenses. 49 A.L.R.3d 820.

What constitutes waiver of stockholder’s or corporation’s right to enforce first-option stock purchase agreement. 55 A.L.R.3d 723.

Corporation’s criminal liability for homicide. 45 A.L.R.4th 1021.

Corporation cannot surrender franchise with freedom of individual. Southern Electric Sec. Co. v. State, 91 Miss. 195, 44 So. 785, 1907 Miss. LEXIS 136 (Miss. 1907).

Laws 1912, ch. 162, does not affect right of corporation to acquire land for other than agricultural purposes. Middleton v. Georgetown Mercantile Co., 117 Miss. 134, 77 So. 956, 1918 Miss. LEXIS 157 (Miss. 1918).

Under Code 1880 and Laws 1882, p. 50, there is no public policy making a distinction between the rights of foreign and domestic corporations as to ownership of lands in this state; nor does comity authorize such a distinction. Taylor v. Alliance Trust Co., 71 Miss. 694, 15 So. 121, 1893 Miss. LEXIS 81 (Miss. 1893).

A conveyance of the land of an incorporated bank executed by its officers, where the purchase money is paid, passes the equitable title without the use of a corporate seal; whether the complete legal title passes by such a conveyance is not decided. McIver v. Abernathy, 66 Miss. 79, 5 So. 519, 1888 Miss. LEXIS 63 (Miss. 1888).

A stockholder in a corporation is bound by the act of a majority where due notice of a stockholders’ meeting was given him, although he was absent and unrepresented at the meeting. Hinds County v. Natchez J. & C. R. Co., 85 Miss. 599, 38 So. 189, 1904 Miss. LEXIS 111 (Miss. 1904).

Stock of domestic corporation held by foreign corporation cannot be voted except in this state. Southern Electric Sec. Co. v. State, 91 Miss. 195, 44 So. 785, 1907 Miss. LEXIS 136 (Miss. 1907).

Unsealed deed by corporation held not available in ejectment to support plaintiff’s title. Littelle v. Creek Lumber Co., 99 Miss. 241, 54 So. 841, 1911 Miss. LEXIS 199 (Miss. 1911).

Corporation receiving proceeds of purchase of property cannot defeat payment of note for price on ground that general manager had no authority to execute it. Watts Mercantile Co. v. Buchanan, 92 Miss. 540, 46 So. 66, 1908 Miss. LEXIS 204 (Miss. 1908).

Corporation held liable for slander of agent within scope of his employment, though without knowledge, approval, or ratification thereof. Rivers v. Yazoo & M. V. R. Co., 90 Miss. 196, 43 So. 471, 1907 Miss. LEXIS 69 (Miss. 1907).

An insolvent corporation may in good faith prefer a creditor. Ferguson v. Oxford Mercantile Co., 78 Miss. 65, 27 So. 877, 1900 Miss. LEXIS 68 (Miss. 1900).

Estoppel of stockholder to recover back or to secure restoration of compensation of corporate officers claimed to be exorbitant or unauthorized. 16 A.L.R.2d 467.

Power of particular officer or agent of business corporation to bind it by a donation to a charity or similar institution. 50 A.L.R.2d 447.

Authority of corporate officers to mortgage or pledge corporate personal property. 62 A.L.R.2d 712.

Liability of corporate officer or director for commission or compensation received from third person in connection with that person’s transaction with corporation. 47 A.L.R.3d 373.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records-modern status. 87 A.L.R. Fed. 177.

The defense of ultra vires cannot prevail against the doctrine of equitable estoppel where action was brought by receivers of an educational corporation seeking a recovery in connection with a completely executed purchase of stock. Pendleton v. Williams, 198 So. 2d 235, 1967 Miss. LEXIS 1255 (Miss. 1967).

Article 4. Name.

Board of directors authorized to adopt amendment to articles of incorporation to make certain changes to corporate name without share-holder approval, ss § 79-4-10.05.

Requirements for foreign corporation to obtain certificate of authority to transact business when its corporate name does not satisfy requirements of this section, see § 79-4-15.06.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 4.

Creation of cab corporation under name “City Yellow Cabs” for operation of cabs in city in which another corporation had previously been created for operation of cabs under name of “Meridian Yellow Cab Company, Inc.” transgresses this section [Code 1942, § 5322] to extent that City Yellow Cabs may not lawfully operate under its misleading name in city and its environs in manner to confuse public, names being so similar as to be misleading. Meridian Yellow Cab Co. v. City Yellow Cabs, 206 Miss. 812, 41 So. 2d 14, 1949 Miss. LEXIS 303 (Miss. 1949).

Reserving exclusive use of corporate name under Mississippi Nonprofit Corporation Act, see § 79-11-159.

Requirement that name of corporation applying for reinstatement after being administratively dissolved satisfy requirements of this section, see § 79-4-14.22.

Mississippi Nonprofit Corporation Act, see §§ 79-11-101 et seq.

Use of “family name” by corporation as unfair competition. 72 A.L.R.3d 8.

In granting corporate charter, state does not thereby adjudicate legal right of corporation to unlimited use of name chosen; and name, though derived through authority of state, may not be used in manner which will result in fraud or deception. Meridian Yellow Cab Co. v. City Yellow Cabs, 206 Miss. 812, 41 So. 2d 14, 1949 Miss. LEXIS 303 (Miss. 1949).

Requirement that corporate name of foreign corporation must be distinguishable from corporate name reserved under this section, see § 79-4-15.06.

Use of “family name” by corporation as unfair competition. 72 A.L.R.3d 8.

Article 5. Office and Agent.

Article 6. Shares and Distributions.

Subarticle A. Shares.

§79-4-6.01. Authorized shares.

The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one (1) class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and must describe, prior to the issuance of shares of a class or series, the terms, including the preferences, rights, and limitations of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights and limitations that are identical with those of other shares of the same class or series.

The articles of incorporation must authorize:

  1. One or more classes or series of shares that together have unlimited voting rights, and
  2. One or more classes or series of shares (which may be the same class or classes as those with voting rights) that together are entitled to receive the net assets of the corporation upon dissolution.
  3. Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative; or
  4. Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.

The articles of incorporation may authorize one or more classes or series of shares that:

Have special, conditional or limited voting rights, or no right to vote, except to the extent otherwise provided by Section 79-4-1.01 et seq.;

Are redeemable or convertible as specified in the articles of incorporation (i) at the option of the corporation, the shareholder or another person or upon the occurrence of a specified event; (ii) for cash, indebtedness, securities or other property; and (iii) at prices and in amounts specified or determined in accordance with a formula;

Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with Section 79-4-1.20(k).

Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.

The description of the preferences, rights and limitations of classes or series of shares in subsection (c) is not exhaustive.

HISTORY: Laws, 1987, ch. 486, § 6.01; Laws, 1988, ch. 368, § 4; Laws, 2001, ch. 435, § 1; Laws, 2004, ch. 495, § 4, eff from and after July 1, 2004.

Amendment Notes —

The 2001 amendment, in the second sentence of (a), inserted “terms, including the” preceding “preferences,” inserted “rights, and” preceding “limitations,” and deleted “and relative rights” following “limitations”; in the third sentence of (a), inserted “terms, including” preceding “preferences,” inserted “rights and” preceding “limitations,” deleted “and relative rights” following “limitations,” and inserted “this section or” preceding “Section 79-4-6.02”; and added (c)(5).

The 2004 amendment rewrote the section.

Cross References —

Applicability of this section to mandatory provisions of articles of incorporation, see § 79-4-2.02.

Authority of board of directors to determine preferences, limitations and relative rights of classes of shares, see § 79-4-6.02.

Fractional shares, see § 79-4-6.04.

Share dividends, see § 79-4-6.23.

Shareholder’s right to appraisal, see § 79-4-13.02.

Voluntary dissolution of corporation after issuance of shares, see § 79-4-14.02.

RESEARCH REFERENCES

ALR.

Construction and application of provisions of articles, bylaws, statutes, or agreements restricting alienation or transfer of corporate stock. 2 A.L.R.2d 745.

Statutory requirements respecting issuance of corporate stock as applicable to foreign corporations. 8 A.L.R.2d 1185.

Delay of stockholders in exercising their right to convert their stock into other class of stock or corporate obligations. 10 A.L.R.2d 587.

Enforcement of stock subscription after suit on note of subscriber is barred by statute of limitations. 11 A.L.R.2d 1380.

Validity of stock option plan under which selected personnel of corporation may acquire stock interest therein. 34 A.L.R.2d 852.

Validity of restrictions on alienation of corporate stock. 61 A.L.R.2d 1318.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Construction and effect of constitutional or statutory provisions precluding issuance of corporate stock in consideration of promissory notes. 78 A.L.R.2d 834.

Failure to issue stock as factor in disregard of corporate entity. 8 A.L.R.3d 1122.

Corporation’s delivery of stock certificate to stockholder as prerequisite of its issuance to him. 16 A.L.R.3d 1015.

Change in stock or corporate structure, or split or substitution of stock of corporation, as affecting bequest of stock. 46 A.L.R.3d 7.

Corporation: validity of charter provision for non-voting common stock. 52 A.L.R.3d 1131.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

Valuation of corporate stock for purposes of state gift, inheritance or estate tax, as affected by predetermined price in buy-out or first option agreement among stockholders or with corporation. 58 A.L.R.3d 1104.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 355 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:624 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 61 et seq.

CJS.

18 C.J.S., Corporations §§ 254 et seq.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-111.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-111.

11. In general.

Incorporators who, following the issuance of a certificate of incorporation but prior to the payment into the treasury of the corporation of the required $1,000 as consideration for the issuance of shares, executed, as officers of the corporation, its note for $25,000, were not individually on the corporation’s note. In re Estate of Hardin, 218 So. 2d 889, 1969 Miss. LEXIS 1634 (Miss. 1969).

A deed to a corporation after its organization meeting is valid notwithstanding at the time the amount of capital stock required by this section [Code 1942, § 5311] had not been paid up. Allen v. Thompson, 248 Miss. 544, 158 So. 2d 503, 1963 Miss. LEXIS 406 (Miss. 1963).

§79-4-6.02. Terms of class or series determined by board of directors.

If the articles of incorporation so provide, the board of directors is authorized without shareholder approval, to:

  1. Classify any unissued shares into one or more classes or into one or more series within a class;
  2. Reclassify any unissued shares of any class into one or more classes or into one or more series within one or more classes; or
  3. Reclassify any unissued shares of any series of any class into one or more classes or into one or more series within a class.

If the board of directors acts pursuant to subsection (a), it must determine the terms, including the preferences, rights and limitations, to the same extent permitted under Section 79-4-6.01 of:

Any class of shares before the issuance of any shares of that class, or

Any series within a class before the issuance of any shares of that series.

Before issuing any shares of a class or series created under this section, the corporation must deliver to the Secretary of State for filing articles of amendment setting forth the terms determined under subsection (a).

HISTORY: Laws, 1987, ch. 486, § 6.02; Laws, 2001, ch. 435, § 2; Laws, 2004, ch. 495, § 5, eff from and after July 1, 2004.

Amendment Notes —

The 2001 amendment rewrote the section.

The 2004 amendment rewrote the section.

Cross References —

Restrictions on board’s authority to determine preferences, limitations and relative rights of classes of shares, see § 79-4-6.01.

RESEARCH REFERENCES

ALR.

Validity of cancellation of accrued dividends on preferred corporate stock. 8 A.L.R.2d 893.

Overpayments of dividends on preferred stock as deductible in payment of dividends for later years. 10 A.L.R.2d 241.

Preferred stockholder’s rights, upon liquidation or dissolution, to dividends. 25 A.L.R.2d 788.

Rights of preferred stockholders as to past or accumulated dividends in going concern. 27 A.L.R.2d 1073.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 361, 363, 404.

18B Am. Jur. 2d, Corporations §§ 1079 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:654 et seq., 74:685 et seq.

CJS.

18 C.J.S., Corporations §§ 261, 288 et seq.

§79-4-6.03. Issued and outstanding shares.

A corporation may issue the number of shares of each class or series authorized by the articles of incorporation. Shares that are issued are outstanding shares until they are reacquired, redeemed, converted or cancelled.

The reacquisition, redemption or conversion of outstanding shares is subject to the limitations of subsection (c) of this section and to Section 79-4-6.40.

At all times that shares of the corporation are outstanding, one or more shares that together have unlimited voting rights and one or more shares that together are entitled to receive the net assets of the corporation upon dissolution must be outstanding.

HISTORY: Laws, 1987, ch. 486, § 6.03, eff from and after January 1, 1988.

Cross References —

Shareholder’s right to appraisal, see § 79-4-13.02.

RESEARCH REFERENCES

ALR.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 187, 403-437, 617.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:653-74:690.

CJS.

18 C.J.S., Corporations, §§ 261-276.

§79-4-6.04. Fractional shares.

A corporation may:

  1. Issue fractions of a share or pay in money the value of fractions of a share;
  2. Arrange for disposition of fractional shares by the shareholders;
  3. Issue scrip in registered or bearer form entitling the holder to receive a full share upon surrendering enough scrip to equal a full share.

Each certificate representing scrip must be conspicuously labeled “scrip” and must contain the information required by Section 79-4-6.25(b).

The holder of a fractional share is entitled to exercise the rights of a shareholder, including the right to vote, to receive dividends, and to participate in the assets of the corporation upon liquidation. The holder of scrip is not entitled to any of these rights unless the scrip provides for them.

The board of directors may authorize the issuance of scrip subject to any condition considered desirable, including:

That the scrip will become void if not exchanged for full shares before a specified date; and

That the shares for which the scrip is exchangeable may be sold and the proceeds paid to the scripholders.

HISTORY: Laws, 1987, ch. 486, § 6.04, eff from and after January 1, 1988.

Cross References —

Shareholder’s right to appraisal, see § 79-4-13.02.

Subarticle B. Issuance of Shares.

§79-4-6.20. Subscription for shares before incorporation.

A subscription for shares entered into before incorporation is irrevocable for six (6) months unless the subscription agreement provides a longer or shorter period or all the subscribers agree to revocation.

The board of directors may determine the payment terms of subscriptions for shares that were entered into before incorporation, unless the subscription agreement specifies them. A call for payment by the board of directors must be uniform so far as practicable as to all shares of the same class or series, unless the subscription agreement specifies otherwise.

Shares issued pursuant to subscriptions entered into before incorporation are fully paid and nonassessable when the corporation receives the consideration specified in the subscription agreement.

If a subscriber defaults in payment of money or property under a subscription agreement entered into before incorporation, the corporation may collect the amount owed as any other debt. Alternatively, unless the subscription agreement provides otherwise, the corporation may rescind the agreement and may sell the shares if the debt remains unpaid more than twenty (20) days after the corporation sends a written demand for payment to the subscriber.

A subscription agreement entered into after incorporation is a contract between the subscriber and the corporation subject to Section 79-4-6.21.

HISTORY: Laws, 1987, ch. 486, § 6.20; Laws, 2012, ch. 481, § 8, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, inserted “a” preceding “written demand for payment to the subscriber” at the end of (d).

Cross References —

Liability of purchaser from corporation of its own shares, see § 79-4-6.22.

RESEARCH REFERENCES

ALR.

Enforcement of stock subscription after suit on note of subscriber is barred by statute of limitations. 11 A.L.R.2d 1380.

Conversion by promoter of money paid for preincorporation subscription for stock shares as embezzlement. 84 A.L.R.2d 1100.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 480 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:85 et seq.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1776 et seq.

7 Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 81 et seq.

CJS.

18 C.J.S., Corporations §§ 345 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-31.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-31.

11. In general.

Complainant induced by fraud to purchase stock did not ratify such purchase so as to preclude him setting it aside by transferring it before discovering the fraud. Jones v. Barnes, 107 Miss. 800, 66 So. 212, 1914 Miss. LEXIS 146 (Miss. 1914).

Complainant induced by fraud to purchase stock which he transferred to another held not required to return anything as condition precedent to his right to rescind upon both the assignee and the corporation becoming insolvent. Jones v. Barnes, 107 Miss. 800, 66 So. 212, 1914 Miss. LEXIS 146 (Miss. 1914).

Where maker of note for purchase-price of stock set up plea that payee bank had breached its agreement to furnish the corporation with sufficient capital to carry on business, thereby rendering the stock worthless, it was unnecessary to deny reception of the money by the maker. Merchants' & Farmers' Bank v. Smith, 107 Miss. 105, 64 So. 970, 1914 Miss. LEXIS 57 (Miss. 1914).

Subscription to capital stock of corporation to be organized may be withdrawn at any time before organization thereof. Wright Bros. v. Merchants' & Planters' Packet Co., 104 Miss. 507, 61 So. 550, 1913 Miss. LEXIS 57 (Miss. 1913).

Instruction authorizing recovery on written contract to subscribe for stock because of defendant’s attendance at meeting of prospective stockholders and participation therein, held erroneous. Wright Bros. v. Merchants' & Planters' Packet Co., 104 Miss. 507, 61 So. 550, 1913 Miss. LEXIS 57 (Miss. 1913).

Subscriber who has signed a promissory note to secure payment of his subscription for stock in corporation who afterwards acted as director therein and received a dividend, held estopped, when sued by receiver of the corporation on a separate cause of action, from demanding credit for the sum collected by the corporation on the note although the corporation held it only for collection and such collection was not made until the corporation had become insolvent and was disabled from issuing such subscriber a certificate for his stock. Allen v. Edwards, 93 Miss. 719, 47 So. 382, 1908 Miss. LEXIS 128 (Miss. 1908).

§79-4-6.21. Issuance of shares.

The powers granted in this section to the board of directors may be reserved to the shareholders by the articles of incorporation.

The board of directors may authorize shares to be issued for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts for services to be performed, or other securities of the corporation.

Before the corporation issues shares, the board of directors must determine that the consideration received or to be received for shares to be issued is adequate. That determination by the board of directors is conclusive insofar as the adequacy of consideration for the issuance of shares relates to whether the shares are validly issued, fully paid and nonassessable.

When the corporation receives the consideration for which the board of directors authorized the issuance of shares, the shares issued therefor are fully paid and nonassessable.

The corporation may place in escrow shares issued for a contract for future services or benefits or a promissory note, or make other arrangements to restrict the transfer of the shares, and may credit distributions in respect of the shares against their purchase price, until the services are performed, the note is paid or the benefits received. If the services are not performed, the note is not paid or the benefits are not received, the shares escrowed or restricted and the distributions credited may be cancelled in whole or part.

HISTORY: Laws, 1987, ch. 486, § 6.21; Laws, 1988, ch. 368, § 5, eff from and after passage (approved April 18, 1988).

Cross References —

Applicability of this section to subscription agreement entered into after incorporation, see § 79-4-6.20.

Liability of purchaser from corporation of its own shares, see § 79-4-6.22.

Restriction on transfer or registration of transfer of shares, see § 79-4-6.27.

Shareholders’ preemptive rights, see § 79-4-6.30.

Purchaser of shares who, at the time of purchase, did not have knowledge of certain agreements authorized by § 79-4-7.32 entitled to rescission of the purchase, see § 79-4-7.32.

Procedure for adopting amendments to articles of incorporation once shares have been issued, see § 79-4-10.03.

RESEARCH REFERENCES

ALR.

Presumption as to value of corporate stock or bonds. 6 A.L.R.2d 189.

Meaning of “book value” of corporate stock. 51 A.L.R.2d 606.

Retroactive effect of statute fixing minimum value of corporate stock shares or otherwise affecting power of corporation to change par value of existing shares. 54 A.L.R.2d 1289.

What amounts to participation by corporate officer or agent in illegal issuance of security, in order to impose liability upon him under state securities regulations. 44 A.L.R.3d 588.

Valuation of corporate stock under “buy-out” or “first option” agreement giving option to or requiring corporation or other stockholders to purchase stock of deceased or withdrawing stockholders. 54 A.L.R.3d 790.

What constitutes waiver of stockholder’s or corporation’s right to enforce first-option stock purchase agreement. 55 A.L.R.3d 723.

Valuation of corporate stock for purposes of state gift, inheritance or estate tax, as affected by predetermined price in buy-out or first option agreement among stockholders or with corporation. 58 A.L.R.3d 1104.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity”. 16 A.L.R.4th 784.

Valuation of closely held stock for federal estate tax purposes under § 2031(b) of Internal Revenue Code of 1954 ( 26 USCS § 2031(b)) and implementing regulations. 22 A.L.R. Fed. 31.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 368- 371 et seq. Graves, Inc. v. Commissioner, 202 F.2d 286 (5th Cir. Miss. 1953), cert. denied, 346 U.S. 812, 74 S. Ct. 21, 98 L. Ed. 340 (1953).

6 Am. Jur. Legal Forms 2d, Corporations § 74:689.

2 Am. Jur. Proof of Facts 625, Book Value.

2 Am. Jur. Proof of Facts 2d 1, Valuation of Stock of Closely Held Corporations.

CJS.

18 C.J.S., Corporations §§ 304 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-35.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-35.

11. In general.

Stock may be paid for by an assignment, in good faith, of contract rights. Sterling Varnish Co. v. Sonom Co., 241 Miss. 810, 133 So. 2d 624, 1961 Miss. LEXIS 403 (Miss. 1961).

This section [Code 1942, § 5327] applies to additional stock, authorized and issued after the corporation has become a going concern, and regardless of whether note given for corporate stock is secured by collateral other than the stock itself. Graves, Inc. v. Commissioner, 202 F.2d 286, 1953 U.S. App. LEXIS 4209 (5th Cir. Miss.), cert. denied, 346 U.S. 812, 74 S. Ct. 21, 98 L. Ed. 340, 1953 U.S. LEXIS 1733 (U.S. 1953).

Intent of this section [Code 1942, § 5327] is that all stock must be fully and actually paid for, and that payee of a note given in purported payment of stock cannot recover thereon, nor can a purchaser with notice. Graves, Inc. v. Commissioner, 202 F.2d 286, 1953 U.S. App. LEXIS 4209 (5th Cir. Miss.), cert. denied, 346 U.S. 812, 74 S. Ct. 21, 98 L. Ed. 340, 1953 U.S. LEXIS 1733 (U.S. 1953).

This section [Code 1942, § 5327] does not indicate any legislative intention to restrict its application to stock issued by a corporation before it became a going concern, or that it should not apply to additional stock authorized and issued after it became a going concern, or that it does not apply where a note given for corporate stock is secured by collateral other than the stock itself. Merchants Bank & Trust Co. v. Walker, 192 Miss. 737, 6 So. 2d 107, 1942 Miss. LEXIS 15 (Miss. 1942).

This section [Code 1942, § 5327] is applicable to banking corporations. Merchants Bank & Trust Co. v. Walker, 192 Miss. 737, 6 So. 2d 107, 1942 Miss. LEXIS 15 (Miss. 1942).

Under statute providing that stockholder should be individually liable for debts of corporation contracted during ownership of stock for amount remaining unpaid on stock subscription Code 1942, § 5332, trustee in bankruptcy of corporation held entitled to maintain suit on notes executed by stockholders for balance due on subscriptions for additional stock. Frazier v. Zachariah, 174 Miss. 378, 164 So. 893, 1936 Miss. LEXIS 188 (Miss. 1936).

Cancellation and surrender of notes, given by stockholders for purchase of additional stock by president of corporation without authorization of board of directors while corporation was hopelessly insolvent and less than one month before filing of petition in bankruptcy, held ineffectual to discharge liability of stockholder for balance due on stock as against trustee in bankruptcy of corporation. Frazier v. Zachariah, 174 Miss. 378, 164 So. 893, 1936 Miss. LEXIS 188 (Miss. 1936).

Note given to corporation for stock subscription held enforceable by innocent holder for value paid before maturity, notwithstanding statute providing that note given by subscriber for stock shall not be considered payment therefor. Gordin v. Bank of Forest, 170 Miss. 56, 153 So. 375, 1934 Miss. LEXIS 90 (Miss. 1934).

Purchaser knowing notes were given for corporate stock in violation of statute could not recover thereon. Aldridge v. Rice, 161 Miss. 879, 138 So. 570, 1932 Miss. LEXIS 185 (Miss. 1932).

That maker, after plaintiff purchased notes given for stock, received dividend and attended stockholders’ meeting did not estop maker to set up defense that notes violated statute. Aldridge v. Rice, 161 Miss. 879, 138 So. 570, 1932 Miss. LEXIS 185 (Miss. 1932).

Payee of note given in payment of stock in a corporation cannot recover thereon, nor can a purchaser with notice. Ellis Jones Drug Co. v. Williams, 139 Miss. 170, 103 So. 810, 1925 Miss. LEXIS 126 (Miss. 1925).

Stock may be paid for in property if done in good faith and on a fair valuation unless the charter or a statutory provision forbids it. Lea v. Cutrer, 96 Miss. 355, 51 So. 808, 1909 Miss. LEXIS 64 (Miss. 1909).

Defaulting subscriber cannot set up this section [Code 1942, § 5327] as a bar to liability as a stockholder in an action on behalf of creditors of the corporation. Allen v. Edwards, 93 Miss. 719, 47 So. 382, 1908 Miss. LEXIS 128 (Miss. 1908).

All stock must be fully and actually paid for. Alford v. Laurel Imp. Co., 86 Miss. 375, 38 So. 548, 1905 Miss. LEXIS 62 (Miss. 1905); Graves, Inc. v. Commissioner, 202 F.2d 286, 1953 U.S. App. LEXIS 4209 (5th Cir. Miss.), cert. denied, 346 U.S. 812, 74 S. Ct. 21, 98 L. Ed. 340, 1953 U.S. LEXIS 1733 (U.S. 1953).

Subscriber who has not fully paid for his stock cannot maintain replevin to recover the certificate therefor although he has given a note to the corporation for the full amount. Alford v. Laurel Imp. Co., 86 Miss. 375, 38 So. 548, 1905 Miss. LEXIS 62 (Miss. 1905).

Where subscriber gave note for stock and the corporation retained the certificate as security, the fact that the capital was then doubled and another certificate written in name of the subscriber did not entitle him to possession of it. Alford v. Laurel Imp. Co., 86 Miss. 375, 38 So. 548, 1905 Miss. LEXIS 62 (Miss. 1905).

§79-4-6.22. Liability of shareholders.

A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued (Section 79-4-6.21) or specified in the subscription agreement (Section 79-4-6.20).

A shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct.

HISTORY: Laws, 1987, ch. 486, § 6.22, eff from and after January 1, 1988.

RESEARCH REFERENCES

ALR.

Statute of frauds: promise by stockholder, officer, or director to pay debt of corporation. 35 A.L.R.2d 906.

Enforceability in another jurisdiction of personal liability of stockholders for debts of corporation whose organization is incomplete or defective. 42 A.L.R.2d 659.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Liability of corporate directors or officers for negligence in permitting conversion of property of third persons by corporation. 29 A.L.R.3d 660.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Controlling stockholder’s duty to investigate intent and motive of purchaser before selling stock. 77 A.L.R.3d 1005.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

Professional corporation stockholder’s nonmalpractice liability. 50 A.L.R.4th 1276.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 724, 732 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 261 et seq.

CJS.

18 C.J.S., Corporations §§ 679 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-47.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-47.

11. In general.

A holder of or subscriber to shares of a corporation shall be under no obligation to the corporation or its creditors with respect to such shares, other than the obligation to pay the corporation the full consideration for which its shares were issued or to be issued. Wood v. Gulf States Capital Corp., 217 So. 2d 257, 1968 Miss. LEXIS 1259 (Miss. 1968).

Stock may be paid for by an assignment, in good faith, of contract rights. Sterling Varnish Co. v. Sonom Co., 241 Miss. 810, 133 So. 2d 624, 1961 Miss. LEXIS 403 (Miss. 1961).

Under statute providing that stockholder should be individually liable for debts of corporation contracted during ownership of stock for amount remaining unpaid on stock subscription, trustee in bankruptcy of corporation held entitled to maintain suit on notes executed by stockholders for balance due on subscriptions for additional stock. Frazier v. Zachariah, 174 Miss. 378, 164 So. 893, 1936 Miss. LEXIS 188 (Miss. 1936).

Cancellation and surrender of notes, given by stockholders for purchase of additional stock by president of corporation without authorization of board of directors while corporation was hopelessly insolvent and less than one month before filing of petition in bankruptcy, held ineffectual to discharge liability of stockholder for balance due on stock as against trustee in bankruptcy of corporation. Frazier v. Zachariah, 174 Miss. 378, 164 So. 893, 1936 Miss. LEXIS 188 (Miss. 1936).

Stockholder held not liable for debts and liabilities of corporation; stockholder of bottling corporation held not liable for damages to buyers where he did not participate in actual bottling of drinks. Grapico Bottling Co. v. Ennis, 140 Miss. 502, 106 So. 97, 1925 Miss. LEXIS 285 (Miss. 1925).

President held entitled to recover against stockholders where corporation had repurchased its own stock rendering it insolvent. First Nat'l Bank v. Pearson, 109 Miss. 638, 68 So. 921, 1915 Miss. LEXIS 206 (Miss. 1915).

Such stockholders were liable to creditor after the corporation’s bankruptcy and trustee’s refusal to sue for him. First Nat'l Bank v. Pearson, 109 Miss. 638, 68 So. 921, 1915 Miss. LEXIS 206 (Miss. 1915).

Knowledge of bank that money loaned to corporation was to be used for an unauthorized purpose does not render it liable to stockholders for loss arising from misuse of such funds in the absence of fraud on its part. Beckett v. Planters' Compress & Bonded Warehouse Co., 107 Miss. 305, 65 So. 275, 1914 Miss. LEXIS 84 (Miss. 1914).

Stockholder’s liability for withdrawn capital necessary to pay debts is several. Kimbrough v. Davies, 104 Miss. 722, 61 So. 697, 1913 Miss. LEXIS 78 (Miss. 1913).

Bank permitting executrix to fraudulently appropriate and sell stock therein to the prejudice of creditors held not liable to creditors. Myers v. Martinez, 95 Miss. 104, 48 So. 291, 1909 Miss. LEXIS 206 (Miss. 1909).

Stockholder held not liable for payment of judgment for damages for infringement of a patent. B. F. Avery & Sons v. McClure, 94 Miss. 172, 47 So. 901, 1908 Miss. LEXIS 33 (Miss. 1908).

Every subscriber is liable for debts contracted during his ownership of stock and for one year after he transfers it, to the amount of his unpaid subscription. Allen v. Edwards, 93 Miss. 719, 47 So. 382, 1908 Miss. LEXIS 128 (Miss. 1908).

A creditor of a corporation may recover the amount of unpaid subscription of a stockholder to its capital stock, although he has given a note to the corporation for the same, payable on calls, and having died before payment, the note has not been probated against his estate within the time prescribed by law. Robinette v. Starling, 72 Miss. 652, 18 So. 421, 1895 Miss. LEXIS 50 (Miss. 1895).

In such case the right to sue does not rest upon the relation of debtor and creditor between the plaintiff and stockholder, but upon the statute giving creditors of the corporation a right of action against its delinquent stockholders. Robinette v. Starling, 72 Miss. 652, 18 So. 421, 1895 Miss. LEXIS 50 (Miss. 1895).

Under this section [Code 1942, § 5332], making a stockholder liable, to the amount of his unpaid stock, for corporate debts created during his ownership thereof, the liability to continue for one year after a transfer thereof, the year does not begin until a transfer in the manner provided by the said statute, namely, by indorsement and delivery of the stock certificate and registry of the transfer on the books of the corporation. Kriger v. Hanover Nat'l Bank, 72 Miss. 462, 16 So. 351, 1894 Miss. LEXIS 81 (Miss. 1894).

A stockholder in an insolvent corporation who has not paid the stock subscription is liable to the creditors of the corporation and may be sued therefor, and the debt so due by him may be subjected by garnishment as well as in a direct prosecution, and although the subscription is, by its terms, payable on the call of the directors, and no such call has been in fact made. Scott v. Windham, 73 Miss. 76, 16 So. 206, 1895 Miss. LEXIS 75 (Miss. 1895).

A subsequent judgment against the stockholders in favor of one creditor of the corporation is erroneous if it fails to provide that no execution shall issue against him until satisfaction of an earlier judgment against him in favor of another creditor of the corporation, and then only for so much, if anything, as may remain due on the subscription. Scott v. Windham, 73 Miss. 76, 16 So. 206, 1895 Miss. LEXIS 75 (Miss. 1895).

The liability of a stockholder to a creditor whose debt was contracted during the debtor’s ownership of the stock is not discharged by a release executed by the corporation when solvent. Vick v. Larochelle, 57 Miss. 602, 1880 Miss. LEXIS 12 (Miss. 1880).

In a suit by judgment creditors of an insolvent corporation to compel stockholders to pay up on subscriptions, all of the solvent stockholders within the jurisdiction of the court must be joined as defendants, except where there are so many as to justify the charge that they are too numerous to be all made parties. Vick v. Lane, Hazelhurst & Co., 56 Miss. 681, 1879 Miss. LEXIS 192 (Miss. 1879).

§79-4-6.23. Share dividends.

Unless the articles of incorporation provide otherwise, shares may be issued pro rata and without consideration to the corporation’s shareholders or to the shareholders of one or more classes or series. An issuance of shares under this subsection is a share dividend.

Shares of one class or series may not be issued as a share dividend in respect of shares of another class or series unless (1) the articles of incorporation so authorize, (2) a majority of the votes entitled to be cast by the class or series to be issued approve the issue, or (3) there are no outstanding shares of the class or series to be issued.

If the board of directors does not fix the record date for determining shareholders entitled to a share dividend, it is the date the board of directors authorizes the share dividend.

HISTORY: Laws, 1987, ch. 486, § 6.23, eff from and after January 1, 1988.

Cross References —

Corporation’s acquisition of its own shares, see § 79-4-6.31.

Record date for distribution to shareholders, see § 79-4-6.40.

Record date for determining shareholders entitled to notice of meeting, to demand special meeting, to vote, or to take other action, see § 79-4-7.07.

RESEARCH REFERENCES

ALR.

Validity of cancelation of accrued dividends on preferred corporate stock. 8 A.L.R.2d 893.

Over-payments of dividends on preferred stock as deductible in payment of dividends for later years. 10 A.L.R.2d 241.

Rights of preferred stockholders as to passed or accumulated dividends in going concern. 27 A.L.R.2d 1073.

Dividend rights in surplus of new consolidated corporation resulting from reduction of capital stock of former constituent corporations. 28 A.L.R.2d 1177.

Jurisdiction of action involving dividends of foreign corporation. 72 A.L.R.2d 1211.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 998 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:750 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 393 et seq.

CJS.

18 C.J.S., Corporations §§ 559 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-87.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-87.

11. In general.

The receiver may bring such suit as representative of all the creditors. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

Court of equity has jurisdiction of an action of a receiver of an insolvent bank to recover from directors a dividend disbursed in violation of this section [Code 1942, § 5328]. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

Receiver, with court authority, may recover from stockholder dividends paid while bank was insolvent. Kretschmar v. Stone, 90 Miss. 375, 43 So. 177, 1907 Miss. LEXIS 45 (Miss. 1907).

Where declaration of receiver in such suit alleges authorization by chancery court to bring it, it is not demurrable on ground of want of jurisdiction. Kretschmar v. Stone, 90 Miss. 375, 43 So. 177, 1907 Miss. LEXIS 45 (Miss. 1907).

§79-4-6.24. Corporate issuance of rights, options and warrants; board may authorize officer or officers to designate recipients of rights, options and warrants.

A corporation may issue rights, options or warrants for the purchase of shares or other securities of the corporation. The board of directors shall determine (i) the terms upon which the rights, options or warrants are issued, and (ii) the terms, including the consideration for which the shares or other securities are to be issued. The authorization by the board of directors to issue such rights, options, or warrants constitutes authorization of the issuance of the shares or other securities for which the rights, options or warrants are exercisable.

The terms and conditions of such rights, options or warrants, including those outstanding on April 20, 2005, may include, without limitation, restrictions or conditions that preclude or limit the exercise, transfer or receipt of such rights, options or warrants by any person or persons owning or offering to acquire a specified number or percentage of the outstanding shares or other securities of the corporation, or by any transferee or transferees of any such person or persons, or that invalidate or void such rights, options or warrants held by any such person or persons or any such transferee or transferees.

The board of directors may authorize one or more officers to (1) designate the recipients of rights, options, warrants or other equity compensation awards that involve the issuance of shares, and (2) determine, within an amount and subject to any other limitations established by the board and, if applicable, the stockholders, the number of such rights, options, warrants or other equity compensation awards and the terms thereof to be received by the recipients, provided that an officer may not use such authority to designate either himself or herself or any other persons as the board of directors may specify as a recipient of such rights, options, warrants or other equity compensation awards.

HISTORY: Laws, 2005, ch; Laws, 2009, ch. 530, § 2, eff from and after July 1, 2009.

Editor’s Notes —

A former § 79-4-6.24 [Laws, 1987, ch. 486, § 6.24; Laws, 2001, ch. 435, § 3, eff from and after July 1, 2001; Repealed by Laws, 2004, ch. 495, § 6, eff from and after July 1, 2004] also contained provisions for the issuance of rights, options, and warrants.

Amendment Notes —

The 2009 amendment added (c).

RESEARCH REFERENCES

CJS.

18 C.J.S., Corporations §§ 358, 494.

§79-4-6.25. Form and content of certificate.

Shares may but need not be represented by certificates. Unless this act or another statute expressly provides otherwise, the rights and obligations of shareholders are identical whether or not their shares are represented by certificates.

At a minimum each share certificate must state on its face:

  1. The name of the issuing corporation and that it is organized under the law of this state;
  2. The name of the person to whom issued; and
  3. The number and class of shares and the designation of the series, if any, the certificate represents.

If the issuing corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series (and the authority of the board of directors to determine variations for future series) must be summarized on the front or back of each certificate or the corporation must furnish the shareholder this information on request in writing and without charge.

Each share certificate (1) must be signed (either manually or in facsimile) by two (2) officers designated in the bylaws or by the board of directors, and (2) may bear the corporate seal or its facsimile.

If the person who signed (either manually or in facsimile) a share certificate no longer holds office when the certificate is issued, the certificate is nevertheless valid.

HISTORY: Laws, 1987, ch. 486, § 6.25; Laws, 1990, ch. 384, § 55, eff from and after July 1, 1990.

Cross References —

Applicability of this section to certificates representing “scrip,” see § 79-4-6.04.

Application of this section to requirements for issuing shares without certificates, see § 79-4-6.26.

RESEARCH REFERENCES

ALR.

Necessity of delivery of stock certificates to complete valid gift of stock. 23 A.L.R.2d 1171.

Validity, construction, and effect of articles of incorporation or stock certificates relating to call, redemption, or retirement of common stock. 48 A.L.R.2d 392.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 405, 406.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:1155 et seq.

CJS.

18 C.J.S., Corporations §§ 325 et seq.

§79-4-6.26. Authorization to issue shares without certificates.

Unless the articles of incorporation or bylaws provide otherwise, the board of directors of a corporation may authorize the issue of some or all of the shares of any or all of its classes or series without certificates. The authorization does not affect shares already represented by certificates until they are surrendered to the corporation.

Within a reasonable time after the issue or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by Section 79-4-6.25(b) and (c), and if applicable, Section 79-4-6.27.

HISTORY: Laws, 1990 Ex Sess, ch. 47, § 1, eff from and after July 1, 1990.

Cross References —

Existence of certain shareholder agreements, specifically permitted although otherwise inconsistent with this chapter, to be noted on share certificate or on information statement required by this section, see § 79-4-7.32.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 405.

CJS.

18 C.J.S., Corporations § 235.

§79-4-6.27. Restriction on transfer of shares and other securities.

The articles of incorporation, bylaws, an agreement among shareholders or an agreement between shareholders and the corporation may impose restrictions on the transfer or registration of transfer of shares of the corporation. A restriction does not affect shares issued before the restriction was adopted unless the holders of the shares are parties to the restriction agreement or voted in favor of the restriction.

A restriction on the transfer or registration of transfer of shares is valid and enforceable against the holder or a transferee of the holder if the restriction is authorized by this section and its existence is noted conspicuously on the front or back of the certificate or is contained in the information statement required by Section 79-4-6.26(b). Unless so noted, a restriction is not enforceable against a person without knowledge of the restriction.

A restriction on the transfer or registration of transfer of shares is authorized:

  1. To maintain the corporation’s status when it is dependent on the number or identity of its shareholders;
  2. To preserve exemptions under federal or state securities law;
  3. For any other reasonable purpose.
  4. Prohibit the transfer of the restricted shares to designated persons or classes of persons, if the prohibition is not manifestly unreasonable.

A restriction on the transfer or registration of transfer of shares may:

Obligate the shareholder first to offer the corporation or other persons (separately, consecutively or simultaneously) an opportunity to acquire the restricted shares;

Obligate the corporation or other persons (separately, consecutively or simultaneously) to acquire the restricted shares;

Require the corporation, the holders of any class of its shares or another person to approve the transfer of the restricted shares, if the requirement is not manifestly unreasonable;

For purposes of this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.

HISTORY: Laws, 1987, ch. 486, § 6.27; Laws, 1990, ch. 384, § 56, eff from and after July 1, 1990.

Cross References —

Application of this section to requirements for issuing shares without certificates, see § 79-4-6.26.

RESEARCH REFERENCES

ALR.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

What constitutes waiver of stockholder’s or corporation’s right to enforce first-option stock purchase agreement. 55 A.L.R.3d 723.

Valuation of corporate stock for purposes of state gift, inheritance or estate tax, as affected by predetermined price in buy-out or first option agreement among stockholders or with corporation. 58 A.L.R.3d 1104.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 172, 570-591.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:731-74:738, 74:1160, 74:1173.

7A Am. Jur. Pl & Pr Forms, Corporations, Form 101.

CJS.

18 C.J.S., Corporations § 478.

§79-4-6.28. Expenses of issue.

A corporation may pay the expenses of selling or underwriting its shares, and of organizing or reorganizing the corporation, from the consideration received for shares.

HISTORY: Laws, 1987, ch. 486, § 6.28 eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

6B Am. Jur. Legal Forms 2d, Corporations § 74:1787.

Subarticle C. Subsequent Acquisition of Shares by Shareholders and Corporation.

§79-4-6.30. Shareholders’ preemptive rights.

The shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent the articles of incorporation so provide.

A statement included in the articles of incorporation that “the corporation elects to have preemptive rights” (or words of similar import) means that the following principles apply except to the extent the articles of incorporation expressly provide otherwise:

  1. The shareholders of the corporation have a preemptive right granted on uniform terms and conditions prescribed by the board of directors to provide a fair and reasonable opportunity to exercise the right, to acquire proportional amounts of the corporation’s unissued shares upon the decision of the board of directors to issue them.
  2. A shareholder may waive his preemptive right. A waiver evidenced by a writing is irrevocable even though it is not supported by consideration.
  3. There is no preemptive right with respect to:
  4. Holders of shares of any class without general voting rights but with preferential rights to distributions or assets have no preemptive rights with respect to shares of any class.
  5. Holders of shares of any class with general voting rights but without preferential rights to distributions or assets have no preemptive rights with respect to shares of any class with preferential rights to distributions or assets unless the shares with preferential rights are convertible into or carry a right to subscribe for or acquire shares without preferential rights.
  6. Shares subject to preemptive rights that are not acquired by shareholders may be issued to any person for a period of one (1) year after being offered to shareholders at a consideration set by the board of directors that is not lower than the consideration set for the exercise of preemptive rights. An offer at a lower consideration or after the expiration of one (1) year is subject to the shareholders’ preemptive rights.

Shares issued as compensation to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;

Shares issued to satisfy conversion or option rights created to provide compensation to directors, officers, agents or employees of the corporation, its subsidiaries or affiliates;

Shares authorized in articles of incorporation that are issued within six (6) months from the effective date of incorporation;

Shares sold otherwise than for money.

For purposes of this section, “shares” includes a security convertible into or carrying a right to subscribe for or acquire shares.

HISTORY: Laws, 1987, ch. 486, § 6.30, eff from and after January 1, 1988.

RESEARCH REFERENCES

ALR.

What constitutes waiver of stockholder’s or corporation’s right to enforce first-option stock purchase agreement. 55 A.L.R.3d 723.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 438 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:696, 74:697.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 62.

3 Am. Jur. Proof of Facts 2d 379, Waiver of Right to Enforce “First Option” Stock Purchase Requirement, §§ 16 et seq.

CJS.

18 C.J.S., Corporations §§ 265, 277.

§79-4-6.31. Corporation’s acquisition of its own shares.

A corporation may acquire its own shares, and shares so acquired constitute authorized but unissued shares.

If the articles of incorporation prohibit the reissue of the acquired shares, the number of authorized shares is reduced by the number of shares acquired.

HISTORY: Laws, 1987, ch. 486, § 6.31; Laws, 2000, ch. 469, § 2, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment deleted “effective upon amendment of the articles of incorporation” following “shares acquired” in (b); and deleted former (c).

Cross References —

Board of directors authorized to adopt amendments to articles of incorporation to reflect reduction in authorized shares or to delete a class of changes as a result of the operation of this section without shareholder approval, see § 79-4-10.05.

RESEARCH REFERENCES

ALR.

Construction and operation of statute restricting corporation’s right to purchase its own stock to purchase from surplus. 61 A.L.R.3d 1049.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity”. 16 A.L.R.4th 784.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1775 et seq.

CJS.

19 C.J.S., Corporations § 1028.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II Under Former §79-3-9.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II Under Former § 79-3-9.

11. In general.

Where the trial court held that promissory notes of a corporation executed for the purchase of the corporation’s stock from the payees were good and valid obligations and no cross-appeal was taken from this finding, the question was not reviewable on appeal. Cooper v. Mississippi Land Co., 220 So. 2d 302, 1969 Miss. LEXIS 1451 (Miss. 1969).

The deed of an insolvent corporation, or of a corporation rendered insolvent by reason of its execution, by which it undertook to convey substantially all of its assets to persons who were all of its officers, directors, and stockholders is void; for insiders cannot prefer themselves in payment of pre-existing debts and thus deprive other creditors of the corporation of their claims; and such creditors had a lien upon the assets of the corporation superior to that of a mortgagee which held a deed of trust executed by the corporation’s grantees as to all property not covered by prior deeds of trust executed by the corporation. Cooper v. Mississippi Land Co., 220 So. 2d 302, 1969 Miss. LEXIS 1451 (Miss. 1969).

This section [Code 1942, § 5311], by clearest implication, permits a corporation to retire its stock at will unless in the process it renders the corporation insolvent, and it follows that where a particular transaction working a retirement of capital stock is attacked, the burden is on the moving party to show insolvency. Alcott Co. v. Raphael, 275 F.2d 551, 1960 U.S. App. LEXIS 5200 (5th Cir. Miss. 1960).

In order to set aside a conveyance of real estate by a bankrupt corporation to its stockholder, the trustee in bankruptcy must prove the insolvency of the corporation following, and as a result of, the transfer. Alcott Co. v. Raphael, 275 F.2d 551, 1960 U.S. App. LEXIS 5200 (5th Cir. Miss. 1960).

Subarticle D. Distributions.

§79-4-6.40. Distributions to shareholders.

A board of directors may authorize and the corporation may make distributions to its shareholders subject to restriction by the articles of incorporation and the limitation in subsection (c).

If the board of directors does not fix the record date for determining shareholders entitled to a distribution (other than one involving a purchase, redemption or other acquisition of the corporation’s shares), it is the date the board of directors authorizes the distribution.

No distribution may be made if, after giving it effect:

  1. The corporation would not be able to pay its debts as they become due in the usual course of business; or
  2. The corporation’s total assets would be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.
  3. In all other cases, as of (i) the date the distribution is authorized if the payment occurs within one hundred twenty (120) days after the date of authorization, or (ii) the date the payment is made if it occurs more than one hundred twenty (120) days after the date of authorization.

The board of directors may base a determination that a distribution is not prohibited under subsection (c) either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

Except as otherwise provided in subsection (g), the effect of a distribution under subsection (c) is measured;

In the case of distribution by purchase, redemption or other acquisition of the corporation’s shares, as of the earlier of (i) the date money or other property is transferred or debt incurred by the corporation, or (ii) the date the shareholder ceases to be a shareholder with respect to the acquired shares;

In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

A corporation’s indebtedness to a shareholder incurred by reason of a distribution made in accordance with this section is at parity with the corporation’s indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

Indebtedness of a corporation, including indebtedness issued as a distribution, is not considered a liability for purposes of determinations under subsection (c) if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to shareholders could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made.

This section shall not apply to distributions in liquidation under Article 14 (Section 79-4-14.01 et seq.).

HISTORY: Laws, 1987, ch. 486, § 6.40; Laws, 1988, ch. 369, § 2; Laws, 2001, ch. 435, § 4, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment added (h).

Cross References —

Record date for determining shareholders entitled to notice of meeting, to demand special meeting, to vote, or to take other action, see § 79-4-1.07.

Applicability of this section to reacquisition, redemption or conversion of shares, see § 79-4-6.03.

Record date for determining shareholders entitled to a share dividend, see § 79-4-6.40.

Certain shareholder agreements as to authorization or making of distributions, although otherwise inconsistent with act, permitted subject to limitations in this section, see § 79-4-7.32.

Director’s liability for unlawful distributions, see § 79-4-8.33.

Applicability of this section to sale, lease, exchange or other disposition of all, or substantially all, property of corporation other then in regular course of business that constitutes a distribution, see § 79-4-12.02.

Payment by corporation, pursuant to order directing buyout of shareholder petitioning to dissolve corporation whose shares are not listed or regularly traded, as subject to provisions of this section, see § 79-4-14.34.

Distribution to shareholders during voluntary dissolution of corporation, see §§ 79-4-14.01 et seq.

RESEARCH REFERENCES

ALR.

Dividend rights in surplus of new consolidated corporation resulting from reduction of capital stock of former constituent corporations. 28 A.L.R.2d 1177.

Reduction of capital stock and distribution of capital assets on reduction. 35 A.L.R.2d 1149.

Modern status of rules governing allocations of stock dividends or splits between principal and income. 81 A.L.R.3d 876.

Am. Jur.

18B Am. Jur. 2d, Corporations § 1019.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 263.1 (complaint by judgment creditor against sole stockholder receiving distributions of corporate property causing corporation to become insolvent).

22 Am. Jur. Proof of Facts 2d 593, Wrongful Failure of Corporate Directors to Declare Dividend.

CJS.

18 C.J.S., Corporations §§ 543, 545.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-85.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-85.

11. In general.

In order to set aside a conveyance of real estate by a bankrupt corporation to its stockholder, the trustee in bankruptcy must prove the insolvency of the corporation following, and as a result of, the transfer. Alcott Co. v. Raphael, 275 F.2d 551, 1960 U.S. App. LEXIS 5200 (5th Cir. Miss. 1960).

Cancellation and surrender of notes, given by stockholders for purchase of additional stock, by president of corporation without authorization of the board of directors and while corporation was insolvent, less than one month before filing of petition in bankruptcy, was ineffectual to discharge liability of stockholder for balance due on stock as against trustee in bankruptcy. Frazier v. Zachariah, 174 Miss. 378, 164 So. 893, 1936 Miss. LEXIS 188 (Miss. 1936).

One year statute of limitations on suits for penalties does not bar action under this section [Code 1942, § 5328]. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

This section [Code 1942, § 5328] is not penal but remedial. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

State banking law did not repeal this section [Code 1942, § 5328] as applicable to banks. Metzger v. Joseph, 111 Miss. 385, 71 So. 645, 1916 Miss. LEXIS 309 (Miss. 1916).

Corporation’s capital cannot be withdrawn by stockholders until all debts are paid. Kimbrough v. Davies, 104 Miss. 722, 61 So. 697, 1913 Miss. LEXIS 78 (Miss. 1913).

Liability of stockholders for withdrawn capital necessary to pay creditors is several. Kimbrough v. Davies, 104 Miss. 722, 61 So. 697, 1913 Miss. LEXIS 78 (Miss. 1913).

This section [Code 1942, § 5328] does not prevent recovery of portion of corporation’s capital withdrawn for distribution among stockholders and necessary to pay debts. Kimbrough v. Davies, 104 Miss. 722, 61 So. 697, 1913 Miss. LEXIS 78 (Miss. 1913).

Article 7. Shareholders.

Subarticle A. Meetings.

§79-4-7.01. Annual meeting.

Unless directors are elected by written consent in lieu of an annual meeting as permitted by Section 79-4-7.04, a corporation shall hold a meeting of shareholders annually at a time stated in or fixed in accordance with the bylaws; provided, however, that if a corporation’s articles of incorporation authorize shareholders to cumulate their votes when electing directors pursuant to Section 79-4-7.28, directors may not be elected by less than unanimous written consent.

Annual shareholders’ meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation’s principal office.

The failure to hold an annual meeting at the time stated in or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporate action.

HISTORY: Laws, 1987, ch. 486, § 7.01; Laws, 2007, ch. 361, § 4, eff from and after July 1, 2007.

Amendment Notes —

The 2007 amendment rewrote (a) to revise election of directors at the annual meeting.

Cross References —

Special meeting, see § 79-4-7.02.

Right of shareholder who signed demand for special meeting to apply for court-ordered meeting of shareholders, see § 79-4-7.03.

Notice of meeting, see § 79-4-7.05.

Appointment of party to voting agreement as proxy as being an appointment coupled with an interest, see § 79-4-7.22.

Copies of minutes of shareholders’ meetings to be maintained at corporation’s principal office, see § 79-4-16.01.

RESEARCH REFERENCES

ALR.

Remedies to restrain or compel holding of stockholders’ meetings. 48 A.L.R.2d 615.

Holding directors’, officers’, stockholders’, or sales meetings or conventions in a state by foreign corporation as doing business or otherwise subjecting it to service of process and suit. 84 A.L.R.2d 412.

Corporations: casting of ballots after closing of polls. 41 A.L.R.3d 234.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Right of corporation to discharge employee who asserts right as stockholder. 84 A.L.R.3d 1107.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 789 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:994 et seq.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1642 et seq.

CJS.

18 C.J.S., Corporations §§ 635-678.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

1. In general.

Although the shareholders did not ratify the president’s act of terminating an attorney’s position as an employee until more than a year after the fact, the action was invalidated by the lack of yearly meeting under Miss. Code Ann. § 79-4-7.01 which applied to the corporation by Miss. Code Ann. § 79-10-3. Jowett v. Scruggs, 901 So. 2d 638, 2004 Miss. App. LEXIS 768 (Miss. Ct. App. 2004), cert. denied, 901 So. 2d 1273, 2005 Miss. LEXIS 312 (Miss. 2005).

§79-4-7.02. Special meeting.

A corporation shall hold a special meeting of shareholders:

  1. On call of its board of directors or the person or persons authorized to do so by the articles of incorporation or bylaws; or
  2. Unless the articles of incorporation provide otherwise, if shareholders having at least ten percent (10%) of all the votes entitled to be cast on an issue proposed to be considered at the proposed special meeting sign, date and deliver to the corporation one or more written demands for the meeting describing the purpose or purposes for which it is to be held. Unless otherwise provided in the articles of incorporation, a written demand for a special meeting may be revoked by a writing to that effect received by the corporation prior to the receipt by the corporation of demands sufficient in number to require the holding of a special meeting.

If not otherwise fixed under Section 79-4-7.03 or 79-4-7.07, the record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs the demand.

Special shareholders’ meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation’s principal office.

Only business within the purpose or purposes described in the meeting notice required by Section 79-4-7.05(c) may be conducted at a special shareholders’ meeting.

HISTORY: Laws, 1987, ch. 486, § 7.02; Laws, 1997, ch. 418, § 49, eff from and after July 1, 1997.

Cross References —

Right of shareholder who signed demand for special meeting to apply for court-ordered meeting of shareholders, see § 79-4-7.03.

Timing of and information to be included in notice of special meeting, see § 79-4-7.05.

RESEARCH REFERENCES

ALR.

Remedies to restrain or compel holding of stockholders’ meeting. 48 A.L.R.2d 615.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:995, 74:998.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1642-74:1644, 74:1651, 74:1655, 74:1656, 74:1676.

CJS.

18 C.J.S., Corporations § 639.

§79-4-7.03. Court-ordered meeting.

The chancery court of the county where a corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may summarily order a meeting to be held:

  1. On application of any shareholder of the corporation entitled to participate in an annual meeting if an annual meeting was not held or action by written consent in lieu thereof did not become effective within the earlier of six (6) months after the end of the corporation’s fiscal year or fifteen (15) months after its last annual meeting or written consent in lieu thereof; or
  2. On application of a shareholder who signed a demand for a special meeting valid under Section 79-4-7.02 if:

Notice of the special meeting was not given within thirty (30) days after the date the demand was delivered to the corporation’s secretary; or

The special meeting was not held in accordance with the notice.

The court may fix the time and place of the meeting, determine the shares entitled to participate in the meeting, specify a record date for determining shareholders entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the votes represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes of the meeting.

HISTORY: Laws, 1987, ch. 486, § 7.03; Laws, 2007, ch. 361, § 5; Laws, 2012, ch. 382, § 26, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2007 amendment, in (a)(1), inserted “or action by written consent in lieu thereof did not become effective” and “or written consent in lieu thereof.”

The 2012 amendment, effective January 1, 2013, rewrote (a).

Cross References —

Record date for determining shareholders entitled to demand special meeting where date is not fixed under this section, see § 79-4-7.02.

Record date for determining shareholders entitled to take action without meeting where date is not otherwise determined under this section, see § 79-4-7.04.

Record date for determining shareholders entitled to notice of and to vote at annual or special shareholder’s meeting where date is not otherwise determined under this section, see § 79-4-7.05.

RESEARCH REFERENCES

ALR.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 992-997.

CJS.

18 C.J.S., Corporations § 652.

§79-4-7.04. Action without meeting.

Action required or permitted by Section 79-4-1.01 et seq. to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by all the shareholders entitled to vote on the action. The action must be evidenced by one or more written consents describing the action taken, signed by all the shareholders entitled to vote on the action and delivered to the corporation for inclusion in the minutes or filing with the corporate records. A unanimous consent signed under this subsection is the act of the shareholders when consents signed by all shareholders have been delivered to the corporation.

The articles of incorporation may provide that any action required or permitted by Section 79-4-1.01 et seq. to be taken at a shareholder’s meeting may be taken without a meeting and without prior notice, if consents in writing setting forth the action so taken are signed by the holders of outstanding shares having not less than the minimum number of votes that would be required to authorize or take the action at a meeting at which all shares entitled to vote on the action were present and voted. The written consent shall bear the date of signature of the shareholder who signs the consent and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

If not otherwise fixed under Section 79-4-7.03 or 79-4-7.07, and if prior board action is not required respecting the action to be taken without a meeting, the record date for determining the shareholders entitled to take action without a meeting shall be the first date on which a signed written consent is delivered to the corporation. If not otherwise fixed under Section 79-4-7.03 or 79-4-7.07, and if prior board action is required respecting the action to be taken without a meeting, the record date shall be the close of business on the day the resolution of the board taking such prior action is adopted. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest date on which a consent delivered to the corporation as required by this section was signed, written consents signed by the holders of shares having sufficient votes to take the action have been delivered to the corporation. A written consent may be revoked by a writing to that effect delivered to the corporation before unrevoked written consents sufficient in number to take the corporation action are delivered to the corporation.

A consent signed pursuant to the provisions of this section has the effect of a vote taken at a meeting and may be described as such in any document. Unless the articles of incorporation, bylaws, or a resolution of the board of directors provides for a reasonable delay to permit tabulation of written consents, the action taken by less than unanimous written consent shall be effective when written consents signed by the holders of shares having sufficient votes to take the action are delivered to the corporation.

If Section 79-4-1.01 et seq. requires that notice of a proposed action be given to nonvoting shareholders and the action is to be taken by written consent of the voting shareholders, the corporation must give its nonvoting shareholders written notice of the action not more than ten (10) days after (i) written consents sufficient to take the action have been delivered to the corporation, or (ii) such later date that tabulation of consents is completed pursuant to an authorization under subsection (d). The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under Section 79-4-1.01 et seq., would have been required to be sent to nonvoting shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action.

If action is taken by less than unanimous written consent of the voting shareholders, the corporation must give its nonconsenting voting shareholders written notice of the action not more than ten (10) days after (i) written consents sufficient to take the action have been delivered to the corporation, or (ii) such later date that tabulation of consents is completed pursuant to an authorization under subsection (d). The notice must reasonably describe the action taken and contain or be accompanied by the same material that, under Section 79-4-1.01 et seq., would have been required to be sent to voting shareholders in a notice of a meeting at which the action would have been submitted to the shareholders for action.

The notice requirements in subsections (e) and (f) shall not delay the effectiveness of actions taken by written consent, and a failure to comply with such notice requirements shall not invalidate actions taken by written consent, provided that this subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a shareholder adversely affected by a failure to give such notice within the required time period.

HISTORY: Laws, 1987, ch. 486, § 7.04; Laws, 2007, ch. 361, § 6; Laws, 2012, ch. 382, § 27; Laws, 2012, ch. 481, § 9, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 9 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 27 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 9 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-7.04 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The 2007 amendment rewrote the section to revise action by written consent in lieu of a meeting.

The first 2012 amendment (ch. 382), deleted “at its registered office” preceding “or to the secretary of the corporation at its principal office” in (i).

The second 2012 amendment (ch. 481), effective January 1, 2013, deleted former (h) and (i) which read: “(h) An electronic transmission may be used to consent to an action, if the electronic transmission contains or is accompanied by information from which the corporation can determine the date on which the electronic transmission was signed and that the electronic transmission was authorized by the shareholder, the shareholder’s agent, or the shareholder’s attorney-in-fact. (i) Delivery of a written consent to the corporation under this section is delivery to the corporation’s registered agent at its registered office or to the secretary of the corporation at its principal office.”

RESEARCH REFERENCES

ALR.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Am. Jur.

18A Am. Jur. 2d, Corporations § 790.

CJS.

18 C.J.S., Corporations § 539.

§79-4-7.05. Notice of meeting.

A corporation shall notify shareholders of the date, time and place of each annual and special shareholders’ meeting no fewer than ten (10) nor more than sixty (60) days before the meeting date. If the board of directors has authorized participation by means of remote communication pursuant to Section 79-4-7.09 for any class or series of shareholders, the notice of such class or series of shareholders shall describe the means of remote communication to be used. Unless Section 79-4-1.01 et seq. or the articles of incorporation require otherwise, the corporation is required to give notice only to shareholders entitled to vote at the meeting.

Unless Section 79-4-1.01 et seq. or the articles of incorporation require otherwise, notice of an annual meeting need not include a description of the purpose or purposes for which the meeting is called.

Notice of a special meeting must include a description of the purpose or purposes for which the meeting is called.

If not otherwise fixed under Section 79-4-7.03 or 79-4-7.07, the record date for determining shareholders entitled to notice of and to vote at an annual or special shareholders’ meeting is the day before the first notice is delivered to shareholders.

Unless the bylaws require otherwise, if an annual or special shareholders’ meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if the new date, time or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under Section 79-4-7.07, however, notice of the adjourned meeting must be given under this section to persons who are shareholders as of the new record date.

HISTORY: Laws, 1987, ch. 486, § 7.05; Laws, 1988, ch. 369, § 3; Laws, 2012, ch. 481, § 10, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added the second sentence in (a); and made a minor stylistic change.

Cross References —

Applicability of this section to business that may be conducted at special shareholders’ meeting, see § 79-4-7.02.

Waiver of notice, see § 79-4-7.06.

Shareholders’ list to be made available for inspection by shareholder beginning two business days after notice of shareholder’s meeting is given, see § 79-4-7.20.

Applicability of this section to notice of a shareholders’ meeting to consider amendments to articles of incorporation, see § 79-4-10.03.

Applicability of this section to notice of shareholders’ meeting to consider restatement of articles of incorporation, see § 79-4-10.07.

Applicability of this section to notice of shareholders’ meeting to consider plan of merger or share exchange, see § 79-4-11.04.

Applicability of this section to notice of shareholders’ meeting to consider sale, lease, exchange, or other disposition of all, or substantially all, property of corporation other than in regular course of business, see § 79-4-12.02.

Requirement that corporation notify each shareholder, whether or not entitled to vote, in accordance with this section, of shareholders’ meeting to consider proposed dissolution of the corporation, see § 79-4-14.02.

RESEARCH REFERENCES

ALR.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 803 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:999, (bylaws – notice of meetings – to holders of stock not entitled to vote), 74:1000.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1651-74:1656.

CJS.

18 C.J.S., Corporations § 640.

JUDICIAL DECISIONS

1. Proper notice.

Trial court did not err by finding that a corporation provided adequate notice of a special meeting to shareholders because the notice provided the location, time, date, and purpose of the shareholders meeting pursuant to Miss. Code Ann. § 79-4-7.05(a) and (c), and an attached proxy vote sheet setting forth the voting issues referenced the discussion of the issues in the minutes. Keene v. Brookhaven Acad., Inc., 28 So.3d 1285, 2010 Miss. LEXIS 107 (Miss. 2010).

§79-4-7.06. Waiver of notice.

A shareholder may waive any notice required by Sections 79-4-1.01 et seq., the articles of incorporation, or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the shareholder entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.

A shareholder’s attendance at a meeting:

  1. Waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.
  2. Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.

HISTORY: Laws, 1987, ch. 486, § 7.06, eff from and after January 1, 1988.

RESEARCH REFERENCES

ALR.

Participation in meeting as waiver of compliance with notice requirement for shareholders’ meeting. 64 A.L.R.3d 358.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 817-820.

18B Am. Jur. 2d, Corporations § 1191.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1001, 74:1002.

6B Am. Jur. Legal Forms 2d, Corporations § 74:1668.

§79-4-7.07. Record date.

The bylaws may fix or provide the manner of fixing the record date for one or more voting groups in order to determine the shareholders entitled to notice of shareholders’ meeting, to demand a special meeting, to vote, or to take any other action. If the bylaws do not fix or provide for fixing a record date, the board of directors of the corporation may fix a future date as the record date.

A record date fixed under this section may not be more than seventy (70) days before the meeting or action requiring a determination of shareholders.

A determination of shareholders entitled to notice of or to vote at a shareholders’ meeting is effective for any adjournment of the meeting unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than one hundred-twenty (120) days after the date fixed for the original meeting.

If a court orders a meeting adjourned to a date more than one hundred-twenty (120) days after the date fixed for the original meeting, it may provide that the original record date continues in effect or it may fix a new record date.

HISTORY: Laws, 1987, ch. 486, § 7.07, eff from and after January 1, 1988.

Cross References —

Record date for share dividends, see § 79-4-6.23.

Record date for determining shareholders entitled to demand special meeting where date is not fixed under this section, see § 79-4-7.02.

Record date for determining shareholders entitled to take action without meeting where date is not otherwise determined under this section, see § 79-4-7.04.

Record date for determining shareholders entitled to notice of and to vote at annual or special shareholder’s meeting where date is not otherwise determined under this section, see § 79-4-7.05.

Requirement of notice of adjourned meeting where new record date for meeting is or must be fixed under this section, see § 79-4-7.05.

RESEARCH REFERENCES

ALR.

Rights, duties, and liability of corporation in connection with transfer of stock of infant or incompetent. 3 A.L.R.2d 881.

Rights, duties, and liability in connection with transfer of stock of decedent. 7 A.L.R.2d 1240.

Remedy for refusal of corporation or its agent to register of effectuate transfer of stock. 22 A.L.R.2d 12.

Validity of restrictions on alienation or transfer of corporate stock. 61 A.L.R.2d 1318.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Validity and construction of provision restricting transfer of corporate stock, which conditions transfer upon consent of one other than shareholder, officer, or director of corporation. 53 A.L.R.3d 1272.

Construction and effect of “dilution” provision of employee’s stock option contract, dealing with rights where stock structure of corporation changes before option is exercised. 59 A.L.R.3d 1030.

Restrictions on transfer of corporate stock as applicable to testamentary dispositions thereof. 61 A.L.R.3d 1090.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 858 et seq., 914.

18B Am. Jur. 2d, Corporations §§ 1036, 1066.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1163, 74:1164.

§79-4-7.08. Appointment of chair to preside over meetings; duties of chair.

At each meeting of shareholders, a chair shall preside. The chair shall be appointed as provided in the bylaws, or, in the absence of such provision, by the board.

The chair, unless the articles of incorporation or bylaws provide otherwise, shall determine the order of business and shall have the authority to establish rules for the conduct of the meeting.

Any rules adopted for, and the conduct of, the meeting shall be fair to shareholders.

The chair of the meeting shall announce at the meeting when the polls close for each matter voted upon. If no announcement is made, the polls shall be deemed to have closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies or votes nor any revocations or changes thereto may be accepted.

HISTORY: Laws, 1997, ch. 418, § 50, eff from and after July 1, 1997.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 828.

§79-4-7.09. Promote participation in annual and special meetings.

Shareholders of any class or series may participate in any meeting of shareholders by means of remote communication to the extent the board of directors authorizes such participation for such class or series. Participation by means of remote communication shall be subject to such guidelines and procedures as the board of directors adopts, and shall be in conformity with subsection (b) of this section.

Shareholders participating in a shareholders’ meeting by means of remote communication shall be deemed present and may vote at such a meeting if the corporation has implemented reasonable measures:

  1. To verify that each person participating remotely is a shareholder; and
  2. To provide such shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to communicate, and to read or hear the proceedings of the meeting, substantially concurrently with such proceeding.

HISTORY: Laws, 2012, ch. 481, § 11, eff from and after Jan. 1, 2013.

Subarticle B. Voting.

§79-4-7.20. Shareholders’ list for meeting.

After fixing a record date for a meeting, a corporation shall prepare an alphabetical list of the names of all its shareholders who are entitled to notice of a shareholders’ meeting. The list must be arranged by voting group (and within each voting group by class or series of shares) and show the address of and number of shares held by each shareholder.

The shareholders’ list must be available for inspection by any shareholder beginning two (2) business days after notice of the meeting is given for which the list was prepared and continuing through the meeting, at the corporation’s principal office or at a place identified in the meeting notice in the city where the meeting will be held. A shareholder, his agent or attorney is entitled on written demand to inspect and, subject to the requirements of Section 79-4-16.02(c), to copy the list during regular business hours and at his expense, during the period it is available for inspection.

The corporation shall make the shareholders’ list available at the meeting, and any shareholder, his agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment.

If the corporation refuses to allow a shareholder, his agent or attorney to inspect the shareholders’ list before or at the meeting (or copy the list as permitted by subsection (b)), the chancery court of the county where a corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, on application of the shareholder, may summarily order the inspection or copying at the corporation’s expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete.

Refusal or failure to prepare or make available the shareholders’ list does not affect the validity of action taken at the meeting.

HISTORY: Laws, 1987, ch. 486, § 7.20; Laws, 2012, ch. 382, § 28, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (d), deleted “(or, if none in this state, its registered office)” preceding “is located”, and inserted “or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” thereafter.

Cross References —

General rights of shareholders to inspect and copy certain corporate records, as not affecting shareholders’ right to inspect records under this section, see § 79-4-16.02.

RESEARCH REFERENCES

ALR.

Who may exercise voting power of corporate stock pending settlement of estate of deceased owner. 7 A.L.R.3d 629.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Am. Jur.

18 Am. Jur. 2d, Corporations § 23.

18A Am. Jur. 2d, Corporations §§ 835 et seq., 850.

CJS.

18 C.J.S., Corporations §§ 644 et seq.

§79-4-7.21. Voting entitlement of shares.

Except as provided in subsections (b) and (c) or unless the articles of incorporation provide otherwise, each outstanding share, regardless of class, is entitled to one (1) vote on each matter voted on at a shareholders’ meeting. Only shares are entitled to vote.

Absent special circumstances, the shares of a corporation are not entitled to vote if they are owned, directly or indirectly, by a second corporation, domestic or foreign, and the first corporation owns, directly or indirectly, a majority of the shares entitled to vote for directors of the second corporation.

Subsection (b) does not limit the power of a corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.

Redeemable shares are not entitled to vote after notice of redemption is mailed to the holders and a sum sufficient to redeem the shares has been deposited with a bank, trust company or other financial institution under an irrevocable obligation to pay the holders the redemption price on surrender of the shares.

HISTORY: Laws, 1987, ch. 486, § 7.21, eff from and after January 1, 1988.

Cross References —

Shareholder’s right to appraisal, see § 79-4-13.02.

RESEARCH REFERENCES

ALR.

Who may exercise voting power of corporate stock pending settlement of estate of deceased owner. 7 A.L.R.3d 629.

Corporation: validity of charter provision for non-voting common stock. 52 A.L.R.3d 1131.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Right of corporation to discharge employee who asserts right as stockholder. 84 A.L.R.3d 1107.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 858 et seq., 876 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1015 et seq.

CJS.

18 C.J.S., Corporations §§ 645 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-63.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-63.

11. In general.

Court authority is not per se necessary to authorize an executrix with will annexed to exercise the estate’s stock voting rights in a closely held corporation. Harper v. Harper, 491 So. 2d 189, 1986 Miss. LEXIS 2508 (Miss. 1986).

§79-4-7.22. Proxies.

A shareholder may vote his shares in person or by proxy.

A shareholder or his agent or attorney-in-fact may appoint a proxy to vote or otherwise act for the shareholder by signing an appointment form or by electronic transmission. An electronic transmission must contain or be accompanied by information from which the recipient can determine the date of the transmission, and that the transmission was authorized by the sender or the sender’s agent or attorney-in-fact.

An appointment of a proxy is effective when a signed appointment form or an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the corporation authorized to tabulate votes. An appointment is valid for eleven (11) months unless a longer period is expressly provided in the appointment.

An appointment of a proxy is revocable unless the appointment form or electronic transmission states that it is irrevocable and the appointment is coupled with an interest. Appointments coupled with an interest include the appointment of:

  1. A pledgee;
  2. A person who purchased or agreed to purchase the shares;
  3. A creditor of the corporation who extended it credit under terms requiring the appointment;
  4. An employee of the corporation whose employment contract requires the appointment; or
  5. A party to a voting agreement created under Section 79-4-7.31.

The death or incapacity of the shareholder appointing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises his authority under the appointment.

An appointment made irrevocable under subsection (d) is revoked when the interest with which it is coupled is extinguished.

A transferee for value of shares subject to an irrevocable appointment may revoke the appointment if he did not know of its existence when he acquired the shares and the existence of the irrevocable appointment was not noted conspicuously on the certificate representing the shares or on the information statement for shares without certificates.

Subject to Section 79-4-7.24 and to any express limitation on the proxy’s authority stated in the appointment form or electronic transmission, a corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment.

HISTORY: Laws, 1987, ch. 486, § 7.22; Laws, 1997, ch. 418, § 51; Laws, 2012, ch. 481, § 12, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote the last sentence in (b).

Cross References —

Corporation accepting or rejecting vote, consent, waiver or proxy appointment in accordance with § 79-4-7.24 or this section not liable in damages to shareholder for consequences of acceptance or rejection, see § 79-4-7.24.

Procedure by which beneficial owner of shares registered in name of nominee may be recognized as the shareholder, see § 79-4-23.

RESEARCH REFERENCES

ALR.

Expenses incurred by competing factions within corporation in soliciting proxies as charge against corporation. 51 A.L.R.2d 873.

Corporations: power of inspectors of election relating to irregular or conflicting proxies. 44 A.L.R.3d 1443.

Right, as between pledgor and pledgee, to vote pledged stock, 68 A.L.R.3d 680.

Misrepresentation in proxy solicitation-state cases. 20 A.L.R.4th 1287.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 944 et seq.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1681-74:1694.

CJS.

18 C.J.S., Corporations § 647.

§79-4-7.23. Shares held by nominees.

A corporation may establish a procedure by which the beneficial owner of shares that are registered in the name of a nominee is recognized by the corporation as the shareholder. The extent of this recognition may be determined in the procedure.

The procedure may set forth:

  1. The types of nominees to which it applies;
  2. The rights or privileges that the corporation recognizes in a beneficial owner;
  3. The manner in which the procedure is selected by the nominee;
  4. The information that must be provided when the procedure is selected;
  5. The period for which selection of the procedure is effective; and
  6. Other aspects of the rights and duties created.

HISTORY: Laws, 1987, ch. 486, § 7.23, eff from and after January 1, 1988.

RESEARCH REFERENCES

ALR.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

§79-4-7.24. Corporation’s acceptance of votes.

If the name signed on a vote, consent, waiver or proxy appointment corresponds to the name of the shareholder, the corporation, if acting in good faith, is entitled to accept the vote, consent, waiver or proxy appointment and give it effect as the act of the shareholder.

If the name signed on a vote, consent, waiver or proxy appointment does not correspond to the name of its shareholder, the corporation, if acting in good faith, is nevertheless entitled to accept the vote, consent, waiver or proxy appointment and give it effect as the act of the shareholder if:

  1. The shareholder is an entity and the name signed purports to be that of an officer or agent of the entity;
  2. The name signed purports to be that of an administrator, executor, guardian or conservator representing the shareholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver or proxy appointment;
  3. The name signed purports to be that of a receiver or trustee in bankruptcy of the shareholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver or proxy appointment;
  4. The name signed purports to be that of a pledgee, beneficial owner or attorney-in-fact of the shareholder and, if the corporation requests, evidence acceptable to the corporation of the signatory’s authority to sign for the shareholder has been presented with respect to the vote, consent, waiver or proxy appointment;
  5. Two (2) or more persons are the shareholders as cotenants or fiduciaries and the name signed purports to be the name of at least one (1) of the co-owners and the person signing appears to be acting on behalf of all the co-owners.

The corporation is entitled to reject a vote, consent, waiver or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the shareholder.

The corporation and its officer or agent who accepts or rejects a vote, consent, waiver or proxy appointment in good faith and in accordance with the standards of this section or Section 79-4-7.22(b) are not liable in damages to the shareholder for the consequences of the acceptance or rejection.

Corporate action based on the acceptance or rejection of a vote, consent, waiver or proxy appointment under this section or Section 79-4-7.22(b) is valid unless a court of competent jurisdiction determines otherwise.

HISTORY: Laws, 1987, ch. 486, § 7.24; Laws, 1997, ch. 418, § 52, eff from and after July 1, 1997.

Cross References —

Authority of corporation to accept proxy’s vote or other action as that of shareholder making appointment, see § 79-4-7.22.

RESEARCH REFERENCES

ALR.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 846, 859, 864, 911.

CJS.

18 C.J.S., Corporations §§ 644, 645.

§79-4-7.25. Quorum and voting requirements for voting groups.

Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or Sections 79-4-1.01 et seq. provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter.

Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation or Sections 79-4-1.01 et seq. require a greater number of affirmative votes.

An amendment of articles of incorporation adding, changing or deleting a quorum or voting requirement for a voting group greater than specified in subsection (b) or (c) is governed by Section 79-4-7.27.

The election of directors is governed by Section 79-4-7.28.

HISTORY: Laws, 1987, ch. 486, § 7.25, eff from and after January 1, 1988.

Cross References —

Action by single and multiple voting groups, see § 79-4-7.26.

Articles of incorporation may provide for greater quorum or voting requirements for shareholders than provided for by this section, see § 79-4-7.27.

Applicability of this section to adoption of amendments to articles of incorporation, see § 79-4-10.03.

Shareholder’s right to appraisal, see § 79-4-13.02.

Deadlock among shareholders in electing directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

RESEARCH REFERENCES

ALR.

Who may exercise voting power of corporate stock pending settlement of estate of deceased owner. 7 A.L.R.3d 629.

Duty of pledgee of stocks, bonds or similar securities to protect their value during period of pledge, under UCC § 9-207. 68 A.L.R.3d 657.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Validity, construction, and effect of provision in charter or bylaw requiring supermajority vote. 80 A.L.R.4th 667.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 830 et seq., 840, 841, 850 et seq.

18B Am. Jur. 2d, Corporations §§ 1198, 1200.

CJS.

18 C.J.S., Corporations §§ 642-644, 650.

§79-4-7.26. Action by single and multiple voting groups.

If the articles of incorporation or Sections 79-4-1.01 et seq. provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group as provided in Section 79-4-7.25.

If the articles of incorporation or Sections 79-4-1.01 et seq. provide for voting by two (2) or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately as provided in Section 79-4-7.25. Action may be taken by one (1) voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.

HISTORY: Laws, 1987, ch. 486, § 7.26, eff from and after January 1, 1988.

Cross References —

Applicability of this section to adoption of amendments to articles of incorporation, see § 79-4-10.03.

Deadlock among shareholders in electing directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

RESEARCH REFERENCES

ALR.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Defamation of class or group as actionable by individual member. 52 A.L.R.4th 618.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 854-856, 868-875.

CJS.

18 C.J.S., Corporations §§ 644, 645.

§79-4-7.27. Greater quorum or voting requirements.

The articles of incorporation may provide for a greater quorum or voting requirement for shareholders (or voting groups of shareholders) than is provided for by Sections 79-4-1.01 et seq.

An amendment to the articles of incorporation that adds, changes or deletes a greater quorum or voting requirement must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever is greater.

HISTORY: Laws, 1987, ch. 486, § 7.27, eff from and after January 1, 1988.

Cross References —

General quorum and voting requirements for voting groups, see § 79-4-7.25.

Deadlock among shareholders in electing directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

RESEARCH REFERENCES

ALR.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Validity, construction, and effect of provision in charter or bylaw requiring supermajority vote. 80 A.L.R.4th 667.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 832, 841.

CJS.

18 C.J.S., Corporations §§ 642, 643.

§79-4-7.28. Voting for directors; cumulative voting.

Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

For corporations incorporated before July 1, 2002, shareholders shall have a right to cumulate their votes for directors unless the articles of incorporation provide otherwise. For corporations incorporated on or after July 1, 2002, shareholders do not have a right to cumulate their votes for directors unless the articles of incorporation provide otherwise.

A statement included in the articles of incorporation that “a designated voting group of shareholders is entitled to cumulate their votes for directors,” or words of similar import, means that the shareholders designated are entitled to multiply the number of votes they are entitled to cast by the number of directors for whom they are entitled to vote and cast the product for a single candidate or distribute the product among two (2) or more candidates.

HISTORY: Laws, 1987, ch. 486, § 7.28; Laws, 1988, ch. 368, § 6; Laws, 2001, ch. 435, § 5, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment, in (b), inserted “For corporations incorporated before July 1, 2002” in the first sentence, and added the second sentence.

Cross References —

General quorum and voting requirements for voting groups, see § 79-4-7.25.

Articles of incorporation may provide for greater quorum or voting requirements for shareholders than provided for by § 79-4-7.25, see § 79-4-7.27.

Appointment and duties of election inspectors, see § 79-4-7.29.

Shareholder’s right to appraisal, see § 79-4-13.02.

Deadlock among shareholders in electing directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

RESEARCH REFERENCES

ALR.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1205 et seq.

CJS.

18 C.J.S., Corporations §§ 645, 646.

§79-4-7.29. Appointment of election inspectors; duties of inspectors.

A corporation having any shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association shall, and any other corporation may, appoint one or more inspectors to act at a meeting of shareholders and make a written report of the inspectors’ determinations. Each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector’s ability.

The inspectors shall:

  1. Ascertain the number of shares outstanding and the voting power of each;
  2. Determine the shares represented at a meeting;
  3. Determine the validity of proxies and ballots;
  4. Count all votes; and
  5. Determine the result.

An inspector may be an officer or employee of the corporation.

HISTORY: Laws, 1997, ch. 418, § 53, eff from and after July 1, 1997.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 843 et seq., 911 et seq.

Subarticle C. Voting Trusts and Agreements.

§79-4-7.30. Voting trusts.

One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust (which may include anything consistent with its purpose) and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all owners of beneficial interests in the trust, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the corporation’s principal office.

A voting trust becomes effective on the date the first shares subject to the trust are registered in the trustee’s name. A voting trust is valid for the period specified in the trust agreement.

All or some of the parties to a voting trust may extend it for additional terms by signing an extension agreement and obtaining the voting trustee’s written consent to the extension. An extension is valid for the period specified in the extension agreement. The voting trustee must deliver copies of the extension agreement and list of beneficial owners to the corporation’s principal office. An extension agreement binds only those parties signing it.

HISTORY: Laws, 1987, ch. 486, § 7.30; Laws, 2017, ch. 369, § 1, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment rewrote the second sentence of (b), which read: “A voting trust is valid for not more than ten (10) years after its effective date unless extended under subsection (c)”; and in (c), deleted “of not more than ten (10) years each” following “additional terms” in the first sentence, and rewrote the second sentence, which read: “An extension is valid for ten (10) years from the date the first shareholder signs the extension agreement.”

Cross References —

Inapplicability of provisions of this section to voting agreements, see § 79-4-7.31.

RESEARCH REFERENCES

ALR.

Validity of provision of voting trust against transfer of beneficiary’s interest. 11 A.L.R.2d 1000.

Removal of trustee of voting trust. 34 A.L.R.2d 1136.

Validity and effect of agreement controlling the vote of corporate stock. 45 A.L.R.2d 799.

Validity of voting trust or other similar agreement for control of voting power of corporate stock. 98 A.L.R.2d 376.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Validity of voting trust created by will. 77 A.L.R.4th 1194.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 956 et seq.

6B Am. Jur. Legal Forms 2d, Corporations §§ 74:1713, 74:1735 (discharge of voting trustees on termination of voting trust agreement).

CJS.

18 C.J.S., Corporations § 649.

§79-4-7.31. Voting agreements.

Two (2) or more shareholders may provide for the manner in which they will vote their shares by signing an agreement for that purpose. A voting agreement created under this section is not subject to the provisions of Section 79-4-7.30.

A voting agreement created under this section is specifically enforceable.

HISTORY: Laws, 1987, ch. 486, § 7.31, eff from and after January 1, 1988.

Cross References —

Appointment of party to voting agreement created under this section as appointment coupled with an interest, see § 79-4-22.

RESEARCH REFERENCES

ALR.

Validity and effect of agreement controlling the vote of corporate stock. 45 A.L.R.2d 799.

Right, as between pledgor and pledgee, to vote pledged stock. 68 A.L.R.3d 680.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 944 et seq.

6B Am. Jur. Legal Forms 2d, Corporations § 74:1735 (discharge of voting trustees on termination of voting trust agreement).

CJS.

18 C.J.S., Corporations § 648.

Law Reviews.

Kruger, Corporate pooling agreements and restriction-of-directors agreements. 10 Anglo-American Law Review 73, 1981.

§79-4-7.32. Certain agreements among shareholders, otherwise inconsistent with chapter, permitted; conditions.

An agreement among the shareholders of a corporation that complies with this section is effective among the shareholders and the corporation even though it is inconsistent with one or more other provisions of this chapter in that it:

  1. Eliminates the board of directors or restricts the discretion or powers of the board of directors;
  2. Governs the authorization or making of distributions whether or not in proportion to ownership of shares, subject to the limitations in Section 79-4-6.40;
  3. Establishes who shall be directors or officers of the corporation, or their terms of office or manner of selection or removal;
  4. Governs, in general or in regard to specific matters, the exercise or division of voting power by or between the shareholders and directors or by or among any of them, including use of weighted voting rights or director proxies;
  5. Establishes the terms and conditions of any agreement for the transfer or use of property or the provision of services between the corporation and any shareholder, director, officer or employee of the corporation or among any of them;
  6. Transfers to one or more shareholders or other persons all or part of the authority to exercise the corporate powers or to manage the business and affairs of the corporation, including the resolution of any issue about which there exists a deadlock among directors or shareholders;
  7. Requires dissolution of the corporation at the request of one or more of the shareholders or upon the occurrence of a specified event or contingency; or
  8. Otherwise governs the exercise of the corporate powers or the management of the business and affairs of the corporation or the relationship among the shareholders, the directors and the corporation, or among any of them, and is not contrary to public policy.

An agreement authorized by this section shall be:

Set forth (A) in the articles of incorporation or bylaws and approved by all persons who are shareholders at the time of the agreement, or (B) in a written agreement that is signed by all persons who are shareholders at the time of the agreement and is made known to the corporation;

Subject to amendment only by all persons who are shareholders at the time of the amendment, unless the agreement provides otherwise; and

Valid for ten (10) years, unless the agreement provides otherwise.

The existence of an agreement authorized by this section shall be noted conspicuously on the front or back of each certificate for outstanding shares or on the information statement required by Section 79-4-6.26(b). If at the time of the agreement the corporation has shares outstanding represented by certificates, the corporation shall recall the outstanding certificates and issue substitute certificates that comply with this subsection. The failure to note the existence of the agreement on the certificate or information statement shall not affect the validity of the agreement or any action taken pursuant to it. Any purchaser of shares who, at the time of purchase, did not have knowledge of the existence of the agreement shall be entitled to rescission of the purchase. A purchaser shall be deemed to have knowledge of the existence of the agreement if its existence is noted on the certificate or information statement for the shares in compliance with this subsection (c) and, if the shares are not represented by a certificate, the information statement is delivered to the purchaser at or prior to the time of purchase of the shares. An action to enforce the right of rescission authorized by this subsection (c) must be commenced within the earlier of ninety (90) days after discovery of the existence of the agreement or two (2) years after the time of purchase of the shares.

An agreement authorized by this section shall cease to be effective when the corporation becomes a public corporation. If the agreement ceases to be effective for any reason, the board of directors may, if the agreement is contained or referred to in the corporation’s articles of incorporation or bylaws, adopt an amendment to the articles of incorporation or bylaws, without shareholder action, to delete the agreement and any references to it.

An agreement authorized by this section that limits the discretion or powers of the board of directors shall relieve the directors of, and impose upon the person or persons in whom such discretion or powers are vested, liability for acts or omissions imposed by law on directors to the extent that the discretion or powers of the directors are limited by the agreement.

The existence or performance of an agreement authorized by this section shall not be a ground for imposing personal liability on any shareholder for the acts or debts of the corporation even if the agreement or its performance treats the corporation as if it were a partnership or results in failure to observe the corporate formalities otherwise applicable to the matters governed by the agreement.

Incorporators or subscribers for shares may act as shareholders with respect to an agreement authorized by this section if no shares have been issued when the agreement is made.

HISTORY: Laws, 1993, ch. 368, § 1; Laws, 1994, ch. 417, § 2; Laws, 2006, ch. 429, § 3, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment substituted “chapter” for “act” following provisions of this” in (a); and substituted “when the corporation becomes a public corporation” for “when shares of the corporation are listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association” in (d).

Cross References —

Requirement for and duties of Board of Directors, generally, see § 79-4-8.01.

RESEARCH REFERENCES

Am. Jur.

18-19 Am. Jur. 2d, Corporations §§ 1 et seq.

CJS.

18-19 C.J.S., Corporations §§ 1 et seq.

Subarticle D. Derivative Procedures.

§79-4-7.40. Meaning of “derivative proceeding”, “shareholder” in subarticle.

In Sections 79-4-7.41 through 79-4-7.47:

  1. “Derivative proceeding” means a civil suit in the right of a domestic corporation or, to the extent provided in Section 79-4-7.47, in the right of a foreign corporation.
  2. “Shareholder” includes a beneficial owner whose shares are held in a voting trust or held by a nominee on the beneficial owner’s behalf.

HISTORY: Laws, 1987, ch. 486, § 7.40; Laws, 1993, ch. 368, § 3, eff from and after July 1, 1993.

RESEARCH REFERENCES

ALR.

Allowance of punitive damages in stockholder’s derivative action. 67 A.L.R.3d 350.

Right of corporation to discharge employee who asserts right as stockholder. 84 A.L.R.3d 1107.

Negligence, nonfeasance, or ratification of wrongdoing as excusing demand on directors as prerequisite to bringing of stockholder’s derivative suit on behalf of corporation. 99 A.L.R.3d 1034.

Propriety of termination of properly initiated derivative action by “independent committee” appointed by board of directors whose actions (or inaction) are under attack. 22 A.L.R.4th 1206.

Construction, as to terms and conditions, of state statute or rule providing for voluntary dismissal without prejudice upon such terms and conditions as state court deems proper. 34 A.L.R.4th 778.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

Notice to shareholders and court approval of dismissal or compromise of derivative actions, under Rule 23.1 of Federal Rules of Civil Procedure.26 A.L.R. Fed. 465.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 1934, 1935 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 161 et seq., 191 et seq., 201 et seq., 221 et seq., 354, 441.

11A Am. Jur. Pl & Pr Forms (Rev), Federal Practice and Procedure, Forms 2051 et seq.

CJS.

18 C.J.S., Corporations §§ 612-627.

Law Reviews.

DuBose, Whose corporation is it, anyway? Abolishing the futility exception in derivative litigation. 12 Miss. C. L. Rev. 197, Fall, 1991.

JUDICIAL DECISIONS

I. Under Current Law.

1. Derivative claim versus individual recovery.

2.-10. [Reserved for future use.]

II. Under Former §79-3-93.

11. In general.

I. Under Current Law.

1. Derivative claim versus individual recovery.

Chancellor erred by failing to transfer a dispute over contractual obligations to a circuit court because a former member did not bring most of the claims derivatively under Miss. Code Ann. § 79-4-7.40 since he was seeking a personal recovery, and the proper procedures were not followed; moreover, the parties would have been deprived of the right to a jury trial if transfer was not obtained. ERA Franchise Sys. v. Mathis, 931 So. 2d 1278, 2006 Miss. LEXIS 337 (Miss. 2006).

2.-10. [Reserved for future use.]

II. Under Former § 79-3-93.

11. In general.

In an action by a savings and loan association against a former vice-president and members of the board of directors for $26 million dollars in damages for alleged breach of fiduciary duty in the management of the association, the trial court properly rejected the defendants’ contention that the suit was barred due to the acquisition of the association by a successor corporation where the written bill of sale and assignment had the effect of transferring and assigning unto the successor corporation all properties, assets and choses in action of every kind and nature, including the present action. Liberty Sav. & Loan Asso. v. Mitchell, 398 So. 2d 208, 1981 Miss. LEXIS 2003 (Miss. 1981).

§79-4-7.41. Who may commence or maintain derivative proceeding.

A shareholder may not commence or maintain a derivative proceeding unless the shareholder:

  1. Was a shareholder of the corporation at the time of the act or omission complained of or became a shareholder through transfer by operation of law from one who was a shareholder at that time; and
  2. Fairly and adequately represents the interests of the corporation in enforcing the right of the corporation.

HISTORY: Laws, 1993, ch. 368, § 4, eff from and after July 1, 1993.

Cross References —

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

JUDICIAL DECISIONS

1. Standing.

Son lacked standing to bring suit on behalf of closely held corporations because the injury for which he sought relief pertained to the corporations only; the son’s objection to the closing of the decedent’s estate was a shareholder derivative claim because the son was seeking solely to enforce a putative corporate right, and the son failed to satisfy the statutory conditions required of shareholder derivative actions. Ware v. Ware (In re Estate of Ware), 238 So.3d 613, 2018 Miss. LEXIS 86 (Miss. 2018).

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2007 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 161 et seq. (complaints and other forms, shareholders’ derivative actions).

§79-4-7.42. Prerequisites to commencing derivative proceeding.

No shareholder may commence a derivative proceeding until:

  1. A written demand has been made upon the corporation to take suitable action; and
  2. Ninety (90) days have expired from the date delivery of the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation or unless irreparable injury to the corporation would result by waiting for the expiration of the ninety-day period.

HISTORY: Laws, 1993, ch. 368, § 5; Laws, 2012, ch. 481, § 13, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added “delivery of” preceding “the demand was made unless the shareholder” in (2).

Cross References —

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

RESEARCH REFERENCES

ALR.

Negligence, nonfeasance, or ratification of wrongdoing as excusing demand on directors as prerequisite to bringing of stockholder’s derivative suit on behalf of corporation. 99 A.L.R.3d 1034.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 1959 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 161 et seq. (complaints and other forms, shareholders’ derivative actions).

JUDICIAL DECISIONS

0.5.Standing. Son lacked standing to bring suit on behalf of closely held corporations because the injury for which he sought relief pertained to the corporations only; the son’s objection to the closing of the decedent’s estate was a shareholder derivative claim because the son was seeking solely to enforce a putative corporate right, and the son failed to satisfy the statutory conditions required of shareholder derivative actions. Ware v. Ware (In re Estate of Ware), 238 So.3d 613, 2018 Miss. LEXIS 86 (Miss. 2018).

1. No futility exception.

2. Suit demand not required.

3. Standing.

1. No futility exception.

Miss. Code Ann. § 79-4-7.42 is unambiguous and does not contain an exception for futility. Speetjens v. Malaco Inc., 929 So. 2d 303, 2006 Miss. LEXIS 269 (Miss. 2006).

Shareholders alleged that a corporation’s directors breached their fiduciary duties, usurped corporate opportunities, and awarded themselves excessive salaries and extravagant bonuses; their derivative suit against the corporation and directors was properly dismissed because, before filing suit, they failed to make a written demand on the corporation to take suitable action, as required by Miss. Code Ann. § 79-4-7.42, and that statute did not contain an exception for futility. Speetjens v. Malaco Inc., 929 So. 2d 303, 2006 Miss. LEXIS 269 (Miss. 2006).

2. Suit demand not required.

Sister had standing to assert corporate claims because (1) the subject corporations were closely held, (2) the sister’s accounting and dissolution claims were direct actions, and (3) the sister’s fiduciary breach claims were properly considered as direct actions, since no creditors were prejudiced, there was no risk of multiple suits, and the claims did not interfere with the fair distribution of a recovery. Scafidi v. Hille, 180 So.3d 634, 2015 Miss. LEXIS 603 (Miss. 2015).

3. Standing.

Son lacked standing to bring suit on behalf of closely held corporations because the injury for which he sought relief pertained to the corporations only; the son’s objection to the closing of the decedent’s estate was a shareholder derivative claim because the son was seeking solely to enforce a putative corporate right, and the son failed to satisfy the statutory conditions required of shareholder derivative actions. Ware v. Ware (In re Estate of Ware), 238 So.3d 613, 2018 Miss. LEXIS 86 (Miss. 2018).

§79-4-7.43. Stay of proceeding when corporation inquires into allegations.

If the corporation commences an inquiry into the allegations made in the demand or complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.

HISTORY: Laws, 1993, ch. 368, § 6, eff from and after July 1, 1993.

Cross References —

This section, not foreign law, to govern matters arising hereunder in derivative proceeding involving foreign corporation, see § 79-4-7.47.

§79-4-7.44. Determination by independent directors or independent persons whether maintenance of proceeding is in best interests of corporation.

A derivative proceeding shall be dismissed by the court on motion by the corporation if one of the groups specified in subsection (b) or (f) has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the corporation.

Unless a panel is appointed pursuant to subsection (e), the determination in subsection (a) shall be made by:

  1. A majority vote of qualified directors present at a meeting of the board of directors if the qualified directors constitute a quorum; or
  2. A majority vote of a committee consisting of two (2) or more qualified directors appointed by majority vote of qualified directors present at a meeting of the board of directors, regardless of whether such qualified directors constitute a quorum.

If a derivative proceeding is commenced after a determination has been made rejecting a demand by a shareholder, the complaint shall allege with particularity facts establishing either (1) that a majority of the board of directors did not consist of qualified directors at the time the determination was made or (2) that the requirements of subsection (a) have not been met.

If a majority of the board of directors consisted of qualified directors at the time the determination was made, the plaintiff shall have the burden of proving that the requirements of subsection (a) have not been met; if not, the corporation shall have the burden of proving that the requirements of subsection (a) have been met.

Upon motion by the corporation, the court may appoint a panel of one or more individuals to make a determination whether the maintenance of the derivative proceeding is in the best interests of the corporation. In such case, the plaintiff shall have the burden of proving that the requirements of subsection (a) have not been met.

HISTORY: Laws, 1993, ch. 368, § 7; Laws, 2006, ch. 429, § 4, eff from and after July 1, 2006.

Editor’s Notes —

In subsection (a) there is a reference to “subsection (b) or (f)” although there is no subsection (f) in this section. The section is set out above as enacted by Section 8 of Chapter 368, Laws of 1993.

Amendment Notes —

The 2006 amendment substituted “qualified directors” for “independent directors” throughout the section; substituted “regardless of whether such qualified directors constitute a quorum” for “whether or not such independent directors constituted a quorum” in (b)(2); repealed former (c), which read: “(c) None of the following shall by itself cause a director to be considered not independent for purposes of this section: (1) The nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded; (2) The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded; or (3) The approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.”; redesignated former (d) through (f) as (c) through (e); rewrote (d); in the first sentence in (e), added “Upon motion by the corporation” at the beginning, and substituted “appoint a panel of one or more individuals” for “appoint a panel of one or more independent persons upon motion by the corporation”; and made minor stylistic changes.

Cross References —

Qualified director defined, see § 79-4-1.43.

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

RESEARCH REFERENCES

ALR.

Propriety of termination of properly initiated derivative action by “independent committee” appointed by board of directors whose actions (or inaction) are under attack. 22 A.L.R.4th 1206.

JUDICIAL DECISIONS

1. Burden of proof.

2. Special committee.

1. Burden of proof.

Plaintiff bears the burden, pursuant to Miss. Code Ann. § 79-4-7.44(d), of establishing, pursuant to § 79-4-7.44(a), that a special committee’s determination that the maintenance of the derivative proceeding was not in the best interests of the corporation was not made in good faith after it conducted a reasonable inquiry upon which its conclusions were based. If the plaintiff fails to demonstrate lack of good faith after a reasonable inquiry upon which the special committee’s conclusions were based, then the derivative proceeding must be dismissed. Burgess v. Patterson, 188 So.3d 537, 2016 Miss. LEXIS 154 (Miss. 2016).

Plaintiff failed to demonstrate that a special committee’s decision that the maintenance of the derivative suit was not in the best interests of the corporation was not made in good faith after it had conducted a reasonable inquiry. Therefore, the circuit court was not in error for granting dismissal to the corporation Burgess v. Patterson, 188 So.3d 537, 2016 Miss. LEXIS 154 (Miss. 2016).

2. Special committee.

Because plaintiff did not allege with particularity facts establishing that the members of a special committee were not qualified, dismissal of plaintiff’s derivative action was appropriate. Burgess v. Patterson, 188 So.3d 537, 2016 Miss. LEXIS 154 (Miss. 2016).

§79-4-7.45. Court approval for settlement or discontinuance.

A derivative proceeding may not be discontinued or settled without the court’s approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the corporation’s shareholders or a class of shareholders, the court shall direct that notice be given to the shareholders affected.

HISTORY: Laws, 1993, ch. 368, § 8, eff from and after July 1, 1993.

Cross References —

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

This section, not foreign law, to govern matters arising hereunder in derivative proceeding involving foreign corporation, see § 79-4-7.47.

RESEARCH REFERENCES

ALR.

Notice to shareholders and court approval of dismissal or compromise of derivative actions, under Rule 23.1 of Federal Rules of Civil Procedure.26 A.L.R. Fed. 465.

Am. Jur.

19 Am. Jur. 2d, Corporations § 2127.

§79-4-7.46. Expenses and attorney fees.

On termination of the derivative proceeding the court may:

  1. Order the corporation to pay the plaintiff’s reasonable expenses (including attorney fees) incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the corporation; or
  2. Order the plaintiff to pay any defendant’s reasonable expenses (including attorney fees) incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.

HISTORY: Laws, 1993, ch. 368, § 9, eff from and after July 1, 1993.

Cross References —

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

This section, not foreign law, to govern matters arising hereunder in derivative proceeding involving foreign corporation, see § 79-4-7.47.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2147 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 221 et seq. (petition, notice, motion, affidavit and order, for attorney’s fees).

JUDICIAL DECISIONS

1. In general.

Although a shareholder may bring suit against other shareholders in the name of the corporation, there is no authority whereby the suit can be prosecuted at the cost of the corporation unless the action is successful. Wyssbrod v. Wittjen, 798 So. 2d 352, 2001 Miss. LEXIS 23 (Miss. 2001).

The statute does not provide authority to order an attorney to disgorge corporate funds improperly paid as attorney’s fees. Wyssbrod v. Wittjen, 798 So. 2d 352, 2001 Miss. LEXIS 23 (Miss. 2001).

§79-4-7.47. Law applicable in derivative proceedings involving foreign corporations.

In any derivative proceeding in the right of a foreign corporation, the matters covered by this subchapter shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation except for Sections 79-4-7.43, 79-4-7.45 and 79-4-7.46.

HISTORY: Laws, 1993, ch. 368, § 10, eff from and after July 1, 1993.

Cross References —

Derivative proceeding defined for purposes of this subarticle, see § 79-4-7.40.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2052.

§79-4-7.48. Shareholder action to appoint custodian or receiver.

The chancery court of the county where a corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may appoint one or more persons to be custodians, or, if the corporation is insolvent, to be receivers, of and for a corporation in a proceeding by a shareholder where it is established that:

  1. The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered; or
  2. The directors or those in control of the corporation are acting fraudulently and irreparable injury to the corporation is threatened or being suffered.
  3. Has jurisdiction over the corporation and all of its property, wherever located.

The court:

May issue injunctions, appoint a temporary custodian or temporary receiver with all the powers and duties the court directs, take other action to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing is held;

Shall hold a full hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a custodian or receiver; and

The court may appoint an individual or domestic or foreign corporation (authorized to transact business in this state) as a custodian or receiver and may require the custodian or receiver to post bond, with or without sureties, in an amount the court directs.

The court shall describe the powers and duties of the custodian or receiver in its appointing order, which may be amended from time to time. Among other powers,

A custodian may exercise all of the powers of the corporation, through or in place of its board of directors, to the extent necessary to manage the business and affairs of the corporation; and

A receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; and (ii) may sue and defend in the receiver’s own name as receiver in all courts of this state.

The court during a custodianship may redesignate the custodian a receiver, and during a receivership may redesignate the receiver a custodian, if doing so is in the best interests of the corporation.

The court from time to time during the custodianship or receivership may order compensation paid and expense disbursements or reimbursements made to the custodian or receiver from the assets of the corporation or proceeds from the sale of its assets.

HISTORY: Laws, 2007, ch. 361, § 7; Laws, 2012, ch. 382, § 29, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (a).

Article 8. Directors and Officers.

Subarticle A. Board of Directors.

§79-4-8.01. Requirement for Board of Directors; exception; duties of Board.

Except as provided in Section 79-4-7.32, each corporation must have a board of directors.

All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under Section 79-4-7.32.

HISTORY: Laws, 1987, ch. 486, § 8.01; Laws, 1988, ch. 368, § 7; Laws, 1993, ch. 368, § 2; Laws, 2001, ch. 435, § 6; Laws, 2012, ch. 481, § 14, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2001 amendment inserted “by or” following “managed” in (b).

The 2012 amendment, effective January 1, 2013, in (b), inserted “the board of directors of the corporation” preceding “and the business and affairs of the corporation”, inserted “shall be” thereafter, and “and subject to the oversight” preceding “of its board of directors.”

Cross References —

Authority of committees to exercise authority of board of directors under this section, see § 79-4-8.25.

Voluntary dissolution of corporation by board of directors and shareholders, see § 79-4-14.02.

Revocation of dissolution, see § 79-4-14.04.

Deadlock among shareholders in electing directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Director of corporation entitled to inspect and copy the books, records and documents of the corporation, see § 79-4-16.05.

Requirement for and duties of board of directors under Mississippi Nonprofit Corporation Act, see § 79-11-231.

RESEARCH REFERENCES

ALR.

Provision authorizing directors to fill vacancies as applicable to newly created directorships. 6 A.L.R.2d 174.

Purchase of claims against corporation by officer or director thereof. 13 A.L.R.2d 1172.

Corporation as necessary or proper party defendant in proceedings to determine validity of election or appointment of corporate director or officer. 21 A.L.R.2d 1048.

Validity of security for contemporaneous loan to corporation by officer, director, or stockholder. 31 A.L.R.2d 663.

Validity of contract between corporations as affected by directors or officers in common. 33 A.L.R.2d 1060.

Statute of frauds: promise by stockholder, officer, or director to pay debt of corporation. 35 A.L.R.2d 906.

Allowance, as taxable costs, of witness fees and mileage of stockholders, directors, officers, and employees of corporate litigant. 57 A.L.R.2d 1243.

Personal liability of one who signs or indorses without qualification commercial paper of corporation. 82 A.L.R.2d 424.

Construction and effect of corporate bylaws or articles relating to change in number of directors. 3 A.L.R.3d 623.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Validity of agreement, in conjunction with sale of corporate shares that majority of directors will be replaced by purchaser’s designees. 13 A.L.R.3d 361.

Liability of corporate directors for negligence in permitting mismanagement or defalcations by officers or employees. 25 A.L.R.3d 941.

Liability of corporate directors or officers for negligence in permitting conversion of property of third persons by corporation. 29 A.L.R.3d 660.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

Liability of corporate officer or director for commission or compensation received from third person in connection with that person’s transaction with corporation. 47 A.L.R.3d 373.

Who has possession, custody, or control of corporate books or records for purposes of order to produce. 47 A.L.R.3d 676.

Personal liability of officers or directors or corporation on corporate checks issued against insufficient funds. 47 A.L.R.3d 1250.

Insurance: construction of policy or bond indemnifying directors or officers of corporations for expenses incurred in defending actions brought against them in their capacity as such. 49 A.L.R.3d 1250.

Test in stockholders’ actions as to reasonableness of compensation of corporate officers who as directors determine own compensation. 53 A.L.R.3d 358.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 A.L.R.4th 492.

Time for bringing suit to recover insider short-swing profits under sec. 16(b) of the Securities Exchange Act of 1934 ( 15 USCS sec. 78p(b)). 67 A.L.R. Fed. 849.

Proper measure and elements of recovery for insider short-swing transaction. 86 A.L.R. Fed. 16.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1166 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1051 et seq., 74:1353 et seq.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations §§ 822 et seq.

Law Reviews.

Transactions between a corporation and its directors: Where does Mississippi stand? 52 Miss. L. J. 877, December, 1982.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2. Dealing by director in own stock.

3.-10. [Reserved for future use.]

II. Under Former §79-3-67.

11. In general.

I. Under Current Law.

1. In general.

In a close corporation where a majority stockholder stands to benefit as a controlling stockholder, the majority’s action must be “intrinsically fair” to the minority interest. Thus, stockholders in close corporations must bear towards each other the same relationship of trust and confidence which prevails in partnerships, rather than resort to statutory defenses. This does not mean that directors, executive officers and stockholders are not required to adhere to the corporate statutes; rather, blind adherence to corporate statutes may not be used to circumvent the corporation’s by-laws, charter or various agreements, such as a stock redemption agreement, because of the “intrinsically fair” standard that is now adopted. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

2. Dealing by director in own stock.

Generally, a director violates no duty by dealing in his or her own stock on his or her own account. This rule is not applicable, however, when there is a showing that a closely-held corporation has a practice of purchasing its own stock, or that it ever contemplated doing so, as evidenced by a stock redemption agreement, in order to maintain proportionate control of the corporation. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

3.-10. [Reserved for future use.]

II. Under Former § 79-3-67.

11. In general.

The management of a corporation is vested in its board of directors and not the stockholders. Harper v. Harper, 491 So. 2d 189, 1986 Miss. LEXIS 2508 (Miss. 1986).

If owners of stock in a restaurant were also directors of the corporation, they may have had the power to obtain a loss payable clause in an insurance policy on the restaurant, such clause naming them as payees of insurance proceeds to the extent of the amount of their actual interest in the restaurant. Cherokee Ins. Co. v. Koenenn, 536 F.2d 585, 1976 U.S. App. LEXIS 7720 (5th Cir. Miss. 1976).

A director of a corporation occupies a fiduciary position toward creditors, having a better knowledge of the condition of the company than have other creditors, and should not be permitted to use that position to benefit himself at their expense or to grant himself preferences or advantages in the payment of his claims over other creditors. Cooper v. Mississippi Land Co., 220 So. 2d 302, 1969 Miss. LEXIS 1451 (Miss. 1969).

§79-4-8.02. Qualifications of directors.

The articles of incorporation or bylaws may prescribe qualifications for directors. A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe.

HISTORY: Laws, 1987, ch. 486, § 8.02; Laws, 1988, ch. 368, § 8, eff from and after passage (approved April 18, 1988).

Cross References —

Qualifications of directors under Mississippi Nonprofit Corporation Act, see § 79-11-231.

RESEARCH REFERENCES

ALR.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1176 et seq.

6AAm. Jur. Legal Forms 2d, Corporations §§ 74:1055 et seq.

§79-4-8.03. Number and election of directors.

A board of directors must consist of one or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.

The number of directors may be increased or decreased, from time to time, by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.

Directors are elected at the first annual shareholders’ meeting and at each annual meeting thereafter unless their terms are staggered under Section 79-4-8.06.

HISTORY: Laws, 1987, ch. 486, § 8.03; Laws, 2001, ch. 435, § 7, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment rewrote (b); deleted former (c); and redesignated former (d) as present (c).

Cross References —

Number and election of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-235, 79-11-237.

RESEARCH REFERENCES

ALR.

Corporation as necessary or proper party defendant in proceedings to determine validity of election or appointment of corporate director or officer. 21 A.L.R.2d 1048.

Construction, application, and effect of constitutional provisions or statutes relating to cumulative voting of stock for corporate directors. 43 A.L.R.2d 1322.

Construction and effect of corporate bylaws or articles relating to change in number of directors. 3 A.L.R.3d 623.

Validity of agreement in conjunction with sale of corporate shares that majority of directors will be replaced by purchaser’s designees. 13 A.L.R.3d 361.

Corporations: casting ballots after closing of polls. 41 A.L.R.3d 234.

Corporations: power of inspectors of election relating to irregular or conflicting proxies. 44 A.L.R.3d 1443.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1174, 1175, 1183 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1051-74:1053, 74:1353-74:1354, 74:1357-74:1361.

CJS.

19 C.J.S., Corporations §§ 797 et seq.

§79-4-8.04. Election of directors by authorized classes of shares.

If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one or more authorized classes of shares. Each class (or classes) of shares entitled to elect one or more directors is a separate voting group for purposes of the election of directors.

HISTORY: Laws, 1988, ch. 368, § 12, eff from and after passage (approved April 18, 1988).

Cross References —

Authorizing shares generally, see § 79-4-6.01.

Election of directors generally, see § 79-4-8.03.

Number and election of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-235, 79-11-237.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1184, 1185, 1187 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1015-74:1018, 74:1061.

§79-4-8.05. Terms of directors generally.

The terms of the initial directors of a corporation expire at the first shareholders’ meeting at which directors are elected.

The terms of all other directors expire at the next, or if their terms are staggered in accordance with Section 79-4-8.06, at the applicable second or third, annual shareholders’ meeting following their election.

A decrease in the number of directors does not shorten an incumbent director’s term.

The term of a director elected to fill a vacancy expires at the next shareholders’ meeting at which directors are elected.

Despite the expiration of a director’s term, he continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors.

HISTORY: Laws, 1987, ch. 486, § 8.05; Laws, 2012, ch. 481, § 15, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (b).

Cross References —

Vacancy on board generally, see § 79-4-8.10.

Terms of office of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-239, 79-11-241.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1212-1217.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1064, 74:1065.

CJS.

19 C.J.S., Corporations §§ 811-814.

§79-4-8.06. Staggered terms for directors.

The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two (2) or three (3) groups, with each group containing one-half (1/2) or one-third (1/3) of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders’ meeting after their election, the terms of the second group expire at the second annual shareholders’ meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders’ meeting after their election. At each annual shareholders’ meeting held thereafter, directors shall be chosen for a term of two (2) years or three (3) years, as the case may be, to succeed those whose terms expire.

HISTORY: Laws, 1987, ch. 486, § 8.06; Laws, 2001, ch. 435, § 8; Laws, 2012, ch. 481, § 16, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2001 amendment deleted “If there are nine (9) or more directors” at the beginning, and substituted “the terms of directors” for “their terms” following “staggering.”

The 2012 amendment, effective January 1, 2013, added “practicable” at the end of the first sentence.

Cross References —

Election of directors whose terms of office are not staggered pursuant to this section, see § 79-4-8.03.

Terms of directors whose terms of office are not staggered pursuant to this section, see § 79-4-8.05.

Terms of office of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-239, 79-11-241.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1215, 1216.

§79-4-8.07. Resignation of directors.

A director may resign at any time by delivering written notice to the board of directors, or its chair or to the secretary of the corporation.

A resignation is effective when the notice is delivered unless the notice specifies a later effective date.

HISTORY: Laws, 1987, ch. 486, § 8.07; Laws, 2012, ch. 481, § 17, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “or its chair or to the secretary of the corporation” for “its chairmen or to the corporation” at the end of (a).

Cross References —

Term of director elected to fill vacancy, see § 79-4-8.05.

Authority to fill vacancy that will occur at specified later date before vacancy occurs, see § 79-4-8.10.

Resignation of director under Mississippi Nonprofit Corporation Act, see § 79-11-243.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1233-1240.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1070, 74:1380-74:1386.

CJS.

19 C.J.S., Corporations § 815.

§79-4-8.08. Removal of directors by shareholders.

The shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.

If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove him.

If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect him under cumulative voting is voted against his removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove him exceeds the number of votes cast not to remove him.

A director may be removed by the shareholders only at a meeting called for the purpose of removing him and the meeting notice must state that the purpose, or one (1) of the purposes, of the meeting is removal of the director.

HISTORY: Laws, 1987, ch. 486, § 8.08; Laws, 1988, ch. 368, § 9, eff from and after passage (approved April 18, 1988).

Cross References —

Voting groups, see §§ 79-4-7.25, 79-4-7.26.

Cumulative voting generally, see § 79-4-7.28.

Removal of director by judicial proceeding, see § 79-4-8.09.

Removal of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-245 through 79-11-249.

RESEARCH REFERENCES

ALR.

Validity of agreement in conjunction with sale of corporate shares that majority of directors will be replaced by purchaser’s designees. 13 A.L.R.3d 361.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1247 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1071, 74:1372-74:1373.

CJS.

19 C.J.S., Corporations § 817.

Law Reviews.

Corporations. 25 SC L Rev 422.

§79-4-8.09. Removal of directors by judicial proceeding.

The chancery court of the county where a corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its shareholders holding at least ten percent (10%) of the outstanding shares of any class if the court finds that (1) the director engaged in fraudulent or dishonest conduct, or gross abuse of authority or discretion, with respect to the corporation, and (2) removal is in the best interest of the corporation.

The court that removes a director may bar the director from reelection for a period prescribed by the court.

If shareholders commence a proceeding under subsection (a), they shall make the corporation a party defendant.

HISTORY: Laws, 1987, ch. 486, § 8.09; Laws, 2012, ch. 382, § 30, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (a), deleted “(or, if none in this state, its registered office)” preceding “is located” and added “or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” thereafter.

Cross References —

Term of director elected to fill vacancy, see § 79-4-8.05.

Removal of director by shareholders, see § 79-4-8.08.

Removal of directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-245 through 79-11-249.

RESEARCH REFERENCES

ALR.

Relief other than by dissolution in cases of intracorporate deadlock or dissension. 34 A.L.R.4th 13.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1247-1253.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1371-74:1373.

CJS.

19 C.J.S., Corporations § 817.

§79-4-8.10. Vacancy on board.

Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:

  1. The shareholders may fill the vacancy;
  2. The board of directors may fill the vacancy; or
  3. If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to fill the vacancy if it is filled by the shareholders and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the director.

A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date under Section 79-4-8.07(b) or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

HISTORY: Laws, 1987, ch. 486, § 8.10; Laws, 1988, ch. 368, § 10; Laws, 2012, ch. 481, § 18, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added “and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the director” at the end of (b).

Cross References —

Voting groups, see §§ 79-4-7.25, 79-4-7.26.

Election of directors whose terms of office are not staggered, see § 79-4-8.03.

Term of director elected to fill vacancy, see § 79-4-8.05.

Staggered terms of directors, see § 79-4-8.06.

Committees created by board of directors not authorized to fill vacancies on the board of directors, see § 79-4-8.25.

Filling vacancy on board under Mississippi Nonprofit Corporation Act, see § 79-11-251.

RESEARCH REFERENCES

ALR.

Provision authorizing directors to fill vacancies as applicable to newly created directorships. 6 A.L.R.2d 174.

Am. Jur.

18B Am. Jur. 2d, Corporations § 1218.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1075-74:1077.

CJS.

19 C.J.S., Corporations § 797.

§79-4-8.11. Compensation of directors.

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors.

HISTORY: Laws, 1987, ch. 486, § 8.11, eff from and after January 1, 1988.

Cross References —

Compensation of directors under Mississippi Nonprofit Corporation Act, see § 79-11-253.

RESEARCH REFERENCES

ALR.

Reasonableness of compensation paid to officers or employees, so as to warrant deduction thereof in computing employer’s income tax. 10 A.L.R.3d 125.

Test of stockholders’ actions as to reasonableness of compensation of corporate officers who as directors determine own compensation. 53 A.L.R.3d 358.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1655 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1135-74:1138, 74:1550.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 351 et seq.

4 Am. Jur. Proof of Facts 2d 425, Reasonableness of Corporate Officer’s Compensation.

Subarticle B. Meetings and Action of the Board.

§79-4-8.20. Meetings.

The board of directors may hold regular or special meetings in or out of this state.

Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

HISTORY: Laws, 1987, ch. 486, § 8.20, eff from and after January 1, 1988.

Cross References —

Applicability of this section to committees of board of directors and their members, see § 79-4-8.25.

Deadlock among directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

ALR.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1274, 1275.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1108 et seq.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations § 826.

§79-4-8.21. Action without meeting.

Action required or permitted by Section 79-4-1.01 et seq. to be taken by the board of directors may be taken without a meeting if each director signs a consent describing the action taken and delivers it to the corporation.

Action taken under this section is the act of the board of directors when one or more consents signed by all the directors are delivered to the corporation. The consent may specify the time at which the action taken thereunder is to be effective. A consent may be withdrawn by a revocation signed by the director and received by the corporation prior to receipt by the corporation of unrevoked written consents signed by all the directors.

A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.

HISTORY: Laws, 1987, ch. 486, § 8.21; Laws, 2001, ch. 435, § 9, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment rewrote (a) and (b); and substituted “action taken at a meeting of the board of directors” for “a meeting vote” in (c).

Cross References —

Applicability of this section to committees of board of directors and their members, see § 79-4-8.25.

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

ALR.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1256-1260.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1114, 74:1117.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations § 825.

JUDICIAL DECISIONS

1. In general.

One member of the board of directors of a corporation did not have authority to hire an attorney and pay for his services from corporate funds where the record contained no documentation of a determination or resolution that an action be filed on behalf of the corporation, whether in the form of minutes from a directors’ meeting or written consents signed by the members of the board. Wyssbrod v. Wittjen, 798 So. 2d 352, 2001 Miss. LEXIS 23 (Miss. 2001).

§79-4-8.22. Notice of meeting.

Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place or purpose of the meeting.

Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least two (2) days’ notice of the date, time and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.

HISTORY: Laws, 1987, ch. 486, § 8.22, eff from and after January 1, 1988.

Cross References —

Applicability of this section to committees of board of directors and their members, see § 79-4-8.25.

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1262 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1521 et seq.

CJS.

19 C.J.S., Corporations § 827.

§79-4-8.23. Waiver of notice.

A director may waive any notice required by Sections 79-4-1.01 et seq., the articles of incorporation or bylaws before or after the date and time stated in the notice. Except as provided by subsection (b), the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.

A director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

HISTORY: Laws, 1987, ch. 486, § 8.23, eff from and after January 1, 1988.

Cross References —

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1267-1269.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1110-74:1112, 74:1122 (attendance by directors as waiver of notice of meeting), 74:1525-74:1527.

CJS.

19 C.J.S., Corporations § 827.

§79-4-8.24. Quorum and voting.

Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in this chapter, a quorum of a board of directors consists of:

  1. A majority of the fixed number of directors if the corporation has a fixed board size; or
  2. A majority of the number of directors prescribed, or if no number is prescribed, the number in office immediately before the meeting begins, if the corporation has a variable-range size board.

The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third (1/3) of the fixed or prescribed number of directors determined under subsection (a).

If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation or bylaws require the vote of a greater number of directors.

A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless: (1) the director objects at the beginning of the meeting (or promptly upon his arrival) to holding it or transacting business at the meeting; (2) the dissent or abstention from the action taken is entered in the minutes of the meeting; or (3) the director delivers written notice of the director’s dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

HISTORY: Laws, 1987, ch. 486, § 8.24; Laws, 1996, ch. 459, § 2; Laws, 2012, ch. 481, § 19, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “the director” for “he” in (d)(1) and (3); and made minor stylistic changes.

Cross References —

Applicability of this section to committees of board of directors and their members, see § 79-4-8.25.

Deadlock among directors as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

ALR.

Construction, application, and effect of constitutional provisions or statutes relating to cumulative voting of stock for corporate directors. 43 A.L.R.2d 1322.

Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 A.L.R.4th 492.

Validity, construction, and effect of provision in charter or bylaw requiring supermajority vote. 80 A.L.R.4th 667.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1278 et seq.

CJS.

19 C.J.S., Corporations §§ 801, 834, 835.

§79-4-8.25. Committees.

Unless this chapter, the articles of incorporation or the bylaws provide otherwise, a board of directors may create one or more committees and appoint one or more members of the board of directors to serve on any such committee.

Unless this chapter otherwise provides, the creation of a committee and appointment of members to it must be approved by the greater of (1) a majority of all the directors in office when the action is taken or (2) the number of directors required by the articles of incorporation or bylaws to take action under Section 79-4-8.24.

Sections 79-4-8.20 through 79-4-8.24 apply both to committees of the board and their members.

To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the powers of the board of directors under Section 79-4-8.01.

A committee may not, however:

  1. Authorize or approve distributions, except according to a formula or method or within limits prescribed by the board of directors;
  2. Approve or propose to shareholders action that Section 79-4-1.01 et seq. requires to be approved by shareholders;
  3. Fill vacancies on the board of directors, or subject to subsection (g), on any of its committees; or
  4. Adopt, amend or repeal bylaws.

The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Section 79-4-8.30.

The board of directors may appoint one or more directors as alternate members of any committee to replace any absent or disqualified member during the member’s absence or disqualification. Unless the articles of incorporation or the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member.

HISTORY: Laws, 1987, ch. 486, § 8.25; Laws, 2001, ch. 435, § 10, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment, in (a), inserted “this chapter” following “unless,” inserted “the” preceding “bylaws,” inserted “one or more” preceding “members,” and deleted the last sentence; in the first sentence of (b), inserted “Unless this chapter otherwise provides”; rewrote (c); substituted “powers” for “authority” in (d); in (e), rewrote (1) and (3), deleted former (4) and redesignated former (5) as present (4), and deleted (6), (7), and (8); and added (g).

Cross References —

Meetings and actions of the board under Mississippi Nonprofit Corporation Act, see §§ 79-11-255 through 79-11-265.

RESEARCH REFERENCES

ALR.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1310 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1100-74:1102.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations § 847.

§79-4-8.26. Submission of matters for shareholder vote.

A corporation may agree to submit a matter to a vote of its shareholders even if, after approving the matter, the board of directors determines it no longer recommends the matter.

HISTORY: Laws, 2012, ch. 481, § 20, eff from and after Jan. 1, 2013.

Subarticle C. Standards of Conduct.

§79-4-8.30. General standards for directors.

Each member of the board of directors, when discharging the duties of a director, shall act:

  1. In good faith, and
  2. In a manner the director reasonably believes to be in the best interests of the corporation.
  3. A committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
  4. The long-term as well as short-term interests of the corporation and its shareholders, including the possibility that these interests may be best served by the continued independence of the corporation.

The members of the board of directors or a committee of the board, when becoming informed in connection with their decision-making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.

In discharging board or committee duties a director, who does not have knowledge that makes reliance unwarranted, is entitled to rely on the performance by any of the persons specified in subsection (e)(1) or subsection (e)(3) to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one or more of the board’s functions that are delegable under applicable law.

In discharging board or committee duties a director, who does not have knowledge that makes reliance unwarranted, is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (e).

A director is entitled to rely, in accordance with subsection (c) or (d), on:

One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports or statements provided;

Legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters (i) within the particular person’s professional or expert competence or (ii) as to which the particular person merits confidence; or

For purposes of this section, a director, in determining what he reasonably believes to be in the best interests of the corporation, shall consider the interests of the corporation’s shareholders and, in his discretion, may consider any of the following:

The interests of the corporation’s employees, suppliers, creditors and customers;

The economy of the state and nation;

Community and societal considerations;

HISTORY: Laws, 1987, ch. 486, § 8.30; Laws, 1990, ch. 538, § 5; Laws, 1999, ch. 471, § 1, eff from and after July 1, 1999.

Amendment Notes —

The 1999 amendment rewrote the section.

Cross References —

Creation of, delegation of authority to, or action by a committee as not constituting compliance by director with standards of conduct described in § 79-4-8.30, see § 79-4-8.25.

Liability of director who votes for or assents to unlawful distribution without complying with applicable standards of conduct described in § 79-4-8.30, see § 79-4-8.33.

Provisions governing directors’ conflicts of interest, see § 79-4-8.60 through 79-4-8.63.

Dissolution of corporation as not subjecting corporation’s directors and officers to standards of conduct different from those prescribed in this article, see § 79-4-14.05.

Misapplication or waste of corporate assets as ground for judicial dissolution of corporation, see § 79-4-14.30.

Directors acting in manner that is illegal, oppressive or fraudulent as grounds for judicial dissolution of corporation, see § 79-4-14.30.

General standards for directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-267 through 79-11-270.

RESEARCH REFERENCES

ALR.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Liability of corporate directors for negligence in permitting mismanagement or defalcation by officers or employees. 25 A.L.R.3d 941.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

What business opportunities are in “line of business” of corporation for purposes of determining whether a corporate opportunity was presented. 77 A.L.R.3d 961.

Duty to disclose material facts to stock purchaser. 80 A.L.R.3d 13.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 A.L.R.4th 492.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1455 et seq.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations §§ 848 et seq.

Law Reviews.

Smith, Recognition of the fiduciary duties of corporate directors and officers defending against change of control by tender offer. 7 Miss. C. L. Rev. 117, Spring, 1987.

Transactions between a corporation and its directors: Where does Mississippi stand? 52 Miss L. J. 877, December, 1982.

Robertson, The Law of Corporate Governance: Coming of Age in Mississippi? 65 Miss. L. J. 477.

JUDICIAL DECISIONS

1. In general.

2. Dealing by director in own stock.

1. In general.

In a close corporation where a majority stockholder stands to benefit as a controlling stockholder, the majority’s action must be “intrinsically fair” to the minority interest. Thus, stockholders in close corporations must bear towards each other the same relationship of trust and confidence which prevails in partnerships, rather than resort to statutory defenses. This does not mean that directors, executive officers and stockholders are not required to adhere to the corporate statutes; rather, blind adherence to corporate statutes may not be used to circumvent the corporation’s by-laws, charter or various agreements, such as a stock redemption agreement, because of the “intrinsically fair” standard that is now adopted. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

2. Dealing by director in own stock.

Generally, a director violates no duty by dealing in his or her own stock on his or her own account. This rule is not applicable, however, when there is a showing that a closely held corporation has a practice of purchasing its own stock, or that it ever contemplated doing so, as evidenced by a stock redemption agreement, in order to maintain proportionate control of the corporation. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

§79-4-8.31. Standards of liability for directors.

A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as a director, unless the party asserting liability in a proceeding establishes that:

  1. No defense by the director based on (i) any provision in the articles of incorporation authorized by Section 79-4-2.02(b)(4) or the protection afforded by Section 79-4-8.61 for action taken in compliance with Section 79-4-8.62 or 79-4-8.63, or (ii) the protection afforded by Section 79-4-8.70, precludes liability; and
  2. The challenged conduct consisted or was the result of:
  3. For other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever persuasion burden may be called for to establish that the equitable remedy sought is appropriate in the circumstances.

Action not in good faith; or

A decision:

Which the director did not reasonably believe to be in the best interests of the corporation; or

As to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances; or

A lack of objectivity due to the director’s familial, financial or business relationship with, or a lack of independence due to the director’s domination or control by, another person having a material interest in the challenged conduct:

Which relationship or which domination or control could reasonably be expected to have affected the director’s judgment respecting the challenged conduct in a manner adverse to the corporation; and

After a reasonable expectation to such effect has been established, the director shall not have established that the challenged conduct was reasonably believed by the director to be in the best interests of the corporation; or

A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation, or a failure to devote timely attention, by making (or causing to be made) appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefor; or

Receipt of a financial benefit to which the director was not entitled or any other breach of the director’s duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.

The party seeking to hold the director liable:

For money damages, shall also have the burden of establishing that:

Harm to the corporation or its shareholders has been suffered; and

The harm suffered was proximately caused by the director’s challenged conduct; or

For other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever persuasion burden may be called for to establish that the payment sought is appropriate in the circumstances; or

Nothing contained in this section shall (1) in any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under Section 79-4-8.61(b)(3), alter the burden of proving the fact or lack of fairness otherwise applicable, (2) alter the fact or lack of liability of a director under another section of this act, such as the provisions governing the consequences of an unlawful distribution under Section 79-4-8.33 or a transactional interest under Section 79-4-8.61, or (3) affect any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States.

HISTORY: Laws, 1999, ch. 471, § 2; Laws, 2012, ch. 481, § 21, eff from and after Jan. 1, 2013.

Editor’s Notes —

A prior § 79-4-8.31 [Laws, 1987, ch. 486, § 8.31, eff from and after January 1, 1988] was repealed by Laws, 1990, ch. 538, § 10, eff from and after July 1, 1990. That section pertained to director’s conflicts of interests. For provisions governing directors’ conflicts of interest, see §§ 79-4-8.60 through 79-4-8.63.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (a)(1), added “No defense by the director based on (i)” to the beginning and substituted “or (ii) the protection afforded by Section 79-4-8.70, precludes” for “if interposed as a bar to the proceeding by the director, does not preclude” at the end; and rewrote (a)(2)(iv).

Cross References —

Limit on liability of directors for acts or omissions imposed by law, see § 79-4-7.32.

General standards for directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-267 through 79-11-270.

§79-4-8.33. Liability for unlawful distributions.

A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to Section 79-4-6.40(a) or 79-4-14.09(a) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 79-4-6.40(a) or 79-4-14.09(a) if the party asserting liability establishes that when taking the action the director did not comply with Section 79-4-8.30.

A director held liable under subsection (a) for an unlawful distribution is entitled to:

  1. Contribution from every other director who could be held liable under subsection (a) for the unlawful distribution; and
  2. Recoupment from each shareholder of the pro rata portion of the amount of the unlawful distribution the shareholder accepted, knowing the distribution was made in violation of Section 79-4-6.40(a) or 79-4-14.09(a).

A proceeding to enforce:

The liability of a director under subsection (a) is barred unless it is commenced within two (2) years after the date (i) on which the effect of the distribution was measured under Section 79-4-6.40(e) or (g); (ii) as of which the violation of Section 79-4-6.40(a) occurred as the consequence of disregard of a restriction in the articles of incorporation; or (iii) on which the distribution of assets to shareholders under Section 79-4-14.09(a) was made; or

Contribution or recoupment under subsection (b) is barred unless it is commenced within one (1) year after the liability of the claimant has been finally adjudicated under subsection (a).

HISTORY: Laws, 1987, ch. 486, § 8.33; Laws, 1988, ch. 369, § 4; Laws, 1999, ch. 471, § 3; Laws, 2001, ch. 435, § 11, eff from and after July 1, 2001.

Amendment Notes —

The 1999 amendment rewrote the section.

The 2001 amendment inserted “or 79-4-14.09(a)” following “Section 79-4-6.40(a)” twice in (a) and once in (b)(2); and in (c)(1), inserted “(i)” following “after the date” and “(ii)” following “or (g),” and added the language following “or (iii).”

Cross References —

Liability for unlawful distributions under this section excepted from requirment that articles of incorporation set forth a provision eliminating or limiting liability of director or shareholders for money damages and a provision permitting or making obligatory indemnification of director for liability as defined in § 79-4-8.50(4), see § 79-4-2.02.

Directors acting in manner that is illegal, oppressive or fraudulent as grounds for judicial dissolution of corporation, see § 79-4-14.30.

Misapplication or waste of corporate assets as ground for judicial dissolution of corporation, see § 79-4-14.30.

Payment of claims and distribution of assets of dissolved corporations, see § 79-4-14.09.

General standards for directors under Mississippi Nonprofit Corporation Act, see §§ 79-11-267 through 79-11-270.

RESEARCH REFERENCES

ALR.

Personal liability of one who signs or indorses without qualification commercial paper of corporation. 82 A.L.R.2d 424.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Liability of corporate directors for negligence in permitting mismanagement or defalcation by officers or employees. 25 A.L.R.3d 941.

Liability of corporate directors or officers for negligence in permitting conversion of property of third persons by corporation. 29 A.L.R.3d 660.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

What amounts to participation by corporate officer or agent in illegal issuance of security, in order to impose liability upon him under state securities regulations. 44 A.L.R.3d 588.

Liability of corporate officer or director for commission or compensation received from third person in connection with that person’s transaction with corporation. 47 A.L.R.3d 373.

Personal liability of officer or directors of corporation on corporate checks issued against insufficient funds. 47 A.L.R.3d 1250.

Test in stockholders’ actions as to reasonableness of compensation of corporate officers who as directors determine their own compensation. 53 A.L.R.3d 358.

Liability of director or dominant shareholder for enforcing debt legally owed him by corporation. 56 A.L.R.3d 212.

Personal civil liability of officer or director of corporation for negligence of subordinate employee causing personal injury or death of third person. 90 A.L.R.3d 916.

Validity of stockholders’ agreement allegedly infringing on directors’ management powers – modern cases. 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

Time for bringing suit to recover insider short-swing profits under sec. 16(b) of the Securities Exchange Act of 1934 ( 15 USCS sec. 78p(b)). 67 A.L.R. Fed. 849.

Proper measure and elements of recovery for insider short-swing transaction. 86 A.L.R. Fed. 16.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1455 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 162 et seq., 263.1 (complaint by judgment creditor against sole stockholder receiving distributions of corporate property causing corporation to become insolvent), 312 et seq.

8 Am. Jur. Proof of Facts 2d 193, Personal Liability of Corporate Officer on Promissory Note.

CJS.

19 C.J.S., Corporations §§ 848 et seq.

Law Reviews.

Smith, Recognition of the fiduciary duties of corporate directors and officers defending against change of control by tender offer. 7 Miss. C. L. Rev. 117, Spring, 1987.

Transactions between a corporation and its directors: Where does Mississippi stand? 52 Miss L. J. 877, December, 1982.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-91.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-91.

11. In general.

The fact that a direct remedy is given the creditors by the statute is not intended to deprive the corporation itself of the right to hold an officer to account for breach of his duty to it. In re Dalton Electric Co., 7 F. Supp. 465, 1934 U.S. Dist. LEXIS 1642 (D. Miss. 1934).

Bill in chancery against directors of insolvent bank charging them with liability for making a loan in excess of one-fifth of the bank’s capital to a director after his resignation, on the grounds that the notes representing the loan were either signed or delivered while he was director, or that the loan had been agreed upon while he was director and the notes subsequently executed, was insufficient to show liability under former enactment of this section (§ 922, Code 1906), since bill affirmatively showed that borrower was not a director at the time the loan was made. Bramlette v. Joseph, 111 Miss. 379, 71 So. 643, 1916 Miss. LEXIS 307 (Miss. 1916).

Subarticle D. Officers.

§79-4-8.40. Required offices.

A corporation has the offices described in its bylaws or designated by the board of directors in accordance with the bylaws.

The board of directors may elect individuals to fill one or more offices of the corporation. A duly authorized officer may appoint one or more officers if authorized by the bylaws or the board of directors.

The bylaws or the board of directors shall delegate to one (1) of the officers responsibility for preparing minutes of the directors’ and shareholders’ meetings and for maintaining and authenticating records of the corporation.

The same individual may simultaneously hold more than one (1) office in a corporation.

HISTORY: Laws, 1987, ch. 486, § 8.40; Laws, 1991, ch. 320 § 1; Laws, 2001, ch. 435, § 12, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment, in (a), substituted “offices” for “officers” and “designated” for “appointed”; in (b), added the first sentence, substituted “authorized officer” for “appointed officer,” and deleted “or assistant officers”; and in (c), inserted “maintaining and” preceding “authenticating.”

Cross References —

Definition of “secretary” see § 79-4-1.40.

Officers of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-271 through 79-11-279.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1166-1169.

6 & 6A Am. Jur. Legal Forms 2d, Corporations §§ 74:61, 74:976, 74:1062.

CJS.

19 C.J.S., Corporations §§ 796, 838-844.

§79-4-8.41. Duties of officers.

Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the duties of other officers.

HISTORY: Laws, 1987, ch. 486, § 8.41, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-271 through 79-11-279.

RESEARCH REFERENCES

ALR.

Power of president of corporation to have litigation instituted by it where board of directors has failed or refused to grant permission. 10 A.L.R.2d 701.

Purchase of claims against corporation by officer or director thereof. 13 A.L.R.2d 1172.

Purposes for which stockholder or officer may exercise right to examine corporate books and records. 15 A.L.R.2d 11.

Estoppel of stockholder to recover back or to secure restoration of compensation of corporate officers claimed to be exorbitant or unauthorized. 16 A.L.R.2d 467.

Right of corporate officer to purchase corporate assets from corporation. 24 A.L.R.2d 71.

Power of corporate officer to hire employees for life. 28 A.L.R.2d 929.

Validity of contract between corporations as affected by directors or officers in common. 33 A.L.R.2d 1060.

Authority of officer or agent to bind corporation as guarantor or surety. 34 A.L.R.2d 290.

Authority of agent to indorse and transfer commercial paper. 37 A.L.R.2d 453.

Construction of “net profits,” “earnings,” or the like, in provision for profit-sharing bonus for corporate officers or employees. 49 A.L.R.2d 1129.

Power of particular officer or agent of business corporation to bind it by a donation to a charity or similar institution. 50 A.L.R.2d 447.

Authority of president to subordinate corporation’s claim, assignment, lien, or the like. 53 A.L.R.2d 1421.

Authority of corporate officers to mortgage or pledge corporate personal property. 62 A.L.R.2d 712.

Power of secretary or treasurer of corporation to institute litigation for it. 64 A.L.R.2d 900.

Power of president of corporation to commence or to carry on arbitration proceedings. 65 A.L.R.2d 1321.

Right of corporate officer to recover compensation for period between original improper discharge and subsequent legal discharge. 82 A.L.R.2d 965.

Recovery back by employer of compensation paid to employee as result of mistake or the employee’s fraud. 88 A.L.R.2d 1437.

Power and authority of president of business corporation to execute commercial paper. 96 A.L.R.2d 549.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Liability of corporate directors for negligence in permitting mismanagement or defalcations by officers or employees. 25 A.L.R.3d 941.

Liability of corporate directors or officers for negligence in permitting conversion of property of third persons by corporation. 29 A.L.R.3d 660.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

What amounts to participation by corporate officer or agent in illegal issuance of security, in order to impose liability upon him under state securities regulations. 44 A.L.R.3d 588.

Liability of corporate officer or director for commission or compensation received from third person in connection with that person’s transaction with corporation. 47 A.L.R.3d 373.

Insurance: construction of policy or bond indemnifying directors or officers of corporation for expenses incurred in defending actions brought against them in their capacity as such. 49 A.L.R.3d 1250.

Test in stockholders’ actions as to reasonableness of compensation of corporate officers who as directors determine their own compensation. 53 A.L.R.3d 358.

Payment of premiums by corporation on corporate officer’s life insurance as affecting right to policy. 56 A.L.R.3d 1086.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 A.L.R.4th 492.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1176, 1177, 1183, 1316 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1057, 74:1086 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 312 et seq.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

CJS.

19 C.J.S., Corporations §§ 796, 807, 838 et seq.

Law Reviews.

Smith, Recognition of the fiduciary duties of corporate directors and officers defending against change of control by tender offer. 7 Miss. C. L. Rev. 117, Spring, 1987.

JUDICIAL DECISIONS

1. In general.

A corporate officer’s duties of care and loyalty extend to pledgees of corporate shares as well as to shareholders. Gibson v. Manuel, 534 So. 2d 199, 1988 Miss. LEXIS 543 (Miss. 1988).

§79-4-8.42. Standards of conduct for officers.

An officer, when performing in such capacity, shall act:

  1. In good faith;
  2. With the care that a person in a like position would reasonably exercise under similar circumstances; and
  3. In a manner the officer reasonably believes to be in the best interests of the corporation.

In discharging those duties an officer, who does not have knowledge that makes reliance unwarranted, is entitled to rely on:

The performance of properly delegated responsibilities by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated; or

Information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by one or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants, or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters (i) within the particular person’s professional or expert competence or (ii) as to which the particular person merits confidence.

An officer shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action, as an officer, if the duties of the office are performed in compliance with this section. Whether an officer who does not comply with this section shall have liability will depend in such instance on applicable law, including those principles of Section 79-4-8.31 that have relevance.

HISTORY: Laws, 1987, ch. 486, § 8.42; Laws, 1999, ch. 471, § 4, eff from and after July 1, 1999.

Amendment Notes —

The 1999 amendment rewrote the section.

Cross References —

Indemnification of officers, see § 79-4-8.56.

Dissolution of corporation as not subjecting corporation’s directors and officers to standards of conduct different from those prescribed in this article, see § 79-4-14.05.

Misapplication or waste of corporate assets as ground for judicial dissolution of corporation, see § 79-4-14.30.

Officers of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-271 through 79-11-279.

Bank officer and director standard of care, see § 81-5-105.

RESEARCH REFERENCES

ALR.

Duty and liability of closely held corporation, its directors, officers, or majority stockholders, in acquiring stock of minority shareholder. 7 A.L.R.3d 500.

Liability of corporate directors for negligence in permitting mismanagement or defalcation by officers or employees. 25 A.L.R.3d 941.

What amounts to participation by corporate officer or agent in illegal issuance of security, in order to impose liability upon him under state securities regulations. 44 A.L.R.3d 588.

Payment of premiums by corporation on corporate officer’s life insurance as affecting right to policy. 56 A.L.R.3d 1086.

What business opportunities are in “line of business” of corporation for purposes of determining whether a corporate opportunity was presented. 77 A.L.R.3d 961.

Duty to disclose material facts to stock purchaser. 80 A.L.R.3d 13.

Financial inability of corporation to take advantage of business opportunity as affecting determination whether “corporate opportunity” was presented. 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of “corporate opportunity.” 16 A.L.R.4th 784.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 A.L.R.4th 492.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1455 et seq.

9 Am. Jur. Proof of Facts 2d 57, Corporate Officer or Director as Alter Ego of Corporation.

22 Am. Jur. Proof of Facts 2d 593, Wrongful Failure of Corporate Directors to Declare Dividend, §§ 14 et seq.

CJS.

19 C.J.S., Corporations §§ 848 et seq.

Law Reviews.

Smith, Recognition of the fiduciary duties of corporate directors and officers defending against change of control by tender offer. 7 Miss. C. L. Rev. 117, Spring, 1987.

Robertson, The Law of Corporate Governance: Coming of Age in Mississippi? 65 Miss. L. J. 477.

JUDICIAL DECISIONS

1. In general.

2. Duties where close corporation.

1. In general.

Alleged contributory negligence of other bank officers was not defense to branch bank’s loan officer’s breach of duty of care to bank. Omnibank of Mantee v. United Southern Bank, 607 So. 2d 76, 1992 Miss. LEXIS 446 (Miss. 1992).

Alleged inexperience or lack of skill and training of branch bank’s loan officer did not protect him from liability to parent for breach of fiduciary duties in making loans. Omnibank of Mantee v. United Southern Bank, 607 So. 2d 76, 1992 Miss. LEXIS 446 (Miss. 1992).

Chief operating official at branch bank who had substantial discretionary authority was “officer” of bank, although bank’s board of directors had not elected him. Omnibank of Mantee v. United Southern Bank, 607 So. 2d 76, 1992 Miss. LEXIS 446 (Miss. 1992).

Under “business judgment rule” director or officer who makes business judgment in good faith fulfills duty of care if director or officer: is not interested in subject of business judgment to extent director or officer reasonably believes to be appropriate under circumstances; and rationally believes that business judgment is in best interests of corporation. Omnibank of Mantee v. United Southern Bank, 607 So. 2d 76, 1992 Miss. LEXIS 446 (Miss. 1992).

Person charging corporate officer with breach of his or her duty of care has burden of production and persuasion on issues of breach, cause, and damage to corporation. Omnibank of Mantee v. United Southern Bank, 607 So. 2d 76, 1992 Miss. LEXIS 446 (Miss. 1992).

A corporate officer’s duties of care and loyalty extend to pledgees of corporate shares as well as to shareholders. Gibson v. Manuel, 534 So. 2d 199, 1988 Miss. LEXIS 543 (Miss. 1988).

2. Duties where close corporation.

In a close corporation where a majority stockholder stands to benefit as a controlling stockholder, the majority’s action must be “intrinsically fair” to the minority interest. Thus, stockholders in close corporations must bear towards each other the same relationship of trust and confidence which prevails in partnerships, rather than resort to statutory defenses. This does not mean that directors, executive officers and stockholders are not required to adhere to the corporate statutes; rather, blind adherence to corporate statutes may not be used to circumvent the corporation’s by-laws, charter or various agreements, such as a stock redemption agreement, because of the “intrinsically fair” standard that is now adopted. Fought v. Morris, 543 So. 2d 167, 1989 Miss. LEXIS 221 (Miss. 1989).

§79-4-8.43. Resignation and removal of officers.

An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective time. If a resignation is made effective at a later time and the board or the appointing officer accepts the future effective time, the board or the appointing officer may fill the pending vacancy before the effective time if the board or the appointing officer provides that the successor does not take office until the effective time.

An officer may be removed at any time with or without cause by: (i) the board of directors; (ii) the officer who appointed such officer, unless the bylaws or the board of directors provide otherwise; or (iii) any other officer if authorized by the bylaws or the board of directors.

In this section, “appointing officer” means the officer (including any successor to that officer) who appointed the officer resigning or being removed.

HISTORY: Laws, 1987, ch 486, § 8.43; Laws, 2001, ch. 435, § 13, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment substituted “time” for “date” five times in (a); in the third sentence of (a), substituted “board or the appointing officer” for “corporation” and “the board or the appointing officer” for “it”; rewrote (b); and added (c).

Cross References —

Officer’s contract rights-effect of officer’s removal or resignation, see § 79-4-8.44.

Officers of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-271 through 79-11-279.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1218, 1241 et seq.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1070, 74:1072, 74:1373.

CJS.

19 C.J.S., Corporations §§ 811-817.

Law Reviews.

Smith, Recognition of the fiduciary duties of corporate directors and officers defending against change of control by tender offer. 7 Miss. C. L. Rev. 117, Spring, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-97.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-97.

11. In general.

While a bylaw or statute may empower the board of directors to strip an officer of his title and corporate authority, it does not follow that the board is also empowered to disregard contractual obligations with impunity. Short v. Columbus Rubber & Gasket Co., 535 So. 2d 61, 1988 Miss. LEXIS 570 (Miss. 1988).

§79-4-8.44. Contract rights of officers.

The appointment of an officer does not itself create contract rights.

An officer’s removal does not affect the officer’s contract rights, if any, with the corporation. An officer’s resignation does not affect the corporation’s contract rights, if any, with the officer.

HISTORY: Laws, 1987, ch. 486, § 8.44, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-271 through 79-11-279.

RESEARCH REFERENCES

ALR.

Payment of premiums by corporation on corporate officer’s life insurance as affecting right to policy. 56 A.L.R.3d 1086.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1244, 1254.

6 Am. Jur. Legal Forms 2d, Corporations § 74:1410.

CJS.

19 C.J.S., Corporations §§ 804, 811.

Subarticle E. Indemnification.

§79-4-8.50. Subarticle definitions.

In this subarticle:

  1. “Corporation” includes any domestic or foreign predecessor entity of a corporation in a merger.
  2. “Director” or “officer” means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation’s request as a director, officer, manager, partner, trustee, employee or agent of another entity or employee benefit plan. A director or officer is considered to be serving an employee benefit plan at the corporation’s request if the individual’s duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan. “Director” or “officer” includes, unless the context requires otherwise, the estate or personal representative of a director or officer.
  3. “Expenses” means reasonable expenses of any kind that are incurred in connection with a matter.
  4. “Liability” means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.
  5. “Official capacity” means: (i) when used with respect to a director, the office of director in a corporation; and (ii) when used with respect to an officer, as contemplated in Section 79-4-8.56, the office in a corporation held by the officer. “Official capacity” does not include service for any other domestic or foreign corporation or any partnership, joint venture, trust, employee benefit plan or other entity.
  6. “Party” means an individual who was, is, or is threatened to be made a defendant or respondent in a proceeding.
  7. “Proceeding” means any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal.

HISTORY: Laws, 1987, ch. 486, § 8.50; Laws, 1996, ch. 459, § 3; Laws, 2006, ch. 429, § 5; Laws, 2012, ch. 481, § 22, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2006 amendment repealed former (3), which read: “(3) ‘Disinterested director’ means a director who, at the time of a vote referred to in Section 79-4-8.53(c) or a vote or selection referred to in Section 79-4-8.55(b) or (c), is not: (i) A party to the proceeding; or (ii) An individual having a familial, financial, professional or employment relationship with the director whose indemnification or advance for expenses is the subject of the decision being made, which relationship would, in the circumstances, reasonably be expected to exert an influence on the director’s judgment when voting on the decision being made.”; redesignated former (4) through (8) as present (3) through (7); and made gender neutralization changes.

The 2012 amendment, effective January 1, 2013, rewrote the first sentence in (2); and rewrote (3).

Cross References —

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

§79-4-8.51. Authority to indemnify.

Except as otherwise provided in subsection (d) of this section, a corporation may indemnify an individual who is a party to a proceeding because he is a director against liability incurred in the proceeding if:

    1. He conducted himself in good faith; and
      1. He reasonably believed:
        1. In the case of conduct in his official capacity, that his conduct was in the best interests of the corporation; and
        2. In all other cases, that his conduct was at least not opposed to the best interests of the corporation; and
      2. In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful; or
  1. He engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation as authorized by Section 79-4-2.02(b)(5).

A director’s conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interest of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (a)(1)(ii)(B).

The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.

Unless ordered by a court under Section 79-4-8.54(a)(3), a corporation may not indemnify a director under this section:

In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (a); or

In connection with any proceeding with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not involving action in his official capacity.

HISTORY: Laws, 1987, ch. 486, § 8.51; Laws, 1996, ch. 459, § 4, eff from and after January 1, 1997.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (a)(2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by inserting the word “for” following “He engaged in conduct...” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Corporation’s authority to pay for or reimburse reasonable expenses incurred by director who was party to proceeding in advance of final disposition, see § 79-4-8.53.

Court-ordered indemnification of director, see § 79-4-8.54.

Determination of and authorization for indemnification, see § 79-4-8.55.

Authority for corporation to purchase indemnification insurance to cover situations not covered by §§ 79-4-8.51 or 79-4-8.52, see § 79-4-8.57.

Requirement that corporation report to shareholders if corporation indemnifies or advances expenses to director under this section, see § 79-4-16.21.

Indemnification of nonprofit corporation director officer, employee or agent, see § 79-11-281.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1644 et seq.

6A Am. Jur. Legal Forms 2d, Corporations § 74:1141.

CJS.

19 C.J.S., Corporations §§ 1063, 1230-1232.

§79-4-8.52. Mandatory indemnification.

A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.

HISTORY: Laws, 1987, ch. 486, § 8.52; Laws, 1996, ch. 459, § 5, eff from and after January 1, 1997.

Cross References —

Court-ordered indemnification of director, see § 79-4-8.54.

Mandatory indemnification of officers of corporation who are not directors, see § 79-4-8.56.

Authority for corporation to purchase indemnification insurance to cover situations not covered by §§ 79-4-8.51 or 79-4-8.52, see § 79-4-8.57.

Requirement that corporation report to shareholders if corporation indemnifies or advances expenses to director under this section, see § 79-4-16.21.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1654.

§79-4-8.53. Advance for expenses.

A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation:

  1. A signed written affirmation of the director’s good faith belief that the relevant standard of conduct described in Section 79-4-8.51 has been met by the director or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation as authorized by Section 79-4-2.02(b)(4); and
  2. A signed written undertaking of the director to repay any funds advanced if the director is not entitled to mandatory indemnification under Section 79-4-8.52 and it is ultimately determined under Section 79-4-8.54 or Section 79-4-8.55 that the director has not met the relevant standard of conduct described in Section 79-4-8.51.

The undertaking required by subsection (a)(2) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

Authorizations under this section shall be made:

By the board of directors:

If there are two (2) or more qualified directors, by a majority vote of all the qualified directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two (2) or more qualified directors appointed by such a vote; or

If there are fewer than two (2) qualified directors, by the vote necessary for action by the board in accordance with Section 79-4-8.24(c), in which authorization directors who are not qualified directors may participate; or

By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

HISTORY: Laws, 1987, ch. 486, § 8.53; Laws, 1996, ch. 459, § 6; Laws, 2006, ch. 429, § 6; Laws, 2012, ch. 481, § 23, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2006 amendment rewrote the introductory paragraph of (a); substituted “written affirmation of the director’s good faith belief that the relevant standard of conduct described in Section 79-4-8.51 has been met by the director” for “written affirmation of his good faith belief that he has met the relevant standard of conduct described in Section 79-4-8.51” in (a)(1); substituted “A written undertaking of the director to repay any funds advanced if the director is not entitled” for “His written undertaking, to repay any funds advanced if he is not entitled” in (a)(2); in (c), deleted “in the manner specified in Section 79-4-8.55” from the end of the introductory paragraph, substituted “directors who are not qualified directors” for “directors who do not qualify as disinterested directors” near the end of (1)(ii), substituted “director who at the time is not a qualified director” for “director who at the time does not qualify as a disinterested director” in (2) and substituted “qualified directors” for “disinterested directors” throughout; and made gender neutralization changes.

The 2012 amendment, effective January 1, 2013, added “signed” preceding “written” at the beginning of (a)(1) and (2).

Cross References —

Qualified director defined, see § 79-4-1.43.

Court ordered advance for expenses, see § 79-4-8.54.

Indemnification of nonprofit corporation director, officer, employee, agent, see § 79-11-281.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Insurance: construction of policy or bond indemnifying directors or officers of corporation for expenses incurred in defending actions brought against them in their capacity as such. 49 A.L.R.3d 1250.

Am. Jur.

18B Am. Jur. 2d, Corporations § 1651.

§79-4-8.54. Court-ordered indemnification.

A director who is a party to a proceeding because he is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application, and after giving any notice it considers necessary, the court shall:

  1. Order indemnification if the court determines that the director is entitled to mandatory indemnification under Section 79-4-8.52;
  2. Order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by Section 79-4-8.58(a); or
  3. Order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable:

To indemnify the director; or

To advance expenses to the director, even if he has not met the relevant standard of conduct set forth in Section 79-4-8.51(a), failed to comply with Section 79-4-8.53 or was adjudged liable in a proceeding referred to in subsection 79-4-8.51(d)(1) or (d)(2), but if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred in connection with the proceeding.

If the court determines that the director is entitled to indemnification under subsection (a)(1) or to indemnification or advance for expenses under subsection (a)(2), it shall also order the corporation to pay the director’s reasonable expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under subsection (a)(3), it may also order the corporation to pay the director’s reasonable expenses to obtain court-ordered indemnification or advance for expenses.

HISTORY: Laws, 1987, ch. 486, § 8.54; Laws, 1996, ch. 459, § 7, eff from and after January 1, 1997.

Cross References —

Exceptions to indemnification of director under § 79-4-8.51 unless ordered by a court under subsection (a)(3) of this section, see § 79-4-8.51.

Advance for expenses, see § 79-4-8.53.

Court-ordered indemnification of officer of corporation who is not a director, see § 79-4-8.56.

Requirement that corporation report to shareholders if corporation indemnifies or advances expenses to director under this section, see § 79-4-16.21.

Indemnification of nonprofit corporation director, officer, employee, agent, see § 79-11-281.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Power of court, in absence of statute, to require corporate surety on fiduciary bond in probate proceeding. 82 A.L.R.2d 926.

Causes of action governed by limitations period in UCC § 2-725. 49 A.L.R.5th 1.

Am. Jur.

18B Am. Jur. 2d, Corporations § 1650.

§79-4-8.55. Determination and authorization of indemnification.

A corporation may not indemnify a director under Section 79-4-8.51 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in Section 79-4-8.51.

The determination shall be made:

  1. If there are two (2) or more qualified directors, by the board of directors by a majority vote of all the qualified directors (a majority of whom shall for such purpose constitute a quorum), or by a majority of the members of a committee of two (2) or more qualified directors appointed by such a vote;
  2. By special legal counsel:
  3. By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.

Selected in the manner prescribed in subdivision (1); or

If there are fewer than two (2) qualified directors, selected by the board of directors (in which selection directors who are not qualified directors may participate); or

Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two (2) qualified directors, or if the determination is made by special legal counsel, authorization of indemnification shall be made by those entitled to select special legal counsel under subsection (b)(2)(ii).

HISTORY: Laws, 1987, ch. 486, § 8.55; Laws, 1996, ch. 459, § 8; Laws, 2006, ch. 429, § 7, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment substituted “indemnification is permissible because the director” for “indemnification of the director is permissible because he” in (a); in (b)(2)(ii), substituted “selected by the board of directors (in which selection directors who are not qualified” for “elected by the board of directors (in which selection directors who do not qualify as”; in (b)(3), substituted “director who at the time is not a” for “director who at the time does not qualify as a”; rewrote (c); and substituted “qualified director” and “qualified directors” for “disinterested director” and “disinterested directors” throughout.

Cross References —

Qualified director defined, see § 79-4-1.43.

Applicability of this section to payment of expenses to director in advance of final disposition of proceeding, see § 79-4-8.53.

Applicability of this section to determinations of further indemnity, see § 79-4-8.58.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Right of corporation to indemnity for civil or criminal liability incurred by employee’s violation of antitrust laws. 37 A.L.R.3d 1355.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1644 et seq.

§79-4-8.56. Indemnification of officers.

A corporation may indemnify and advance expenses under this subarticle to an officer of the corporation who is a party to a proceeding because he is an officer of the corporation:

  1. To the same extent as to a director; and
  2. If he is an officer but not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors or contract except for (A) liability in connection with a proceeding by or in the right of the corporation other than for reasonable expenses incurred in connection with the proceeding or (B) liability arising out of conduct that constitutes (i) receipt by him of a financial benefit to which he is not entitled, (ii) an intentional infliction of harm on the corporation or the shareholders, or (iii) an intentional violation of criminal law.

The provisions of subsection (a)(2) shall apply to an officer who is also a director if the basis on which he is made a party to the proceeding is an act or omission solely as an officer.

An officer of a corporation who is not a director is entitled to mandatory indemnification under Section 79-4-8.52, and may apply to a court under Section 79-4-8.54 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those provisions.

HISTORY: Laws, 1987, ch. 486, § 8.56; Laws, 1996, ch. 459, § 9, eff from and after January 1, 1997.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a publishing error in the section heading. The words “employees and agents” were deleted from the end. The Joint Committee ratified the correction at its May 16, 2002 meeting.

Cross References —

Definition of “official capacity”, see § 79-4-8.50.

Indemnification of nonprofit corporation director, officer, employee, agent, see § 79-11-281.

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Who is “executive officer” of insured within liability insurance policy. 1 A.L.R.5th 132.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1644 et seq.

6A Am. Jur. Legal Forms 2d, Corporations § 74:1141.

§79-4-8.57. Insurance.

A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation, or who, while a director or officer of the corporation, serves at the corporation’s request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan or other entity, against liability asserted against or incurred by him in that capacity or arising from his status as a director or officer, whether or not the corporation would have power to indemnify or advance expenses to him against the same liability under this subarticle.

HISTORY: Laws, 1987, ch. 486, § 8.57; Laws, 1996, ch. 459, § 10, eff from and after January 1, 1997.

Cross References —

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

RESEARCH REFERENCES

ALR.

Insurance: construction of policy or bond indemnifying directors or officers of corporation for expenses incurred in defending actions brought against them in their capacity as such. 49 A.L.R.3d 1250.

Who is “executive officer” of insured within liability insurance policy. 1 A.L.R.5th 132.

Am. Jur.

18B Am. Jur. 2d, Corporations § 1649.

§79-4-8.58. Application of subarticle.

A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with Section 79-4-8.51 or advance funds to pay for or reimburse expenses in accordance with Section 79-4-8.53. Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with Section 79-4-8.53 to the fullest extent permitted by law, unless the provision specifically provides otherwise.

A right of indemnification or to advances for expenses created by this subarticle or under subsection (a) that is in effect at the time of an act or omission shall not be eliminated or impaired with respect to the act or omission by an amendment of the articles of incorporation or bylaws or a resolution of the directors or shareholders adopted after the occurrence of the act or omission, unless, in the case of a right created under subsection (a), the provision creating the right that is in effect at the time of the act or omission explicitly authorizes elimination or impairment after the act or omission has occurred.

Any provision pursuant to subsection (a) shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by Section 79-4-11.06(a)(3).

Subject to subsection (b), a corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this subarticle.

This subarticle does not limit a corporation’s power to pay or reimburse expenses incurred by a director or an officer in connection with his appearance as a witness in a proceeding at a time when he is not a party.

This subarticle does not limit a corporation’s power to indemnify, advance expenses to or provide or maintain insurance on behalf of an employee or agent.

HISTORY: Laws, 1987, ch. 486, § 8.58; Laws, 1996, ch. 459, § 11; Laws, 2012, ch. 481, § 24, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added (b); and redesignated former (b) through (e) as (c) through (f); and added “Subject to subsection (b)” to the beginning of (d).

Cross References —

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

§79-4-8.59. Subarticle to be controlling.

A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by this subarticle.

HISTORY: Laws, 1996, ch. 459, § 12, eff from and after January 1, 1997.

Cross References —

Indemnification of directors, officers, employees, agents under Mississippi Nonprofit Corporation Act, see § 79-11-281.

Subarticle F. Director’s Conflicts of Interest.

§79-4-8.60. Definitions.

In Sections 79-4-8.60 through 79-4-8.63 and Section 79-4-8.70:

  1. “Director’s conflicting interest transaction” means a transaction effected or proposed to be effected by the corporation (or by an entity controlled by the corporation):
  2. “Control” (including the term “controlled by”) means (i) having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise, or (ii) being subject to a majority of the risk of loss from the entity’s activities or entitled to receive a majority of the entity’s residual returns.
  3. “Relevant time” means (i) the time at which directors’ actions respecting the transaction are taken in compliance with Section 79-4-8.62, or (ii) if the transaction is not brought before the board of directors of the corporation (or its committee) for action under Section 79-4-8.62, at the time the corporation (or an entity controlled by the corporation) becomes legally obligated to consummate the transaction.
  4. “Material financial interest” means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director’s judgment when participating in action on the authorization of the transaction.
  5. “Related person” means:
  6. “Fair to the corporation” means, for purposes of Section 79-4-8.61(b) (3), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was (i) fair in terms of the director’s dealings with the corporation, and (ii) comparable to what might have been obtainable in an arms’ length transaction, given the consideration paid or received by the corporation.
  7. “Required disclosure” means disclosure of (i) the existence and nature of the director’s conflicting interest, and (ii) all facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.

To which, at the relevant time, the director is a party; or

Respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or

Respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.

The director’s spouse;

A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsiblings, half-siblings, aunt, uncle, niece or nephew (or spouse of any thereof) of the director or of the director’s spouse;

An individual living in the same home as the director;

An entity (other than the corporation or an entity controlled by the corporation) controlled by the director or any person specified in this paragraph (5);

A domestic or foreign (A) business or nonprofit corporation (other than the corporation or an entity controlled by the corporation) of which the director is a director, (B) unincorporated entity of which the director is a general partner or a member of the governing body, or (C) individual, trust or estate for whom or of which the director is a trustee, guardian, personal representative or like fiduciary; or

A person that is, or an entity that is controlled by, an employer of the director.

HISTORY: Laws, 1990, ch. 538, § 1; Laws, 2006, ch. 429, § 8; Laws, 2012, ch. 481, § 25, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, a typographical error in paragraph (3) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “(i) the time at which directors’ actions respecting the transaction are taken...” for “(i) the time at which directors’ actions respecting the transaction is taken...” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2006 amendment rewrote the section to revise definitions dealing with a director’s conflicts of interest.

The 2012 amendment, effective January 1, 2013, inserted “stepsiblings, half-siblings, aunt, uncle, niece or nephew” following “sibling” in (5)(ii).

Cross References —

Director’s conflict of interest under Mississippi Nonprofit Corporation Act, see § 79-11-269.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1500 et seq.

16 Am. Jur. Proof of Facts 3d 583, Corporate Director’s Breach of Fiduciary Duty to Creditors.

CJS.

19 C.J.S., Corporations §§ 870 et seq.

Law Reviews.

Transactions Between a Corporation and Its Directors: Where Does Mississippi Stand? 52 Miss. L. J. 877.

§79-4-8.61. When director’s actions not sanctionable.

A transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if it is not a director’s conflicting interest transaction.

A director’s conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation on the ground that the director has an interest respecting the transaction, if:

  1. Directors’ action respecting the transaction was taken in compliance with Section 79-4-8.62 at any time; or
  2. Shareholders’ action respecting the transaction was taken in compliance with Section 79-4-8.63 at any time; or
  3. The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.

HISTORY: Laws, 1990, ch. 538, § 2; Laws, 1991, ch. 320 § 2; Laws, 2006, ch. 429, § 9, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment rewrote the section to clarify when a director’s actions are not sanctionable.

Cross References —

Director’s conflicting interest transaction defined, see § 79-4-8.60.

Effectiveness of director’s action for purposes of § 79-4-8.61, see § 79-4-8.62.

Effectiveness of transaction for purposes of § 79-4-8.61 when shareholders approve, see § 79-4-8.63.

Shareholders’ action respecting a business opportunity taken in compliance with § 79-4-8.63 not sanctionable, see § 79-4-8.70.

Director’s conflict of interest under Mississippi Nonprofit Corporation Act, see § 79-11-269.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1500 et seq.

CJS.

19 C.J.S., Corporations §§ 870 et seq.

Law Reviews.

Transactions Between a Corporation and Its Directors: Where Does Mississippi Stand? 52 Miss. L. J. 877.

Robertson, The Law of Corporate Governance: Coming of Age in Mississippi? 65 Miss. L. J. 477.

§79-4-8.62. Effectiveness of directors’ action; disclosure.

Directors’ action respecting a director’s conflicting interest transaction is effective for purposes of Section 79-4-8.61(b)(1)if the transaction has been authorized by the affirmative vote of a majority (but no fewer than two (2)) of the qualified directors who voted on the transaction, after required disclosure by the conflicted director of information not already known by such qualified directors or after modified disclosure in compliance with subsection (b), provided that:

  1. The qualified directors have deliberated and voted outside the presence of and without the participation by any other director; and
  2. Where the action has been taken by a committee, all members of the committee were qualified directors, and either (i) the committee was composed of all the qualified directors on the board of directors, or (ii) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.
  3. The nature of the conflicted director’s duty not to disclose the confidential information.

Notwithstanding subsection (a), when a transaction is a director’s conflicting interest transaction only because a related person described in Section 79-4-8.60(5)(v) or (vi) is a party to or has material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction:

All information required to be disclosed that is not so violative;

The existence and nature of the director’s conflicting interest; and

A majority (but no fewer than two (2)) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section.

Where directors’ action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws, or provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.

HISTORY: Laws, 1990, ch. 538, § 3; Laws, 2006, ch. 429, § 10, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment rewrote the section to clarify disclosure required of a director concerning a conflicting interest.

Cross References —

Qualified director defined, see § 79-4-1.43.

Director’s conflicting interest transaction defined, see § 79-4-8.60.

Directors’ action respecting transaction taken in compliance with § 79-4-8.62 not sanctionable, see § 79-4-8.61.

Directors’ action respecting a business opportunity taken in compliance with § 79-4-8.62 not sanctionable, see § 79-4-8.70.

Director’s conflict of interest under Mississippi Nonprofit Corporation Act, see § 79-11-269.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1500 et seq.

CJS.

19 C.J.S., Corporations §§ 870 et seq.

Law Reviews.

Transactions Between a Corporation and Its Directors: Where Does Mississippi Stand? 52 Miss. L. J. 877.

§79-4-8.63. Shareholder approval of director’s conflicting interest transaction.

Shareholders’ action respecting a director’s conflicting interest transaction is effective for purposes of Section 79-4-8.61(b)(2) if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after (1) notice to shareholders describing the action to be taken respecting the transaction, (2) provision to the corporation of the information referred to in subsection (b), and (3) communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, to the extent the information is not known by them.

A director who has a conflicting interest respecting the transaction shall, before the shareholders’ vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under subsection (c), and the identity of the holders of those shares.

For purposes of this section, (1) “holder” means, and “held by” refers to shares held by, both a record shareholder (as defined in Section 79-4-13.01(7)) and a beneficial shareholder (as defined in Section 79-4-13.01(2)); and (2) “qualified shares” means all shares entitled to be voted with respect to the transaction except for shares that the secretary (or other officer or agent of the corporation authorized to tabulate votes) either knows, or under subsection (b) is notified, are held by (A) a director who has a conflicting interest respecting the transaction, or (B) a related person of the director (excluding a person described in Section 79-4-8.60(5)(vi)).

A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section. Subject to the provisions of subsection (e), shareholders’ action that otherwise complies with this section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares.

If a shareholders’ vote does not comply with subsection (a) solely because of a director’s failure to comply with subsection (b), and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may take such action respecting the transaction and the director, and may give such effect, if any, to the shareholders’ vote, as the court considers appropriate in the circumstances.

Where shareholders’ action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shares that are not qualified shares may participate.

HISTORY: Laws, 1990, ch. 538, § 4; Laws, 2006, ch. 429, § 11, eff from and after July 1, 2006.

Amendment Notes —

The 2006 amendment rewrote the section to revise requirements necessary for shareholder approval of a director’s conflicting interest transaction.

Cross References —

Director’s conflicting interest transaction defined, see § 79-4-8.60.

Shareholders’ action respecting transaction taken in compliance with § 79-4-8.63 as not sanctionable, see § 79-4-8.61.

Director’s conflict of interest under Mississippi Nonprofit Corporation Act, see § 79-11-269.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1500 et seq.

CJS.

19 C.J.S., Corporations §§ 870 et seq.

Law Reviews.

Transactions Between a Corporation and Its Directors: Where Does Mississippi Stand? 52 Miss. L. J. 877.

§79-4-8.70. Business opportunities.

A director’s taking advantage, directly or indirectly, of a business opportunity may not be the subject of equitable relief, or give rise to an award of damages or other sanctions against the director, in a proceeding by or in the right of the corporation on the ground that such opportunity should have first been offered to the corporation, if before becoming legally obligated respecting the opportunity the director brings it to the attention of the corporation and:

  1. Action by qualified directors disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in Section 79-4-8.62, as if the decision being made concerned a director’s conflicting interest transaction; or
  2. Shareholders’ action disclaiming the corporation’s interest in the opportunity is taken in compliance with the procedures set forth in Section 79-4-8.63, as if the decision being made concerned a director’s conflicting interest transaction;

    except that, rather than making “required disclosure” as defined in Section 79-4-8.60, in each case the director shall have made prior disclosure to those acting on behalf of the corporation of all material facts concerning the business opportunity that are then known to the director.

In any proceeding seeking equitable relief or other remedies based upon an alleged improper taking advantage of a business opportunity by a director, the fact that the director did not employ the procedure described in subsection (a) before taking advantage of the opportunity shall not create an inference that the opportunity should have been first presented to the corporation or alter the burden of proof otherwise applicable to establish that the director breached a duty to the corporation in the circumstances.

HISTORY: Laws, 2006, ch. 429, § 12, eff from and after July 1, 2006.

Cross References —

Qualified director defined, see § 79-4-1.43.

Director’s conflicting interest transaction defined, see § 79-4-8.60.

Director’s conflict of interest under Mississippi Nonprofit Corporation Act, see § 79-11-269.

JUDICIAL DECISIONS

1. No breach found.

Fifty-percent shareholder in a company and related parties did not breach their corporate fiduciary duties to company and divert certain corporate opportunities of company because company was completely dysfunctional due to a stalemate with the other shareholder and could not take advantage of opportunities that were allegedly usurped or diverted. Mandrella v. East (In re East Sys.), 2012 Bankr. LEXIS 5929 (Bankr. N.D. Miss. Dec. 28, 2012).

Article 10. Amendment of Articles of Incorporation and Bylaws.

Subarticle A. Amendment of Articles of Incorporation.

§79-4-10.01. Authority to amend.

A corporation may amend its articles of incorporation at any time to add or change a provision that is required or permitted in the articles of incorporation as of the effective date of the amendment or to delete a provision that is not required to be contained in the articles of incorporation.

A shareholder of the corporation does not have a vested property right resulting from any provision in the articles of incorporation, including provisions relating to management, control, capital structure, dividend entitlement or purpose or duration of the corporation.

HISTORY: Laws, 1987, ch. 486, § 10.01; Laws, 2000, ch. 469, § 3, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote (a).

Cross References —

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

ALR.

Provision authorizing directors to fill vacancies as applicable to newly created directorships. 6 A.L.R.2d 174.

Reduction of capital stock and distribution of capital assets upon reduction. 35 A.L.R.2d 1149.

Retroactive effect of statute fixing minimum value of corporate stock shares or otherwise affecting power of corporation to change par value of existing shares. 54 A.L.R.2d 1289.

Power of corporation to change existing redemption rights of common stock shareholders. 70 A.L.R.2d 843.

Change in stock or corporate structure, or split or substitution of stock of corporation, as affecting bequest of stock. 46 A.L.R.3d 7.

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 96 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:783 (amendment of articles of incorporation – amendment of article concerning capitalization), 74:884 et seq.

CJS.

18 C.J.S., Corporations §§ 81, 112-117.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-115.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-115.

11. In general.

Under Miss. Const. Art. 4, § 88 a bank organized with an authorized capital stock of $35,000 may by a majority vote of its stockholders, as provided for amendments, reduce its capital stock to $25,000. Perry v. Bank of Commerce, 116 Miss. 838, 77 So. 812, 1917 Miss. LEXIS 365 (Miss. 1917).

§79-4-10.02. Amendment before issuance of shares.

If a corporation has not yet issued shares, its board of directors, or its incorporators, if it has no board of directors, may adopt one or more amendments to the corporation’s articles of incorporation.

HISTORY: Former 1972 Code §79-4-10.02 [Laws, 1987, ch. 486, § 10.02; Laws, 1988, ch. 368, § 11] renumbered as §79-4-10.05 by Laws, 2000, ch. 469, § 7. Former 1972 Code §79-4-10.05 [Laws, 1987, ch. 486, § 10.05] amended and renumbered as §79-4-10.02 by Laws, 2000, ch. 469, § 4, eff from and after July 1, 2000.

Editor’s Notes —

This section, formerly appearing as § 79-4-10.05, was amended and renumbered as present § 79-4-10.02 by Laws of 2000, ch. 469, § 4. Former § 79-4-10.02 was amended and renumbered as present § 79-4-10.05 by Laws of 2000, ch. 469, § 7.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

Cross References —

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 84-99.

18A Am. Jur. 2d, Corporations § 179.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:894, 74:896, 74:897, 74:902.

§79-4-10.03. Amendment by board of directors and shareholders.

If a corporation has issued shares, an amendment to the articles of incorporation shall be adopted in the following manner:

The proposed amendment must be adopted by the board of directors.

Except as provided in Sections 79-4-10.05, 79-4-10.07, and 79-4-10.08, after adopting the proposed amendment the board of directors must submit the amendment to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the amendment, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to the shareholders the basis for that determination.

The board of directors may condition its submission of the amendment to the shareholders on any basis.

If the amendment is required to be approved by the shareholders and the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment.

Unless the articles of incorporation or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater number of shares to be present, approval of the amendment requires the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the amendment exists, and, if any class or series of shares is entitled to vote as a separate group on the amendment, except as provided in Section 79-4-10.04(c), the approval of each such separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the amendment by that voting group exists.

HISTORY: Laws, 1987, ch. 486, § 10.03; Laws, 2000, ch. 469, § 5, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Applicability of this section to restatement of articles of incorporation, see § 79-4-10.07.

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 99.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 153.5 (complaint, petition, or declaration – stockholders’ individual action – for declaratory and injunctive relief barring amendment to Articles of Incorporation).

CJS.

18 C.J.S., Corporations §§ 81, 112-117.

§79-4-10.04. Voting on amendments by voting groups.

If a corporation has more than one (1) class of shares outstanding, the holders of the outstanding shares of a class are entitled to vote as a separate voting group, if shareholder voting is otherwise required by the Mississippi Business Corporation Act, on a proposed amendment to the articles of incorporation if the amendment would:

  1. Effect an exchange or reclassification of all or part of the shares of the class into shares of another class;
  2. Effect an exchange or reclassification, or create the right of exchange, of all or part of the shares of another class into shares of the class;
  3. Change the rights, preferences or limitations of all or part of the shares of the class;
  4. Change the shares of all or part of the class into a different number of shares of the same class;
  5. Create a new class of shares having rights or preferences with respect to distributions or to dissolution that are prior or superior to the shares of the class;
  6. Increase the rights, preferences or number of authorized shares of any class that, after giving effect to the amendment, have rights or preferences with respect to distributions or to dissolution that are prior or superior to the shares of the class;
  7. Limit or deny an existing preemptive right of all or part of the shares of the class; or
  8. Cancel or otherwise affect rights to distributions that have accumulated but not yet been authorized on all or part of the shares of the class.

If a proposed amendment would affect a series of a class of shares in one or more of the ways described in subsection (a), the holders of shares of that series are entitled to vote as a separate voting group on the proposed amendment.

If a proposed amendment that entitles the holders of two (2) or more classes or series of shares to vote as separate voting groups under this section would affect those two (2) or more classes or series in the same or a substantially similar way, the holders of shares of all the classes or series so affected must vote together as a single voting group on the proposed amendment, unless otherwise provided in the articles of incorporation or required by the board of directors.

A class or series of shares is entitled to the voting rights granted by this section although the articles of incorporation provide that the shares are nonvoting shares.

The provisions of subsection (a)(6) shall not apply to preferred stock issued by a public utility subject to the provisions of the Public Utility Holding Company Act, 15 United States Code, Section 79 et seq., where the issuance of its securities is regulated by an agency of the United States.

HISTORY: Laws, 1987, ch. 486, § 10.04; Laws, 2000, ch. 469, § 6, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment, in (a), substituted “If a corporation has more than one (1) class of shares outstanding” for “Except as otherwise provided in subsection (e),” substituted “the Mississippi Business Corporation Act” for “Sections 79-4-1.01 et seq,” and inserted “to the articles of incorporation”; deleted former (a)(1) and redesignated the remaining subsections accordingly; deleted “designation” following “Change the” in (a)(3); substituted “prior or superior to” for “prior, superior or substantially equal to” in (a)(5) and (6); deleted “or dividends” following “distributions” and substituted “authorized” for “declared” in (a)(8); inserted “holders of” in (b); rewrote (c); and substituted “subsection (a)(6)” for “subsections (a)(1) and (a)(7)” in (e).

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

Applicability of voting by voting groups as provided in this section to adoption of plan of merger, see § 79-4-11.04.

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

Federal Aspects—

The Public Utility Holding Company Act is codified as 15 USCS §§ 79 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 99.

6A Am. Jur. Legal Forms 2d, Corporations § 74:919.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 153.5 (complaint, petition, or declaration – stockholders’ individual action – for declaratory and injunctive relief barring amendment to Articles of Incorporation).

CJS.

18 C.J.S., Corporations § 113.

§79-4-10.05. Amendment by board of directors.

Unless the articles of incorporation provide otherwise, a corporation’s board of directors may adopt amendments to the corporation’s articles of incorporation without shareholder approval:

  1. To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;
  2. To delete the names and addresses of the initial directors;
  3. To change the information required by Section 79-35-5(a);
  4. If the corporation has only one (1) class of shares outstanding:
    1. To change each issued and unissued authorized share of the class into a greater number of whole shares of that class; or
    2. To increase the number of authorized shares of the class to the extent necessary to permit the issuance of shares as a share dividend;
  5. To change the corporate name by substituting the word “corporation,” “incorporated,” “company,” “limited” or the abbreviation “corp.,” “inc.,” “co.” or “ltd.” for a similar word or abbreviation in the name, or by adding, deleting or changing a geographical attribution for the name;
  6. To reflect a reduction in authorized shares, as a result of the operation of Section 79-4-6.31(b), when the corporation has acquired its own shares and the articles of incorporation prohibit the reissue of the acquired shares;
  7. To delete a class of shares from the articles of incorporation, as a result of the operation of Section 79-4-6.31(b), when there are no remaining shares of the class because the corporation has acquired all shares of the class and the articles of incorporation prohibit the reissue of the acquired shares; or
  8. To make any change expressly permitted by Section 79-4-6.02(a) or (b) to be made without shareholder approval.

HISTORY: Former 1972 Code §79-4-10.05 [Laws, 1987, ch. 486, § 10.05] renumbered as §79-4-10.02 by Laws, 2000, ch. 469, § 4. Former 1972 Code §79-4-10.02 [Laws, 1987, ch. 486, § 10.02; Laws, 1988, ch. 368, § 11] amended and renumbered as §79-4-10.05 by Laws, 2000, ch. 469, § 7; Laws, 2004, ch. 495, § 7; Laws, 2012, ch. 382, § 31, eff from and after Jan. 1, 2013.

Editor’s Notes —

This section, formerly appearing as § 79-4-10.02, was amended and renumbered as present § 79-4-10.05 by Laws, 2000, ch. 469, § 7. Former § 79-4-10.05 was amended and renumbered as present § 79-4-10.02 by Laws, 2000, ch. 469, § 4.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2004 amendment substituted “79-4-6.02(a) or (b)” for “79-4-6.02(d)” in (8).

The 2012 amendment, effective January 1, 2013, rewrote (3).

Cross References —

Lack of authority for committees to amend articles of incorporation pursuant to this section, see § 79-4-8.25.

No necessity for action by shareholders of surviving corporation on plan of merger if articles of incorporation will not differ except for amendments enumerated in § 79-4-10.05, see § 79-4-11.04.

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 84-99.

18A Am. Jur. 2d, Corporations § 179.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:898-74:901.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 153.5.

CJS.

18 C.J.S., Corporations § 81.

§79-4-10.06. Articles of amendment.

After an amendment to the articles of incorporation has been adopted and approved in the manner required by the Mississippi Business Corporation Act and by the articles of incorporation, the corporation shall deliver to the Secretary of State, for filing, articles of amendment, which shall set forth:

  1. The name of the corporation;
  2. The text of each amendment adopted, or the information required by Section 79-4-1.20(k)(5);
  3. If an amendment provides for an exchange, reclassification or cancellation of issued shares, provisions for implementing the amendment (if not contained in the amendment itself), which may be made dependent upon facts objectively ascertainable outside the articles of amendment in accordance with Section 79-4-1.20(k);
  4. The date of each amendment’s adoption; and
  5. If an amendment:
    1. Was adopted by the incorporators or board of directors without shareholder approval, a statement that the amendment was duly approved by the incorporators or by the board of directors, as the case may be, and that shareholder approval was not required;
    2. Required approval by the shareholders, a statement that the amendment was duly approved by the shareholders in the manner required by the Mississippi Business Corporation Act and by the articles of incorporation; or
    3. Is being filed pursuant to Section 79-4-1.20(k)(5), a statement to that effect.

HISTORY: Laws, 1987, ch. 486, § 10.06; Laws, 1993, ch. 368, § 17; Laws, 2000, ch. 469, § 8; Laws, 2004, ch. 495, § 8, eff from and after July 1, 2004.

Amendment Notes —

The 2000 amendment rewrote the introductory paragraph; rewrote (5); and deleted former (6).

The 2004 amendment added “or the information required by Section 79-4-1.20(k)(5)” to the end of (2); added “which may be made dependent upon facts objectively ascertainable outside the articles of amendment in accordance with Section 79-4-1.20(k)” to the end of (3); added (5)(c); and made other minor changes.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-101 et seq.

Applicability of § 79-4-10.06 to requirements for filing certificate of restated articles of incorporation, see § 79-4-10.07.

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 84-99.

18A Am. Jur. 2d, Corporations § 179.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:877, 74:937, 74:938-74:940.

CJS.

18 C.J.S., Corporations § 81.

§79-4-10.07. Restated articles of incorporation.

A corporation’s board of directors may restate its articles of incorporation at any time, with or without shareholder approval, to consolidate all amendments into a single document.

If the restated articles include one or more new amendments that require shareholder approval, the amendments must be adopted and approved as provided in Section 79-4-10.03.

A corporation that restates its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation, together with a certificate which states that the restated articles consolidate all amendments into a single document and, if a new amendment is included in the restated articles, which also includes the statements required under Section 79-4-10.06.

Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments thereto.

The Secretary of State may certify restated articles of incorporation as the articles of incorporation currently in effect, without including the certificate information required by subsection (c).

HISTORY: Laws, 1987, ch. 486, § 10.07; Laws, 2000, ch. 469, § 9, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment substituted “shareholder approval to consolidate all amendments into a single document” for “shareholder action” in (a); rewrote (b); deleted former (c) and (d) and redesignated the remaining subsections accordingly; substituted “that restates” for “restating” and “which states that the restated . . .” for “setting forth” in (c); substituted “thereto” for “to them” in (d); substituted “subsection (c)” for “subsection (d)” in (e); and made minor punctuation changes throughout.

Cross References —

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:885.

§79-4-10.08. Amendment pursuant to reorganization.

A corporation’s articles of incorporation may be amended without action by the board of directors or shareholders to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under the authority of a law of the United States.

The individual or individuals designated by the court shall deliver to the Secretary of State for filing articles of amendment setting forth:

  1. The name of the corporation;
  2. The text of each amendment approved by the court;
  3. The date of the court’s order or decree approving the articles of amendment;
  4. The title of the reorganization proceeding in which the order or decree was entered; and
  5. A statement that the court had jurisdiction of the proceeding under federal statute.

This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.

HISTORY: Laws, 1987, ch. 486, § 10.08; Laws, 2000, ch. 469, § 10, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment substituted “the authority of a law of the United States” for “federal statute if the articles of incorporation after amendment contain only provisions required or permitted by Section 79-4-2.02” in (a); deleted former (c) and redesignated former (d) as present (c).

Cross References —

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2309.

CJS.

19 C.J.S., Corporations § 1584.

§79-4-10.09. Effect of amendment.

An amendment to the articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, or the existing rights of persons other than shareholders of the corporation. An amendment changing a corporation’s name does not abate a proceeding brought by or against the corporation in its former name.

HISTORY: Laws, 1987, ch. 486, § 10.09; Laws, 2000, ch. 469, § 11, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment inserted “the” following “An amendment to.”

Cross References —

Amendment of articles of incorporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-295 through 79-11-311.

JUDICIAL DECISIONS

3. Illustrative cases.

Arbitrator was the proper arbitrator, and it had jurisdiction, because the arbitrator’s name change did not negate the validity of an arbitration agreement, Wells Fargo Advisors, LLC v. Runnels, 126 So.3d 137, 2013 Miss. App. LEXIS 781 (Miss. Ct. App. 2013).

Subarticle B. Amendment of Bylaws.

§79-4-10.20. Amendment by board of directors or shareholders.

A corporation’s shareholders may amend or repeal the corporation’s bylaws.

A corporation’s board of directors may amend or repeal the corporation’s bylaws unless:

  1. The articles of incorporation or Section 79-4-10.21 reserve that power exclusively to the shareholders in whole or part; or
  2. The shareholders in amending, repealing, or adopting a bylaw expressly provide that the board of directors may not amend, repeal, or reinstate that bylaw.

HISTORY: Laws, 1987, ch. 486, § 10.20; Laws, 2000, ch. 469, § 12, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Amendment of bylaws under Mississippi Nonprofit Corporation Act, see §§ 79-11-313 through 79-11-317.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 263, 266, 272-275.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:797, 74:798, 74:976, 74:1190-74:1192.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 153.

CJS.

18 C.J.S., Corporations § 252.

§79-4-10.21. Bylaw increasing quorum or voting requirement for directors.

A bylaw that increases a quorum or voting requirement for the board of directors may be amended or repealed:

  1. If adopted by the shareholders, only by the shareholders, unless the bylaw otherwise provides;
  2. If adopted by the board of directors, either by the shareholders or by the board of directors.

A bylaw adopted or amended by the shareholders that increases a quorum or voting requirement for the board of directors may provide that it can be amended or repealed only by a specified vote of either the shareholders or the board of directors.

Action by the board of directors under subsection (a) to amend or repeal a bylaw that changes the quorum or voting requirement for the board of directors must meet the same quorum requirement and be adopted by the same vote required to take action under the quorum and voting requirement then in effect or proposed to be adopted, whichever is greater.

HISTORY: Laws, 1987, ch. 486, § 10.21; Laws, 2000, ch. 469, § 13, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Amendment of bylaws under Mississippi Nonprofit Corporation Act, see §§ 79-11-313 through 79-11-317.

RESEARCH REFERENCES

ALR.

Validity, construction, and effect of provision in charter or bylaw requiring supermajority vote. 80 A.L.R.4th 667.

Am. Jur.

18A Am. Jur. 2d, Corporations § 832.

CJS.

18 C.J.S., Corporations §§ 642, 643.

§79-4-10.22. Repealed.

Repealed by Laws, 2000, ch. 469, eff from and after July 1, 2000.

[Laws, 1987, ch. 486, § 10.22, eff from and after January 1, 1988]

Editor’s Notes —

Former § 79-4-10.22 provided for bylaws increasing quorum or voting requirements for directors. For present provisions, see § 79-4-10.21.

Cross References —

Amendment of bylaws under Mississippi Nonprofit Corporation Act, see §§ 79-11-313 through 79-11-317.

Article 11. Merger and Share Exchange.

§79-4-11.01. Definitions.

As used in this chapter:

“Merger” means a business combination pursuant to Section 79-4-11.02.

“Organizational documents” means the basic document or documents that create, or determine the internal governance of, an eligible entity.

“Party to a merger” or “party to a share exchange” means any domestic or foreign corporation or eligible entity that will:

  1. Merge under a plan of merger;
  2. Acquire shares or eligible interests of another corporation or eligible entity in a share exchange; or
  3. Have all of its shares or eligible interests or all of one or more classes or series of its shares or eligible interests acquired in a share exchange.

“Share exchange” means a business combination pursuant to Section 79-4-11.03.

“Survivor” in a merger means the corporation or eligible entity into which one or more other corporations or eligible entities are merged. A survivor of a merger may preexist the merger or be created by the merger.

HISTORY: Laws, 2000, ch. 469, § 15; Laws, 2012, ch. 481, § 26, eff from and after Jan. 1, 2013.

Editor’s Notes —

Laws, 2000, ch. 469, § 16, renumbered and amended former § 79-4-11.01 as present § 79-4-11.02.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted former definitions (a) and (d), “Interests” and “Other entity,” and redesignated the remaining paragraphs accordingly; substituted “eligible” for “other” preceding “entity” throughout the section; and made a minor stylistic change.

§79-4-11.02. Merger.

One or more domestic corporations may merge with a domestic or foreign corporation or eligible entity pursuant to a plan of merger.

A foreign corporation, or a domestic or foreign eligible entity, may be a party to the merger, or may be created by the terms of the plan of merger, only if:

  1. The merger is permitted by the laws under which the corporation or eligible entity is organized or by which it is governed; and
  2. In effecting the merger, the corporation or eligible entity complies with such laws and with its articles of incorporation or organizational documents.
  3. The manner and basis of converting the shares of each merging corporation and eligible interest of each merging eligible entity into shares or other securities, eligible interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing;
  4. The articles of incorporation of any corporation, or the organizational documents of any eligible entity to be created by the merger, or if a new corporation or eligible entity is not to be created by the merger, any amendments to the survivor’s articles of incorporation, or organizational documents; and
  5. Any other provisions required by the laws under which any party to the merger is organized or by which it is governed, or by the articles of incorporation or organizational documents of any such party.

The plan of merger must include:

The name of each corporation or eligible entity that will merge and the name of the corporation or eligible entity that will be the survivor of the merger;

The terms and conditions of the merger;

Terms of a plan of merger may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 79-4-1.20(k).

The plan of merger may also include a provision that the plan may be amended prior to filing the articles of merger with the Secretary of State, provided that if the shareholders of a domestic corporation that is a party to the merger are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to:

Change the amount or kind of shares or other securities, eligible interests, obligations, rights to acquire shares or other securities, cash, or other property to be received by the shareholders of or owners of interests in any party to the merger upon conversion of their shares or interests under the plan;

Change the articles of incorporation of any corporation or the organizational documents of any eligible entity, that will survive or be created as a result of the merger, except for changes permitted by Section 79-4-10.05 or by comparable provisions of the laws under which the foreign corporation or eligible entity is organized or governed; or

Change any of the other terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

Liability from a merger shall be limited as provided in Sections 79-33-1 through 79-33-9.

HISTORY: Former 1972 Code §79-4-11.02 [Laws, 1987, ch. 486, § 11.02] renumbered as §79-4-11.03 by Laws, 2000, ch. 469, § 17. Former 1972 Code §79-4-11.01 [Laws, 1987, ch. 486, § 11.01] amended and renumbered as §79-4-11.02 by Laws, 2000, ch. 469, § 16; Laws, 2004, ch. 353, § 7; Laws, 2004, ch. 495, § 9; Laws, 2012, ch. 481, § 27, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 7 of ch. 353, Laws of 2004, effective from and after passage (approved April 20, 2004), amended this section. Section 9 of ch. 495, Laws of 2004, effective from and after July 1, 2004, also amended this section. As set out above, this section reflects the language of Section 9 of ch. 495, Laws of 2004, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the same legislative session, the amendment with the latest effective date shall supersede all other amendments to the same section effective on an earlier date.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.01, was amended and renumbered as present § 79-4-11.02 by Laws, 2000, ch. 469, § 16. Former § 79-4-11.02 was amended and renumbered as present § 79-4-11.03 by Laws, 2000, ch. 469, § 17.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The first 2004 amendment (ch. 353) added (f).

The second 2004 amendment (ch. 495) rewrote (d); and added (f).

The 2012 amendment, effective January 1, 2013, substituted “eligible” for “other” preceding “entity” and “interests” throughout the section.

Cross References —

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

Merger of one or more foreign business or nonprofit corporations with one or more domestic nonprofit corporations, see § 79-11-327.

Acquisition of control shares pursuant to a merger under this article as not constituting control share acquisition, see § 79-27-5.

RESEARCH REFERENCES

ALR.

Similarity of ownership or control as basis for charging corporation acquiring assets of another with liability for former owner’s debts. 49 A.L.R.3d 881.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Liability of successor corporation for punitive damages for injury caused by predecessor’s product. 55 A.L.R.4th 166.

Sufficiency, under § 14 of Securities Exchange Act of 1934 ( 15 USCS § 78n) and implementing regulations, of proxy or information statement incident to merger of corporation. 4 A.L.R. Fed. 1021.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

What constitutes violation of § 208 of Employee Retirement Income Security Act (ERISA) ( 29 USCS § 1058), prohibiting certain mergers, consolidations, and transfers involving pension plans. 103 A.L.R. Fed. 390.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2239 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 401 et seq. (consolidation and merger).

20 Am. Jur. Proof of Facts 2d 609, De Facto Merger of Two Corporations.

CJS.

19 C.J.S., Corporations §§ 1617 et seq.

Law Reviews.

Clarke, The fiduciary obligations of lenders in leveraged buyouts. 54 Miss. L. J. 423, Sept.-Dec., 1984.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-141.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-141.

11. In general.

Documentary evidence was not required to show the existence of a merger of two corporations. Although it may have been preferable to have introduced the certificate of merger, the testimony of an officer of one of the corporations was sufficient to prove the existence of the merger. Weeks v. Cal-Maine Foods, Inc., 522 So. 2d 725, 1987 Miss. LEXIS 2970 (Miss. 1987).

In the absence of proof of the existence of a de facto merger, or of any bona fide or colorable attempt to comply with the statutory requirements for corporate mergers, a creditor cannot maintain a joint and several action against two corporations for debts incurred only by one. Jac See Packing Co. v. C. & F. Packing House Market, Inc., 215 So. 2d 704, 1968 Miss. LEXIS 1373 (Miss. 1968).

§79-4-11.03. Share exchange.

Through a share exchange:

  1. A domestic corporation may acquire all of the shares of one or more classes or series of shares of another domestic or foreign corporation, or all of the interests of one or more classes or series of interests of a domestic or foreign eligible entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange; or
  2. All of the shares of one or more classes or series of shares of a domestic corporation may be acquired by another domestic or foreign corporation or eligible entity, in exchange for shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, pursuant to a plan of share exchange.
  3. The manner and basis of exchanging shares of a corporation or interests in an eligible entity whose shares or interests will be acquired under the share exchange into shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing; and
  4. Any other provisions required by the laws under which any party to the share exchange is organized or by the articles of incorporation or organizational documents of any such party.

A foreign corporation, or a domestic or foreign eligible entity, may be a party to the share exchange only if:

The share exchange is permitted by the laws under which the corporation or eligible entity is organized or by which it is governed; and

In effecting the share exchange, the corporation or eligible entity complies with such laws and with its articles of incorporation or organizational documents.

The plan of share exchange must include:

The name of each corporation or eligible entity whose shares or interests will be acquired and the name of the corporation or eligible entity that will acquire those shares or interests;

The terms and conditions of the share exchange;

Terms of a plan of share exchange may be made dependent on facts objectively ascertainable outside the plan in accordance with Section 79-4-1.20(k).

The plan of share exchange may also include a provision that the plan may be amended prior to filing of the articles of share exchange with the Secretary of State, provided that if the shareholders of a domestic corporation that is a party to the share exchange are required or permitted to vote on the plan, the plan must provide that subsequent to approval of the plan by such shareholders the plan may not be amended to:

Change the amount or kind of shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, or other property to be issued by the corporation or to be received by the shareholders of or owners of interests in any party to the share exchange in exchange for their shares or interests under the plan; or

Change any of the terms or conditions of the plan if the change would adversely affect such shareholders in any material respect.

Section 79-4-11.03 does not limit the power of a domestic corporation to acquire shares of another corporation or interests in another entity in a transaction other than a share exchange.

HISTORY: Former 1972 Code §79-4-11.03 [Laws, 1987, ch. 486, § 11.03] renumbered as §79-4-11.04 by Laws, 2000, ch. 469, § 18. Former 1972 Code §79-4-11.02 [Laws, 1987, ch. 486, § 11.02] amended and renumbered as §79-4-11.03 by Laws, 2000, ch. 469, § 17; Laws, 2004, ch. 495, § 10; Laws, 2012, ch. 481, § 28, eff from and after Jan. 1, 2013.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.02, was amended and renumbered as present § 79-4-11.03 by Laws of 2000, ch. 469, § 17. Former § 79-4-11.03 was amended and renumbered as present § 79-4-11.04 by Laws of 2000, ch. 469, § 18.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2004 amendment rewrote (d).

The 2012 amendment, effective January 1, 2013, substituted “eligible” for “other” preceding “entity” throughout the section.

Cross References —

Shareholder’s right to appraisal, see § 79-4-13.02.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

RESEARCH REFERENCES

ALR.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Liability of successor corporation for punitive damages for injury caused by predecessor’s product. 55 A.L.R.4th 166.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2239 et seq.

CJS.

19 C.J.S., Corporations §§ 1617 et seq.

§79-4-11.04. Action on a plan of merger or share exchange.

In the case of a domestic corporation that is a party to a merger or share exchange:

The plan of merger or share exchange must be adopted by the board of directors.

Except as provided in subsection (g) and in Section 79-4-11.05, after adopting the plan of merger, the board of directors must submit the plan to the shareholders for their approval. After adopting the plan of share exchange, the board of directors of the corporation whose shares will be acquired in the share exchange must submit the plan to the shareholders for their approval. The board of directors must also transmit to the shareholders a recommendation that the shareholders approve the plan of merger or share exchange, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to the shareholders the basis for that determination.

The board of directors may condition its submission of the plan of merger or share exchange to the shareholders on any basis.

If the plan of merger or share exchange is required to be approved by the shareholders, and if the approval is to be given at a meeting, the corporation must notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the plan is to be submitted for approval. The notice must state that the purpose, or one (1) of the purposes, of the meeting is to consider the plan and must contain or be accompanied by a copy or summary of the plan. If the corporation is to be merged into an existing corporation or eligible entity, the notice shall also include or be accompanied by a copy or summary of the articles of incorporation or organizational documents of that corporation or eligible entity. If the corporation is to be merged into a corporation or eligible entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the articles of incorporation or organizational documents of the new corporation or eligible entity.

Unless the articles of incorporation, or the board of directors acting pursuant to subsection (c), requires a greater vote or a greater number of votes to be present, the approval of the plan of merger or share exchange shall require the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the plan exists, and, if any class or series of shares is entitled to vote as a separate group on the plan of merger or share exchange, the approval of each such separate voting group at a meeting at which a quorum of the voting group consisting of at least a majority of the votes entitled to be cast on the merger or share exchange by that voting group is present.

Separate voting by voting groups is required:

  1. On a plan of merger, by each class or series of shares that (A) are to be converted, pursuant to the provisions of the plan of merger, into shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing, or (B) would have a right to vote as a separate group on a provision of the plan that, if contained in a proposed amendment to articles of incorporation, would require action by separate voting groups under Section 79-4-10.04;
  2. On a plan of share exchange, by each class or series of shares included in the exchange, with each class or series constituting a separate voting group; and
  3. On a plan of merger or share exchange, if the voting group is entitled under the articles of incorporation to vote as a voting group to approve a plan of merger or share exchange.
  4. The number of voting shares outstanding immediately after the merger, plus the number of voting shares issuable as a result of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger), will not exceed by more than twenty percent (20%) the total number of voting shares of the surviving corporation outstanding immediately before the merger; and
  5. The number of participating shares outstanding immediately after the merger, plus the number of participating shares issuable as a result of the merger (either by the conversion of securities issued pursuant to the merger or the exercise of rights and warrants issued pursuant to the merger), will not exceed by more than twenty percent (20%) the total number of participating shares outstanding immediately before the merger.

Unless the articles of incorporation otherwise provide, approval by the corporation’s shareholders of a plan of merger is not required if:

The corporation will survive the merger; and

Except for amendments permitted by Section 79-4-10.05, its articles of incorporation will not be changed; and

Each shareholder of the corporation whose shares were outstanding immediately before the effective date of the merger will hold the same number of shares, with identical preferences, limitations, and relative rights, immediately after the effective date of change; and

As used in subsection (g):

“Participating shares” means shares that entitle their holders to participate without limitation in distributions.

“Voting shares” means shares that entitle their holders to vote unconditionally in elections of directors.

If as a result of a merger or share exchange one or more shareholders of a domestic corporation would become subject to personal liability for the obligations or liabilities of any other person or entity, approval of the plan of merger shall require the execution, by each such shareholder, of a separate written consent to become subject to such personal liability.

HISTORY: Former 1972 Code §79-4-11.04 [Laws, 1987, ch. 486, § 11.04] renumbered as §79-4-11.05 by Laws, 2000, ch. 469, § 19. Former 1972 Code §79-4-11.03 [Laws, 1987, ch. 486, § 11.03] amended and renumbered as §79-4-11.04 by Laws, 2000, ch. 469, § 18; Laws, 2012, ch. 481, § 29, eff from and after Jan. 1, 2013.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.03, was amended and renumbered as present § 79-4-11.04 by Laws of 2000, ch. 469, § 18. Former § 79-4-11.04 was amended and renumbered as present § 79-4-11.05 by Laws of 2000, ch. 469, § 19.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2012 amendment, effective January 1, 2013, substituted “eligible” for “other” preceding “entity” throughout (d).

Cross References —

Voting groups generally, see §§ 79-4-7.25, 79-4-7.26.

Voting on amendments by voting groups generally, see § 79-4-10.04.

Authorization for corporations to merge, see § 79-4-11.02.

Authorization for corporation to participate in share exchange, see § 79-4-11.03.

Effect of merger or share exchange, see § 79-4-11.07.

Abandonment of merger or share exchange, see § 79-4-11.08.

Shareholder’s right to appraisal, see § 79-4-13.02.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

Action on plan of merger under Revised Limited Liability Company Act, see § 79-29-223.

RESEARCH REFERENCES

ALR.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2242, 2246.

20 Am. Jur. Proof of Facts 2d 609, De Facto Merger of Two Corporations.

CJS.

19 C.J.S., Corporations § 1611.

§79-4-11.05. Merger between parent and subsidiary or between subsidiaries.

A domestic parent corporation that owns shares of a domestic or foreign subsidiary corporation that carry at least ninety percent (90%) of the voting power of each class and series of the outstanding shares of the subsidiary that have voting power may merge the subsidiary into itself or into another such subsidiary, or merge itself into the subsidiary, without the approval of the board of directors or shareholders of the subsidiary unless the articles of incorporation of any of the corporations otherwise provide, and unless, in the case of a foreign subsidiary, approval by the subsidiary’s board of directors or shareholders is required by the laws under which the subsidiary is organized.

If under subsection (a) approval of a merger by the subsidiary’s shareholders is not required, the parent corporation shall, within ten (10) days after the effective date of the merger, notify each of the subsidiary’s shareholders that the merger has become effective.

Except as provided in subsections (a) and (b), a merger between a parent and a subsidiary shall be governed by the provisions of Title 79, Chapter 4, Article 11 applicable to mergers generally.

HISTORY: Former 1972 Code §79-4-11.05 [Laws, 1987, ch. 486, § 11.05] renumbered as §79-4-11.06 by Laws, 2000, ch. 469, § 20. Former 1972 Code §79-4-11.04 [Laws, 1987, ch. 486, § 11.04] amended and renumbered as §79-4-11.05 by Laws, 2000, ch. 469, § 19, eff from and after July 1, 2000.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.04, was amended and renumbered as present § 79-4-11.05 by Laws of 2000, ch. 469, § 19. Former § 79-4-11.05 was amended and renumbered as present § 79-4-11.06 by Laws of 2000, ch. 469, § 20.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

Cross References —

Shareholder’s right to appraisal, see § 79-4-13.02.

Requirement that parent corporation, in a merger pursuant to this section, notify all record shareholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective, see § 79-4-13.20.

Materials to be included in notice to record shareholders required by § 79-4-13.20, see § 79-4-13.22.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

RESEARCH REFERENCES

ALR.

Liability of corporation for contracts of subsidiary. 38 A.L.R.3d 1102.

Similarity of ownership or control as basis for charging corporation acquiring assets of another with liability for former owner’s debts. 49 A.L.R.3d 881.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Liability of successor corporation for punitive damages for injury caused by predecessor’s product. 55 A.L.R.4th 166.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

Am. Jur.

19 Am. Jur. 2d, Corporations § 2243.

20 Am. Jur. Proof of Facts 2d 609, De Facto Merger of Two Corporations.

§79-4-11.06. Articles of merger or share exchange.

After a plan of merger or share exchange has been adopted and approved as required by the Mississippi Business Corporation Act, articles of merger or share exchange shall be signed on behalf of each party to the merger or share exchange by any officer or other duly authorized representative. The articles shall set forth:

  1. The names of the parties to the merger or share exchange and the date on which the merger or share exchange occurred or is to be effective;
  2. If the articles of incorporation of the survivor of a merger are amended, or if a new corporation is created as a result of a merger, the amendments to the survivor’s articles of incorporation or the articles of incorporation of the new corporation;
  3. If the plan of merger or share exchange required approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement that the plan was duly approved by the shareholders and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by the Mississippi Business Corporation Act and the articles of incorporation;
  4. If the plan of merger or share exchange did not require approval by the shareholders of a domestic corporation that was a party to the merger or share exchange, a statement to that effect; and
  5. As to each foreign corporation and each eligible entity that was a party to the merger or share exchange, a statement that the plan and the performance of its terms were duly authorized by all action required by the laws under which the corporation or eligible entity is organized or by which it is governed, and by its articles of incorporation or organizational documents.

Articles of merger or share exchange shall be delivered to the Secretary of State for filing by the survivor of the merger or the acquiring corporation in a share exchange and shall take effect on the effective date.

HISTORY: Former 1972 Code §79-4-11.06 [Laws, 1987, ch. 486, § 11.06] renumbered as §79-4-11.07 by Laws, 2000, ch. 469, § 21. Former 1972 Code §79-4-11.05 [Laws, 1987, ch. 486, § 11.05] amended and renumbered as §79-4-11.06 by Laws, 2000, ch. 469, § 20; Laws, 2012, ch. 481, § 30, eff from and after Jan. 1, 2013.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.05, was amended and renumbered as present § 79-4-11.06 by Laws of 2000, ch. 469, § 20. Former § 79-4-11.06 was amended and renumbered as present § 79-4-11.07 by Laws of 2000, ch. 469, § 21.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2012 amendment, effective January 1, 2013, substituted “signed” for “executed” preceding “on behalf” in (a); and substituted “eligible” for “other” twice in (a)(5).

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

Action on plan of merger or share exchange, see § 79-4-11.04.

Effect of merger or share exchange, see § 79-4-11.07.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

Certificate of merger under Limited Liability Company Act, see § 79-29-211.

Effect of merger or consolidation of domestic stock insurance company with another domestic or foreign stock insurance company is as provided in this section, see § 83-19-119.

RESEARCH REFERENCES

ALR.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

§79-4-11.07. Effect of merger or share exchange.

When a merger becomes effective:

  1. The corporation or eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be;
  2. The separate existence of every corporation or eligible entity that is merged into the survivor ceases;
  3. All property owned by, and every contract right possessed by, each corporation or eligible entity that merges into the survivor is vested in the survivor without reversion or impairment;
  4. All liabilities of each corporation or eligible entity that is merged into the survivor are vested in the survivor subject to the limitations as provided in Sections 79-33-1 through 79-33-9;
  5. The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;
  6. The articles of incorporation or organizational documents of the survivor are amended to the extent provided in the plan of merger;
  7. The articles of incorporation or organizational documents of a survivor that is created by the merger become effective; and
  8. The shares of each corporation that is a party to the merger, and the interests in an eligible entity that is a party to a merger, that are to be converted under the plan of merger into shares, interests, obligations, rights to acquire securities, other securities, cash, other property, or any combination of the foregoing, are converted and the former holders of such shares or interests are entitled only to the rights provided to them in the plan of merger or to any rights they may have under Title 79, Chapter 4, Article 13.

When a share exchange becomes effective, the shares of each domestic corporation that are to be exchanged for shares or other securities, interests, obligations, rights to acquire shares or securities, other securities, cash, other property, or any combination of the foregoing, are entitled only to the rights provided to them in the plan of share exchange or to any rights they may have under Title 79, Chapter 4, Article 13.

Any shareholder of a domestic corporation that is a party to a merger or share exchange who, prior to the merger or share exchange, was liable for the liabilities or obligations of such corporation, shall not be released from such liabilities or obligations by reason of the merger or share exchange.

Upon a merger becoming effective, a foreign corporation, or a foreign eligible entity, that is the survivor of the merger is deemed to:

Agree that service of process in a proceeding to enforce the rights of shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights, may be made in the manner provided in Section 79-35-13; and

Agree that it will promptly pay the amount, if any, to which such shareholders are entitled under Title 79, Chapter 4, Article 13.

HISTORY: Former 1972 Code §79-4-11.07 [Laws, 1987, ch. 486, § 11.07] deleted by Laws, 2000, ch. 469, § 21. Former 1972 Code §79-4-11.06 [Laws, 1987, ch. 486, § 11.06] amended and renumbered as §79-4-11.07 by Laws, 2000, ch. 469, § 21; Laws, 2004, ch. 353, § 8; Laws, 2012, ch. 382, § 32; Laws, 2012, ch. 481, § 31, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 31 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 32 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 31 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-11.07 as amended by Laws of 2012, ch. 382.

Editor’s Notes —

This section, formerly appearing as § 79-4-11.06, was amended and renumbered as present § 79-4-11.07 by Laws of 2000, ch. 469, § 21.

A former § 79-4-11.07 [Laws, 1987, ch. 486, § 11.07, eff from and after January 1, 1988] pertaining to merger or share exchange with foreign corporations was deleted by Laws of 2000, ch. 469, § 21, effective from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2004 amendment added “subject to the limitations as provided in §§ 79-33-1 et seq.” at the end of (a)(4).

The first 2012 amendment (ch. 382), effective January 1, 2013, rewrote (d)(1); and made minor stylistic changes.

The second 2012 amendment (ch. 481), effective January 1, 2013, rewrote (d)(1); and substituted “eligible” for “other” preceding “entity” throughout the section.

Cross References —

“Other entity” defined, see § 79-4-11.01.

Abandonment of merger or share exchange, see § 79-4-11.08.

Appraisal rights, Title 79, Chapter 4, Article 13, see §§ 79-4-13.01 through 79-4-13.40.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

RESEARCH REFERENCES

ALR.

Tax liabilities as within agreement for assumption or payment of another’s obligations. 4 A.L.R.2d 1314.

Dividend rights in surplus of new consolidated corporation resulting from reduction of capital stock of former constituent corporations. 28 A.L.R.2d 1177.

Merger or consolidation of corporation as terminating charitable trust of which corporation is beneficiary. 34 A.L.R.3d 749.

Dominant shareholder’s accountability to minority for profit, bonus, or the like, received on sale of stock to outsiders. 38 A.L.R.3d 738.

Timeliness and sufficiency of dissenting stockholder’s notice of his objection to consolidation or merger and of his demand for payment for his shares. 40 A.L.R.3d 260.

Products liability: liability of successor corporation for injury or damage caused by product issued by predecessor. 66 A.L.R.3d 824.

Merger or consolidation of corporate lessee as breach of clause in lease prohibiting, conditioning, or restricting assignment or sublease. 39 A.L.R.4th 879.

Who acquires rights under patent license owned by constituent corporation in case of corporate merger or consolidation. 49 A.L.R. Fed. 890.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2249 et seq.

CJS.

19 C.J.S., Corporations §§ 1626 et seq.

JUDICIAL DECISIONS

1. In general.

A corporate obligor and those who control it may not with impunity dissolve the corporation in a debt avoidance maneuver and cause its assets to be transferred to a new successor corporation. This is so whether the debt arises in contract, quasi-contract, or tort. Where a corporation unsuccessfully sought to avoid liability on a contract with a former shareholder by dissolving the corporation and transferring assets to a newly formed corporation, the shareholder’s rights against the new corporation were limited to the extent that the new corporation acquired assets of the contracting corporation without paying fair value therefor. Morris v. Macione, 546 So. 2d 969, 1989 Miss. LEXIS 319 (Miss. 1989).

§79-4-11.08. Abandonment of merger or share exchange.

Unless otherwise provided in a plan of merger or share exchange or in the laws under which a foreign corporation or a domestic or foreign eligible entity that is a party to a merger or a share exchange is organized or by which it is governed, after the plan has been adopted and approved as required by this article, and at any time before the merger or share exchange has become effective, it may be abandoned by any party thereto without action by the party’s shareholders or owners of interests, in accordance with any procedures set forth in the plan of merger or share exchange or, if no such procedures are set forth in the plan, in the manner determined by the board of directors, subject to any contractual rights of other parties to the merger or share exchange.

If a merger or share exchange is abandoned under subsection (a) after articles of merger or share exchange have been filed with the Secretary of State but before the merger or share exchange has become effective, a statement that the merger or share exchange has been abandoned in accordance with this section, signed on behalf of a party to the merger or share exchange by an officer or other duly authorized representative, shall be delivered to the Secretary of State for filing prior to the effective date of the merger or share exchange. Upon filing, the statement shall take effect and the merger or share exchange shall be deemed abandoned and shall not become effective.

HISTORY: Laws, 2000, ch. 469, § 22; Laws, 2012, ch. 481, § 32, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (a), substituted “eligible” for “other” preceding “entity”, and deleted “of a corporation, or the managers of an other entity” following “board of directors” near the end; and substituted signed” for “executed” preceding “on behalf” in (b).

Cross References —

“Other entity” defined, see § 79-4-11.01.

Merger of corporations under Mississippi Nonprofit Corporation Act, see §§ 79-11-319 through 79-11-327.

Abandonment of merger under Limited Liability Company Act, see § 79-29-213.

Article 12. Sale of Assets.

§79-4-12.01. Disposition of assets not requiring shareholder approval.

No approval of the shareholders of a corporation is required, unless the articles of incorporation otherwise provide:

  1. To sell, lease, exchange, or otherwise dispose of any or all of the corporation’s assets in the usual and regular course of business;
  2. To mortgage, pledge, dedicate to the repayment of indebtedness (whether with or without recourse) or otherwise encumber any or all of the corporation’s assets, whether or not in the usual and regular course of business;
  3. To transfer any or all of the corporation’s assets to one or more corporations or other entities all of the shares or interests of which are owned by the corporation; or
  4. To distribute assets pro rata to the holders of one or more classes or series of the corporation’s shares.

HISTORY: Laws, 1987, ch. 486, § 12.01; Laws, 2000, ch. 469, § 23, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Disposition of assets requiring shareholder approval, see § 79-4-12.02.

Disposition of corporation assets under Mississippi Nonprofit Corporation Act, see §§ 79-11-329, 79-11-331.

RESEARCH REFERENCES

ALR.

Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation. 9 A.L.R.2d 1306.

Right of corporate officer to purchase corporate assets from corporation. 24 A.L.R.2d 71.

Who may assert invalidity of sale, mortgage, or other disposition of corporate property without approval of stockholders. 58 A.L.R.2d 784.

Right or duty of corporation to refuse to transfer stock on presentation of properly indorsed certificate, because of conflicting rights or claims of one other than transferee. 75 A.L.R.2d 746.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1791, 1792.

16 Am. Jur. Legal Forms 2d, Sale of Business §§ 226:202 et seq. (sale of corporate assets).

CJS.

19 C.J.S., Corporations § 1102.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-155.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-155.

11. In general.

Deeds of trust and security agreement, taken together, and which mortgaged to plaintiff all or substantially all of the property of the corporation were invalid under Mississippi law where: (1) they were not made in the regular corporation course of business; (2) the mortgage was not a purchase money mortgage except as to supplies subsequently delivered; (3) corporation was not in the business of buying and selling real estate or business equipment; (4) no notice of the mortgage was given to the shareholders; and (5) there was no meeting of the stockholders authorizing or consenting to the mortgage. In re James Calvin Belk Constr. Co., 4 B.R. 132, 1980 Bankr. LEXIS 5278 (Bankr. N.D. Miss. 1980).

§79-4-12.02. Disposition of assets requiring shareholder approval.

A sale, lease, exchange, or other disposition of assets, other than a disposition described in Section 79-4-12.01, requires approval of the corporation’s shareholders if the disposition would leave the corporation without a significant continuing business activity. If a corporation retains a business activity that represented at least twenty-five percent (25%) of total assets at the end of the most recently completed fiscal year, and twenty-five (25%) of either income from continuing operations before taxes or revenues from continuing operations for that fiscal year, in each case of the corporation and its subsidiaries on a consolidated basis, the corporation will conclusively be deemed to have retained a significant continuing business activity.

A disposition that requires approval of the shareholders under subsection (a) shall be initiated by a resolution by the board of directors authorizing the disposition. After adoption of such a resolution, the board of directors shall submit the proposed disposition to the shareholders for their approval. The board of directors shall also transmit to the shareholders a recommendation that the shareholders approve the proposed disposition, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors shall transmit to the shareholders the basis for that determination.

The board of directors may condition its submission of a disposition to the shareholders under subsection (b) on any basis.

If a disposition is required to be approved by the shareholders under subsection (a), and if the approval is to be given at a meeting, the corporation shall notify each shareholder, whether or not entitled to vote, of the meeting of shareholders at which the disposition is to be submitted for approval. The notice shall state that the purpose, or one of the purposes, of the meeting is to consider the disposition and shall contain a description of the disposition, including the terms and conditions thereof and the consideration to be received by the corporation.

Unless the articles of incorporation or the board of directors acting pursuant to subsection (c) require a greater vote, or a greater number of votes to be present, the approval of a disposition by the shareholders shall require the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast on the disposition exists.

After a disposition has been approved by the shareholders under subsection (b), and at any time before the disposition has been consummated, it may be abandoned by the corporation without action by the shareholders, subject to any contractual rights of other parties to the disposition.

A disposition of assets in the course of dissolution under Title 79, Chapter 4, Article 14 is not governed by this section.

The assets of a direct or indirect consolidated subsidiary shall be deemed the assets of the parent corporation for the purposes of this section.

HISTORY: Laws, 1987, ch. 486, § 12.02; Laws, 2000, ch. 469, § 24, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Disposition of assets not requiring shareholder approval, see § 79-4-12.01.

Dissolution generally, Title 79, Chapter 4, Article 14, see §§ 79-4-14.01 through 79-4-14.40.

Shareholder’s right to appraisal, see § 79-4-13.02.

Disposition of corporation assets under Mississippi Nonprofit Corporation Act, see §§ 79-11-329, 79-11-331.

RESEARCH REFERENCES

ALR.

Applicability of statutes regulating sale of assets or property of corporation as affected by purpose or character of corporation. 9 A.L.R.2d 1306.

Right of corporate officer to purchase corporate assets from corporation. 24 A.L.R.2d 71.

Who may assert invalidity of sale, mortgage, or other disposition of corporate property without approval of stockholders. 58 A.L.R.2d 784.

Validity of agreement in conjunction with sale of corporate shares that majority of directors will be replaced by purchaser’s designees. 13 A.L.R.3d 361.

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1791 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 441 et seq.

5 Am. Jur. Proof of Facts 505, Good Will.

CJS.

19 C.J.S., Corporations § 1102.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-10. [Reserved for future use.]

II. Under Former §79-3-157.

11. In general.

I. Under Current Law.

1. In general.

A corporate obligor and those who control it may not with impunity dissolve the corporation in a debt avoidance maneuver and cause its assets to be transferred to a new successor corporation. This is so whether the debt arises in contract, quasi-contract, or tort. Where a corporation unsuccessfully sought to avoid liability on a contract with a former shareholder by dissolving the corporation and transferring assets to a newly formed corporation, the shareholder’s rights against the new corporation were limited to the extent that the new corporation acquired assets of the contracting corporation without paying fair value therefor. Morris v. Macione, 546 So. 2d 969, 1989 Miss. LEXIS 319 (Miss. 1989).

2.-10. [Reserved for future use.]

II. Under Former § 79-3-157.

11. In general.

Deeds of trust and security agreement, taken together, and which mortgaged to plaintiff all or substantially all of the property of the corporation were invalid under Mississippi law where: (1) they were not made in the regular corporation course of business; (2) the mortgage was not a purchase money mortgage except as to supplies subsequently delivered; (3) corporation was not in the business of buying and selling real estate or business equipment; (4) no notice of the mortgage was given to the shareholders; and (5) there was no meeting of the stockholders authorizing or consenting to the mortgage. In re James Calvin Belk Constr. Co., 4 B.R. 132, 1980 Bankr. LEXIS 5278 (Bankr. N.D. Miss. 1980).

Article 13. Appraisal Rights.

Subarticle A. Right to Appraisal and Payment for Shares.

§79-4-13.01. Definitions.

In this article:

  1. “Affiliate” means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person or is a senior executive thereof.For purposes of Section 79-4-13.02(b)(5), a person is deemed to be an affiliate of its senior executives.
  2. “Beneficial shareholder” means a person who is the beneficial owner of shares held in a voting trust or by a nominee on the beneficial owner’s behalf.
  3. “Corporation” means the issuer of the shares held by a shareholder demanding appraisal and, for matters covered in Sections 79-4-13.22 through 79-4-13.31, includes the surviving entity in a merger.
  4. “Fair value” means the value of the corporation’s shares determined:
  5. “Interest” means interest from the effective date of the corporate action until the date of payment, at the rate of interest on judgments in this state on the effective date of the corporate action.

    (5.1) “Interested transaction” means a corporate action described in Section 79-4-13.02(a), other than a merger pursuant to Section 79-4-11.05, involving an interested person in which any of the shares or assets of the corporation are being acquired or converted.As used in this definition:

  6. “Preferred shares” means a class or series of shares whose holders have preference over any other class or series with respect to distributions.
  7. “Record shareholder” means the person in whose name shares are registered in the records of the corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with the corporation.
  8. “Senior executive” means the chief executive officer, chief operating officer, chief financial officer, and anyone in charge of a principal business unit or function.
  9. “Shareholder” means both a record shareholder and a beneficial shareholder.

Immediately before the effectuation of the corporate action to which the shareholder objects;

Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and

Without discounting for lack of marketability or minority status except, if appropriate, for amendments to the articles pursuant to Section 79-4-13.02(a)(5).

“Interested person” means a person, or an affiliate of a person, who at any time during the one-year period immediately preceding approval by the board of directors of the corporate action:(A) was the beneficial owner of twenty percent (20%) or more of the voting power of the corporation, excluding any shares acquired pursuant to an offer for all shares having voting power if the offer was made within one (1) year prior to the corporate action for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action; (B) had the power, contractually or otherwise to cause the appointment or election of twenty-five percent (25%) or more of the directors to the board of directors of the corporation; or (C) was a senior executive or director of the corporation or a senior executive of any affiliate thereof, and that senior executive or director will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders as such, other than:(1) employment, consulting, retirement, or similarbenefits established separately and not as part of, or in contemplation of, the corporate action; or (2) employment, consulting, retirement, or similar benefits established in contemplation of or as part of the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in Section 79-4-8.62; or (3) in the case of a director of the corporation who will, in the corporate action become a director of the acquiring entity in the corporate action, or one of its affiliates, rights and benefits as a director that are provided on the same basis as those afforded by the acquiring entity generally to other directors of such entity or such affiliate.

“Beneficial owner” means any person who, directly or indirectly, through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote, or to direct the voting of, shares; except that a member of a national securities exchange is not deemed to be a beneficial owner of securities held directly or indirectly by it on behalf of another person solely because the member is the record holder of the securities if the member is precluded by the rules of the exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted.When two (2) or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed thereby is deemed to have acquired beneficial ownership, as of the date of the agreement, of all voting shares of the corporation beneficially owned by any member of the group.

HISTORY: Laws, 1987, ch. 486, § 13.01; Laws, 1988, ch. 369, § 5; Laws, 2000, ch. 469, § 28; Laws, 2002, ch. 333, § 1; Laws, 2007, ch. 361, § 8, eff from and after July 1, 2007.

Amendment Notes —

The 2000 amendment rewrote the section.

The 2002 amendment, substituted “79-4-13.02(b)(5)” for “79-4-13.02(b)(4)” in (1).

The 2007 amendment added (5.1).

Cross References —

Interest on judgments and decrees, see § 75-17-7.

Requirement that plan of reorganization of stock savings bank to ownership by holding company contain dissenters’ rights as provided under §§ 79-4-13.01 et seq., see § 81-14-401.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 682, 683 et seq.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

§79-4-13.02. Right to appraisal.

A shareholder is entitled to appraisal rights, and to obtain payment of the fair value of that shareholder’s shares, in the event of any of the following corporate actions:

  1. Consummation of a merger to which the corporation is a party (i) if shareholder approval is required for the merger by Section 79-4-11.04 and the shareholder is entitled to vote on the merger, except that appraisal rights shall not be available to any shareholder of the corporation with respect to shares of any class or series that remain outstanding after consummation of the merger, or (ii) if the corporation is a subsidiary and the merger is governed by Section 79-4-11.05;
  2. Consummation of a share exchange to which the corporation is a party as the corporation whose shares will be acquired if the shareholder is entitled to vote on the exchange, except that appraisal rights shall not be available to any shareholder of the corporation with respect to any class or series of shares of the corporation that is not exchanged;
  3. Consummation of a disposition of assets pursuant to Section 79-4-12.02 if the shareholder is entitled to vote on the disposition;
  4. An amendment of the articles of incorporation with respect to a class or series of shares that reduces the number of shares of a class or series owned by the shareholder to a fraction of a share if the corporation has the obligation or right to repurchase the fractional share so created;
  5. Any other amendment to the articles of incorporation, merger, share exchange or disposition of assets to the extent provided by the articles of incorporation, bylaws or a resolution of the board of directors;
  6. Consummation of a domestication if the shareholder does not receive shares in the foreign corporation resulting from the domestication that have terms as favorable to the shareholder in all material respects, and represent at least the same percentage interest of the total voting rights of the outstanding shares of the corporation, as the shares held by the shareholder before the domestication; or
  7. Consummation of a conversion of the corporation to a different form of entity under the Mississippi Entity Conversion and Domestication Act.

Notwithstanding subsection (a), the availability of appraisal rights under subsection (a)(1), (2), (3), (4) and (6) shall be limited in accordance with the following provisions:

Appraisal rights shall not be available to any shareholder of the constituent corporations in a corporate reorganization transaction otherwise covered by subsection (a)(1) or (2) if: (i) the shareholders of an existing corporation exchange shares of such corporation for shares of a newly formed corporation and receive, after the reorganization, the same proportionate share interest in the new corporation and the rights and interests of the shareholders in the newly formed corporation are substantially the same as those in the existing corporation prior to the transaction; (ii) the newly formed corporation has no significant assets other than the shares of the existing corporation; (iii) after the reorganization the newly formed corporation and its subsidiaries have substantially the same assets and liabilities, on a consolidated basis, as those of the existing corporation prior to the transaction; (iv) fractional shares are neither created nor eliminated as a result of the transaction; (v) the existing corporation and the newly formed corporation are the only constituent corporations to such reorganization; (vi) the existing corporation and the newly formed corporation are corporations of this state; (vii) the directors of the existing corporation become the directors of the newly formed corporation upon the effective time of the corporate reorganization; (viii) the existing corporation becomes a direct wholly owned subsidiary of the newly formed corporation; and (ix) the shareholders of the existing corporation do not recognize gain or loss for United States federal income tax purposes as determined by the board of directors of the existing corporation.

Appraisal rights shall not be available for the holders of shares of any class or series of shares which is:

Listed on the New York Stock Exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.; or

Not so listed or designated, but has at least two thousand (2,000) shareholders and the outstanding shares of such class or series has a market value of at least Twenty Million Dollars ($20,000,000.00) (exclusive of the value of such shares held by its subsidiaries, senior executives, directors and beneficial shareholders owning more than ten percent (10%) of such shares).

The applicability of subsection (b)(2) shall be determined as of:

The record date fixed to determine the shareholders entitled to receive notice of, and to vote at, the meeting of shareholders to act upon the corporate action requiring appraisal rights; or

The day before the effective date of such corporate action if there is no meeting of shareholders.

Subsection (b)(2) shall not be applicable and appraisal rights shall be available pursuant to subsection (a) for the holders of any class or series of shares who are required by the terms of the corporate action requiring appraisal rights to accept for such shares anything other than cash or shares of any class or any series of shares of any corporation, or any other proprietary interest of any other entity, that satisfies the standards set forth in subsection (b)(2) at the time the corporate action becomes effective.

Subsection (b)(2) shall not be applicable and appraisal rights shall be available pursuant to subsection (a) for the holders of any class or series of shares where the corporate action is an interested transaction.

Notwithstanding any other provision of this section, the articles of incorporation as originally filed or any amendment thereto may limit or eliminate appraisal rights for any class or series of preferred shares, but any such limitation or elimination contained in an amendment to the articles of incorporation that limits or eliminates appraisal rights for any of such shares that are outstanding immediately prior to the effective date of such amendment or that the corporation is or may be required to issue or sell thereafter pursuant to any conversion, exchange or to other right existing immediately before the effective date of such amendment shall not apply to any corporate action that becomes effective within one (1) year of that date if such action would otherwise afford appraisal rights.

HISTORY: Laws, 1987, ch. 486, § 13.02; Laws, 1990, ch. 411, § 7; Laws, 2000, ch. 469, § 29; Laws, 2001, ch. 435, § 14; Laws, 2007, ch. 361, § 9; Laws, 2014, ch. 399, § 36, eff from and after Jan. 1, 2015.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (b)(1) by substituting “subsection (a)(1) or (2)” for “Section 79-4-13.02(a)(1) or (2).” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Subsection (c) contained an error in a statutory reference. At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, the error has been corrected by substituting “Notwithstanding any other provision of this section” for “Notwithstanding any other provision of Section 79-4-13.02.”

Amendment Notes —

The 2000 amendment rewrote the section.

The 2001 amendment, in (b), inserted (1) and redesignated the remaining paragraphs in (b) accordingly, made punctuation changes in (b)(5)(ii)(A), substituted “paragraph (5)” for “paragraph (4)” in (b)(6), and substituted “(b)(2)” for “(b)(1)” throughout.

The 2007 amendment added “the corporate action is an interested transaction” to the end of (b)(5); deleted former (b)(5)(i) through (b)(6); and deleted former (d).

The 2014 amendment, effective January 1, 2015, deleted “or” following “fractional share so created” at the end of (a)(4) and “or the American Stock Exchange” following “New York Stock Exchange” at the beginning of (b)(2)(i); inserted (a)(6) and (a)(7); substituted a comma for “and” and inserted “and (6)” in (b); and made minor punctuation changes.

Cross References —

Rights of former holders of shares of corporation that is party to merger or share exchange, which shares are to be converted into other shares, obligations, securities or cash or property, see § 79-4-11.07.

Requirement that surviving foreign corporation of merger and acquiring foreign corporation of share exchange agree to give appraisal rights to shareholders of domestic corporations party to merger or share exchange, pursuant to Article 13, see § 79-4-11.07.

Legality of proposed or completed action described in this section maybe contested and action enjoined, set aside or rescinded after shareholder approval of the action under certain circumstances, see § 79-4-13.40.

Mississippi Control Share Act, see §§ 79-27-1 et seq.

RESEARCH REFERENCES

ALR.

Dominant shareholder’s accountability to minority for profit, bonus, or the like, received on sale of stock to outsiders. 38 A.L.R.3d 738.

Timeliness and sufficiency of dissenting stockholder’s notice of his objection to consolidation or merger and of his demand for payment for his shares. 40 A.L.R.3d 260.

Right of corporation to discharge employee who asserts rights as stockholder. 84 A.L.R.3d 1107.

Propriety of applying minority discount to value of shares purchased by corporation or its shareholders from minority shareholders. 13 A.L.R.5th 840.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 683, 684.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 411 et seq.

CJS.

18 C.J.S., Corporations §§ 612-627.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-161.

11. In general.

12. Determination of fair value.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-161.

11. In general.

The fair value of stock is a purely factual question, and it was within the province of the chancellor, as the trier of fact, to evaluate the evidence, resolve any conflict, and to ascertain the fair value of stock to be paid by a corporation to those shareholders who dissented to a merger. Cal-Maine Foods, Inc. v. Duvic, 264 So. 2d 383, 1972 Miss. LEXIS 1353 (Miss. 1972).

12. Determination of fair value.

Under circumstances of instant case, trial court did not err in finding fair value of dissenting stockholders’ shares of bank to be $100 per share, notwithstanding dissenting stockholders’ contention that court resorted to wrong methodology when it computed both market value and investment value of shares. Hernando Bank v. Huff, 796 F.2d 803, 1986 U.S. App. LEXIS 28054 (5th Cir. Miss. 1986).

Statutory prohibition against consideration of appreciation or depreciation in anticipation of corporate merger does not exclude consideration of purchase offers made for comparable corporations; in case of offer for comparable company, relevance of purchase offer is not diminished due to consummation of sale; minority discount is proper in determining fair value of stock of dissenters; in determining fair value of stock, court considers market value, asset value, and investment or earnings value; costs and expenses of proceeding which are assessed against corporation where dissenting shareholders were justified in not accepting offer do not include fees of counsel, although fees and expenses of experts may be allowed if court determines that fair value of shares as determined materially exceeds offer of corporation; interest on award accrues from date on which vote was taken on proposed corporate action, and court uses rate of return in effect for one-year certificate of deposit of that date. Hernando Bank v. Huff, 609 F. Supp. 1124, 1985 U.S. Dist. LEXIS 19880 (N.D. Miss. 1985), aff'd, 796 F.2d 803, 1986 U.S. App. LEXIS 28054 (5th Cir. Miss. 1986).

§79-4-13.03. Assertion of appraisal rights by nominees and beneficial owners.

A record shareholder may assert appraisal rights as to fewer than all the shares registered in the record shareholder’s name but owned by a beneficial shareholder only if the record shareholder objects with respect to all shares of the class or series owned by the beneficial shareholder and notifies the corporation in writing of the name and address of each beneficial shareholder on whose behalf appraisal rights are being asserted. The rights of a record shareholder who asserts appraisal rights for only part of the shares held of record in the record shareholder’s name under this subsection shall be determined as if the shares as to which the record shareholder objects and the record shareholder’s other shares were registered in the names of different record shareholders.

A beneficial shareholder may assert appraisal rights as to shares of any class or series held on behalf of the shareholder only if such shareholder:

  1. Submits to the corporation the record shareholder’s written consent to the assertion of such rights no later than the date referred to in Section 79-4-13.22(b)(2)(ii); and
  2. Does so with respect to all shares of the class or series that are beneficially owned by the beneficial shareholder.

HISTORY: Laws, 1987, ch. 486, § 13.03; Laws, 2000, ch. 469, § 30, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote the section.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 683, 684.

Subarticle B. Procedure for Exercise of Appraisal Rights.

§79-4-13.20. Notice of appraisal rights.

Where any corporate action specified in Section 79-4-13.02(a) is to be submitted to a vote at a shareholders’ meeting, the meeting notice must state that the corporation has concluded that the shareholders are, are not or may be entitled to assert appraisal rights under this article. If the corporation concludes that appraisal rights are or may be available, a copy of this article must accompany the meeting notice sent to those record shareholders entitled to exercise appraisal rights.

In a merger pursuant to Section 79-4-11.05, the parent corporation must notify in writing all record shareholders of the subsidiary who are entitled to assert appraisal rights that the corporate action became effective. Such notice must be sent within ten (10) days after the corporate action became effective and include the materials described in Section 79-4-13.22.

Where any corporate action specified in Section 79-4-13.02(a) is to be approved by written consent of the shareholders pursuant to Section 79-4-7.04:

  1. Written notice that appraisal rights are, are not or may be available must be sent to each record shareholder from whom a consent is solicited at the time consent of such shareholder is first solicited and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of this article; and
  2. Written notice that appraisal rights are, are not or may be available must be delivered together with the notice to nonconsenting and nonvoting shareholders required by Section 79-4-7.04(e) and (f), may include the materials described in Section 79-4-13.22 and, if the corporation has concluded that appraisal rights are or may be available, must be accompanied by a copy of this article.

HISTORY: Laws, 1987, ch. 486, § 13.20; Laws, 2000, ch. 469, § 31; Laws, 2007, ch. 361, § 10; Laws, 2012, ch. 481, § 33, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2000 amendment rewrote the section.

The 2007 amendment substituted “Where any corporate action specified” for “If proposed corporate action described” in the first sentence in (a); added (c); and made a minor stylistic change.

The 2012 amendment, effective January 1, 2013, substituted “sent” for “given” preceding “to each record shareholder from whom a consent is solicited” in (c)(1).

Cross References —

Assessment of court costs and expenses in appraisal proceeding against corporation for failure to substantially comply with this section, see § 79-4-13.131.

§79-4-13.21. Notice of intent to demand payment and consequences of voting or consenting.

If a corporate action specified in Section 79-4-13.02(a) is submitted to a vote at a shareholders’ meeting, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares:

  1. Must deliver to the corporation, before the vote is taken, written notice of the shareholder’s intent to demand payment if the proposed action is effectuated; and
  2. Must not vote, or cause or permit to be voted, any shares of such class or series in favor of the proposed action.

If a corporate action specified in Section 79-4-13.02(a) is to be approved by less than unanimous written consent, a shareholder who wishes to assert appraisal rights with respect to any class or series of shares must not sign a consent in favor of the proposed action with respect to that class or series of shares.

A shareholder who fails to satisfy the requirements of subsection (a) or (b) is not entitled to payment under this article.

HISTORY: Laws, 1987, ch. 486, § 13.21; Laws, 2000, ch. 469, § 32; Laws, 2007, ch. 361, § 11; Laws, 2012, ch. 481, § 34, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2000 amendment redesignated former (a) as present (a), (a)(1) and (a)(2); substituted “requiring appraisal” for ‘creating dissenters” and “appraisal” for “dissenters,” and added “with respect to any class or series of shares” in (a); substituted “the shareholder’s” for “his” and deleted “for his shares” following “payment” in (a)(1); substituted “or cause or permit to be voted, any shares of such class or series” for “his shares” in (a)(2); and deleted “for his shares” following “payment” in (b).

The 2007 amendment in (a), substituted “a corporate” for “proposed corporate” and “specified in” for “requiring appraisal rights under”; added (b) and redesignated former (b) as present (c); in (c), substituted “fails to satisfy” for “does not satisfy,” and inserted “or (b)”; and made minor stylistic changes.

The 2012 amendment, effective January 1, 2013, substituted “sign” for “execute” preceding “a consent in favor of the proposed action” near the end of (b).

RESEARCH REFERENCES

ALR.

Dominant shareholder’s accountability to minority for profit, bonus, or the like, received on sale of stock to outsiders. 38 A.L.R.3d 738.

Timeliness and sufficiency of dissenting stockholder’s notice of his objection to consolidation or merger and of his demand for payment for his shares. 40 A.L.R.3d 260.

Valuation of stock of dissenting stockholders in case of consolidation or merger of corporation, sale of its assets, or the like. 48 A.L.R.3d 430.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 691-697.

§79-4-13.22. Appraisal notice and form.

If proposed corporate action requiring appraisal rights under Section 79-4-13.02(a) becomes effective, the corporation must send a written appraisal notice and the form required by subsection (b)(1) to all shareholders who satisfied the requirements of Section 79-4-13.21(a) or Section 79-4-13.21(b). In the case of a merger under Section 79-4-11.05, the parent must deliver an appraisal notice and form to all record shareholders who may be entitled to assert appraisal rights.

The appraisal notice must be delivered no earlier than the date the corporate action specified in Section 79-4-13.02(a) became effective and no later than ten (10) days after such date, and must:

  1. Supply a form that (i) specifies the date of the first announcement to shareholders of the principal terms of the proposed corporate action, if any, and (ii) if such announcement was made, requires the shareholder asserting appraisal rights to certify whether beneficial ownership of those shares for which appraisal rights are asserted was acquired before that date and that, as to those shares, the shareholder did not vote for or consent to the transaction;
  2. State:
  3. Be accompanied by a copy of this article.

Where the form must be sent and where certificates for certificated shares must be deposited and the date by which those certificates must be deposited, which date may not be earlier than the date for receiving the required form under subsection (2)(ii);

A date by which the corporation must receive the form, which date may not be fewer than forty (40) nor more that sixty (60) days after the date the subsection (a) appraisal notice is sent, and state that the shareholder shall have waived the right to demand appraisal with respect to the shares unless the form is received by the corporation by such specified date;

The corporation’s estimate of the fair value of the shares;

That, if requested in writing, the corporation will provide, to the shareholder so requesting, within ten (10) days after the date specified in subsection (2) (ii) the number of shareholders who return the forms by the specified date and the total number of shares owned by them; and

The date by which the notice to withdraw under Section 79-4-13.23 must be received, which date must be within twenty (20) days after the date specified in subsection (2)(ii); and

HISTORY: Laws, 1987, ch. 486, § 13.22; Laws, 2000, ch. 469, § 33; Laws, 2007, ch. 361, § 12; Laws, 2012, ch. 481, § 35, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2000 amendment rewrote the section.

The 2007 amendment substituted “Section 79-4-13.21(a) or Section 79-4-13.21(b)” for “Section 79-4-13-21” at the end of the first sentence in (a); inserted “specified in Section 79-4-13.02(a)” in (b); and substituted “earlier than” for “earlier that” in (2)(i).

The 2012 amendment, effective January 1, 2013, substituted “send” for “deliver” preceding “a written appraisal” in the first sentence of (a); substituted “delivered” for “sent” in (b); and made minor stylistic changes throughout.

Cross References —

Assessment of court costs and expenses in appraisal proceeding against corporation for failure to substantially comply with this section, see § 79-4-13.131.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 698-699.

§79-4-13.23. Perfection of rights; right to withdraw.

A shareholder who receives notice pursuant to Section 79-4-13.22 and who wishes to exercise appraisal rights must sign and return on the form sent by the corporation and, in the case of certificated shares, deposit the shareholder’s certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to Section 79-4-13.22(b)(2)(ii).In addition, if applicable, the shareholder must certify on the form whether the beneficial owner of such shares acquired beneficial ownership of the shares before the date required to be set forth in the notice pursuant to Section 79-4-13.22(b)(1).If a shareholder fails to make this certification, the corporation may elect to treat the shareholder’s shares as after-acquired shares under Section 79-4-13.25. Once a shareholder deposits that shareholder’s certificates or, in the case of uncertificated shares, returns the signed forms, that shareholder loses all rights as a shareholder, unless the shareholder withdraws pursuant to subsection (b).

A shareholder who has complied with subsection (a) may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by so notifying the corporation in writing by the date set forth in the appraisal notice pursuant to Section 79-4-13.22(b)(2)(v). A shareholder who fails to so withdraw from the appraisal process may not thereafter withdraw without the corporation’s written consent.

A shareholder who does not sign and return the form and, in the case of certificated shares, deposit that shareholder’s share certificates where required, each by the date set forth in the notice described in Section 79-4-13.22(b), shall not be entitled to payment under this article.

HISTORY: Laws, 1987, ch. 486, § 13.23; Laws, 2000, ch. 469, § 34; Laws, 2007, ch. 361, § 13, eff from and after July 1, 2007.

Amendment Notes —

The 2000 amendment rewrote the section.

The 2007 amendment rewrote (a); and substituted “sign” for “execute” in (c).

RESEARCH REFERENCES

ALR.

Dominant shareholder’s accountability to minority for profit, bonus, or the like, received on sale of stock to outsiders. 38 A.L.R.3d 738.

Timeliness and sufficiency of dissenting stockholder’s notice of his objection to consolidation or merger and of his demand for payment for his shares. 40 A.L.R.3d 260.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 691-697.

§79-4-13.24. Payment.

Except as provided in Section 79-4-13.25, within thirty (30) days after the form required by Section 79-4-13.22(b)(2)(ii) is due, the corporation shall pay in cash to those shareholders who complied with Section 79-4-13.23(a) the amount the corporation estimates to be the fair value of their shares, plus interest.

The payment to each shareholder pursuant to subsection (a) must be accompanied by:

  1. Financial statements of the corporation that issued the shares to be appraised, consisting of a balance sheet as of the end of a fiscal year ending not more than sixteen (16) months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any;
  2. A statement of the corporation’s estimate of the fair value of the shares, which estimate must equal or exceed the corporation’s estimate given pursuant to Section 79-4-13.22(b)(2)(iii); and
  3. A statement that shareholders described in subsection (a) have the right to demand further payment under Section 79-4-13.26 and that if any such shareholder does not do so within the time period specified therein, such shareholder shall be deemed to have accepted such payment in full satisfaction of the corporation’s obligations under this chapter.

HISTORY: Former 1972 Code §79-4-13.24 [Laws, 1987, ch. 486, § 13.24] deleted by Laws, 2000, ch. 469, § 35. Former 1972 Code §79-4-13.25 [Laws, 1987, ch. 486, § 13.25] amended and renumbered as §79-4-13.24 by Laws, 2000, ch. 469, § 35, eff from and after July 1, 2000.

Editor’s Notes —

This section, formerly appearing as § 79-4-13.25, was amended and renumbered as present § 79-4-13.24 by Laws of 2000, ch. 469, § 35.

A former § 79-4-13.24 [Laws, 1987, ch. 486, § 13.24, eff from and after January 1, 1988], pertaining to share restrictions, was deleted by Laws of 2000, ch. 469, § 35, effective from and after July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

Cross References —

Procedure if shareholder dissatisfied with payment or after made pursuant to this section or § 79-4-13.25, see § 79-4-13.26.

Assessment of court costs and expenses in appraisal proceeding against corporation for failure to substantially comply with this section, see § 79-4-13.131.

RESEARCH REFERENCES

ALR.

Valuation of stock of dissenting stockholders in case of consolidation or merger of corporation, sale of its assets, or the like. 48 A.L.R.3d 430.

Construction and operation of statute restricting corporation’s right to purchase its own stock to purchase from surplus. 61 A.L.R.3d 1049.

Propriety of applying minority discount to value of shares purchased by corporation or its shareholders from minority shareholders. 13 A.L.R.5th 840.

Am. Jur.

18A Am. Jur. 2d, Corporations § 699.

§79-4-13.25. After-acquired shares.

A corporation may elect to withhold payment required by Section 79-4-13.24 from any shareholder who was required to, but did not certify that beneficial ownership of all of the shareholder’s shares for which appraisal rights are asserted was acquired before the date set forth in the appraisal notice sent pursuant to Section 79-4-13.22(b)(1).

If the corporation elected to withhold payment under subsection (a), it must, within thirty (30) days after the form required by Section 79-4-13.22(b)(2)(ii) is due, notify all shareholders who are described in subsection (a):

  1. Of the information required by Section 79-4-13.24(b)(1);
  2. Of the corporation’s estimate of fair value pursuant to Section 79-4-13.24(b)(2);
  3. That they may accept the corporation’s estimate of fair value, plus interest, in full satisfaction of their demands or demand appraisal under Section 79-4-13.26;
  4. That those shareholders who wish to accept such offer must so notify the corporation of their acceptance of the corporation’s offer within thirty (30) days after receiving the offer; and
  5. That those shareholders who do not satisfy the requirements for demanding appraisal under Section 79-4-13.26 shall be deemed to have accepted the corporation’s offer.

Within ten (10) days after receiving the shareholder’s acceptance pursuant to subsection (b), the corporation must pay in cash the amount it offered under subsection (b)(2) to each shareholder who agreed to accept the corporation’s offer in full satisfaction of the shareholder’s demand.

Within forty (40) days after sending the notice described in subsection (b), the corporation must pay in cash the amount it offered to pay under subsection (b)(2) to each shareholder described in subsection (b)(5).

HISTORY: Former 1972 Code §79-4-13.25 [Laws, 1987, ch. 486, § 13.25] renumbered as §79-4-13.24 by Laws, 2000, ch. 469, § 35. Former 1972 Code §79-4-13.27 [Laws, 1987, ch. 486, § 13.27] amended and renumbered as §79-4-13.25 by Laws, 2000, ch. 469, § 36; Laws, 2007, ch. 361, § 14, eff from and after July 1, 2007.

Editor’s Notes —

This section, formerly appearing as § 79-4-13.27, was amended and renumbered as present § 79-4-13.25 by Laws of 2000, ch. 469, § 36. Former § 79-4-13.25 was amended and renumbered as present § 79-4-13.24 by Laws of 2000, ch. 469, § 35.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

The 2007 amendment inserted “was required to, but” following “any shareholder who” in (a).

Cross References —

Procedure if shareholder dissatisfied with payment or after made pursuant to this section or § 79-4-13.25, see § 79-4-13.26.

Court action to determine fair value of shares of shareholder’s after-acquired shares for which corporation elected to withhold payment under this section, see § 79-4-13.30.

Assessment of court costs and expenses in appraisal proceeding against corporation for failure to substantially comply with this section, see § 79-4-13.131.

§79-4-13.26. Procedure if shareholder dissatisfied with payment or offer.

A shareholder paid pursuant to Section 79-4-13.24 who is dissatisfied with the amount of the payment must notify the corporation in writing of that shareholder’s estimate of the fair value of the shares and demand payment of that estimate plus interest (less any payment under Section 79-4-13.24). A shareholder offered payment under Section 79-4-13.25 who is dissatisfied with that offer must reject the offer and demand payment of the shareholder’s stated estimate of the fair value of the shares plus interest.

A shareholder who fails to notify the corporation in writing of that shareholder’s demand to be paid the shareholder’s stated estimate of the fair value plus interest under subsection (a) within thirty (30) days after receiving the corporation’s payment or offer of payment under Section 79-4-13.24 or Section 79-4-13.25, respectively, waives the right to demand payment under this section and shall be entitled only to the payment made or offered pursuant to those respective sections.

HISTORY: Former 1972 Code §79-4-13.26 [Laws, 1987, ch. 486, § 13.26] deleted by Laws, 2000, ch. 469, § 37. Former 1972 Code §79-4-13.28 [Laws, 1987, ch. 486, § 13.28] amended and renumbered as §79-4-13.26 by Laws, 2000, ch. 469, § 37, eff from and after July 1, 2000.

Editor’s Notes —

This section, formerly appearing as § 79-4-13.28, was amended and renumbered as present § 79-4-13.26 by Laws of 2000, ch. 469, § 37.

A former § 79-4-13.26 [Laws, 1987, ch. 486, § 13.26, eff from and after January 1, 1988], pertaining to failure to take action, was deleted by Laws of 2000, ch. 469, § 37, effective July 1, 2000.

Amendment Notes —

The 2000 amendment rewrote and renumbered the section.

Cross References —

Commencement of court proceeding by corporation to determine fair value of shares and accrued interest if demand for payment under this section remains unsettled, see § 79-4-13.30.

Assessment of costs of appraisal proceeding against corporation, see § 79-4-13.31.

RESEARCH REFERENCES

ALR.

Dominant shareholder’s accountability to minority for profit, bonus, or the like, received on sale of stock to outsiders. 38 A.L.R.3d 738.

Timeliness and sufficiency of dissenting stockholder’s notice of his objection to consolidation or merger and of his demand for payment for his shares. 40 A.L.R.3d 260.

Propriety of applying minority discount to value of shares purchased by corporation or its shareholders from minority shareholders.

§79-4-13.27. Renumbered.

Renumbered as §79-4-13.25 by Laws, 2000, ch. 469, § 36.

Editor’s Notes —

Laws of 2000, ch. 469, § 36, renumbered and amended former § 79-4-13.27 as present § 79-4-13.25.

§79-4-13.28. Renumbered.

Renumbered as §79-4-13.26 by Laws, 2000, ch. 469, § 37.

Editor’s Notes —

Laws of 2000, ch. 469, § 37, renumbered and amended former § 79-4-13.28 as present § 79-4-13.26.

Subarticle C. Judicial Appraisal of Shares.

§79-4-13.30. Court action.

If a shareholder makes demand for payment under Section 79-4-13.26 which remains unsettled, the corporation shall commence a proceeding within sixty (60) days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the sixty-day period, it shall pay in cash to each shareholder the amount the shareholder demanded pursuant to Section 79-4-13.26 plus interest.

The corporation shall commence the proceeding in the appropriate court of the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state. If the corporation is a foreign corporation, it shall commence the proceeding in the county in this state where the principal office of the domestic corporation merged with the foreign corporation was located or, if the domestic corporation did not have its principal office in this state at the time of the transaction, in Chancery Court of the First Judicial District of Hinds County, Mississippi.

The corporation shall make all shareholders (whether or not residents of this state) whose demands remain unsettled parties to the proceeding as in an action against their shares, and all parties must be served with a copy of the petition. Nonresidents may be served by registered or certified mail or by publication as provided by law.

The jurisdiction of the court in which the proceeding is commenced under subsection (b) is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the powers described in the order appointing them, or in any amendment to it. The shareholders demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. There shall be no right to a jury trial.

Each shareholder made a party to the proceeding is entitled to judgment (i) for the amount, if any, by which the court finds the fair value of the shareholder’s shares, plus interest, exceeds the amount paid by the corporation to the shareholder for such shares or (ii) for the fair value, plus interest, of the shareholder’s shares for which the corporation elected to withhold payment under Section 79-4-13.25.

HISTORY: Laws, 1987, ch. 486, § 13.30; Laws, 2000, ch. 469, § 38; Laws, 2012, ch. 382, § 33, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2000 amendment rewrote the section.

The 2012 amendment, effective January 1, 2013, rewrote (b).

Cross References —

Procedure for shareholder assertion of appraisal rights, see § 79-4-13.21.

Appraisal notice and form, see § 79-4-13.22.

Assessment of all costs of appraisal proceeding commenced under this section against corporation, see § 79-4-13.31.

RESEARCH REFERENCES

ALR.

Construction and operation of statute restricting corporation’s right to purchase its own stock to purchase from surplus. 61 A.L.R.3d 1049.

Place where corporation is doing business for purposes of state venue statute. 42 A.L.R.5th 221.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 700 et seq.

§79-4-13.31. Court costs and expenses.

The court in an appraisal proceeding commenced under Section 79-4-13.30 shall determine all court costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court.The court shall assess the court costs against the corporation, except that the court may assess court costs against all or some of the shareholders demanding appraisal, in amounts which the court finds equitable, to the extent the court finds such shareholders acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this article.

The court in an appraisal proceeding may also assess the expenses of the respective parties in amounts the court finds equitable:

  1. Against the corporation and in favor of any or all shareholders demanding appraisal if the court finds the corporation did not substantially comply with the requirements of Section 79-4-13.20, 79-4-13.22, 79-4-13.24 or 79-4-13.25; or
  2. Against either the corporation or a shareholder demanding appraisal, in favor of any other party, if the court finds that the party against whom the expenses are assessed acted arbitrarily, vexatiously or not in good faith with respect to the rights provided by this article.

If the court in an appraisal proceeding finds that the expenses incurred by any shareholder were of substantial benefit to other shareholders similarly situated, and that such expenses should not be assessed against the corporation, the court may direct that such expenses be paid out of the amounts awarded the shareholders who were benefited.

To the extent the corporation fails to make a required payment pursuant to Section 79-4-13.24, 79-4-13.25 or 79-4-13.26, the shareholder may sue directly for the amount owed and, to the extent successful, shall be entitled to recover from the corporation all expenses of the suit.

HISTORY: Laws, 1987, ch. 486, § 13.31; Laws, 2000, ch. 469, § 39; Laws, 2007, ch. 361, § 15, eff from and after July 1, 2007.

Amendment Notes —

The 2000 amendment, in (a), substituted “shareholders demanding appraisal” for “dissenters,” “such shareholders” for “the dissenters,” and “with respect to the rights provided by this article” for “in demanding payment under Section 79-4-13.28”; inserted “in an appraisal proceeding” in (b); substituted “shareholders demanding appraisal” for “dissenters” and “Sections 79-4-13.20, 79-4-13.22, 79-4-13.24 or 79-4-13.25” for “Sections 79-4-13.20 through 79-4-13.28” in (b)(1); substituted “shareholder demanding appraisal” for “dissenter” in (b)(2); rewrote (c); and added (d).

The 2007 amendment inserted “court” preceding “costs” throughout (a); substituted “assess the expenses of the respective parties” for “assess the fees and expenses of counsel and experts for the respective parties” in (b); deleted “fees and” proceeding “expenses” in (b)(2); in (c), substituted “expenses incurred by” for “services of counsel for,” “such expenses” for “the fees,” and “direct that such expenses” for “award to such counsel reasonable fees”; and substituted “all expenses of the suit” for “all costs and expenses of the suit, including counsel fees” at the end of (d).

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 705.

Subarticle D. Other Remedies.

§79-4-13.40. Other remedies limited.

The legality of a proposed or completed corporate action described in Section 79-4-13.02(a) may not be contested, nor may the corporate action be enjoined, set aside or rescinded, in a legal or equitable proceeding by a shareholder after the shareholders have approved the corporate action.

Subsection (a) does not apply to a corporate action that:

  1. Was not authorized and approved in accordance with the applicable provisions of:
  2. Was procured as a result of fraud, a material misrepresentation, or an omission of a material fact necessary to make statements made, in light of the circumstances in which they were made, not misleading;
  3. Is an interested transaction, unless it has been recommended by the board of directors in the same manner as is provided in Section 79-4-8.62 and has been approved by the shareholders in the same manner as is provided in Section 79-4-8.63 as if the interested transaction were a director’s conflicting interest transaction; or
  4. Is approved by less than unanimous consent of the voting shareholders pursuant to Section 79-4-7.04 if:

Article 9, 10, 11 or 12,

The articles of incorporation or bylaws, or

The resolution of the board of directors authorizing the corporate action;

The challenge to the corporate action is brought by a shareholder who did not consent and as to whom notice of the approval of the corporate action was not effective at least ten (10) days before the corporate action was effected; and

The proceeding challenging the corporate action is commenced within ten (10) days after notice of the approval of the corporation action is effective as to the shareholder bringing the proceeding.

HISTORY: Laws, 2007, ch. 361, § 16, eff from and after July 1, 2007.

Article 14. Dissolution.

Subarticle A. Voluntary Dissolution.

§79-4-14.01. Dissolution by incorporators or initial directors.

A majority of the incorporators or initial directors of a corporation that has not issued shares or has not commenced business may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth:

  1. The name of the corporation;
  2. The date of its incorporation;
  3. Either (i) that none of the corporation’s shares has been issued, or (ii) that the corporation has not commenced business;
  4. That no debt of the corporation remains unpaid;
  5. That the net assets of the corporation remaining after winding up have been distributed to the shareholders, if shares were issued; and
  6. That a majority of the incorporators or initial directors authorized the dissolution.

HISTORY: Laws, 1987, ch. 486, § 14.01 eff from and after January 1, 1988.

Cross References —

Disposition of assets in the cause of dissolution under this article not governed by § 79-4-12.02, disposition of assets requiring shareholder approval, see § 79-4-12.02.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

RESEARCH REFERENCES

ALR.

Dissolving or winding up affairs of corporation domiciled in another state. 19 A.L.R.3d 1279.

What amounts to “oppressive” conduct under statute authorizing dissolution of corporation at suit of minority stockholders. 56 A.L.R.3d 358.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2348 et seq.

CJS.

19 C.J.S., Corporations §§ 1684 et seq.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

§79-4-14.02. Dissolution by board of directors and shareholders.

A corporation’s board of directors may propose dissolution for submission to the shareholders.

For a proposal to dissolve to be adopted:

  1. The board of directors must recommend dissolution to the shareholders unless the board of directors determines that because of conflict of interest or other special circumstances it should make no recommendation and communicates the basis for its determination to the shareholders; and
  2. The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e).

The board of directors may condition its submission of the proposal for dissolution on any basis.

The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders’ meeting. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

Unless the articles of incorporation or the board of directors acting pursuant to subsection (c) require a greater vote, a greater number of shares to be present, or a vote by voting groups, adoption of the proposal to dissolve shall require the approval of the shareholders at a meeting at which a quorum consisting of at least a majority of the votes entitled to be cast exists.

HISTORY: Laws, 1987, ch. 486, § 14.02; Laws, 2000, ch. 469, § 25, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment deleted “in accordance with Section 79-4-7.05” following “shareholders’ meeting” in (d); and rewrote (e).

Cross References —

Filing of notice to adopt articles of dissolution pursuant to this section as affecting elective buyout of shareholder petitioning to dissolve corporation shares of which are not listed or regularly traded, see § 79-4-14.34.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2360 et seq.

CJS.

19 C.J.S., Corporations §§ 1684 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-3-165.

12. Under former §79-3-167.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-3-165.

Although it is the general rule that there is no legal dissolution or surrender of the charter of a nonstock corporation until so decreed pursuant to this section [Code 1942, § 5352], a court of equity may in a proper case treat the corporation as dissolved, even though in a legal sense no dissolution has occurred, and a dissolution may be implied as by consent of all the members when the meetings are voluntarily discontinued and activity of members of such comes to an end. Woodville Lodge, Grand United Order of Odd Fellows v. Poole, 190 Miss. 798, 1 So. 2d 780, 1941 Miss. LEXIS 98 (Miss. 1941).

An agreement between the existing members of a local lodge of a fraternal society to abandon the lodge as such and to discontinue its corporate functions, to divide up the personal property, together with an arrangement to rent the property and share in the rent thereof, was effective to determine the status of the parties thereto as tenants in common as would have been their status after formal surrender, notwithstanding there was no legal dissolution. Woodville Lodge, Grand United Order of Odd Fellows v. Poole, 190 Miss. 798, 1 So. 2d 780, 1941 Miss. LEXIS 98 (Miss. 1941).

Under the law and pursuant to the notice to creditors if any there were, one would be entitled, if in fact he was a creditor, to appear and establish his claim and have the same fixed as a charge against the assets of the corporation in the hands of such persons to whom the same would pass upon a dissolution thereof. Ex parte Woodville Lodge, Grand United Order of Odd Fellows, 186 Miss. 490, 191 So. 89, 1939 Miss. LEXIS 227 (Miss. 1939).

A demurrer by an alleged creditor confessed the allegation of fact in a petition to dissolve a corporation to the effect that there were no debts owing by the corporation and that hence there were no creditors. Ex parte Woodville Lodge, Grand United Order of Odd Fellows, 186 Miss. 490, 191 So. 89, 1939 Miss. LEXIS 227 (Miss. 1939).

One alleging to be a creditor of a corporation seeking dissolution was not entitled to bring into issue by demurrer the allegation of the petition for dissolution that there were no debts, nor could such one challenge the legal sufficiency of the petition as to whether certain persons were alone entitled to share in the corporate assets as the sole remaining stockholders without first obtaining leave of the court, upon a proper showing, to intervene as a party, or to appear as amicus curiae. Ex parte Woodville Lodge, Grand United Order of Odd Fellows, 186 Miss. 490, 191 So. 89, 1939 Miss. LEXIS 227 (Miss. 1939).

12. Under former § 79-3-167.

An agreement for the merger of corporations was not invalid merely because it did not contain any reference to preference to preferred shareholders of the corporation being acquired, since, assuming that all preferred shareholders were opposed to dissolution, it could be fairly implied by the terms of the agreement that they would be paid their interest in cash as dissenting shareholders, as required by Mississippi law. Mid-Continent Tel. Corp. v. Home Tel. Co., 319 F. Supp. 1176, 1970 U.S. Dist. LEXIS 10081 (N.D. Miss. 1970).

§79-4-14.03. Articles of dissolution.

At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth:

  1. The name of the corporation;
  2. The date dissolution was authorized; and
  3. If dissolution was approved by the shareholders, a statement that the proposal to dissolve was duly approved by the shareholders in the manner required by the Mississippi Business Corporation Act and by the articles of incorporation.

A corporation is dissolved upon the effective date of its articles of dissolution.

For purposes of this subarticle, “dissolved corporation” means a corporation whose articles of dissolution have become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of liquidation.

HISTORY: Laws, 1987, ch. 486, § 14.03; Laws, 2000, ch. 469, § 26; Laws, 2001, ch. 435, § 15, eff from and after July 1, 2001.

Amendment Notes —

The 2000 amendment rewrote (a)(3); and deleted former (a)(4).

The 2001 amendment added (c).

Cross References —

Requirement that articles of revocation of dissolution set forth the information required by this section, see § 79-4-14.04.

Filing of notice to adopt articles of dissolution pursuant to this section as affecting elective buyout of shareholder petitioning to dissolve corporation whose shares are not listed or regularly traded, see § 79-4-14.34.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

§79-4-14.04. Revocation of dissolution.

A corporation may revoke its dissolution within one hundred twenty (120) days of its effective date.

Revocation of dissolution must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without shareholder action.

After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the Secretary of State for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:

  1. The name of the corporation;
  2. The effective date of the dissolution that was revoked;
  3. The date that the revocation of dissolution was authorized;
  4. If the corporation’s board of directors (or incorporators) revoked the dissolution, a statement to that effect;
  5. If the corporation’s board of directors revoked a dissolution authorized by the shareholders, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and
  6. If shareholder action was required to revoke the dissolution, the information required by Section 79-4-14.03(a)(3).

Unless a delayed effective date is specified, revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution are filed.

When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its business as if dissolution had never occurred.

HISTORY: Laws, 1987, ch. 486, § 14.04; Laws, 2000, ch. 469, § 27, eff from and after July 1, 2000.

Amendment Notes —

The 2000 amendment inserted “of” following “revocation by action” in (b); deleted “or (4)” following “Section 79-4-14.03(a)(3)” in (c)(6); and substituted “upon the effective date of the” for “when” in (d).

Cross References —

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

§79-4-14.05. Effect of dissolution.

A dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs, including:

  1. Collecting its assets;
  2. Disposing of its properties that will not be distributed in kind to its shareholders;
  3. Discharging or making provision for discharging its liabilities;
  4. Distributing its remaining property among its shareholders according to their interests; and
  5. Doing every other act necessary to wind up and liquidate its business and affairs.
  6. Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or
  7. Terminate the authority of the registered agent of the corporation.

Dissolution of a corporation does not:

Transfer title to the corporation’s property;

Prevent transfer of its shares of securities, although the authorization to dissolve may provide for closing the corporation’s share transfer records;

Subject its directors and officers to standards of conduct different from those prescribed in Article 8;

Change quorum or voting requirements for its board of directors or shareholders; change provisions for selection, resignation or removal of its directors or officers or both; or change provisions for amending its bylaws;

Prevent commencement of a proceeding by or against the corporation in its corporate name;

HISTORY: Laws, 1987, ch. 486, § 14.05, eff from and after January 1, 1988.

Cross References —

Applicability of § 79-4-14.05 to corporation which has been administratively dissolved by Secretary of State, see § 79-4-14.21.

Application of § 79-4-14.05 to winding up and liquidation of corporation’s business and affairs after judicial dissolution, see § 79-4-14.33.

Effect of dissolution, according to provisions of § 79-4-14.05, on order directing buyout of shareholder petitioning to dissolve corporation whose shares are not listed or regularly traded, see § 79-4-14.34.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

RESEARCH REFERENCES

ALR.

Liability of shareholders, directors, and officers where corporate business is continued after its dissolution. 72 A.L.R.4th 419.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2348-2351, 2474 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 451 et seq.

CJS.

19 C.J.S., Corporations §§ 1727-1741.

JUDICIAL DECISIONS

1. In general.

Administratively dissolved corporation is not precluded from liquidation under chapter 11 bankruptcy, even if the corporation is not eligible for reinstatement, since Miss. Code. Ann. § 79-4-14.05(a)(5) provides the dissolved corporation broad discretion to wind up and liquidate its business affairs. In re Superior Boat Works, Inc., 438 B.R. 878, 2010 Bankr. LEXIS 2733 (Bankr. N.D. Miss. 2010).

While a corporation had been administratively dissolved and such dissolution occurred prior to a wrongful death action being filed against the corporation, it was still amenable to suit under the authority of Miss. Code Ann. § 79-4-14.05(b)(5). Schustz v. Buccaneer, Inc., 850 So. 2d 209, 2003 Miss. App. LEXIS 637 (Miss. Ct. App. 2003).

A corporate obligor and those who control it may not with impunity dissolve the corporation in a debt avoidance maneuver and cause its assets to be transferred to a new successor corporation. This is so whether the debt arises in contract, quasi-contract, or tort. Where a corporation unsuccessfully sought to avoid liability on a contract with a former shareholder by dissolving the corporation and transferring assets to a newly formed corporation, the shareholder’s rights against the new corporation were limited to the extent that the new corporation acquired assets of the contracting corporation without paying fair value therefor. Morris v. Macione, 546 So. 2d 969, 1989 Miss. LEXIS 319 (Miss. 1989).

§79-4-14.06. Known claims against dissolved corporation.

A dissolved corporation may dispose of the known claims against it by notifying its known claimants in writing of the dissolution at any time after its effective date.

The written notice must:

  1. Describe information that must be included in a claim;
  2. Provide a mailing address where a claim may be sent;
  3. State the deadline, which may not be fewer than one hundred twenty (120) days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and
  4. State that the claim will be barred if not received by the deadline.

A claim against the dissolved corporation is barred:

If a claimant who was given written notice under subsection (b) does not deliver the claim to the dissolved corporation by the deadline; or

If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety (90) days from the effective date of the rejection notice.

For purposes of this section, “claim” does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

HISTORY: Laws, 1987, ch. 486, § 14.06; Laws, 2001, ch. 435, § 16, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment rewrote (a) and (b); and inserted “or” at the end of (c)(1).

Cross References —

Effective date of dissolution, see § 79-4-14.03.

Barring of claim of claimant, who did not receive written notice under this section, when corporation publishes notice of its dissolution in newspaper, see § 79-4-14.07.

Applicability of § 79-4-14.06 to corporation which has been administratively dissolved by Secretary of State, see § 79-4-14.21.

Application of § 79-4-14.06 to winding up and liquidation of corporation’s business and affairs after judicial dissolution see § 79-4-14.33.

Effect of dissolution, according to provisions of § 79-4-14.06, on order directing buyout of shareholder petitioning to dissolve corporation whose shares are not listed or regularly traded, see § 79-4-14.34.

Deposit of assets of dissolved corporation with State Treasurer for safe keeping until creditor, claimant or shareholder furnishes proof of entitlement to such assets, see § 79-4-14.40.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

RESEARCH REFERENCES

ALR.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Liability of shareholders, directors, and officers where corporate business is continued after its dissolution. 72 A.L.R.4th 419.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2419, 2420, 2450-2458.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 482, 494, 495.

CJS.

19 C.J.S., Corporations §§ 1763-1766, 1772, 1780.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-10. [Reserved for future use.]

II. Under Former §79-3-209.

11. In general.

I. Under Current Law.

1. In general.

A corporate obligor and those who control it may not with impunity dissolve the corporation in a debt avoidance maneuver and cause its assets to be transferred to a new successor corporation. This is so whether the debt arises in contract, quasi-contract, or tort. Where a corporation unsuccessfully sought to avoid liability on a contract with a former shareholder by dissolving the corporation and transferring assets to a newly formed corporation, the shareholder’s rights against the new corporation were limited to the extent that the new corporation acquired assets of the contracting corporation without paying fair value therefor. Morris v. Macione, 546 So. 2d 969, 1989 Miss. LEXIS 319 (Miss. 1989).

2.-10. [Reserved for future use.]

II. Under Former § 79-3-209.

11. In general.

A products liability action against a dissolved corporation could be maintained where the liability of the defendant was incurred at the time the machine at issue was manufactured and placed on the market. Naugher v. Fox River Tractor Co., 446 F. Supp. 1281, 1977 U.S. Dist. LEXIS 12435 (N.D. Miss. 1977).

Judgment rendered against road contractor and his foreign corporate surety held not void because when rendered surety had been dissolved and was in hands of receiver. Rawlings v. American Oil Co., 173 Miss. 683, 161 So. 851, 1935 Miss. LEXIS 236 (Miss. 1935).

This section [Code 1942, § 5353] applies to foreign corporations doing business in state, as well as to domestic corporations. Rawlings v. American Oil Co., 173 Miss. 683, 161 So. 851, 1935 Miss. LEXIS 236 (Miss. 1935).

Foreign corporation dissolved in domicile of its origin may be deemed alive in foreign state, so far as to afford remedies to its own citizens against property within its jurisdiction. Rawlings v. American Oil Co., 173 Miss. 683, 161 So. 851, 1935 Miss. LEXIS 236 (Miss. 1935).

Persons asserting claims against corporation after final decree for corporation’s liquidation was entered and liquidator discharged were not required to obtain permission of chancery court to sue corporation, and suit against liquidator was no longer proper. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Claimant who failed to assert tort claim against corporation pursuant to notice given creditors of corporation’s dissolution could, after dissolution distribution to stockholders of assets, and discharge of liquidator, sue corporation for adjudication of merits of claim, preliminary to taking steps against stockholders as distributees of corporation’s assets. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Failure of creditor of corporation receiving notice of dissolution thereof to file claim does not result in canceling or barring claim. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Corporation’s existence as debtor is continued after dissolution only for purposes of suit against it for adjudication of debt or demand upon its merits, and creditor, upon obtaining judgment against corporation, may pursue stockholders to whom corporation’s assets have been distributed. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Express reservation by statute of rights of creditors of corporation after dissolution carries with it necessarily reasonable means for enforcement of rights so preserved. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

Statute making “debts” due from corporation a charge upon its property after dissolution includes tort demands. Bates v. Mississippi Industrial Gas Co., 173 Miss. 361, 161 So. 133, 1935 Miss. LEXIS 208 (Miss. 1935).

§79-4-14.07. Unknown claims against dissolved corporation.

A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the dissolved corporation present them in accordance with the notice.

The notice must:

  1. Be published one (1) time in a newspaper of general circulation in the county where the dissolved corporation’s principal office is or was located, or in Hinds County if the corporation does not have a principal office in this state;
  2. Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
  3. State that a claim against the dissolved corporation will be barred unless a proceeding to enforce the claim is commenced within three (3) years after the publication of the notice.

If the dissolved corporation publishes a newspaper notice in accordance with subsection (b), the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within the lesser of three (3) years after the publication date of the newspaper notice, or any other applicable limitations period established by applicable law:

A claimant who was not given written notice under Section 79-4-14.06;

A claimant whose claim was timely sent to the dissolved corporation but not acted on;

A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

A claim that is not barred by Section 79-4-14.06(c) or subsection (c) of this section may be enforced:

Against the dissolved corporation, to the extent of its undistributed assets; or

Except as provided in Section 79-4-14.08(d), if the assets have been distributed in liquidation, against a shareholder of the dissolved corporation to the extent of the shareholder’s pro rata share of the claim or the corporate assets distributed to the shareholder in liquidation, whichever is less, but a shareholder’s total liability for all claims under this section may not exceed the total amount of assets distributed to the shareholder.

HISTORY: Laws, 1987, ch. 486, § 14.07; Laws, 1990, ch. 538, § 6; Laws, 2001, ch. 435, § 17; Laws, 2004, ch. 495, § 11; Laws, 2012, ch. 382, § 34, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (d) by substituting “subsection (c) of this section” for “Section 79-4-14.07(c).” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Amendment Notes —

The 2001 amendment, in (a), inserted “dissolved” preceding “corporation”; in (b)(3), inserted “dissolved” preceding “corporation,” and substituted “three (3) years” for “five (5) years”; in (c), substituted “three (3) years” for “five (5) years”; in (c)(1), substituted “was not given” for “did not receive”; rewrote (d); in (d)(2), inserted “Except as provided in Section 79-4-14.08(d),” and substituted “the shareholder’s” for “his” preceding “pro rata,” “the shareholder” for “him” preceding “in liquidation” and “the shareholder” for “him” following “distributed to.”

The 2004 amendment rewrote (d).

The 2012 amendment, effective January 1, 2013, rewrote (b)(1).

Cross References —

Applicability of § 79-4-14.07 to corporation that has been administratively dissolved by Secretary of State, see § 79-4-14.21.

Application of § 79-4-14.07 to winding up and liquidation of corporation’s business and affairs after judicial dissolution, see § 79-4-14.33.

Effect of dissolution, according to provisions of § 79-4-14.07, on order directing buyout of shareholder petitioning to dissolve corporation whose shares are not listed or regularly traded, see § 79-4-14.34.

Deposit of assets of dissolved corporation with State Treasurer for safe keeping until creditor, claimant or shareholder furnishes proof of entitlement to such assets, see § 79-4-14.40.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

RESEARCH REFERENCES

ALR.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Liability of shareholders, directors, and officers where corporate business is continued after its dissolution. 72 A.L.R.4th 419.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2421, 2489-2497.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 491 et seq.

CJS.

19 C.J.S., Corporations §§ 1763, 1766, 1772-1780.

§79-4-14.08. Dissolved corporations — chancery court proceedings for security payment of claims; notice; guardian ad litem; satisfaction of claim.

A dissolved corporation that has published a notice under Section 79-4-14.07 may file an application with the chancery court of the county where the dissolved corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, for a determination of the amount and form of security to be provided for payment of claims that are contingent or have not been made known to the dissolved corporation or that are based on an event occurring after the effective date of dissolution but that, based on the facts known to the dissolved corporation, are reasonably estimated to arise after the effective date of dissolution. Provision need not be made for any claim that is or is reasonably anticipated to be barred under Section 79-4-14.07(c).

Within ten (10) days after the filing of the application, notice of the proceeding shall be given by the dissolved corporation to each claimant holding a contingent claim whose contingent claim is shown on the records of the dissolved corporation.

The court may appoint a guardian ad litem to represent all claimants whose identities are unknown in any proceeding brought under this section. The reasonable fees and expenses of such guardian, including all reasonable expert witness fees, shall be paid by the dissolved corporation.

Provision by the dissolved corporation for security in the amount and the form ordered by the court under subsection (a) of this section shall satisfy the dissolved corporation’s obligations with respect to claims that are contingent, have not been made known to the dissolved corporation or are based on an event occurring after the effective date of dissolution, and such claims may not be enforced against a shareholder who received assets in liquidation.

HISTORY: Laws, 2001, ch. 435, § 18; Laws, 2012, ch. 382, § 35, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (a), deleted “(or, if none in this state, its registered office)” preceding “is located” and added “or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” thereafter.

Cross References —

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

§79-4-14.09. Payment of claims and distribution of assets of dissolved corporations; liability.

Directors shall cause the dissolved corporation to discharge or make reasonable provision for the payment of claims and make distributions of assets to shareholders after payment or provision for claims.

Directors of a dissolved corporation which has disposed of claims under Section 79-4-14.06, 79-4-14.07 or 79-4-14.08 shall not be liable for breach of subsection (a) of this section with respect to claims against the dissolved corporation that are barred or satisfied under Section 79-4-14.06, 79-4-14.07 or 79-4-14.08.

HISTORY: Laws, 2001, ch. 435, § 19, eff from and after July 1, 2001.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (b) by substituting “subsection (a) of this section” for “Section 79-4-14.09(a).” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Cross References —

Liability for unlawful distribution, see § 79-4-8.33.

Voluntary dissolution of corporation under Mississippi Nonprofit Corporation Act, see §§ 79-11-333 through 79-11-345.

Subarticle B. Administrative Dissolution.

§79-4-14.20. Grounds for administrative dissolution.

The Secretary of State may commence a proceeding under Section 79-4-14.21 to administratively dissolve a corporation if:

  1. The corporation does not pay within sixty (60) days after they are due any franchise taxes or penalties imposed by Sections 79-4-1.01 et seq. or other law;
  2. The corporation does not deliver its annual report to the Secretary of State within sixty (60) days after it is due;
  3. The corporation is without a registered agent in this state for sixty (60) days or more;
  4. The corporation does not notify the Secretary of State within sixty (60) days that its registered agent has been changed, or that its registered agent has resigned;
  5. The corporation’s period of duration stated in its articles of incorporation expires; or
  6. An incorporator, director, officer or agent of the corporation signed a document he knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing.

HISTORY: Laws, 1987, ch. 486, § 14.20; Laws, 2012, ch. 382, § 36, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “or registered office” following “registered agent” in (3) and (4) deleted “or that its registered office has been discontinued” at the end of (4); added (6); and made minor stylistic changes.

Cross References —

Procedures for, and effect of, administrative dissolution, see § 79-4-14.21.

Administrative dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-347 through 79-11-353.

RESEARCH REFERENCES

ALR.

What amounts to “oppressive” conduct under statute authorizing dissolution of corporation at suit of minority stockholders. 56 A.L.R.3d 358.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2391 et seq.

CJS.

19 C.J.S., Corporations §§ 1647 et seq.

Law Reviews.

1984 Mississippi Supreme Court Review: Corporate, Contract and Commercial Law. 55 Miss. L. J. 65, March, 1985.

JUDICIAL DECISIONS

I. Under Current Law.

1. President’s liability.

2.-10. [Reserved for future use.]

II. Under Former §79-3-189.

11. In general.

I. Under Current Law.

1. President’s liability.

Liability for corporate debt was limited to those officers and directors who were actively involved in the control and management of the corporation, and the president’s testimony at trial made it clear he was involved in the control and management of the corporation; however, where there was no proof of any assignment to the president by the corporation of any chose in action as contemplated under Miss. Code § 11-7-7, the president had no standing to pursue the action on behalf of the corporation. Consequently, although the president, individually, could have been held liable for the corporate torts committed by the corporation, he had no authority to sue on a contract that belonged to the corporation; accordingly, all claims brought by the corporation and the president were dismissed. 4 H Constr. Corp. v. Superior Boat Works, Inc., 659 F. Supp. 2d 774, 2009 U.S. Dist. LEXIS 83183 (N.D. Miss. 2009), aff'd, 579 Fed. Appx. 278, 2014 U.S. App. LEXIS 16558 (5th Cir. Miss. 2014).

2.-10. [Reserved for future use.]

II. Under Former § 79-3-189.

11. In general.

The owner and operator of an incorporated sole proprietorship was personally liable, under former § 79-3-285, for corporate debts to a creditor who dealt with the corporation as a sole proprietorship which were incurred while the corporation was suspended from doing business, pursuant to former § 79-3-189, for failing to file an annual report. Carolina Transformer Co. v. Anderson, 341 So. 2d 1327, 1977 Miss. LEXIS 2303 (Miss. 1977).

§79-4-14.21. Procedure for and effect of administrative dissolution.

If the Secretary of State determines that one or more grounds exist under Section 79-4-14.20 for dissolving a corporation, he shall serve the corporation with written notice of his determination, except that such determination may be served by first-class mail.

If the corporation does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after service of the notice is perfected, the Secretary of State shall administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the corporation, except that such certificate may be served by first-class mail.

A corporation that has been administratively dissolved continues its corporate existence but may not carry on any business except as necessary to wind up and liquidate its business and affairs under Section 79-4-14.05 and notify claimants under Sections 79-4-14.06 and 79-4-14.07.

The administrative dissolution of a corporation does not terminate the authority of its registered agent.

The administrative dissolution of a corporation shall not impair the validity of any contract, deed, mortgage, security interest, lien, or act of the corporation or prevent the corporation from defending any action, suit or proceeding in any court of this state.

A corporation that has been administratively dissolved may not maintain any action, suit or proceeding in any court of this state until the corporation is reinstated.

HISTORY: Laws, 1987, ch. 486, § 14.21; Laws, 1991, ch. 509, § 2; Laws, 2012, ch. 382, § 37; Laws, 2012, ch. 481, § 36; Laws, 2017, ch. 369, § 2, eff from and after July 1, 2017.

Joint Legislative Committee Note —

Section 36 of Chapter 481 Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 37 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 36 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-14.22 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The first 2012 amendment (ch. 382), deleted “under Section 79-4-5.04” preceding “except that such determination” in (a); in (b), deleted “under Section 79-4-5.04” following “notice is perfected” in the first sentence, and deleted “under Section 79-4-5.04” preceding “except that such certificate may be served” in the last sentence.

The second 2012 amendment (ch. 481), effective January 1, 2013, deleted “under Section 79-4-5.04” following “written notice of his determination” in (a); in (b), deleted “under Section 79-4-5.04” following “notice is perfected” in the first sentence, and preceding “except that such certificate” in the last sentence; rewrote (c); and added (e) and (f).

The 2017 amendment added (c), which had previously been set out as reserved.

Cross References —

Authority for Secretary of State to commence proceeding under § 79-4-14.21 to administratively dissolve corporation, and grounds therefor, see § 79-4-14.20.

Rights of corporation administratively dissolved under § 79-4-14.21 to apply for reinstatement, and procedures therefor, see § 79-4-14.22.

Administrative dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-347 through 79-11-353.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2391 et seq.

CJS.

19 C.J.S., Corporations §§ 1647 et seq.

JUDICIAL DECISIONS

1. Standing to enter into contracts.

2. Standing to bring action.

1. Standing to enter into contracts.

Pursuant to Miss. Code Ann. § 79-4-14.21(c) the corporate existence of the corporation continued, but it was not authorized to carry on any business except that necessary to wind up and liquidate its business and affairs. Because the corporation failed to comply with the process under § 79-4-14.22(a) to reinstate the corporation, the court found that during the period relevant to the present litigation, the corporation was not a viable entity and thus did not have standing to enter into the contracts at issue; therefore, it followed that the corporation’s claims for breach of contract, misrepresentation, and quantum meruit were moot and had to be dismissed. 4 H Constr. Corp. v. Superior Boat Works, Inc., 659 F. Supp. 2d 774, 2009 U.S. Dist. LEXIS 83183 (N.D. Miss. 2009), aff'd, 579 Fed. Appx. 278, 2014 U.S. App. LEXIS 16558 (5th Cir. Miss. 2014).

2. Standing to bring action.

Dissolved corporation could not bring an action against a school district because it had administratively dissolved, pursuant this section; the action was not related to the winding down of the corporation, and it was initiated by a profit corporation, a status that the dissolved corporation did not enjoy. Columbus Cheer Co. v. City of Columbus, 155 So.3d 744, 2014 Miss. LEXIS 532 (Miss. 2014).

§79-4-14.22. Reinstatement following administrative dissolution.

A corporation administratively dissolved under Section 79-4-14.21 may apply to the Secretary of State for reinstatement at any time after the effective date of dissolution. The applicant must:

  1. Recite the name of the corporation and the effective date of its administrative dissolution;
  2. State that the ground or grounds for dissolution either did not exist or have been eliminated;
  3. State that the corporation’s name satisfies the requirements of Section 79-4-4.01; and
  4. Contain a certificate from the Mississippi Department of Revenue reciting that all taxes owed by the corporation have been paid.

If the Secretary of State determines that the application contains the information required by subsection (a) and that the information is correct, he shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites his determination and the effective date of reinstatement, file the original of the certificate and serve a copy on the corporation.

When the reinstatement is effective:

The reinstatement relates back to and takes effect as of the effective date of the administrative dissolution;

Any liability incurred by the corporation, director, officer or a shareholder after the administrative dissolution and before the reinstatement shall be determined as if the administrative dissolution had never occurred; and

The corporation may resume carrying on its business as if the administrative dissolution had never occurred.

HISTORY: Laws, 1987, ch. 486, § 14.22; Laws, 1993, ch. 368, § 13; Laws, 2009, ch. 527, § 1; Laws, 2009, ch. 530, § 3; Laws, 2012, ch. 382, § 38; Laws, 2012, ch. 481, § 37, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 1 of ch. 527, Laws of 2009, effective from and after July 1, 2009 (approved April 13, 2009), amended this section. Section 3 of ch. 530, Laws of 2009, effective from and after July 1, 2009 (approved April 14, 2009), also amended this section. As set out above, this section reflects the language of Section 1 of ch. 527, Laws of 2009, which contains language that specifically provides that it supersedes § 79-4-14.22 as amended by chapter 530, Laws of 2009.

Section 37 of Chapter 481 Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 38 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 37 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-14.22 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The first 2009 amendment (ch. 527) substituted “at any time” for “within five (5) years” in the first sentence of the introductory language of (a).

The second 2009 amendment (ch. 530) substituted “at any time” for “within five (5) years” in the first sentence of the introductory language of (a).

The first 2012 amendment (ch. 382), substituted “Department of Revenue” for “State Tax Commission” in (a)(4); and deleted “under Section 79-4-5.04” following “copy on the corporation” at the end of (b).

The second 2012 amendment (ch. 481), effective January 1, 2013, substituted “Department of Revenue” for “State Tax Commission” preceding “reciting that all taxes owed by the corporation” in (a)(4); and deleted “under Section 79-4-5.04” following “copy on the corporation” at the end of (b); and rewrote (c).

Cross References —

Administrative dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-347 through 79-11-353.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2499 et seq.

CJS.

19 C.J.S., Corporations § 1741.

JUDICIAL DECISIONS

1. Failure to comply with reinstatement process.

Pursuant to Miss. Code Ann. § 79-4-14.21(c) the corporate existence of the corporation continued, but it was not authorized to carry on any business except that necessary to wind up and liquidate its business and affairs. Because the corporation failed to comply with the process under § 79-4-14.22(a) to reinstate the corporation, the court found that during the period relevant to the present litigation, the corporation was not a viable entity and thus did not have standing to enter into the contracts at issue; therefore, it followed that the corporation’s claims for breach of contract, misrepresentation, and quantum meruit were moot and had to be dismissed. 4 H Constr. Corp. v. Superior Boat Works, Inc., 659 F. Supp. 2d 774, 2009 U.S. Dist. LEXIS 83183 (N.D. Miss. 2009), aff'd, 579 Fed. Appx. 278, 2014 U.S. App. LEXIS 16558 (5th Cir. Miss. 2014).

§79-4-14.23. Appeal from denial of reinstatement.

If the Secretary of State denies a corporation’s application for reinstatement following administrative dissolution, he shall serve the corporation with a written notice that explains the reason or reasons for denial.

The corporation may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court of the county where the corporation’s principal office is located or where the corporation is domiciled within thirty (30) days after service of the notice of denial is perfected. The corporation appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State’s certificate of dissolution, the corporation’s application for reinstatement and the Secretary of State’s notice of denial.

The court may summarily order the Secretary of State to reinstate the dissolved corporation or may take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1987, ch. 486, § 14.23; Laws, 2009, ch. 527, § 2; Laws, 2012, ch. 382, § 39, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2009 amendment inserted “or the chancery court of the county where the corporation is domiciled” in (b).

The 2012 amendment, effective January 1, 2013, deleted “under Section 79-4-5.04” following “shall serve the corporation” in (a); in (b), deleted “Mississippi” following “Hinds County” and inserted “corporation’s principal office is located or where the” preceding “corporation is domiciled within thirty (30) days” in the first sentence.

Cross References —

Administrative dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-347 through 79-11-353.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2499-2507.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 500, 501.

CJS.

19 C.J.S., Corporations § 1741.

Subarticle C. Judicial Dissolution.

§79-4-14.30. Grounds for judicial dissolution.

The chancery court may dissolve a corporation:

  1. In a proceeding by the Attorney General if it is established that:
  2. In a proceeding by a shareholder if it is established that:
  3. In a proceeding by a creditor if it is established that:
  4. In a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or
  5. In a proceeding by a shareholder if the corporation has abandoned its business and has failed within a reasonable time to liquidate and distribute its assets and dissolve.

The corporation obtained its articles of incorporation through fraud;

The corporation has continued to exceed or abuse the authority conferred upon it by law;

The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the deadlock, and irreparable injury to the corporation is threatened or being suffered, or the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally, because of the deadlock;

The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive or fraudulent;

The shareholders are deadlocked in voting power and have failed, for a period that includes at least two (2) consecutive annual meeting dates, to elect successors to directors whose terms have expired; or

The corporate assets are being misapplied or wasted;

The creditor’s claim has been reduced to judgment, the execution on the judgment return unsatisfied, and the corporation is insolvent; or

The corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent; or

Subsection (a)(2) shall not apply in the case of a corporation that, on the date of the filing of the proceeding, has shares that are:(i) listed on the New York Stock Exchange, the American Stock Exchange, or any exchange owned or operated by the NASDAQ Stock Market, LLC, or listed or quoted on a system owned or operated by the National Association of Securities Dealers, Inc.; or (ii) not so listed or quoted, but are held by at least three hundred (300) shareholders and the shares outstanding have a market value of at least Twenty Million Dollars ($20,000,000.00) (exclusive of the value of such shares held by the corporation’s subsidiaries, senior executives, directors and beneficial shareholders owning more than ten percent (10%) of such shares).

In this section “beneficial shareholder” has the meaning specified in Section 79-4-13.01(2).

HISTORY: Laws, 1987, ch. 486, § 14.30; Laws, 1990, ch. 538, § 7; Laws, 2007, ch. 361, § 17, eff from and after July 1, 2007.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (b) by substituting “Subsection (a)(2)” for “Section 79-4-14.30(a)(2).” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Amendment Notes —

The 2007 amendment added (b) and (c); designated the previously existing provisions as (a); added (a)(5); and made a minor stylistic change.

Cross References —

Right to challenge corporation’s power to act in proceeding brought by Attorney General for judicial dissolution, see § 79-4-3.04.

Venue for proceeding for judicial dissolution brought by any party named in this section, see § 79-4-14.31.

Required notice, upon commencement of proceeding under § 79-4-14.30 to dissolve corporation whose shares are not listed or regularly traded, of option to avoid dissolution by elective buyout of petitioner’s shares, see § 79-4-14.31.

Entering of decree of judicial dissolution of corporation, see § 79-4-14.33.

Dissolution of corporation the shares of which are not listed on national securities exchange or regularly traded in market maintained by members of national or affiliated securities association, see § 79-4-14.34.

Dissolution of professional corporation by Attorney General, see § 79-10-85.

Judicial dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-355 through 79-11-361.

RESEARCH REFERENCES

ALR.

Preferred stockholder’s rights, upon liquidation or dissolution, to dividends. 25 A.L.R.2d 788.

Stockholders’ rights to patent, copyright, or trademark owned by corporation on dissolution thereof. 30 A.L.R.2d 938.

What amounts to “oppressive” conduct under statute authorizing dissolution of corporation at suit of minority stockholders. 56 A.L.R.3d 358.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Relief other than by dissolution in cases of intracorporate deadlock or dissension. 34 A.L.R.4th 13.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2351, 2360 et seq.

6 Am. Jur. Legal Forms 2d, Corporations § 74:800.

5 Am. Jur. Proof of Facts 2d 645, Oppressive Conduct by Majority Shareholders, Directors, or Those in Control of Corporation.

6 Am. Jur. Proof of Facts 2d 387, Dissension or Deadlock of Corporate Directors or Shareholders.

CJS.

19 C.J.S., Corporations §§ 1641-1645, 1648, 1655, 1694 et seq.

Law Reviews.

1984 Mississippi Supreme Court Review: Corporate, Contract and Commercial Law. 55 Miss. L. J. 65.

JUDICIAL DECISIONS

1. Dissolution order did not exceed pleadings.

Chancellor’s corporate dissolution order did not exceed the pleadings because (1) such a claim was adequately pled, (2) the chancellor did not have to grant an election to purchase shares before exercising broad equity powers under Miss. Code Ann. § 79-4-14.34(i), (3) the chancellor could grant alternate remedies, since dissolution was not ordered, and (4) fiduciary breach was adequately claimed. Scafidi v. Hille, 180 So.3d 634, 2015 Miss. LEXIS 603 (Miss. 2015).

§79-4-14.31. Procedure for judicial dissolution.

Venue for a proceeding brought by any party named in Section 79-4-14.30 lies in the county where a corporation’s principal office is or was located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state.

It is not necessary to make shareholders parties to a proceeding to dissolve a corporation unless relief is sought against them individually.

A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located, and carry on the business of the corporation until a full hearing can be held.

Within ten (10) days of the commencement of a proceeding under Section 79-4-14.30(2) to dissolve a corporation that is not a public corporation, the corporation shall send to all shareholders, other than the petitioner, a notice stating that the shareholders are entitled to avoid the dissolution of the corporation by electing to purchase the petitioner’s shares under Section 79-4-14.34 and accompanied by a copy of Section 79-4-14.34.

HISTORY: Laws, 1987, ch. 486, § 14.31; Laws, 1990, ch. 538, § 8; Laws, 1993, ch. 368, § 12; Laws, 1994, ch. 417, § 3; Laws, 2006, ch. 429, § 13; Laws, 2012, ch. 382, § 40, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2006 amendment, in (d), substituted “is not a public corporation” for “has no shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association,” and near the end of the section, inserted “and” following “Section 79-4-14.34.”

The 2012 amendment, effective January 1, 2013, rewrote (a).

Cross References —

Dissolution of professional corporation by Attorney General, see § 79-10-85.

Judicial dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-355 through 79-11-361.

RESEARCH REFERENCES

ALR.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Am. Jur.

19 Am. Jur. 2d, Corporations § 2351.

CJS.

19 C.J.S., Corporations §§ 1694 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-195.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-195.

11. In general.

The conditions which must be shown in order to entitle a stockholder to have a dissolution of a corporation and a receiver appointed are the insolvency of the corporation, or that the corporation ceases to be a going concern, or while not solvent the corporation sells its franchises in whole or in part. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

An order for the dissolution of a corporation and the appointment of a receiver was void where the petition for the dissolution of the corporation and the appointment of the receiver did not allege the existence of any emergency justifying the appointment of a receiver without notice, and the president and vice president, who owned the majority of the stock, were not given notice, and no bond was executed, as required by Code 1942, § 1357. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

Chancellor was justified in terminating the receivership and returning the assets to the corporation where the entire proceedings wherein the dissolution of the corporation was ordered and the receiver appointed were void for want of notice to other stockholders, and for failure to post the receiver’s bond, without regard to the fact that the president and vice president, who were majority stockholders of the corporation, failed to testify in the case. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

In order for minority stockholders in a domestic corporation to put an end to the corporation by requiring its dissolution, there must be either insolvency or mismanagement which must lead to insolvency. Kiersky v. Hyman Mercantile Co., 192 Miss. 195, 4 So. 2d 881, 198 So. 574 (Miss. 1940).

A minority of stockholders may have a receiver appointed, in equity, on the ground of maladministration, where the corporation is solvent, for the purpose of taking charge of and winding up the business if necessary. Brent v. B. E. Brister Sawmill Co., 103 Miss. 876, 60 So. 1018, 1912 Miss. LEXIS 244 (Miss. 1913).

A receiver of an insolvent corporation, whether public or private, in possession of its entire property, will be required to pay the wages of laborers who rendered services shortly before his appointment which were necessary to continue the business of the corporation and preserve its property in preference to both ordinary and mortgage creditors. L'Hote v. Boyet, 85 Miss. 636, 38 So. 1, 1904 Miss. LEXIS 176 (Miss. 1904).

§79-4-14.32. Receivership or custodianship.

Unless an election to purchase has been filed under Section 79-4-14.34, a court in a judicial proceeding brought to dissolve a corporation may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the business and affairs of the corporation.The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian.The court appointing a receiver or custodian has jurisdiction over the corporation and all its property wherever located.

The court may appoint an individual or a domestic or foreign corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.

The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:

  1. The receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; and (ii) may sue and defend in his own name as receiver of the corporation in all courts of this state;
  2. The custodian may exercise all the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its shareholders and creditors.

The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its shareholders and creditors.

The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian from the assets of the corporation or proceeds from the sale of the assets.

HISTORY: Laws, 1987, ch. 486, § 14.32; Laws, 2007, ch. 361, § 18, eff from and after July 1, 2007.

Amendment Notes —

The 2007 amendment, in (a), added “Unless an election to purchase has been filed under Section 79-4-14.34” to the beginning of the first sentence and deleted “exclusive” preceding “jurisdiction” in the last sentence; and in (e), substituted “expenses paid or reimbursed to the receiver or custodian from the assets” for “expense disbursements or reimbursements made to the receiver or custodian and his counsel from the assets.”

Cross References —

Dissolution of professional corporation by Attorney General, see § 79-10-85.

Judicial dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-355 through 79-11-361.

RESEARCH REFERENCES

ALR.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Am. Jur.

65 Am. Jur. 2d, Receivers §§ 39 et seq.

CJS.

75 C.J.S., Receivers §§ 71 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-193.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-193.

11. In general.

In an action involving a controversy among present and former members of a medical partnership which partnership leased its building from a corporation organized by the partners, the court improperly ordered that the corporation be liquidated, where the alleged conduct by the directors of the corporation consisting of their failing to reelect two directors as directors of the corporation after they withdrew from the medical partnership resulting in these two directors’ deferred compensation of $100 per month being terminated was not “oppressive” conduct within the meaning of § 79-3-193. Kisner v. Coffey, 418 So. 2d 58, 1982 Miss. LEXIS 2092 (Miss. 1982).

In an action by a minority shareholder to compel dissolution of a corporation on grounds of oppressive conduct that arose after the minority shareholder, who had an agreement with the former owners and majority shareholders to manage the corporation until its indebtedness was retired, was terminated by the new owners of the corporation prior to retirement of the debts, the chancery court erred in ordering dissolution, where the contract provided for the majority shareholders to buy the plaintiff’s stock at book value, and where plaintiff’s management of the corporation was inadequate; the statute does not sanction dissolution where the complaining party’s reasonable expectations have been thwarted, but not grossly so. Capitol Toyota, Inc. v. Gervin, 381 So. 2d 1038, 1980 Miss. LEXIS 1929 (Miss. 1980).

An order for the dissolution of a corporation and the appointment of a receiver was void where the petition for the dissolution of the corporation and the appointment of the receiver did not allege the existence of any emergency justifying the appointment of a receiver without notice, and the president and vice-president, who owned the majority of the stock, were not given notice, and no bond was executed, as required by Code 1942, § 1357. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

Chancellor was justified in terminating the receivership and returning the assets to the corporation where the entire proceedings wherein the dissolution of the corporation was ordered and the receiver appointed were void for want of notice to other stockholders, and for failure to post the receiver’s bond, without regard to the fact that the president and vice president, who were majority stockholders of the corporation, failed to testify in the case. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

The conditions which must be shown in order to entitle a stockholder to have a dissolution of a corporation and a receiver appointed are the insolvency of the corporation, or that the corporation ceases to be a going concern, or while not solvent the corporation sells its franchises in whole or in part. Welsh v. Clinton Lumber & Supply Co., 232 Miss. 507, 99 So. 2d 660, 1958 Miss. LEXIS 300 (Miss. 1958).

In order for minority stockholders in a domestic corporation to put an end to the corporation by requiring its dissolution, there must be either insolvency or mismanagement which must lead to insolvency. Kiersky v. Hyman Mercantile Co., 192 Miss. 195, 4 So. 2d 881, 198 So. 574 (Miss. 1940).

§79-4-14.33. Decree of dissolution.

If after a hearing the court determines that one or more grounds for judicial dissolution described in Section 79-4-14.30 exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State who shall file it.

After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation’s business and affairs in accordance with Section 79-4-14.05 and the notification of claimants in accordance with Sections 79-4-14.06 and 79-4-14.07.

HISTORY: Laws, 1987, ch. 486, § 14.33, eff from and after January 1, 1988.

Cross References —

Dissolution of professional corporation by Attorney General, see § 79-10-85.

Judicial dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-355 through 79-11-361.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2471.

CJS.

19 C.J.S., Corporations §§ 1704, 1716, 1725.

§79-4-14.34. Election to purchase in lieu of dissolution.

In a proceeding under Section 79-4-14.30(a)(2) to dissolve a corporation, the corporation may elect or, if it fails to elect, one or more shareholders may elect to purchase all shares owned by the petitioning shareholder at the fair value of the shares.An election pursuant to this section shall be irrevocable unless the court determines that it is equitable to set aside or modify the election.

An election to purchase pursuant to this section may be filed with the court at any time within ninety (90) days after the filing of the petition under Section 79-4-14.30(a)(2) or at such later time as the court in its discretion may allow. If the election to purchase is filed by one or more shareholders, the corporation shall, within ten (10) days thereafter, give written notice to all shareholders, other than the petitioner. The notice must state the name and number of shares owned by the petitioner and the name and number of shares owned by each electing shareholder and must advise the recipients of their right to join in the election to purchase shares in accordance with this section. Shareholders who wish to participate must file notice of their intention to join in the purchase no later than thirty (30) days after the effective date of the notice to them. All shareholders who have filed an election or notice of their intention to participate in the election to purchase thereby become parties to the proceeding and shall participate in the purchase in proportion to their ownership of shares as of the date the first election was filed, unless they otherwise agree or the court otherwise directs. After an election has been filed by the corporation or one or more shareholders, the proceeding under Section 79-4-14.30(a)(2) may not be discontinued or settled, nor may the petitioning shareholder sell or otherwise dispose of his shares, unless the court determines that it would be equitable to the corporation and the shareholders, other than the petitioner, to permit such discontinuance, settlement, sale or other disposition.

If, within sixty (60) days of the filing of the first election, the parties reach agreement as to the fair value and terms of purchase of the petitioner’s shares, the court shall enter an order directing the purchase of petitioner’s shares upon the terms and conditions agreed to by the parties.

If the parties are unable to reach an agreement as provided for in subsection (c), the court, upon application of any party, shall stay the Section 79-4-14.30(a)(2) proceedings and determine the fair value of the petitioner’s shares as of the day before the date on which the petition under Section 79-4-14.30(a)(2) was filed or as of such other date as the court deems appropriate under the circumstances.

Upon determining the fair value of the shares, the court shall enter an order directing the purchase upon such terms and conditions as the court deems appropriate, which may include payment of the purchase price in installments, where necessary in the interests of equity, provision for security to assure payment of the purchase price and any additional costs, fees and expenses as may have been awarded, and, if the shares are to be purchased by shareholders, the allocation of shares among them. In allocating petitioner’s shares among holders of different classes of shares, the court should attempt to preserve the existing distribution of voting rights among holders of different classes insofar as practicable and may direct that holders of a specific class or classes shall not participate in the purchase. Interest may be allowed at the rate and from the date determined by the court to be equitable, but if the court finds that the refusal of the petitioning shareholder to accept an offer of payment was arbitrary or otherwise not in good faith, no interest shall be allowed. If the court finds that the petitioning shareholder had probable grounds for relief under Section 79-4-14.30(a)(2)(ii) or (iv), it may award to the petitioning shareholder reasonable fees and expenses of counsel and of any experts employed by him.

Upon entry of an order under subsection (c) or (e), the court shall dismiss the petition to dissolve the corporation under Section 79-4-14.30, and the petitioning shareholder shall no longer have any rights or status as a shareholder of the corporation, except the right to receive the amounts awarded to him by the order of the court which shall be enforceable in the same manner as any other judgment.

The purchase ordered pursuant to subsection (e) shall be made within ten (10) days after the date the order becomes final unless before that time the corporation files with the court a notice of its intention to adopt articles of dissolution pursuant to Sections 79-4-14.02 and 79-4-14.03, which articles must then be adopted and filed within fifty (50) days thereafter. Upon filing of such articles of dissolution, the corporation shall be dissolved in accordance with the provisions of Sections 79-4-14.05 through 79-4-14.07 and the order entered pursuant to subsection (e) shall no longer be of any force or effect, except that the court may award the petitioning shareholder reasonable fees and expenses in accordance with the provisions of the last sentence of subsection (e) and the petitioner may continue to pursue any claims previously asserted on behalf of the corporation.

Any payment by the corporation pursuant to an order under subsection (c) or (e), other than an award of fees and expenses pursuant to subsection (e), is subject to the provisions of Section 79-4-6.40.

Nothing contained in this section shall diminish the inherent equity powers of the court to fashion alternative remedies to judicial dissolution.

HISTORY: Laws, 1993, ch. 368, § 11; Laws, 2006, ch. 429, § 14; Laws, 2007, ch. 361, § 19, eff from and after July 1, 2007.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, an error in a statutory reference in the section was corrected by substituting “Section 79-4-14.30(a)(2)” for “Section 79-4-14.30(2)” everywhere it appears.

Amendment Notes —

The 2006 amendment substituted “is not a public corporation” for “has no shares listed on a national securities exchange or regularly traded in a market maintained by one or more members of a national or affiliated securities association” in the first sentence of (a); substituted “relief under Section 79-4-14.30(a)(2)(ii) or (iv)” for “relief under paragraphs (ii) or (iv) of Section 79-4-14.30(a)(2)” in the last sentence of (e); and made minor stylistic changes in (f) and (h).

The 2007 amendment deleted “that is not a public corporation” following “dissolve a corporation” in the first sentence of (a).

Cross References —

Required notice, upon commencement of proceeding to dissolve corporation whose shares are not listed or regularly traded, of option to avoid dissolution by elective buyout of petitioner’s shares under § 79-4-14.34, see § 79-4-14.31.

Judicial dissolution under Mississippi Nonprofit Corporation Act, see §§ 79-11-355 through 79-11-361.

RESEARCH REFERENCES

ALR.

Meaning of “book value” of corporate stock. 51 A.L.R.2d 606.

Dissolving or winding up affairs of corporation domiciled in another state. 19 A.L.R.3d 1279.

Valuation of corporate stock under “buy-out” or “first option” agreement giving option to or requiring corporation or other stockholders to purchase stock of deceased or withdrawing stockholders. 54 A.L.R.3d 790.

What constitutes waiver of stockholder’s or corporation’s right to enforce first-option stock purchase agreement. 55 A.L.R.3d 723.

What amounts to “oppressive” conduct under statute authorizing dissolution of corporation at suit of minority stockholders. 56 A.L.R.3d 358.

Dissolution of corporation on ground of intracorporate deadlock or dissension. 83 A.L.R.3d 458.

Availability of and time for bringing action against former director, officer, or stockholder in dissolved corporation for personal injuries incurred after final dissolution. 20 A.L.R.4th 414.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2348 et seq.

3 Am. Jur. Proof of Facts 2d 379, Waiver of Right to Enforce “First Option” Stock Purchase Requirement.

CJS.

19 C.J.S., Corporations §§ 914-916 et seq.

JUDICIAL DECISIONS

1. In general.

2. Equitable powers.

1. In general.

In a proceeding relating to the dissolution of a closely held corporation, the court properly awarded accounting and legal fees to be recovered from the assets of the corporation, rather than from an improperly acting shareholder/officer of the corporation. Covington v. Covington, 780 So. 2d 665, 2001 Miss. App. LEXIS 114 (Miss. Ct. App. 2001).

2. Equitable powers.

Chancellor’s corporate dissolution order did not exceed the pleadings because (1) such a claim was adequately pled, (2) the chancellor did not have to grant an election to purchase shares before exercising broad equity powers under Miss. Code Ann. § 79-4-14.34(i), (3) the chancellor could grant alternate remedies, since dissolution was not ordered, and (4) fiduciary breach was adequately claimed. Scafidi v. Hille, 180 So.3d 634, 2015 Miss. LEXIS 603 (Miss. 2015).

When a shareholder sought a family corporation’s judicial dissolution in chancery court, a decree awarding the shareholder an in-kind division of the corporation’s land was not unauthorized, even after siblings invoked their right to purchase the shareholder’s shares, because Miss. Code Ann. § 79-4-14.34(i) said nothing in Miss. Code Ann. § 79-4-14.34 diminished the chancellor’s equity powers to fashion an alternate remedy. Rainbow Ranch, Inc. v. Hardin (In re Will of Hardin), 158 So.3d 341, 2014 Miss. App. LEXIS 401 (Miss. Ct. App. 2014), cert. denied, — So.3d —, 2015 Miss. LEXIS 120 (Miss. 2015).

Subarticle D. Miscellaneous.

§79-4-14.40. Deposit with state treasurer.

Assets of a dissolved corporation that should be transferred to a creditor, claimant or shareholder of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited with the State Treasurer for safekeeping. When the creditor, claimant or shareholder furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer shall pay him or his representative that amount.

HISTORY: Laws, 1987, ch. 486, § 14.40, eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2421.

7A Am. Jur. Pl & Pr Forms, Corporations, Forms 499, 504.

6 Am. Jur. Legal Forms 2d, Corporations § 74:802.

Article 15. Foreign Corporations.

Subarticle A. Certificate of Authority.

§79-4-15.01. Authority to transact business required.

A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.

The following activities, among others, do not constitute transacting business within the meaning of subsection (a):

  1. Maintaining, defending or settling any proceeding;
  2. Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;
  3. Maintaining bank accounts;
  4. Maintaining offices or agencies for the transfer, exchange and registration of the corporation’s own securities or maintaining trustees or depositories with respect to those securities;
  5. Selling through independent contractors;
  6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
  7. Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
  8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;
  9. Owning, without more, real or personal property;
  10. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature;
  11. Transacting business in interstate commerce;
  12. Being a shareholder in a corporation or a foreign corporation that transacts business in this state;
  13. Being a limited partner of a limited partnership or foreign limited partnership that is transacting business in this state;
  14. Being a member or manager of a limited liability company or foreign limited liability company that is transacting business in this state.

The list of activities in subsection (b) is not exhaustive.

A foreign corporation which is general partner of any general or limited partnership, which partnership is transacting business in this state, is hereby declared to be transacting business in this state.

HISTORY: Laws, 1987, ch. 486, § 15.01; Laws, 1990, ch. 538, § 9; Laws, 2012, ch. 481, § 38, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added (b)(12) through (14); and rewrote (d).

Cross References —

Consequences of transacting business without authority, see § 79-4-15.02.

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

Establishing or acquiring out-of-state trust institution, conditions for approval, see § 81-27-2.105.

OPINIONS OF THE ATTORNEY GENERAL

In practice, obtaining a Certificate of Authority from the Secretary of State qualifies the foreign corporation to do business in the state. 2003 Miss. Op. Att'y Gen. 596.

A School District should not necessarily assume that the foreign corporation is authorized to do business in Mississippi. The Mississippi Secretary of State can confirm whether or not a foreign corporation or contractor has been issued a Certificate of Authority. 2003 Miss. Op. Att'y Gen. 596.

RESEARCH REFERENCES

ALR.

Statutory requirements respecting issuance of corporate stock as applicable to foreign corporations. 8 A.L.R.2d 1185.

Foreign corporation’s purchase within state of goods to be shipped into other state or country as doing business within state for purpose of jurisdiction or service of process. 12 A.L.R.2d 1439.

Ownership or control by foreign corporation of stock of other corporation as constituting doing business within state. 18 A.L.R.2d 187.

Power of state to subject foreign corporation to jurisdiction of its courts on sole ground that corporation committed tort within state. 25 A.L.R.2d 1202.

What constitutes doing business within state by foreign magazine, newspaper, or other publishing corporation, for purposes other than taxation. 38 A.L.R.2d 747.

Leasing of real estate by foreign corporation, as lessor or lessee, as doing business within state within statutes prescribing conditions of right to do business. 59 A.L.R.2d 1131.

Holding directors’, officers’, or stockholders’, or sales meetings or conventions in a state by foreign corporation as doing business within the state. 84 A.L.R.2d 412.

Construction and application of state statutes and rules of court predicating in personam jurisdiction over nonresidents or foreign corporations on making or performing a contract within the state. 23 A.L.R.3d 551.

Construction and application as to isolated acts or transactions, of state statutes or rules of court predicating in personam jurisdiction over nonresidents or foreign corporations upon the doing of an act or upon doing or transacting business or “any” business, within a state. 27 A.L.R.3d 397.

Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to business. 50 A.L.R.3d 1020.

Construction work by foreign corporation as doing business for purposes of statute requiring foreign corporation to qualify as condition of access to local courts. 90 A.L.R.3d 937.

State regulation of land ownership by alien corporation. 21 A.L.R.4th 1329.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

What constitutes doing business within state for purposes of state “closed door” statute barring unqualified or unregistered foreign corporation from local courts – modern cases. 88 A.L.R.4th 466.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action. 23 A.L.R.5th 744.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 14- 16, 157 et seq.

2 Am. Jur. Trials 409, Locating Public Records.

3 Am. Jur. Trials 681, Tactics and Strategy of Pleading.

4 Am. Jur. Proof of Facts 483, Doing Business.

CJS.

20 C.J.S., Corporations §§ 1813 et seq.

Law Reviews.

An analysis of Mississippi’s treatment of foreign corporations. 55 Miss. L. J. 259, June, 1985.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-1-19.

12. Under former §79-1-23.

13. Under former §79-3-211.

14. Under former §79-3-289.

I. Under Current Law.

1. In general.

If a foreign corporation is not transacting business in Mississippi, a certificate of authority is not required in order to maintain an action in Mississippi, as demonstrated by § 79-4-15.02(c) which states that a court may stay a proceeding commenced by a foreign corporation until it determines whether the corporation requires a certificate of authority; since the court is granted some amount of discretion, it is apparent that not all foreign corporations require a certificate to maintain an action. Mississippi Ins. Guar. Ass'n v. Harkins & Co., 652 So. 2d 732, 1995 Miss. LEXIS 145 (Miss. 1995).

A foreign corporation was not transacting business in Mississippi, and therefore did not need a certificate of authority in order to maintain an action in Mississippi where the only business contact the corporation had with Mississippi was the actual commencement of the suit, since § 79-4-15.01(b)(1) states that simply maintaining, defending, or settling a proceeding does not constitute “transacting business.” Mississippi Ins. Guar. Ass'n v. Harkins & Co., 652 So. 2d 732, 1995 Miss. LEXIS 145 (Miss. 1995).

2.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-1-19.

A foreign corporation domesticated in Mississippi under statute remains a resident of state of original incorporation for all jurisdictional purposes, state and federal, and is subject to attachment in Mississippi courts as a “nonresident,” since, for purpose of removing to federal court an action brought in state of domestication, a domesticated foreign corporation is a nonresident. Southern Motor Express Co. v. Magee Truck Lines, Inc., 181 Miss. 223, 177 So. 653, 1937 Miss. LEXIS 132 (Miss. 1937).

Shares of stock in Louisiana corporation, doing business and domesticated in Mississippi, have their situs for devolution purposes in this state. Ewing v. Warren, 144 Miss. 233, 109 So. 601, 1926 Miss. LEXIS 342 (Miss. 1926).

12. Under former § 79-1-23.

In a personal injury action against a domesticated foreign corporation, the trial court’s exercise of jurisdiction as an attachment in chancery on the grounds of nonresidency did not violate the corporation’s right to equal protection of the laws, even though it claimed to be a domestic corporation for all intents and purposes, where the state of incorporation retained, inter alia, supervisory power and the final authority to dissolve the corporation. Louisville & N. R. Co. v. Hasty, 360 So. 2d 925, 1978 Miss. LEXIS 2307 (Miss.), cert. denied, 439 U.S. 1003, 99 S. Ct. 614, 58 L. Ed. 2d 679, 1978 U.S. LEXIS 4129 (U.S. 1978).

A foreign corporation domesticated in Mississippi under statute remains a resident of state of original incorporation for all jurisdictional purposes, state and federal, and is subject to attachment in Mississippi courts as a “nonresident,” since, for the purpose of removing to federal court an action brought in state of domestication, a domesticated foreign corporation is a nonresident. Southern Motor Express Co. v. Magee Truck Lines, Inc., 181 Miss. 223, 177 So. 653, 1937 Miss. LEXIS 132 (Miss. 1937).

13. Under former § 79-3-211.

Foreign corporation seeking to maintain action for breach of contract was not barred under Miss Code § 79-3-247 [repealed] from bringing action for failure to have certificate of authority to do business in state where foreign corporation maintained no office or bank account in state and had no employees in state and where purpose of contract was for foreign corporation to manage hotel, thus bringing business within reach of Commerce Clause and within exception to definition of “transacting business” under § 79-3-211 [repealed]. Madden Management, Inc. v. First Equities Corp., 666 F. Supp. 96, 1987 U.S. Dist. LEXIS 7872 (N.D. Miss. 1987).

If foreign corporation is qualified to do business in State of Mississippi, even though it may not be doing any business, its agent for process may be served and courts have personal jurisdiction over that corporation; actually doing business in state has nothing to do with personal jurisdiction where foreign corporation has qualified to do business in state; corporation qualifying to do business in state, under appropriate statutes, becomes like individual as far as suit is concerned. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

In a diversity action by a Florida construction company in federal district court for Mississippi, seeking to recover a construction contract debt from the surety, a Mississippi bank, the trial court committed reversible error when it granted the bank’s motion for dismissal on the grounds that the foreign company had engaged in intrastate commerce without qualifying to do so as required by Mississippi law, and thus, was precluded from maintaining an action in Mississippi state or federal court, where contract substantially related to interstate activities, where, under the National Bank Act, the bank was required to be sued where it was located, and where it would have been an impermissible burden on interstate commerce to permit Mississippi courtroom doors to remain closed to such foreign company on events and contracts substantially related to interstate activities. Diversacon Industries, Inc. v. National Bank of Commerce, 629 F.2d 1030, 1980 U.S. App. LEXIS 12640 (5th Cir. Miss. 1980).

A Georgia corporation was not barred from seeking relief in the Mississippi courts for an alleged breach of a restrictive covenant by one of its former employees, even though the claim arose out of the transaction of business in the state and even though plaintiff corporation had not first obtained a certificate of authority from the Secretary of State, where the record supported the trial court’s findings that plaintiff was engaged in interstate commerce and was thus exempted by subsections (d) and (e) of this section from the certificate requirements. Cheatham v. Kem Mfg. Corp., 372 So. 2d 1085, 1979 Miss. LEXIS 2148 (Miss. 1979).

Payment of the contractor’s privilege tax by a foreign corporation did not relieve it of the requirement that it obtain a certificate of authority to do business from the secretary of state and, absent such certificate, the contractor was not entitled to sue in state court to enforce a construction lien. Town & Country Plumbing Co. v. Delta Real Estate Development, Inc., 357 So. 2d 126, 1978 Miss. LEXIS 2491 (Miss. 1978).

An Arkansas corporation was doing business within the state where, of its chain of franchised retail stores, several were in Mississippi, and, with respect to a particular Mississippi store from which it sought recovery of franchise fees and other charges, evidence showed that the corporation had a contract right to control virtually the entire operation of the store and that it was in fact significantly involved in that operation. Barbee v. United Dollar Stores, Inc., 337 So. 2d 1277, 1976 Miss. LEXIS 1617 (Miss. 1976).

An Ohio corporation that had acted as purchaser and lessor of frozen drink machines, buying them from a Georgia corporation and leasing them to individuals in Mississippi who had agreed to lease them in an arrangement made through the Georgia corporation, was not “transacting” business within Mississippi within the meaning of § 79-3-247 [repealed] and could bring an action in the Mississippi district court to recover amounts due on the lease from the lessees. Xyoquip, Inc. v. Mims, 413 F. Supp. 962, 1976 U.S. Dist. LEXIS 17295 (N.D. Miss. 1976).

In a suit filed by a foreign corporation having no certificate of authority to do business in this state, where the record showed that the only business that the plaintiff had transacted in this state was entering into the lease contract with the defendant which was the subject of the suit, the transaction sued upon fell within the exception set up in Code 1972, § 79-3-211(d) [repealed], and the plaintiff was therefore not barred from bringing suit by Code 1972, § 79-3-247 [repealed]. Mid--Continent Refrigerator Co. v. Starks, 298 So. 2d 714, 1974 Miss. LEXIS 1572 (Miss. 1974).

Diversity action brought by nonresident plaintiffs to recover a brokerage fee allegedly owed by the defendant for two loan commitments was not barred by Code 1972 § 79-3-247 [repealed] where the transactions involved fell within the exception found in Code 1972 § 79-3-211(e) [repealed]. Ivor B. Clark Co. v. Southern Business & Industrial Development Co., 399 F. Supp. 824, 1974 U.S. Dist. LEXIS 6123 (S.D. Miss. 1974).

A foreign corporation not authorized by statute to do business in Mississippi cannot resort either to the state or to the federal court sitting within the state to enforce its rights unless they arose from and were exempted as a transaction in interstate commerce. Cone Mills Corp. v. Hurdle, 369 F. Supp. 426, 1974 U.S. Dist. LEXIS 12865 (N.D. Miss. 1974).

Code 1942, § 5309-239, prohibiting foreign corporations lacking a certificate of authority to maintain any action, suit or proceeding in the state, is a punitive statute designed to penalize those foreign corporations doing business in the State of Mississippi without qualifying as required by Code 1942, § 5309-221. Alabama Live Poultry, Inc. v. Ervin, 246 So. 2d 915, 1971 Miss. LEXIS 1429 (Miss. 1971).

A foreign corporation’s negotiation and purchase of common stock in one or more subsidiary companies within Mississippi does not render it doing business within the purview of the qualification statutes, and the fact that acquisition of stock in other companies was an avowed purpose of the foreign corporation’s charter has no effect upon the operation of this rule. Mid-Continent Tel. Corp. v. Home Tel. Co., 307 F. Supp. 1014, 1969 U.S. Dist. LEXIS 12626 (N.D. Miss. 1969).

The purchase or ownership of stock, even of a controlling interest, in a domestic corporation by a foreign corporation does not constitute doing business by the foreign corporation sufficient to subject it to service of process in the state of the subsidary’s operation. Mid-Continent Tel. Corp. v. Home Tel. Co., 307 F. Supp. 1014, 1969 U.S. Dist. LEXIS 12626 (N.D. Miss. 1969).

That a foreign corporation entered into a service agreement with its Mississippi subsidiary whereby it furnishes to the subsidiary, upon its request, services in various areas requiring technical training and expertise and also sold to its subsidiary equipment and supplies, lends its money, and other financial assistance, local activities at least partly performed in Mississippi, these facts are insufficient to support the conclusion that the foreign corporation is “doing business” in the State of Mississippi. Mid-Continent Tel. Corp. v. Home Tel. Co., 307 F. Supp. 1014, 1969 U.S. Dist. LEXIS 12626 (N.D. Miss. 1969).

A greater degree of business activity is required to bar a foreign corporation from Mississippi courts than is required to subject the same foreign corporation to local service of process under the state’s long arm statute. Mid-Continent Tel. Corp. v. Home Tel. Co., 307 F. Supp. 1014, 1969 U.S. Dist. LEXIS 12626 (N.D. Miss. 1969).

A foreign corporation is “doing business” within the state where it performs acts (not excluded by the statute itself) that are within the functions of its corporate powers and the business so performed is substantial in scope, and the substantiality and scope of local activity are equated with some substantial part of its ordinary or customary business, usually continuous in the sense that it may be distinguished from merely casual, sporadic, or occasional transactions and isolated acts. Mid-Continent Tel. Corp. v. Home Tel. Co., 307 F. Supp. 1014, 1969 U.S. Dist. LEXIS 12626 (N.D. Miss. 1969).

A corporation is doing business for purposes of requiring it to qualify to have access to the courts of Mississippi when the corporation enters the state and carries on a substantial part of its business there on a regular basis, and the question of whether a corporation is so doing business in the state is one of the facts to be determined by the circumstances of each particular case, and the corporation’s activities must be judged as a whole. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

A Tennessee food processing corporation, which entered into a contract with five Mississippi planters under which the latter agreed to cultivate 1000 acres of green beans and the processor obligated itself to harvest and transport the beans, was not engaged in doing business in Mississippi, and was not prohibited from maintaining an action in federal court in that state, although not qualified to do business there. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

A corporation is not doing business in Mississippi merely because it has employees or agents in the state to solicit orders to be transmitted to the principal, or to perform acts incidental to interstate commerce. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

The penalty imposed against a foreign corporation doing business in Mississippi without having first qualified is that it shall not be permitted to avail itself of the state courts to enforce a cause of action accruing to it prior to the time it qualified to do business; but the contracts and other acts of a foreign corporation entered into or performed prior to its qualification are not rendered invalid. Wood v. Gulf States Capital Corp., 217 So. 2d 257, 1968 Miss. LEXIS 1259 (Miss. 1968).

A foreign credit corporation which has an agent in Mississippi for the purpose of calling upon prospective sellers of title retention notes to solicit and induce them to submit the collateral notes taken from their customers to the office of the credit corporation in Memphis, Tennessee, furnished an automobile to its agent for use in calling on manufacturers and dealers in Mississippi, and offered its services to dealers to collect delinquent money due on notes, or to recover the possession of property described in the notes, was not engaged in doing business in Mississippi within the purview of this section [Code 1942, § 5309-221]. Ross Constr. Co. v. U. M. & M. Credit Corp., 214 So. 2d 822, 1968 Miss. LEXIS 1336 (Miss. 1968).

A foreign corporation doing business in Mississippi without having qualified as required by statute cannot use the courts of this state to enforce any cause of action that accrued as the result of doing such business, and in order to avail itself of the state courts to enforce a cause of action, a foreign corporation doing business in the state must have qualified to do business when the cause of action accrued. Parker v. Lin-Co Producing Co., 197 So. 2d 228, 1967 Miss. LEXIS 1515 (Miss. 1967).

The statutory prohibition against bringing or maintaining actions or suits does not prevent a defendant from interposing defenses when sued nor preclude the asserting or recovering of a counterclaim. Smith v. Kincade, 232 F.2d 306, 1956 U.S. App. LEXIS 3022 (5th Cir. Miss. 1956).

Where a foreign corporation shipped its products f. o. b. from point outside the state to local dealers, who agreed to pay therefor and where the corporation also employed resident contract men to procure and recommend local dealers and investigate sureties on their performance bonds, the foreign corporation was not doing business in the state to such extent that the failure to qualify under this section [Code 1942, § 5319] would bar suits in courts of the state. J. R. Watkins Co. v. Flynt, 220 Miss. 871, 72 So. 2d 195, 1954 Miss. LEXIS 508 (Miss. 1954).

A foreign trading corporation having no office or place of business in this state, by employing a soliciting agent to obtain orders and send them to the home office, where they are filled by direct shipments to the purchasers, is not doing business in this state within the meaning of this section [Code 1942, § 5319]. Savell v. Schultz, Baujan & Co., 213 Miss. 427, 57 So. 2d 151, 1952 Miss. LEXIS 380 (Miss. 1952).

A foreign corporation which has failed to file a written power of attorney designating an agent on whom service of process may be had, in compliance with this section [Code 1942, § 5319], cannot maintain in a federal court an action, commenced on ground of diversity of citizenship, for a broker’s commission alleged to be due for the sale of real estate in the state, since this section [Code 1942, § 5319] also provides that a foreign corporation failing to comply with the above requirements shall not be permitted to bring or maintain any action or suit in any of the courts of the state. Woods v. Interstate Realty Co., 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524, 1949 U.S. LEXIS 2148 (U.S. 1949).

The Mississippi statutes deny to the noncomplying corporations permission to bring a suit in the state courts; but they do not prevent such a corporation from being sued upon its contracts in the state courts. Interstate Realty Co. v. Woods, 168 F.2d 701, 1948 U.S. App. LEXIS 2098 (5th Cir. Miss. 1948), rev'd, 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524, 1949 U.S. LEXIS 2148 (U.S. 1949).

A Tennessee corporation, which, through its agents, had contracted to sell real estate in Mississippi and in connection with sales had sent its agents into the state to meet prospective buyers and to show the properties to be sold, and which had admitted earnings from the sale of real estate in Mississippi over a period of years, was doing business in Mississippi within the meaning of this statute. Interstate Realty Co. v. Woods, 168 F.2d 701, 1948 U.S. App. LEXIS 2098 (5th Cir. Miss. 1948), rev'd, 337 U.S. 535, 69 S. Ct. 1235, 93 L. Ed. 1524, 1949 U.S. LEXIS 2148 (U.S. 1949).

In action on an account by a foreign corporation not authorized to do business in the state, where defendant’s plea and plaintiff’s replication raised issue whether plaintiff was doing business in the state, it was error to sustain demurrer to replication grounded on exhibits attached to the plea. W. T. Rawleigh Co. v. Lowry, 199 Miss. 107, 23 So. 2d 540, 1945 Miss. LEXIS 273 (Miss. 1945).

Foreign corporation, engaged in doing highway construction as its chief corporate function, was doing business in the state in the performance of a contract with the state highway commission for the construction of a link of state highway, within the purview of statutes requiring it to file a copy of its charter and designate an agent for the service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Performance of contract between foreign highway construction corporation and state highway commission for construction of a link of highway within state was not an isolated transaction within the rule that an isolated dealing within the state by a foreign corporation is not doing business in the state so as to require filing of copy of charter and designation of agent for service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

The usual test of whether a foreign corporation is doing business within the meaning of the statutes is whether or not it is doing such acts as are within the function of its corporate powers, and where the business so performed is substantial in scope such corporation is held to be doing business. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Permitting highway commission, in suit against it by foreign corporation to recover for damages for delay and additional compensation for extra work under contract with commission for construction of highway in state, to set up defense that corporation failed to qualify as a foreign corporation doing business in the state, after suit had been pending for three years and complainant had taken testimony for 20 days and rested, was not error, in absence of a showing that commission had notice of the noncompliance with the statutes prior to the taking of the evidence. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Foreign corporation doing business in state in performance of contract with highway commission for construction of highway could not recover damages for delay occasioned by commission nor additional compensation for extra work performed under such contract during time it failed to comply with provision requiring filing of a copy of its charter and designation of an agent for service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

To constitute a foreign corporation doing business in a particular jurisdiction, the business must be of such nature and character as to warrant the inference that the corporation has subjected itself to the local jurisdiction, and is by its duly authorized officers or agents present within the state where the service of process is attempted. Lee v. Memphis Pub. Co., 195 Miss. 264, 14 So. 2d 351, 1943 Miss. LEXIS 133 (Miss. 1943).

A foreign finance company was subject to the privilege tax imposed by Laws 1940, ch. 110 on the business of acquiring notes and other securities whereby title is retained until payment of the purchase price of tangible personal property sold on installment payment contracts and the like, notwithstanding that such company did not file its corporate charter nor qualify to do business within the meaning of this section [Code 1942, § 5319]. Stone v. General Electric Contracts Corp., 193 Miss. 317, 7 So. 2d 811, 1942 Miss. LEXIS 84 (Miss. 1942), limited, Lincoln Nat'l Life Ins. Co. v. State Tax Com., 196 Miss. 82, 16 So. 2d 369, 1944 Miss. LEXIS 170 (Miss. 1944).

Where the sale of phonograph instruments to Mississippi residents by an Illinois corporation, which had no resident agent and had not filed a copy of its charter, was made through a Texas distributor, and was interstate in character, the fact that the distributor, who was compensated by a sales commission, had some sort of an understanding with the purchasers that the instrument would be kept in repair by the distributor, and the distributor did from time to time render this service, did not operate to take away the interstate character of the sale so as to preclude the corporation from foreclosing a chattel mortgage on the instrument. Smith v. J. P. Seeburg Corp., 192 Miss. 563, 6 So. 2d 591, 1942 Miss. LEXIS 44 (Miss. 1942).

A foreign corporation sending agents into the state to solicit the purchase of reserve title purchase money contracts, and purchasing such contracts at its office outside of the state, was not doing business in the state within the meaning of the statute. Yellow Mfg. Acceptance Corp. v. American Oil Co., 191 Miss. 757, 2 So. 2d 834, 1941 Miss. LEXIS 161 (Miss. 1941).

A foreign corporation was not doing business in Mississippi within the meaning of the statute, where it appeared that it was engaged in the business of procuring loans, its local agent sending the applications to the corporation’s home office for examination, and acceptance or rejection, and, if accepted, the transaction in connection with the loan was conducted through the home office, and the corporation required the borrower to pay its commission for handling the loan at the home office, or to execute notes payable to it in the city in which its home office was located. The fact that local correspondents, who received and transmitted applications for loans to a foreign loan corporation, were or were not agents of the corporation, rather than of the borrower, was immaterial in determining that the corporation was not doing business within the state, and so was not subject to the requirement as to filing a copy of its charter and appointing an agent to receive service of process. Morrison v. Guaranty Mortg. & Trust Co., 191 Miss. 207, 199 So. 110, 1940 Miss. LEXIS 256 (Miss. 1940).

Under statute (Laws 1934, Ch. 121), imposing franchise tax on corporations “doing business” in the state, which was defined to include each and every act, power or privilege exercised or enjoyed in the state as an incident to or by virtue of the powers and privileges acquired by the nature of the organization, a foreign corporation is “doing business” in the state and is subject to tax as soon as it gets ready to be active by having property there and enjoying the protection of the state for it, and qualifies formally by filing its charter and naming its agent for the service of process. Stone v. Interstate Natural Gas Co., 103 F.2d 544, 1939 U.S. App. LEXIS 3610 (5th Cir. Miss.), aff'd, 308 U.S. 522, 60 S. Ct. 292, 84 L. Ed. 442, 1939 U.S. LEXIS 16 (U.S. 1939).

A foreign corporation engaged in the business of discounting for cash for dealers, installment sales contracts for the unpaid balances on electric refrigerators and other electrical equipment, was not doing business within the state within the purview of this section [Code 1942, § 5319], so as to deny it the right to bring suit in the state for failure to file its charter and appoint a process agent, where the assignment contract between such corporation and the dealer was executed outside the state, payments thereon were to be made at the corporation’s place of business outside the state, and the title was vested in such corporation until payment was so made, notwithstanding that the corporation sent its agent into the state after the execution of the assignment contract to learn how its business was being conducted. Refrigeration Discount Corp. v. Turley, 189 Miss. 880, 198 So. 731, 1940 Miss. LEXIS 159 (Miss. 1940).

A foreign corporation, executing a contract in Minnesota for the sale of goods at wholesale, to be sold by the other party thereto in Mississippi, which contract required the purchaser to report his sale to the corporation, to designate his sales territory, and to remit a percentage of the proceeds of such sale, and permitted him to return unsold goods, was not doing business in Mississippi so as to require it to file a copy of its charter with the secretary of state and to appoint such officer as its process agent, and so as to preclude its resort to the court for failure to comply with such requirement, such contract being a contract of sale and not a contract of agency. Watson v. J. R. Watkins Co., 188 Miss. 435, 193 So. 913, 1940 Miss. LEXIS 17 (Miss. 1940).

A foreign corporation, engaged in the business of buying trade acceptances, conditional contracts and other financial paper from dealers and others taking such contracts, but maintaining no office in the state and completing the purchase of such commercial paper at its offices in another state, was not “doing business” within the state so as to preclude its resort to the courts of the state for failure to file the appointment of an agent within the state for the service of process, notwithstanding that it sometimes sent its agents into the state to solicit a purchase of such contracts and commercial paper; and, accordingly, it was error for the court below to grant a peremptory instruction for the defendant and to enter judgment in accordance therewith in a replevin suit wherein a foreign corporation sought recovery of possession of a refrigerator upon default in payment of instalments of a reserve title contract which it has purchased and accepted at its office in Memphis, Tennessee. C. I. T. Corp. v. Stuart, 185 Miss. 140, 187 So. 204, 1939 Miss. LEXIS 124 (Miss. 1939).

One test of whether foreign corporation is “doing business” within state within statute barring suit by foreign corporation doing business in state which does not file power of attorney to receive service is whether it is doing such acts as are within the function of its corporate powers. Marx & Bensdorf, Inc. v. First Joint Stock Land Bank, 178 Miss. 345, 173 So. 297, 1937 Miss. LEXIS 213 (Miss. 1937).

Foreign corporation which, through agent, who was nonresident, maintained headquarters at hotel within state large part of agent’s time, advertised for realty brokerage business and realized $19,102.95 in commissions in three years for selling thirty-three tracts of land held “doing business” within state within statute barring suit by foreign corporation doing business in state which does not file power of attorney to receive service. Marx & Bensdorf, Inc. v. First Joint Stock Land Bank, 178 Miss. 345, 173 So. 297, 1937 Miss. LEXIS 213 (Miss. 1937).

Corporation incorporated under laws of foreign country purchasing commercial paper secured by trust deeds in state and collecting notes and foreclosing trust deeds by agent in state who leased property pending foreclosures to realize on mortgages held not “doing business in state” within statute requiring foreign corporation doing business in state to file charter with secretary of state and appoint agent for service of process. North American Mortg. Co. v. Hudson, 176 Miss. 266, 168 So. 79, 1936 Miss. LEXIS 120 (Miss. 1936).

Foreign corporation doing business within state, not having complied with regulatory statute, could not bring action in state on notes due it. Wiley Electric Co. v. Electric Storage Battery Co., 167 Miss. 842, 147 So. 773, 1933 Miss. LEXIS 101 (Miss. 1933).

Louisiana corporation which loaned money pursuant to negotiations through office in Louisana, though loans were secured by Mississippi realty, held not doing business in Mississippi so as to preclude foreclosure of trust deed without compliance with statute. Dodds v. Pyramid Sec. Co., 165 Miss. 269, 147 So. 328, 1933 Miss. LEXIS 298 (Miss. 1933).

14. Under former § 79-3-289.

In a diversity action by a Florida construction company in federal district court for Mississippi, seeking to recover a construction contract debt from the surety, a Mississippi bank, the trial court committed reversible error when it granted the bank’s motion for dismissal on the grounds that the foreign company had engaged in intrastate commerce without qualifying to do so as required by Mississippi law, and thus, was precluded from maintaining an action in Mississippi state or federal Court, where contract substantially related to interstate activities, where, under the National Bank Act, the bank was required to be sued where it was located, and where it would have been an impermissible burden on interstate commerce to permit Mississippi courtroom doors to remain closed to such foreign company on events and contracts substantially related to interstate activities. Diversacon Industries, Inc. v. National Bank of Commerce, 629 F.2d 1030, 1980 U.S. App. LEXIS 12640 (5th Cir. Miss. 1980).

A foreign corporation not authorized by statute to do business in Mississippi cannot resort either to the state or to the federal court sitting within the state to enforce its rights unless they arose from and were exempted as a transaction in interstate commerce. Cone Mills Corp. v. Hurdle, 369 F. Supp. 426, 1974 U.S. Dist. LEXIS 12865 (N.D. Miss. 1974).

§79-4-15.02. Consequences of transacting business without authority.

A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.

The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state until the foreign corporation or its successor obtains a certificate of authority.

A court may stay a proceeding commenced by a foreign corporation, its successor or assignee until it determines whether the foreign corporation or its successor requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains the certificate.

A foreign corporation is liable for a civil penalty of Ten Dollars ($10.00) for each day, but not to exceed a total of One Thousand Dollars ($1,000.00) for each year, it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection.

Notwithstanding subsections (a) and (b), the failure of a foreign corporation to obtain a certificate of authority shall not impair the validity of any contract, deed, mortgage, security interest, lien or act of such foreign corporation or prevent the foreign corporation from defending any action, suit or proceeding in any court of this state.

HISTORY: Laws, 1987, ch. 486, § 15.02; Laws, 2012, ch. 481, § 39, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (e).

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

ALR.

Effect of execution of foreign corporation’s contract which, while executory, was unenforceable because of noncompliance with conditions of doing business in state. 7 A.L.R.2d 256.

Rights of assignee or subsequent holder of negotiable paper executed to a foreign corporation doing business in state without compliance with local requirements. 80 A.L.R.2d 465.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to do business. 50 A.L.R.3d 1020.

Construction work by foreign corporation as doing business for purposes of statute requiring foreign corporation to qualify as condition of access to local courts. 90 A.L.R.3d 937.

State regulation of land ownership by alien corporation. 21 A.L.R.4th 1329.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

What constitutes doing business within state for purposes of state “closed door” statute barring unqualified or unregistered foreign corporation from local courts – modern cases. 88 A.L.R.4th 466.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action. 23 A.L.R.5th 744.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 225, 230 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31-35.

CJS.

20 C.J.S., Corporations §§ 1843-1867.

Law Reviews.

Symposium on Mississippi Rules of Civil Procedure: Joinder of claims and parties-Rules 13, 14, 17 and 18. 52 Miss. L. J. 37.

An analysis of Mississippi’s treatment of foreign corporations. 55 Miss. L. J. 259, June, 1985.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-10. [Reserved for future use.]

II. Under Former §79-3-247.

11. In general.

I. Under Current Law.

1. In general.

Mississippi’s closing-door statute, Miss. Code Ann. § 79-4-15.02(a), did not foreclose the bank from enforcement of the notes and deeds of trust it assumed from a mortgage company because the mortgage company did not need a certificate of authority to enter into the mortgage transactions with the homeowners. Furthermore, the statute did not apply because the bank was merely defending the lawsuit brought by the homeowners. Carson v. McNeal, 375 F. Supp. 2d 509, 2005 U.S. Dist. LEXIS 13166 (S.D. Miss. 2005).

Federal district court dismissed, on grounds of res judicata, the claims of a foreign corporation, even though the prior dismissal of its claims by a State court had been erroneous where the corporation had not been authorized to do business at that time under Miss. Code Ann. § 79-4-15.02(a), but the State court should have stayed the proceedings under Miss. Code Ann. § 79-4-15.02(c). Cuba Timber Co., Plaintiff v. Boswell, 339 F. Supp. 2d 773, 2004 U.S. Dist. LEXIS 20289 (S.D. Miss. 2004).

If a foreign corporation is not transacting business in Mississippi, a certificate of authority is not required in order to maintain an action in Mississippi, as demonstrated by § 79-4-15.02(c) which states that a court may stay a proceeding commenced by a foreign corporation until it determines whether the corporation requires a certificate of authority; since the court is granted some amount of discretion, it is apparent that not all foreign corporations require a certificate to maintain an action. Mississippi Ins. Guar. Ass'n v. Harkins & Co., 652 So. 2d 732, 1995 Miss. LEXIS 145 (Miss. 1995).

A foreign corporation was not transacting business in Mississippi, and therefore did not need a certificate of authority in order to maintain an action in Mississippi where the only business contact the corporation had with Mississippi was the actual commencement of the suit, since § 79-4-15.01(b)(1) states that simply maintaining, defending, or settling a proceeding does not constitute “transacting business.” Mississippi Ins. Guar. Ass'n v. Harkins & Co., 652 So. 2d 732, 1995 Miss. LEXIS 145 (Miss. 1995).

2.-10. [Reserved for future use.]

II. Under Former § 79-3-247.

11. In general.

If corporation does not qualify to do business in State of Mississippi, it does not have access to courts in so far as maintaining action or suit. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

If foreign corporation is qualified to do business in State of Mississippi, even though it may not be doing any business, its agent for process may be served and courts have personal jurisdiction over that corporation; actually doing business in state has nothing to do with personal jurisdiction where foreign corporation has qualified to do business in state; corporation qualifying to do business in state, under appropriate statutes, becomes like individual as far as suit is concerned. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

In a diversity action by a Florida construction company in federal district court for Mississippi, seeking to recover a construction contract debt from the surety, a Mississippi bank, the trial court committed reversible error when it granted the bank’s motion for dismissal on the grounds that the foreign company had engaged in intrastate commerce without qualifying to do so as required by Mississippi law, and thus, was precluded from maintaining an action in Mississippi state or federal court, where contract substantially related to interstate activities, where, under the National Bank Act, the bank was required to be sued where it was located, and where it would have been an impermissible burden on interstate commerce to permit Mississippi courtroom doors to remain closed to such foreign company on events and contracts substantially related to interstate activities. Diversacon Industries, Inc. v. National Bank of Commerce, 629 F.2d 1030, 1980 U.S. App. LEXIS 12640 (5th Cir. Miss. 1980).

Statute prohibiting a foreign corporation which does not obtain from Mississippi’s secretary of state a certificate of authority to transact business in the state from maintaining an action in any courts in Mississippi does not deprive a defendant of the right to prevent compulsory counterclaims and third-party complaints. Environmental Coatings, Inc. v. Baltimore Paint & Chemical Co., 617 F.2d 110, 1980 U.S. App. LEXIS 17512 (5th Cir. Miss. 1980).

Where, at the time a foreign corporation entered into a contract with a franchisee, it was not authorized to do business within the state, but where it had qualified to transact business within the state by the time the cause of action for default in the payment of the franchise fees accrued, the foreign corporation was entitled to bring suit in state court to enforce its contract with its franchisee. Honey Fluff Donut Co. v. Daniel, Inc., 374 So. 2d 800, 1979 Miss. LEXIS 2363 (Miss. 1979).

Payment of the contractor’s privilege tax by a foreign corporation did not relieve it of the requirement that it obtain a certificate of authority to do business from the secretary of state and, absent such certificate, the contractor was not entitled to sue in state court to enforce a construction lien. Town & Country Plumbing Co. v. Delta Real Estate Development, Inc., 357 So. 2d 126, 1978 Miss. LEXIS 2491 (Miss. 1978).

Because it was engaged as well in intrastate business, the general interstate nature of the business of a multistate franchising corporation did not exempt it from the requirement of this section that it obtain a certificate to operate within the state; and a Mississippi franchisee against whom it filed suit to recover franchise fees and other charges was not estopped, by his filing of a counterclaim, from raising this statute as a bar to the corporation’s action, where the corporation had incorrectly alleged in its complaint that it was licensed and qualified in Mississippi, and the franchisee properly relied on the pleading by filing a responsive pleading. Barbee v. United Dollar Stores, Inc., 337 So. 2d 1277, 1976 Miss. LEXIS 1617 (Miss. 1976).

Statute did not apply to a national banking corporation. Indiana Nat'l Bank v. Roberts, 326 So. 2d 802, 1976 Miss. LEXIS 1764 (Miss. 1976).

Chancellor was correct in overruling a motion to dismiss under Code 1972, § 79-3-247 [Repealed] where there was nothing in the record to indicate that the complainant was doing, or had been doing, business in Mississippi. Crescent Plywood Co. v. Lawrence, 305 So. 2d 343, 1974 Miss. LEXIS 1477 (Miss. 1974).

The Mississippi Supreme Court’s judgment holding that because of an out-of-state cotton merchant’s failure to obtain a certificate of authority to qualify to do business in the state as a foreign corporation, the merchant, pursuant to Code 1942, § 5309-239, could not maintain an action in the state courts against a resident cotton farmer for his breach of a contract to sell his future cotton crop to the merchant by delivering the cotton to the merchant at a local warehouse-such contract having been negotiated by an independent, local broker whose practice was to telephone the necessary information to the merchant at its out-of-state office, where a contract was prepared and signed by the merchant and then forwarded to the broker to obtain the farmer’s signature-is repugnant to the commerce clause of the Federal Constitution (Art I, § 8, cl 3), where (1) even though delivery of the cotton to the merchant’s account at the local warehouse, taken in isolation, was an intrastate transaction, nevertheless such delivery was a part of interstate commerce since it was essential for sorting and classifying the cotton as a prerequisite to its shipment in interstate or foreign commerce under the merchant’s contracts for sale of the cotton to customers outside the state, and (2) the merchant’s contracts with the forum state did not exhibit the sort of localization or intrastate character required in situations where a state seeks to require a foreign corporation to qualify to do business, since the local broker who arranged the contracts was paid on a commission basis and had no authority to execute contracts on the merchant’s behalf, and since the merchant had no office or warehouse in the state, and no employees soliciting business or otherwise operating in the state on a regular basis. Allenberg Cotton Co. v. Pittman, 419 U.S. 20, 95 S. Ct. 260, 42 L. Ed. 2d 195, 1974 U.S. LEXIS 11 (U.S. 1974).

Mississippi Supreme Court’s holding that because of Tennessee cotton merchant’s failure to qualify to do business in Mississippi, merchant could not maintain action for Mississippi resident’s breach of contract to sell cotton to merchant, held violative of commerce clause of Federal Constitution. Allenberg Cotton Co. v. Pittman, 419 U.S. 20, 95 S. Ct. 260, 42 L. Ed. 2d 195, 1974 U.S. LEXIS 11 (U.S. 1974).

The phrase “in any court of this state” as used in Code 1942 § 5309-239, precludes an unqualified corporation’s resort, not only to Mississippi state courts but also to federal courts in Mississippi, with regard to actions arising out of purely intrastate activities. Fred Hale Machinery, Inc. v. Laurel Hill Lumber Co., 483 F.2d 58, 1973 U.S. App. LEXIS 8921 (5th Cir. Miss. 1973).

A statute such as Code 1942 § 5309-239 cannot be enforced if its application would unreasonably burden interstate commerce by prohibiting suits growing out of transactions in interstate commerce. Fred Hale Machinery, Inc. v. Laurel Hill Lumber Co., 483 F.2d 58, 1973 U.S. App. LEXIS 8921 (5th Cir. Miss. 1973).

Where negotiations for the design and supply of certain sawmill machinery were conducted in Louisiana and Mississippi, the Louisiana corporation arranged to supply components from manufacturers in Mississippi and Georgia, and the Louisiana corporation sent its employees to Mississippi in connection with the assembly and installation of the system, this transaction was of an interstate character, and application of Code 1942 § 5309-239 would create an unreasonable burden on interstate commerce, and accordingly, that section did not bar the Louisiana corporation from filing suit in Fred Hale Machinery, Inc. v. Laurel Hill Lumber Co., 483 F.2d 58, 1973 U.S. App. LEXIS 8921 (5th Cir. Miss. 1973).

Foreign corporation seeking to maintain action for breach of contract was not barred under Miss Code § 79-3-247 [repealed] from bringing action for failure to have certificate of authority to do business in state where foreign corporation maintained no office or bank account in state and had no employees in state and where purpose of contract was for foreign corporation to manage hotel, thus bringing business within reach of Commerce Clause and within exception to definition of “transacting business” under § 79-3-211 [repealed]. Madden Management, Inc. v. First Equities Corp., 666 F. Supp. 96, 1987 U.S. Dist. LEXIS 7872 (N.D. Miss. 1987).

A foreign corporation transacting business in Mississippi without having first obtained a certificate of authority, as required by statute, would not be precluded from asserting a third-party complaint in an action in which it was a defendant. Park v. Cannco Contractors, Inc., 446 F. Supp. 24, 1977 U.S. Dist. LEXIS 13861 (N.D. Miss. 1977).

An Ohio corporation that had acted as purchaser and lessor of frozen drink machines, buying them from a Georgia corporation and leasing them to individuals in Mississippi who had agreed to lease them in an arrangement made through the Georgia corporation, was not “transacting” business within Mississippi within the meaning of § 79-3-247 [repealed] and could bring an action in the Mississippi district court to recover amounts due on the lease from the lessees. Xyoquip, Inc. v. Mims, 413 F. Supp. 962, 1976 U.S. Dist. LEXIS 17295 (N.D. Miss. 1976).

Diversity action brought by nonresident plaintiffs to recover a brokerage fee allegedly owed by the defendant for two loan commitments was not barred by Code 1972 § 79-3-247 [repealed] where the transactions involved fell within the exception found in Code 1972 § 79-3-211(e) [repealed]. Ivor B. Clark Co. v. Southern Business & Industrial Development Co., 399 F. Supp. 824, 1974 U.S. Dist. LEXIS 6123 (S.D. Miss. 1974).

A foreign corporation not authorized by statute to do business in Mississippi cannot resort either to the state or to the federal court sitting within the state to enforce its rights unless they arose from and were exempted as a transaction in interstate commerce. Cone Mills Corp. v. Hurdle, 369 F. Supp. 426, 1974 U.S. Dist. LEXIS 12865 (N.D. Miss. 1974).

When the plaintiff nonresident corporation ceased to do business in this state, it was no longer in violation of the law requiring it to obtain a certificate of authority, and a cause of action thereafter accruing which did not arise directly out of the operation of the business could be maintained in the courts of this state. Val--U--King Homes, Inc. v. Taylor, 301 So. 2d 857, 1974 Miss. LEXIS 1676 (Miss. 1974).

In a suit filed by a foreign corporation having no certificate of authority to do business in this state, where the record showed that the only business that the plaintiff had transacted in this state was entering into the lease contract with the defendant which was the subject of the suit, the transaction sued upon fell within the exception set up in Code 1972, § 79-3-211(d)[Repealed], and the plaintiff was therefore not barred from bringing suit by Code 1972, § 79-3-247 [repealed]. Mid--Continent Refrigerator Co. v. Starks, 298 So. 2d 714, 1974 Miss. LEXIS 1572 (Miss. 1974).

Where a joint venturer consisted of three foreign corporations, the joint venturer could not maintain an action in negligence for damages where one of the corporations had failed to qualify to do business in Mississippi, even though the connection of such corporation with the transaction consisted only in furnishing its share of the capital needed to carry out the contract in the state and the actual performance of the contract was accomplished by another of the joint venturers. Scott Co. of California v. Enco Constr. Co., 264 So. 2d 409, 1972 Miss. LEXIS 1362 (Miss. 1972).

For the purposes of Code 1942, § 5309-239, providing that a foreign corporation transacting business in Mississippi without a certificate of authority shall not be permitted to maintain any action, a member of a joint venturer is transacting business in the state when one of the joint venturers is transacting in the state the business for which the joint venturer was formed. Scott Co. of California v. Enco Constr. Co., 264 So. 2d 409, 1972 Miss. LEXIS 1362 (Miss. 1972).

A strict construction of this statute is required, it being penal, before access to the state courts is precluded to a foreign corporation found to be “doing business” in the state, and the question of whether a foreign corporation is doing business within the state must be determined upon an ad hoc basis. S & A Realty Co. v. Hilburn, 249 So. 2d 379, 1971 Miss. LEXIS 1159 (Miss. 1971).

Where a foreign corporation had a 10 year lease within the state and subsequently renewed for an additional 10 years, paid the agreed rentals under both the initial and renewal leases, and proposed to execute a purchase option provided therein, and where the charter of the corporation provided that the corporation’s purpose was to buy, sell, lease, exchange, build and construct real estate, the corporation was transacting business within this section [Code 1942, § 5309-239], barring it from the courts because not qualified to do so. S & A Realty Co. v. Hilburn, 249 So. 2d 379, 1971 Miss. LEXIS 1159 (Miss. 1971).

Code 1942, § 5309-239, prohibiting foreign corporations lacking a certificate of authority to maintain any action, suit or proceeding in the state, is a punitive statute designed to penalize those foreign corporations doing business in the State of Mississippi without qualifying as required by Code 1942, § 5309-221. Alabama Live Poultry, Inc. v. Ervin, 246 So. 2d 915, 1971 Miss. LEXIS 1429 (Miss. 1971).

An Alabama corporation which had never received a license or authorization to do business in Mississippi, and which leased trucks for the purpose of hauling chickens in its trucking business, purchasing the chickens in Mississippi and delivering them to a Mississippi destination, was doing business in Mississippi and could not maintain an attachment suit against the owner of the trucks, under the provisions of this section [Code 1942, § 5309-239]. Alabama Live Poultry, Inc. v. Ervin, 246 So. 2d 915, 1971 Miss. LEXIS 1429 (Miss. 1971).

Where the evidence established that the foreign corporation plaintiff was a corporate entity separate and apart from a subsidiary which engaged in business in Mississippi without authority, the association between plaintiff and its subsidiary did not create the relationship of principal and agent between them, and that plaintiff was not engaged in doing business in Mississippi through the activities of its subsidiary, it was not prohibited from bringing a diversity action in the federal courts of that state. Bunge Corp. v. St. Louis Terminal Field Warehouse Co., 295 F. Supp. 1231, 1969 U.S. Dist. LEXIS 12581 (N.D. Miss. 1969).

A foreign corporation doing business in Mississippi without having qualified as required by statute cannot use the courts of the state to enforce any cause of action that accrued as a result of doing such business, and the fact that the corporation subsequently qualified to do business would not authorize it thereafter to maintain an action on the cause which had previously accrued. Bunge Corp. v. St. Louis Terminal Field Warehouse Co., 295 F. Supp. 1231, 1969 U.S. Dist. LEXIS 12581 (N.D. Miss. 1969).

The prohibition against a foreign corporation transacting business in Mississippi without a certificate of authority maintaining an action, suit, or proceeding in any court of the state applies to an action in a federal court in the state. Bunge Corp. v. St. Louis Terminal Field Warehouse Co., 295 F. Supp. 1231, 1969 U.S. Dist. LEXIS 12581 (N.D. Miss. 1969).

The penalty imposed against a foreign corporation doing business in Mississippi without having first qualified is that it shall not be permitted to avail itself of the state courts to enforce a cause of action accruing to it prior to the time it qualified to do business; but the contracts and other acts of a foreign corporation entered into or performed prior to its qualification are not rendered invalid. Wood v. Gulf States Capital Corp., 217 So. 2d 257, 1968 Miss. LEXIS 1259 (Miss. 1968).

A corporation is doing business for purposes of requiring it to qualify to have access to the courts of Mississippi when the corporation enters the state and carries on a substantial part of its business there on a regular basis, and the question of whether a corporation is so doing business in the state is one of the facts to be determined by the circumstances of each particular case, and the corporation’s activities must be judged as a whole. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

A corporation is not doing business in Mississippi merely because it has employees or agents in the state to solicit orders to be transmitted to the principal, or to perform acts incidental to interstate commerce. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

A Tennessee food processing corporation, which entered into a contract with five Mississippi planters under which the latter agreed to cultivate 1000 acres of green beans and the processor obligated itself to harvest and transport the beans, was not engaged in doing business in Mississippi, and was not prohibited from maintaining an action in federal court in that state, although not qualified to do business there. Humboldt Foods, Inc. v. Massey, 297 F. Supp. 236, 1968 U.S. Dist. LEXIS 7941 (N.D. Miss. 1968).

A foreign corporation doing business in Mississippi without having qualified as required by statute cannot use the courts of this state to enforce any cause of action that accrued as the result of doing such business, and in order to avail itself of the state courts to enforce a cause of action, a foreign corporation doing business in the state must have qualified to do business when the cause of action accrued. Parker v. Lin-Co Producing Co., 197 So. 2d 228, 1967 Miss. LEXIS 1515 (Miss. 1967).

§79-4-15.03. Application for certificate of authority.

A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State for filing. The application must set forth:

  1. The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of Section 79-4-15.06;
  2. The name of the state or country under whose law it is incorporated;
  3. Its date of incorporation and period of duration;
  4. The street address of its principal office;
  5. The information required by Section 79-35-5(a); and
  6. The names and usual business addresses of its current directors and officers.

The foreign corporation shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the Secretary of State or other official having custody of corporate records in the state or country under whose law it is incorporated.

HISTORY: Laws, 1987, ch. 486, § 15.03; Laws, 2012, ch. 382, § 41, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (a)(5).

Cross References —

Requirements of this section for obtaining original certificate of authority apply to obtaining amended certificate, see § 79-4-15.04.

Application of foreign professional corporation for certificate of authority to contain information required by this section, see § 79-10-93.

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 174, 205, 220 et seq.

CJS.

20 C.J.S., Corporations § 1818.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-3-219.

12. Under former §79-3-221.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-3-219.

A foreign corporation transacting business in Mississippi without having first obtained a certificate of authority, as required by statute, would not be precluded from asserting a third-party complaint in an action in which it was a defendant. Park v. Cannco Contractors, Inc., 446 F. Supp. 24, 1977 U.S. Dist. LEXIS 13861 (N.D. Miss. 1977).

12. Under former § 79-3-221.

A non-profit foreign corporation, operating a university in another state, which leased a farm which it owned in this state, was not required to file a copy of its charter or articles of incorporation in the office of the secretary of state under this section [Code 1942, § 5343]. Gillentine v. Illinois Wesleyan University, 194 F.2d 970, 1952 U.S. App. LEXIS 3708 (5th Cir. Miss. 1952).

Execution of a mineral lease in Mississippi covering land located in Mississippi, which contract was to be performed in Mississippi, constituted doing business within that state by a foreign corporation. Calcote v. Texas Pac. Coal & Oil Co., 157 F.2d 216, 1946 U.S. App. LEXIS 3285 (5th Cir. Miss.), cert. denied, 329 U.S. 782, 67 S. Ct. 205, 91 L. Ed. 671, 1946 U.S. LEXIS 1740 (U.S. 1946).

The usual test of whether a foreign corporation is doing business within the meaning of the statutes is whether or not it is doing such acts as are within the function of its corporate powers, and where the business so performed is substantial in scope such corporation is held to be doing business. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Foreign corporation, engaged in doing highway construction as its chief corporate function, was doing business in the state in the performance of a contract with the state highway commission for the construction of a link of state highway, within the purview of statutes requiring it to file a copy of its charter and designate an agent for the service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Performance of contract between foreign highway construction corporation and state highway commission for construction of a link of highway within state was not an isolated transaction within the rule that an isolated dealing within the state by a foreign corporation is not doing business in the state so as to require filing of copy of charter and designation of agent for service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Permitting highway commission, in suit against it by foreign corporation to recover for damages for delay and additional compensation for extra work under contract with commission for construction of highway in state, to set up defense that corporation failed to qualify as a foreign corporation doing business in the state, after suit had been pending for three years and complainant had taken testimony for 20 days and rested, was not error, in absence of a showing that commission had notice of the noncompliance with the statutes prior to the taking of the evidence. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Foreign corporation doing business in state in performance of contract with highway commission for construction of highway could not recover damages for delay occasioned by commission nor additional compensation for extra work performed under such contract during time it failed to comply with provision requiring filing of a copy of its charter and designation of an agent for service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

A foreign finance company was subject to the privilege tax imposed by Laws 1940, Ch. 110 on the business of acquiring notes and other securities whereby title is retained until payment of the purchase price of tangible personal property sold on installment payment contracts and the like, notwithstanding that such company did not file its corporate charter nor qualify to do business within the meaning of section 5319. Stone v. General Electric Contracts Corp., 193 Miss. 317, 7 So. 2d 811, 1942 Miss. LEXIS 84 (Miss. 1942), limited, Lincoln Nat'l Life Ins. Co. v. State Tax Com., 196 Miss. 82, 16 So. 2d 369, 1944 Miss. LEXIS 170 (Miss. 1944).

Where the sale of phonograph instruments to Mississippi residents by an Illinois corporation, which had no resident agent and had not filed a copy of its charter, was made through a Texas distributor, and was interstate in character, the fact that the distributor, who was compensated by a sales commission, had some sort of an understanding with the purchasers that the instrument would be kept in repair by the distributor, and the distributor did from time to time render this service, did not operate to take away the interstate character of the sale so as to preclude the corporation from foreclosing a chattel mortgage on the instrument. Smith v. J. P. Seeburg Corp., 192 Miss. 563, 6 So. 2d 591, 1942 Miss. LEXIS 44 (Miss. 1942).

This section [Code 1942, § 5343] is applicable only to corporations doing intrastate business. Morrison v. Guaranty Mortg. & Trust Co., 191 Miss. 207, 199 So. 110, 1940 Miss. LEXIS 256 (Miss. 1940).

The fact that local correspondents, who received and transmitted applications for loans to a foreign loan corporation, were or were not agents of the corporation, rather than of the borrower, was immaterial in determining that the corporation was not doing business within the state, and so was not subject to the requirement as to filing a copy of its charter and appointing an agent to receive service of process. Morrison v. Guaranty Mortg. & Trust Co., 191 Miss. 207, 199 So. 110, 1940 Miss. LEXIS 256 (Miss. 1940).

A foreign corporation was not doing business in Mississippi within the meaning of the statute, where it appeared that it was engaged in the business of procuring loans, its local agent sending the applications to the corporation’s home office for examination, and acceptance or rejection, and, if accepted, the transaction in connection with the loan was conducted through the home office, and the corporation required the borrower to pay its commission for handling the loan at the home office, or to execute notes payable to it in the city in which its home office was located. Morrison v. Guaranty Mortg. & Trust Co., 191 Miss. 207, 199 So. 110, 1940 Miss. LEXIS 256 (Miss. 1940).

In an action on a note by a foreign corporation, in which the defendant pleaded abatement on the ground that the plaintiff had not filed a copy of its charter or appointed an agent to receive service of process, the requirement of interrogatories propounded by the defendant as to all transactions of the corporation within the state from 1923 to 1931 would impose such a burden upon the right to sue as practically to defeat it, and so would not be done, where it appeared that many of the transactions had no relation to the suit before the court and so were irrelevant, there was no index to the plaintiff’s files, which were stored in such a manner that it was practically impossible to go through them, and the defendant had not accepted an offer to give them access to the files. Morrison v. Guaranty Mortg. & Trust Co., 191 Miss. 207, 199 So. 110, 1940 Miss. LEXIS 256 (Miss. 1940).

A foreign corporation, executing a contract in Minnesota for the sale of goods at wholesale, to be sold by the other party thereto in Mississippi, which contract required the purchaser to report his sale to the corporation, to designate his sales territory, and to remit a percentage of the proceeds of such sale, and permitted him to return unsold goods, was not doing business in Mississippi so as to require it to file a copy of its charter with the secretary of state and to appoint such officer as its process agent, and so as to preclude its resort to the court for failure to comply with such requirement, such contract being a contract of sale and not a contract of agency. Watson v. J. R. Watkins Co., 188 Miss. 435, 193 So. 913, 1940 Miss. LEXIS 17 (Miss. 1940).

However, an undertaking by a foreign corporation in connection with a conditional sale of an ice cream dispenser, otherwise an interstate transaction, to service it gratis for a year, gives the transaction a local character, rendering the contract of conditional sale unenforceable by reason of the corporation’s failure to comply with the requirement of this section [Code 1942, § 5343] with regard to filing a copy of its charter in order to do business in the state. Case v. Mills Novelty Co., 187 Miss. 673, 193 So. 625, 1940 Miss. LEXIS 237 (Miss. 1940).

Where a foreign corporation fails to file a copy of its charter, a contract by which an intrastate sale was made by it is void. Case v. Mills Novelty Co., 187 Miss. 673, 193 So. 625, 1940 Miss. LEXIS 237 (Miss. 1940).

Under statute (Laws 1934, Ch. 121), imposing franchise tax on corporations “doing business” in the state, which was defined to include each and every act, power or privilege exercised or enjoyed in the state as an incident to or by virtue of the powers and privileges acquired by the nature of the organization, a foreign corporation is “doing business” in the state and is subject to tax as soon as it gets ready to be active by having property there and enjoying the protection of the state for it, and qualifies formally by filing its charter and naming its agent for the service of process. Stone v. Interstate Natural Gas Co., 103 F.2d 544, 1939 U.S. App. LEXIS 3610 (5th Cir. Miss.), aff'd, 308 U.S. 522, 60 S. Ct. 292, 84 L. Ed. 442, 1939 U.S. LEXIS 16 (U.S. 1939).

Foreign corporation purchasing commercial paper secured by trust deeds in state, and collecting notes and foreclosing trust deeds by agent in state, who leased property pending foreclosures to realize on mortgages, held not “doing business in state.” North American Mortg. Co. v. Hudson, 176 Miss. 266, 168 So. 79, 1936 Miss. LEXIS 120 (Miss. 1936).

Contract for purchase of property sold on foreclosure under deed of trust which had been executed to foreign corporation not having filed its charter with state, held not void as to third persons purchasing property. Citizens' Bank of Hattiesburg v. Grigsby, 170 Miss. 655, 155 So. 684, 1934 Miss. LEXIS 181 (Miss. 1934).

Foreign corporation soliciting subscriptions within state, with intention of thereafter constructing canning factory, was doing business within state. Peterman Constr. & Supply Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548, 1930 Miss. LEXIS 142 (Miss. 1930).

Foreign corporation’s compliance with law cannot as respects particular contract, be made to relate back to date of its execution. Peterman Constr. & Supply Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548, 1930 Miss. LEXIS 142 (Miss. 1930).

Test whether foreign corporation is doing business within state is whether it is doing acts within function of corporate powers. Peterman Constr. & Supply Co. v. Blumenfeld, 156 Miss. 55, 125 So. 548, 1930 Miss. LEXIS 142 (Miss. 1930).

That foreign corporation did business in state without filing charter held not to prevent it from selling property in state to liquidate its affairs; this section [Code 1942, § 5343] only denies corporation the right to enforce rights growing out of business transacted contrary to statute. Long Beach Canning Co. v. Clark, 141 Miss. 177, 106 So. 646, 1926 Miss. LEXIS 439 (Miss. 1926); Harleston v. West Louisiana Bank, 129 Miss. 111, 91 So. 423, 1922 Miss. LEXIS 6 (Miss. 1922).

Foreign corporation not required to file copy of charter to sell property in this state; sale by foreign corporation of specific property in state held not doing business therein. Long Beach Canning Co. v. Clark, 141 Miss. 177, 106 So. 646, 1926 Miss. LEXIS 439 (Miss. 1926); Harleston v. West Louisiana Bank, 129 Miss. 111, 91 So. 423, 1922 Miss. LEXIS 6 (Miss. 1922).

Contract between foreign corporation and one selling its newspapers, not as agent, but on his own account for purchase of newspapers on credit, contemplated a sale of the newspapers by a foreign corporation from without the state, and did not constitute doing business within the state, under this section [Code 1942, § 5343]. Item Co. v. Shipp, 140 Miss. 699, 106 So. 437, 1925 Miss. LEXIS 305 (Miss. 1925).

Single transaction by foreign corporation is not doing business in state. Item Co. v. Shipp, 140 Miss. 699, 106 So. 437, 1925 Miss. LEXIS 305 (Miss. 1925).

Sale of motor trucks by order through agent of foreign corporation resident in state held interstate commerce. City Sales Agency, Inc. v. Smith, 126 Miss. 202, 88 So. 625, 1921 Miss. LEXIS 24 (Miss. 1921).

Failure of foreign corporation to comply with this section [Code 1942, § 5343] does not withdraw from it recognition of its status as a corporation. Springfield Grocery Co. v. Devitt, 126 Miss. 169, 88 So. 497, 1921 Miss. LEXIS 12 (Miss. 1921).

A contract, whereby a foreign corporation purchased cotton seed “F.O.B. Como, Miss., mill weights to govern,” for shipment to the foreign state, where the mills were located and where the contract was required to be approved, held to be an interstate transaction, and corporation could recover for its breach in Mississippi without complying with this section [Code 1942, § 5343]. Union Cotton Oil Co. v. Patterson, 116 Miss. 802, 77 So. 795, 1917 Miss. LEXIS 360 (Miss. 1917).

Foreign corporation which had not complied with this section [Code 1942, § 5343] could not enforce note given by citizen for a debt due it in the courts of this state. Quartette Music Co. v. Haygood, 108 Miss. 755, 67 So. 211, 1914 Miss. LEXIS 271 (Miss. 1915).

§79-4-15.04. Amended certificate of authority.

A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:

  1. Its corporate name;
  2. The period of its duration;
  3. Any of the information required by Section 79-35-5(a); or
  4. The state or country of its incorporation.

The requirements of Section 79-4-15.03 for obtaining an original certificate of authority apply to obtaining an amended certificate under this section.

HISTORY: Laws, 1987, ch. 486, § 15.04; Laws, 2012, ch. 382, § 42, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added (a)(3); and redesignated former (a)(3) as (a)(4); and made a minor stylistic change.

Cross References —

Requirement that foreign corporation which changes its name obtain amended certificate of authority to transact business, see § 79-4-15.06.

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

Am. Jur.

8 Am. Jur. Legal Forms 2d, Foreign Corporations § 122:36.

§79-4-15.05. Effect of certificate of authority.

A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in Sections 79-4-1.01 et seq.

A foreign corporation with a valid certificate of authority has the same but no greater rights and has the same but no greater privileges as, and except as otherwise provided by Sections 79-4-1.01 et seq. is subject to the same duties, restrictions, penalties and liabilities now or later imposed on, a domestic corporation of like character.

Sections 79-4-1.01 et seq. do not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.

HISTORY: Laws, 1987, ch. 486, § 15.05, eff from and after January 1, 1988.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

ALR.

Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to business. 50 A.L.R.3d 1020.

Construction work by foreign corporation as doing business for purposes of statute requiring foreign corporation to qualify as condition of access to local courts. 90 A.L.R.3d 937.

State regulation of land ownership by alien corporation. 21 A.L.R.4th 1329.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing business in the state. 27 A.L.R.4th 387.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

CJS.

20 C.J.S., Corporations §§ 1810-1827.

Law Reviews.

An analysis of Mississippi’s treatment of foreign corporations. 55 Miss. L. J. 259, June, 1985.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former §79-3-213.

12. Under former §79-3-223.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former Law.

11. Under former § 79-3-213.

If foreign corporation is qualified to do business in State of Mississippi, even though it may not be doing any business, its agent for process may be served and courts have personal jurisdiction over that corporation; actually doing business in state has nothing to do with personal jurisdiction where foreign corporation has qualified to do business in state; corporation qualifying to do business in state, under appropriate statutes, becomes like individual as far as suit is concerned. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

Neither the maintaining nor defending of any action or suit constitutes “transacting business” in the state under Mississippi law. Hyde Constr. Co. v. Koehring Co., 321 F. Supp. 1193, 1969 U.S. Dist. LEXIS 13680 (D. Miss. 1969).

A foreign corporation which has never qualified to do business in Mississippi is not precluded from suing there on a policy of liability insurance issued to it in another state, in respect of a judgment recovered against it in Mississippi after its withdrawal from the state for negligence in the performance of services there. Aerial Agricultural Service, Inc. v. Till, 207 F. Supp. 50, 1962 U.S. Dist. LEXIS 3655 (N.D. Miss. 1962).

Foreign corporation doing business in state in performance of contract with highway commission for construction of highway could not recover damages for delay occasioned by commission nor additional compensation for extra work performed under such contract during time it failed to comply with provision requiring filing of a copy of its charter and designation of an agent for service of process. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Permitting highway commission, in suit against it by foreign corporation to recover for damages for delay and additional compensation for extra work under contract with commission for construction of highway in state, to set up defense that corporation failed to qualify as a foreign corporation doing business in the state, after suit had been pending for three years and complainant had taken testimony for 20 days and rested, was not error, in absence of a showing that commission had notice of the noncompliance with the statutes prior to the taking of the evidence. Newell Contracting Co. v. State Highway Com., 195 Miss. 395, 15 So. 2d 700, 1943 Miss. LEXIS 172 (Miss. 1943).

Failure of foreign corporation to file copy of its charter with secretary of state does not affect its status. Springfield Grocery Co. v. Devitt, 126 Miss. 169, 88 So. 497, 1921 Miss. LEXIS 12 (Miss. 1921).

Foreign corporations held authorized to do business in this state by this section [Code 1942, § 5344] and comity of nations. Springfield Grocery Co. v. Devitt, 126 Miss. 169, 88 So. 497, 1921 Miss. LEXIS 12 (Miss. 1921).

Foreign corporations can do nothing that domestic corporations are prohibited from doing. State ex rel. Attorney Gen. v. Edward Hinds Lumber Co., 106 Miss. 780, 64 So. 729, 1914 Miss. LEXIS 19 (Miss. 1914).

Statutes limiting holdings of domestic corporations being legislative declaration of public policy apply to foreign corporations. State ex rel. Attorney Gen. v. Edward Hinds Lumber Co., 106 Miss. 780, 64 So. 729, 1914 Miss. LEXIS 19 (Miss. 1914).

In a suit to cancel an acquittance, and to enforce an accounting between the parties in case a discovery be necessary to obtain data, the fact that defendant in such suit is a foreign corporation having its office, books and assets out of the state, and that the court may find itself powerless to grant administrative relief, if defendant declines to make discovery, is not a cause for declining to sustain the same. Clark v. Equitable Life Assurance Soc., 76 Miss. 22, 23 So. 453, 1898 Miss. LEXIS 60 (Miss. 1898).

Under this section [Code 1942, § 5344] foreign corporations may sue and be sued in this state as individual non-residents may sue and be sued. Pullman Palace-Car Co. v. Lawrence, 74 Miss. 782, 22 So. 53, 1896 Miss. LEXIS 184 (Miss. 1897).

It is no defense to a transitory action of trespass brought in this state that the wrong was done and the injury inflicted in another state, and that both plaintiff and defendant, a foreign corporation, were at the time, are now and have been continuously since, residents and citizens of such other states. Pullman Palace-Car Co. v. Lawrence, 74 Miss. 782, 22 So. 53, 1896 Miss. LEXIS 184 (Miss. 1897).

Although a note and trust deed given by a foreign corporation to secure a loan be void in the state where made, because of a disregard of statutory requirements, it cannot repudiate its contract without restoring the status quo by returning the money borrowed. Though the contract be void, if it be one free from moral turpitude, the corporation is liable for the money received thereunder. Williams v. Bank of Commerce, 71 Miss. 858, 16 So. 238, 1894 Miss. LEXIS 34 (Miss. 1894).

12. Under former § 79-3-223.

A foreign corporation, whose certificate of authority to do business within the State was suspended after it filed a breach of lease action, was not required to become reinstated as a condition for proceeding to trial. Capital Associates, Inc. v. Sally Southland, Inc., 529 So. 2d 640, 1988 Miss. LEXIS 338 (Miss. 1988).

§79-4-15.06. Corporate name of foreign corporation.

If the corporate name of a foreign corporation does not satisfy the requirements of Section 79-4-4.01, the foreign corporation to obtain or maintain a certificate of authority to transact business in this state:

  1. May add the word “corporation,” “incorporated,” “company” or “limited,” or the abbreviation “corp.,” “inc.,” “co.” or “ltd.,” to its corporate name for use in this state; or
  2. May use a fictitious name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name.
  3. The corporate name of a nonprofit corporation incorporated or authorized to transact business in this state;
  4. The name of a limited partnership, limited liability partnership or limited liability company that is organized or registered under the laws of this state and which has not been dissolved; and
  5. A name that is reserved or registered in the Office of the Secretary of State for any of the entities named in subsection (b) which reservation or registration has not expired.

Except as authorized by subsections (c) and (d), the corporate name (including a fictitious name) of a foreign corporation must be distinguishable upon the records of the Secretary of State from:

The corporate name of a corporation incorporated or authorized to transact business in this state;

The fictitious name of another foreign corporation or foreign limited liability company authorized to transact business in this state;

A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation (incorporated or authorized to transact business in this state) that is not distinguishable upon his records from the name applied for. The Secretary of State shall authorize use of the name applied for if:

The other corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation; or

The applicant delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.

A foreign corporation may use in this state the name (including the fictitious name) of another domestic or foreign corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and the foreign corporation:

Has merged with the other corporation;

Has been formed by reorganization of the other corporation; or

Has acquired all or substantially all of the assets, including the corporate name, of the other corporation.

If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of Section 79-4-4.01, it may not transact business in this state under the changed name until it adopts a name satisfying the requirements of Section 79-4-4.01 and obtains an amended certificate of authority under Section 79-4-15.04.

HISTORY: Laws, 1987, ch. 486, § 15.06; Laws, 2012, ch. 481, § 40, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (b), deleted former (2), which read: “A corporate name reserved or registered under Section 79-4-4.02 or 79-4-4.03,” redesignated former (3) and (4) as (2) and (3), inserted “or foreign limited liability company” in (2), and added (4) and (5).

Cross References —

Requirement that application by foreign corporation for certificate of authority to transact business set forth name that satisfies requirements of this section, see § 79-4-15.03.

Mississippi Nonprofit Corporation Act, see §§ 79-11-101 et seq.

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

ALR.

Incorporation of company under particular name as creating exclusive right to such name. 68 A.L.R.3d 1168.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 150 et seq.

CJS.

20 C.J.S., Corporations § 1887.

§79-4-15.07. Repealed.

Repealed by Laws, 2012, ch. 382, § 127, effective January 1, 2013.

§79-4-15.07. [Laws, 1987, ch. 486, § 15.07, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-15.07 pertained to registered office and registered agent of foreign corporation. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-15.08. Repealed.

Repealed by Laws, 2012, ch. 382, § 128, effective January 1, 2013.

§79-4-15.08. [Laws, 1987, ch. 486, § 15.08, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-15.08 provided for the change of an officer or registered agent of a foreign corporation. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-15.09. Repealed.

Repealed by Laws, 2012, ch. 382, § 129, effective January 1, 2013.

§79-4-15.09. [Laws, 1987, ch. 486, § 15.09, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-4-15.09 pertained to the resignation of a registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-4-15.10. Service of process, demand or notice on foreign corporation.

Notice or demand required or permitted by law on a foreign corporation authorized to transact business in this state is governed by Section 79-35-13. Service of process is governed by the Mississippi Rules of Civil Procedure.

HISTORY: Laws, 1987, ch. 486, § 15.10; Laws, 2012, ch. 382, § 43, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment rewrote the section.

Cross References —

Requirement that Secretary of State deliver filed documents to corporation or representative after filing, see § 79-4-1.25.

Requirement that Secretary of State give notice in accordance with this section to foreign corporation for which he has determined that grounds exist for the revocation of its certificate of authority, and notice when certificate of authority has been revoked, see § 79-4-15.31.

Foreign corporation’s right to appeal revocation of its certificate of authority 30 days after service is perfected under § 79-4-15.10, see § 79-4-15.32.

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Nonprofit Corporation Act, see §§ 79-11-363 through 79-11-381.

RESEARCH REFERENCES

ALR.

Foreign corporation’s purchase within state of goods to be shipped into other state or country as doing business within state for purposes of jurisdiction or service of process. 12 A.L.R.2d 1439.

Federal or state law as controlling, in diversity action, whether foreign corporation is amenable to service of process in state. 6 A.L.R.3d 1103.

Attorney representing foreign corporation in litigation as its agent for service of process in unconnected actions or proceedings. 9 A.L.R.3d 738.

Who is “general” or “managing” agent of foreign corporation under statute authorizing service of process on such agent. 17 A.L.R.3d 625.

Products liability: In personam jurisdiction over nonresident manufacturer or seller under “long-arm” statutes. 19 A.L.R.3d 13.

Applicability, to actions not based on products liability, of state statutes or rules of court predicating in personam jurisdiction over foreign manufacturers and distributors upon use of their goods within state. 20 A.L.R.3d 957.

Construction and application of state statutes or rules of court predicating in personam jurisdiction over nonresidents or foreign corporations on making or performing a contract within the state. 23 A.L.R.3d 551.

Construction and application of state statutes or rules of court predicating in personam jurisdiction over nonresidents or foreign corporations on the commission of a tort within the state. 24 A.L.R.3d 532.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action. 23 A.L.R.5th 744.

Validity, construction, and application of “fiduciary shield” doctrine – modern cases. 79 A.L.R.5th 587.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 213- 215, 454, 476 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 11 et seq.

CJS.

20 C.J.S., Corporations §§ 1815, 1937 et seq.

Lawyers’ Edition.

State regulation of judicial proceedings as violating commerce clause (Art I, 8, cl 3) of Federal Constitution – Supreme Court cases. 100 L. Ed. 2d 1049.

JUDICIAL DECISIONS

I. UNDER CURRENT LAW.

1.-10. [Reserved for future use.]

II. UNDER FORMER LAW.

A. Former §79-1-27.

11. In general.

12. What constitutes doing business.

13. Service of process.

14. Attachment suits.

B. Former §79-1-29.

15. In general.

16. Effectiveness of service of process in particular cases.

17. Defective return of process.

18. Mailing copy of process.

19. Appearance of defendant specially as conferring jurisdiction.

20. Application of section to particular corporations.

C. Former §79-3-229.

21. In general.

D. Former §79-4-15.10.

22. In general.

I. UNDER CURRENT LAW.

1.-10. [Reserved for future use.]

II. UNDER FORMER LAW.

A. Former § 79-1-27.

11. In general.

Even when jurisdiction is sought under § 79-1-27 [repealed], it is necessary for plaintiff to prove that nonresident corporation “does business” in Mississippi. Rittenhouse v. Mabry, 832 F.2d 1380, 1987 U.S. App. LEXIS 15605 (5th Cir. Miss. 1987), but see, Gross v. Chevrolet Country, 655 So. 2d 873, 1995 Miss. LEXIS 226 (Miss. 1995), cert. denied, 516 U.S. 1094, 116 S. Ct. 817, 133 L. Ed. 2d 761, 1996 U.S. LEXIS 776 (U.S. 1996).

A nonresident manufacturer of grinding machines was not amenable to suit in Mississippi by a Louisiana resident who had worked in Mississippi as an operator of such machine and who had allegedly become permanently disabled as a result of the constant inhalation of dust particles at work, where, inter alia, defendant manufacturer did not have a single employee in the state when the cause of action accrued or when the complaint was filed, even though a single corporate employee subsequently moved to the state and was served process, and where defendant had never paid state taxes or availed itself of the protection of any state laws; further, plaintiff had only avialed himself of the protection of Mississippi’s laws to the limited extent that he worked and traveled in the state. Washington v. Norton Mfg., Inc., 588 F.2d 441, 1979 U.S. App. LEXIS 17345 (5th Cir. Miss.), cert. denied, 442 U.S. 942, 99 S. Ct. 2886, 61 L. Ed. 2d 313, 1979 U.S. LEXIS 2186 (U.S. 1979).

The Mississippi statutes providing for the method of service on a resident or a qualified foreign corporation, the “doing business” statute, and the statute providing for substituted service on any corporation doing business in the state, must be read together, and such reading leads to the inescapable conclusion that effective process under these statutes presupposes a factual determination that the foreign corporation is doing business in the State of Mississippi. Hyde Constr. Co. v. Koehring Co., 321 F. Supp. 1193, 1969 U.S. Dist. LEXIS 13680 (D. Miss. 1969).

Under statute, foreign corporations are suable only when found doing business in state. Knower v. Baldwin, 195 Miss. 166, 15 So. 2d 47, 1943 Miss. LEXIS 137 (Miss. 1943); Arnett v. Carol C. & Fred R. Smith, Inc., 165 Miss. 53, 145 So. 638, 1932 Miss. LEXIS 301 (Miss. 1932).

Judgment rendered against road contractor and his foreign corporate surety held not void because when rendered surety had been dissolved and was in hands of receiver. Rawlings v. American Oil Co., 173 Miss. 683, 161 So. 851, 1935 Miss. LEXIS 236 (Miss. 1935).

Foreign corporations dissolved in domicile of its origin may be deemed alive in foreign state, so far as to afford remedies to its own citizens against property within its jurisdiction. Rawlings v. American Oil Co., 173 Miss. 683, 161 So. 851, 1935 Miss. LEXIS 236 (Miss. 1935).

Chancery court was without territorial jurisdiction of nonresident national bank not doing business in state. First Nat'l Bank v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349, 1934 Miss. LEXIS 225 (Miss. 1934).

Court, having acquired jurisdiction of foreign corporation, garnishee in suit by non-resident employee-creditor, by personal service on agent of corporation, could require answer and condemn any indebtedness due by corporation to its employee-creditor under employment contract made and performable outside state. Bean v. Bean, 166 Miss. 434, 147 So. 306, 1933 Miss. LEXIS 367 (Miss. 1933).

Foreign corporation designating resident agent is placed, as regards venue in transitory action, in same position as domestic corporation. Sandford v. Dixie Const. Co., 157 Miss. 626, 128 So. 887, 1930 Miss. LEXIS 353 (Miss. 1930).

This section [Code 1942, § 5345] does not apply to actions originating prior to its adoption. Saxony Mills v. Wagner & Co., 94 Miss. 233, 47 So. 899, 1908 Miss. LEXIS 32 (Miss. 1908).

12. What constitutes doing business.

Section 79-1-27 [repealed] applies only to non-resident corporations found doing business in Mississippi; non-resident corporation is not doing business in Mississippi where it has neither employees nor representatives in Mississippi, does not maintain offices, bank accounts or other property in state, and only contract with state is receipt of telephone and catalog orders and sale of product to Mississippi retailers. Schmid v. Roehm GmbH, 617 F. Supp. 655, 1985 U.S. Dist. LEXIS 16189 (S.D. Miss. 1985).

Sections 13-3-57 and 79-1-27 [repealed] must be harmonized to support state’s valid policy of opening doors of Mississippi courts to foreign corporations found doing business in state to sue and be sued from all bona fide causes of action; merely doing business in Mississippi is not sufficient to support exercise of personal jurisdiction, and business in Mississippi of non-resident defendant must be of systematic and ongoing nature, cause of action must be incident to business activity, and assertion of jurisdiction must not offend notions of fairness and substantial justice; busline which does not maintain ticket agents, representatives, employees, offices, or property in Mississippi and which does not advertise or solicit business or negotiate or execute contracts in Mississippi but whose charter service has merely passed through state is not subject to jurisdiction for cause of action which does not arise out of activities of busline in state. Allen v. Jefferson Lines, Inc., 610 F. Supp. 236, 1985 U.S. Dist. LEXIS 19139 (S.D. Miss. 1985).

Pennsylvania corporation which maintains no offices, employees, or representatives in Mississippi, and negotiates no contracts in Mississippi is not “doing business” in Mississippi under § 79-1-27 [repealed], even though its products are sold on regular basis in Mississippi, where such sales are only as result of marketing products nationally to independent distributors who in turn sell to wholesalers and retailers, or who sell in their own outlet stores in various states. Smith v. De Walt Products Corp., 743 F.2d 277, 1984 U.S. App. LEXIS 17911 (5th Cir. Miss. 1984).

Mississippi Code § 79-1-27 [repealed], providing that any corporation doing business in Mississippi is subject to suit there, must be construed and harmonized with § 13-3-57 “doing business clause” which cannot be used by non-resident plaintiff; to extent jurisdiction over nonresident corporation in suit by non-resident plaintiff on authority of § 79-1-27 [repealed] would be contrary to intention of Mississippi legislature. Smith v. De Walt Products Corp., 743 F.2d 277, 1984 U.S. App. LEXIS 17911 (5th Cir. Miss. 1984).

The fact that the president of a foreign corporation made several trips to Mississippi in connection with plans to be performed on certain trucks and had representatives who traveled within the state soliciting the sale and installation of their products, was not sufficient to satisfy the minimal contact requirement necessary for the courts of Mississippi to acquire jurisdiction in an action against the corporation which had installed in Alabama, in a manner alleged to be negligent, a braking system on a truck which crashed into the plaintiff’s store, where all of the actual work of assembly and installation by the corporation was performed in Alabama and the owners of trucks delivered them to the plant in Alabama for these services. Collins v. Truck Equipment Sales, Inc., 231 So. 2d 187, 1970 Miss. LEXIS 1576 (Miss. 1970).

Neither the fact that a manufacturer of equipment sold its products to Mississippi distributors or wholesalers, nor the fact that the manufacturer had employees on an average of 17 or 18 per year visiting within Mississippi to give assistance to the distributors in the sale of equipment manufactured by it and to help repair and adjust such equipment, standing alone, would compel a finding that the manufacturer is or was “doing business” within the State of Mississippi under the provisions of Code 1942, § 1437 or § 5345. Hyde Constr. Co. v. Koehring Co., 321 F. Supp. 1193, 1969 U.S. Dist. LEXIS 13680 (D. Miss. 1969).

Where a Wisconsin corporate manufacturer had 10 distributors in Mississippi, made substantial sales to its distributors, sent an average of 17 employees into the state each year to give assistance to its distributors, had several pieces of equipment operating within the state, extended and secured credit within the state and made contracts with its distributors, giving it considerable control over their activities, the corporation was “doing business” in Mississippi within the “long-arm” and “doing business” statutes. Hyde Constr. Co. v. Koehring Co., 321 F. Supp. 1193, 1969 U.S. Dist. LEXIS 13680 (D. Miss. 1969).

When an agent of foreign finance corporation was served when he came into the state to repossess an automobile purchased by the plaintiff in a tort action for false accusations allegedly made by such finance corporation, and the foreign corporation had purchased the conditional sales contract made by the plaintiff from an automobile dealer in Louisiana, the defendant finance corporation was not doing business in the state so as to be subject to the jurisdiction of the court. Dillon v. Allen-Parker Co., 223 Miss. 359, 78 So. 2d 357, 1955 Miss. LEXIS 388 (Miss. 1955).

A financial agent may be appointed by a nonresident landlord to pay a debt or collect rents without being constituted an agent on whom process may be served. Gillentine v. Illinois Wesleyan University, 194 F.2d 970, 1952 U.S. App. LEXIS 3708 (5th Cir. Miss. 1952).

The mere presence of an agent within the state, transacting some business for a foreign corporation, is not enough to subject the latter to suit unless the agent’s activities are such as to warrant the inference that the corporation itself is present and doing business within the state. Gillentine v. Illinois Wesleyan University, 194 F.2d 970, 1952 U.S. App. LEXIS 3708 (5th Cir. Miss. 1952).

Where a foreign religious, charitable and educational corporation was not licensed to do business in the State of Mississippi, had not appointed any agent for service of process in that state and maintained no office or place of business of any kind, and its sole business was operating a university, the fact that the corporation, which owned a farm in this state which it leased to a tenant, furnished money to build a gin house on leased land and for installation of gin machinery therein does not constitute doing business. Gillentine v. Illinois Wesleyan University, 194 F.2d 970, 1952 U.S. App. LEXIS 3708 (5th Cir. Miss. 1952).

Foreign corporation was not “doing business” in state so as to subject it to suit by service of process on its traveling salesman to recover damages for personal injuries growing out of automobile collision, where such salesman sold no merchandise but merely solicited orders which were submitted to the corporation for approval, was paid by commission, used his own automobile, which he was driving at the time of the collision, and conducted his solicitation according to his own plan, although aided by suggestion or direction from time to time as to points or prospects to be covered, and subject to the general supervision of the corporation. Knower v. Baldwin, 195 Miss. 166, 15 So. 2d 47, 1943 Miss. LEXIS 137 (Miss. 1943).

13. Service of process.

Corporation was in Mississippi doing business day it was served through physician who was sole member of professional corporation, and this satisfied requirements of § 79-1-27 [repealed], where physician was only member of corporation and service was effected on physician as corporation’s agent while he was directly engaged in corporation’s business. Rittenhouse v. Mabry, 832 F.2d 1380, 1987 U.S. App. LEXIS 15605 (5th Cir. Miss. 1987), but see, Gross v. Chevrolet Country, 655 So. 2d 873, 1995 Miss. LEXIS 226 (Miss. 1995), cert. denied, 516 U.S. 1094, 116 S. Ct. 817, 133 L. Ed. 2d 761, 1996 U.S. LEXIS 776 (U.S. 1996).

If foreign corporation is qualified to do business in State of Mississippi, even though it may not be doing any business, its agent for process may be served and courts have personal jurisdiction over that corporation; actually doing business in state has nothing to do with personal jurisdiction where foreign corporation has qualified to do business in state; corporation qualifying to do business in state, under appropriate statutes, becomes like individual as far as suit is concerned. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

If foreign corporation is not qualified to do business in state, and is found doing business in state, it may be sued simply by serving process upon any agent of corporation in state, and Mississippi courts then have personal jurisdiction over foreign corporation. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

The steps required by the statute to be taken in order to give effectual notice to a foreign corporation of a suit against it are essential to the validity of the process, without which a judgment by default is void. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

The sending, by registered mail, by the clerk of the court, of a copy of a summons in an action against the Cudahy Packing Co., a Maine corporation, addressed to “The Cudahy Packing Co., Chicago, Ill.,” was not effectual notice to the defendant, although the return receipt bore the signature “Cudahy Packing Co., H. Bogers,” where it appeared that there were five or six corporations organized and existing under the laws of different states, all named “Cudahy Packing Co.,” and that all these corporations had their general business offices in the same building in Chicago, but that each had a different setup for the handling therein of the details of their respective corporate businesses, and the mailing of the copy of the summons was so addressed and sent as to make it uncertain whether it would be received by the particular defendant, rather than by some other person or corporation. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

Where a foreign corporation, which made no appearance in circuit court, and suffered a default judgment to be entered against it, appealed to the supreme court, and the record showed that the mailing of a copy of the summons had not complied with the statutory requirement so as to give the circuit court territorial jurisdiction over the corporation, if the circuit court, upon remand of the case, took jurisdiction after the issue of territorial jurisdiction was first presented and determined, the appellant corporation (which by appeal had taken notice of the pendency of the action), might then proceed upon the merits, and on appeal might still insist upon and have a review of the question of territorial jurisdiction. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

Plea to jurisdiction of consumer’s action against foreign corporate manufacturer for injuries allegedly caused by glass in candy made by such manufacturer and purchased from retail merchant held properly sustained, where service was had on corporation’s former agent after corporation’s withdrawal from state and it did not appear that candy allegedly causing injuries before such withdrawal was in any way connected with business done by manufacturer within the state. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

Foreign corporation, sued for employee’s death, by moving to quash process and pleading in abatement, did not waive court’s lack of territorial jurisdiction. Arnett v. Carol C. & Fred R. Smith, Inc., 165 Miss. 53, 145 So. 638, 1932 Miss. LEXIS 301 (Miss. 1932).

14. Attachment suits.

In an attachment suit brought in chancery court by an Alabama citizen to recover damages from an Alabama corporation for personal injuries received as a result of a railroad crossing accident in Alabama, and to attach funds in the hands of a Mississippi corporation, where the defendant corporation owned no property or did no business in Mississippi, service of process upon an employee designated as a superintendent of the defendant corporation but who was employed by another corporation, and received no compensation from defendant corporation, was not effective to confer territorial jurisdiction over the defendant corporation. Alabama, T. & N. R. Co. v. Howell, 244 Miss. 157, 141 So. 2d 242, 1962 Miss. LEXIS 433 (Miss. 1962).

Nonresident debtor in attachment suit appearing solely for purpose of objecting, did not, thereby, submit to jurisdiction of court. Alabama Power Co. v. Jackson, 181 Miss. 691, 179 So. 571, 1938 Miss. LEXIS 109 (Miss. 1938).

Motion of nonresident national bank, not doing business in state, to quash attachment in suit against it, did not constitute general appearance. First Nat'l Bank v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349, 1934 Miss. LEXIS 225 (Miss. 1934).

Nonresident national bank’s appearance in chancery court suit for purpose of moving to quash attachment, issued against its property in violation of federal statute, did not confer territorial jurisdiction over bank on court, which should have dismissed bill as to bank after quashing attachment. First Nat'l Bank v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349, 1934 Miss. LEXIS 225 (Miss. 1934).

Nonresident national bank, not doing business in state, did not waive point that chancery court lacked jurisdiction of attachment suit against it by pleading want of territorial jurisdiction. First Nat'l Bank v. Mississippi Cottonseed Products Co., 171 Miss. 282, 157 So. 349, 1934 Miss. LEXIS 225 (Miss. 1934).

Foreign railroad corporation with line of railroad within state and property subject to execution and liable to personal judgment held, nevertheless, “nonresident” within attachment statute. Clark v. Louisville & N. R. Co., 158 Miss. 287, 130 So. 302, 1930 Miss. LEXIS 51 (Miss. 1930).

This section [Code 1942, § 5345] does not domesticate foreign corporations doing business in this state nor relieve them of liability to attachment on ground of nonresidence. Central Western Development Co. v. Lewis, 142 Miss. 428, 107 So. 557, 1926 Miss. LEXIS 100 (Miss. 1926).

B. Former § 79-1-29.

15. In general.

Supplemental record in the supreme court on appeal from a default judgment against a foreign corporation, disclosing that the certificate of the circuit clerk as to service of process on one alleged to be the corporation’s resident agent was filed almost five months after adjournment of the trial court at which the default judgment was obtained, was not a sufficient compliance with the statutory requirement of affirmative proof of service of process on a duly appointed resident agent in order to confer jurisdiction upon the trial court. Superior Oil Co. v. Smith, 200 Miss. 782, 29 So. 2d 114, 1947 Miss. LEXIS 362 (Miss. 1947).

Default judgment against a foreign corporation was set aside where process was served on one alleged to be the corporation’s resident agent for process and a copy was properly forwarded by registered mail to its home office, but there was no proof of the appointment of such resident agent on file in the trial court at the time the case was tried. Superior Oil Co. v. Smith, 200 Miss. 782, 29 So. 2d 114, 1947 Miss. LEXIS 362 (Miss. 1947).

This section [Code 1942, § 5346] refers only to foreign corporations found doing business in this state. Knower v. Baldwin, 195 Miss. 166, 15 So. 2d 47, 1943 Miss. LEXIS 137 (Miss. 1943).

The steps required by the statute to be taken in order to give effectual notice to a foreign corporation of a suit against it are essential to the validity of the process, without which a judgment by default is void. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

The purpose of statute providing that, where a corporation does a local business in state without filing its charter and having an agent upon whom process may be served, process may be served on any person found representing corporation at time transaction involved took place, is to give an effectual process so as to bring a corporation into a court where judgment may be rendered, and that statute has no relation to a motion to quash process. Gridley, Maxon & Co. v. Turner, 179 Miss. 890, 176 So. 733, 177 So. 362, 1937 Miss. LEXIS 83 (Miss. 1937), overruled, Mladinich v. Kohn, 250 Miss. 138, 164 So. 2d 785, 1964 Miss. LEXIS 451 (Miss. 1964).

Statute relating to obtaining jurisdiction of person of foreign corporation by service on agent held not to authorize suit against foreign insurance company in county other than those specified by statute controlling venue of such suits. Fireman's Fund Ins. Co. v. Cole, 169 Miss. 634, 152 So. 872, 1934 Miss. LEXIS 40 (Miss. 1934).

Court, by personal service on agent of foreign corporation doing business in this state, acquired jurisdiction of corporation, garnishee in suit by nonresident employee-creditor, and could require answer and condemn any indebtedness due by corporation to its employee-creditor under employment contract made and performable outside state. Bean v. Bean, 166 Miss. 434, 147 So. 306, 1933 Miss. LEXIS 367 (Miss. 1933).

Claimant of funds in attachment proceeding has burden of proving failure of proper service on judgment debtor. Piqua Sav. Bank v. Copiah Hardware Co., 146 Miss. 581, 111 So. 836, 1927 Miss. LEXIS 225 (Miss. 1927).

This section [Code 1942, § 5346] does not apply to action originating prior to its adoption. Saxony Mills v. Wagner & Co., 94 Miss. 233, 47 So. 899, 1908 Miss. LEXIS 32 (Miss. 1908).

16. Effectiveness of service of process in particular cases.

Where process is personally served on construction superintendent of foreign corporation engaged in building a building in Mississippi, such corporation was properly and legally served with process under § 79-1-29 [repealed]. Holvitz v. Norfleet--Ashley, Inc., 369 F. Supp. 394, 1973 U.S. Dist. LEXIS 10631 (N.D. Miss. 1973).

Service of process on a foreign railroad company’s station agent is sufficient without mailing a copy to the home office by registered mail. Illinois C. R. Co. v. McDaniel, 246 Miss. 600, 151 So. 2d 805, 1963 Miss. LEXIS 486 (Miss. 1963).

In an attachment suit brought in chancery court by an Alabama citizen to recover damages from an Alabama corporation for personal injuries received as a result of a railroad crossing accident in Alabama, and to attach funds in the hands of a Mississippi corporation, where the defendant corporation owned no property nor did any business in Mississippi, service of process upon an employee designated as a superintendent of the defendant corporation but who was employed by another corporation, and received no compensation from defendant corporation, was not effective to confer territorial jurisdiction over the defendant corporation. Alabama, T. & N. R. Co. v. Howell, 244 Miss. 157, 141 So. 2d 242, 1962 Miss. LEXIS 433 (Miss. 1962).

Suit having been filed and process for defendant having been issued promptly by clerk, a suit was pending which tolled running of statute of limitations though process was served on plantation manager of defendant corporation and not on its designated agent for receiving of service of process. Frederick Smith Enterprise Co. v. Lucas, 204 Miss. 43, 36 So. 2d 812, 1948 Miss. LEXIS 341 (Miss. 1948).

Foreign corporation was not “doing business” in state so as to subject it to suit by service of process on its traveling salesman to recover damages for personal injuries growing out of automobile collision, where such salesman sold no merchandise but merely solicited orders which were submitted to the corporation for approval, was paid by commission, used his own automobile, which he was driving at the time of the collision, and conducted his solicitation according to his own plan, although aided by suggestion or direction from time to time as to points or prospects to be covered, and subject to the general supervision of the corporation. Knower v. Baldwin, 195 Miss. 166, 15 So. 2d 47, 1943 Miss. LEXIS 137 (Miss. 1943).

General rule that withdrawal of foreign corporation from state does not revoke local agent’s authority to receive service of process or deprive local courts of jurisdiction of actions arising out of business done within the state cannot be extended to actions not incidental to or connected with business done in state by such foreign corporation. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

Where foreign trainmen’s brotherhood engaged in insurance business in state had never designated state insurance commissioner as its agent for service of process, service of process on officer of local lodge through whom association dealt in respect to matter in controversy, held sufficient to give court jurisdiction in suit against association. Brotherhood of Railroad Trainmen v. Agnew, 170 Miss. 604, 155 So. 205, 1934 Miss. LEXIS 155 (Miss. 1934).

Judgment debtor was not proper person to serve process on against nonresident in garnishment proceeding based on such judgment. Hirsch Bros. & Co. v. R. E. Kennington Co., 155 Miss. 242, 124 So. 344, 1929 Miss. LEXIS 285 (Miss. 1929).

Jurisdiction of foreign corporation suing in state is not obtained by service of summons on its attorney. Delta Ins. & Realty Agency v. Fourth Nat'l Bank, 146 Miss. 11, 111 So. 435, 1927 Miss. LEXIS 184 (Miss. 1927).

Mere soliciting agent of foreign corporation not doing business in state is not an agent on whom process may be served; the statute contemplates agents with general authority and discretion and not mere employees. Saxony Mills v. Wagner & Co., 94 Miss. 233, 47 So. 899, 1908 Miss. LEXIS 32 (Miss. 1908).

17. Defective return of process.

Return on summons “executed personally by delivering to E. M. agent of and for” defendant held insufficient to support decree pro confesso. National Surety Co. v. Board of Sup'rs, 120 Miss. 706, 83 So. 8, 1919 Miss. LEXIS 125 (Miss. 1919).

Service of process held void where return did not show relation of party on whom served to defendant. Supreme Ruling, F. M. C. v. Sommers, 108 Miss. 54, 66 So. 322, 1914 Miss. LEXIS 166 (Miss. 1914).

18. Mailing copy of process.

The sending, by registered mail, by the clerk of the court, of a copy of a summons in an action against the Cudahy Packing Co., a Maine corporation, addressed to “The Cudahy Packing Co., Chicago, Ill.,” was not effectual notice to the defendant, although the return receipt bore the signature “Cudahy Packing Co., H. Bogers,” where it appeared that there were five or six corporations organized and existing under the laws of different states, all named “Cudahy Packing Co.,” and that all these corporations had their general business offices in the same building in Chicago, but that each had a different setup for the handling therein of the details of their respective corporate businesses, and the mailing of the copy of the summons was so addressed and sent as to make it uncertain whether it would be received by the particular defendant, rather than by some other person or corporation. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

Attempted service on agent September 6, 1915, and mailing of summons December 30, 1915, calling for appearance of corporation at rules September 13 did not comply with this section [Code 1942, § 5346]. Columbia Star Milling Co. v. Brand, 115 Miss. 625, 76 So. 557, 1917 Miss. LEXIS 241 (Miss. 1917).

Default judgment held erroneous where clerk failed to mail notice as required. Eminent Household of Columbian Woodmen v. Lundy, 110 Miss. 881, 71 So. 16, 1916 Miss. LEXIS 222 (Miss. 1916).

19. Appearance of defendant specially as conferring jurisdiction.

Where a foreign corporation, which made no appearance in circuit court, and suffered a default judgment to be entered against it, appealed to the supreme court, and the record showed that the mailing of a copy of the summons had not complied with the statutory requirement so as to give the circuit court territorial jurisdiction over the corporation, if the circuit court, upon remand of the case, took jurisdiction after the issue of territorial jurisdiction was first presented and determined, the appellant corporation might (which by appeal had taken notice of the pendency of the action), then proceed upon the merits, and on appeal might still insist upon and have a review of the question of territorial jurisdiction. Cudahy Packing Co. v. Smith, 191 Miss. 31, 2 So. 2d 347, 1941 Miss. LEXIS 129 (Miss. 1941).

Where process on a foreign corporation is invalid or ineffectual, and corporation does not appear in answer to suit, question of jurisdiction of the person may be raised in any appropriate proceeding, but, if corporation files a motion to quash process, corporation is brought into court by appearing for purpose of quashing process, even though process may be insufficient within itself to bring corporation into court, and thereby court is given jurisdiction of the person notwithstanding any defect in process. Gridley, Maxon & Co. v. Turner, 179 Miss. 890, 176 So. 733, 177 So. 362, 1937 Miss. LEXIS 83 (Miss. 1937), overruled, Mladinich v. Kohn, 250 Miss. 138, 164 So. 2d 785, 1964 Miss. LEXIS 451 (Miss. 1964).

Where nonresident defendant corporation in attachment suit was not brought in by publication of summons, and attempted service of summons on agent was not within county where suit was brought, the appearance of the defendant in state court for the sole purpose of procuring the removal of the cause to the federal court did not constitute such an appearance that, upon remand of the cause, defendant was then in state court without necessity of further process. McCoy v. Watson, 153 Miss. 416, 121 So. 116, 1929 Miss. LEXIS 35 (Miss. 1929).

20. Application of section to particular corporations.

But where foreign trainmen’s brotherhood, engaged in insurance business instate, had never designated state insurance commissioner as its agent for service of process, service of process on association may properly be made in same manner as provided for service on foreign corporations doing business in state. Brotherhood of Railroad Trainmen v. Agnew, 170 Miss. 604, 155 So. 205, 1934 Miss. LEXIS 155 (Miss. 1934).

This section [Code 1942, § 5346] does not apply to insurance companies who have filed power of attorney with insurance commissioner, Fidelity & Casualty Co. v. Cross (1921) 127 Miss 31, 89 So 780; nor to insurance companies appointing agent for service of process. Great Southern Life Ins. Co. v. Gomillion, 145 Miss. 314, 110 So. 770, 1927 Miss. LEXIS 116 (Miss. 1927).

Railroad doing only interstate business is not denied due process by serving one of its bona fide agents within the state in a cause of action accruing elsewhere. Vicksburg, S. & P. R. Co. v. Forcheimer, 113 Miss. 531, 74 So. 418, 1917 Miss. LEXIS 130 (Miss. 1917).

C. Former § 79-3-229.

21. In general.

If foreign corporation is qualified to do business in State of Mississippi, even though it may not be doing any business, its agent for process may be served and courts have personal jurisdiction over that corporation; actually doing business in state has nothing to do with personal jurisdiction where foreign corporation has qualified to do business in state; corporation qualifying to do business in state, under appropriate statutes, becomes like individual as far as suit is concerned. Read v. Sonat Offshore Drilling, Inc., 515 So. 2d 1229, 1987 Miss. LEXIS 2929 (Miss. 1987).

In a diversity action a federal district court in Mississippi would have jurisdiction over a nonresident car manufacturer pursuant to Miss Code § 79-3-229 in a suit by a nonresident plaintiff pleading a cause of action which arose entirely out-of-state, where the manufacturer was expressly authorized to do business in Mississippi, was actually doing business, and had designated a resident agent upon whom process was served pursuant to § 79-3-229. Cowan v. Ford Motor Co., 694 F.2d 104, 1982 U.S. App. LEXIS 23146 (5th Cir. Miss. 1982).

A foreign credit corporation which has an agent in Mississippi for the purpose of calling upon prospective sellers of title retention notes to solicit and induce them to submit the collateral notes taken from their customers to the office of the credit corporation in Memphis, Tennessee, furnished an automobile to its agent for use in calling on manufacturers and dealers in Mississippi, and offered its services to dealers to collect delinquent money due on notes, or to recover the possession of property described in the notes, was not engaged in doing business in Mississippi within the purview of this section [Code 1942, § 5309-230]. Ross Constr. Co. v. U. M. & M. Credit Corp., 214 So. 2d 822, 1968 Miss. LEXIS 1336 (Miss. 1968).

Service of process on a foreign corporation’s statutory agent does not confer jurisdiction of an action by a nonresident or a cause of action accruing in another state. Stavang v. American Potash & Chemical Corp., 227 F. Supp. 786, 1964 U.S. Dist. LEXIS 8326 (S.D. Miss. 1964), aff'd, 344 F.2d 117, 1965 U.S. App. LEXIS 5882 (5th Cir. Miss. 1965).

A foreign corporation which has never qualified to do business in Mississippi is not precluded from suing there on a policy of liability insurance issued to it in another state, in respect of judgment recovered against it in Mississippi after its withdrawal from the state for negligence in the performance of services there. Aerial Agricultural Service, Inc. v. Till, 207 F. Supp. 50, 1962 U.S. Dist. LEXIS 3655 (N.D. Miss. 1962).

All foreign corporations doing business in this state shall be subject to suit here to same extent that corporations of state are, whether cause of action accrued here or not, and this statute indicates general policy of equality and similarity of treatment as between foreign and domestic corporations. Poole v. Mississippi Publishers Corp., 208 Miss. 364, 44 So. 2d 467, 1950 Miss. LEXIS 255 (Miss. 1950).

Rule to effect that citizen of one state may be enjoined from prosecuting action against another citizen of same state applies equally when injunction is sought to restrain citizen of one state from prosecuting action against nonresident corporation doing business with lawful authority in such state. Poole v. Mississippi Publishers Corp., 208 Miss. 364, 44 So. 2d 467, 1950 Miss. LEXIS 255 (Miss. 1950).

Actions against Louisiana corporation brought in the federal district court for the southern district of Mississippi was proper where such corporation had appointed an agent for the service of process in accordance with this section [Code 1942, § 5319], such appointment being a consent by the corporation to be sued in the state, which waives the right to be sued only in the district of which it is an inhabitant, irrespective of the basis of federal jurisdiction. Amalgamated Ass'n of St., Elec. Ry. & Motor Coach Emples. of Am. v. Southern Bus Lines, Inc., 172 F.2d 946, 1949 U.S. App. LEXIS 3511 (5th Cir. Miss. 1949).

Maintenance by a foreign newspaper corporation of a news gathering office in the state, the employment of a resident contact man to recommend suitable persons to become local distributors in the state, and a contract with a truck operator to transport its papers into the state for sale and distribution by local distributor, did not constitute “doing business” in the state so as to make such corporation amenable to service of process in the state. Lee v. Memphis Pub. Co., 195 Miss. 264, 14 So. 2d 351, 1943 Miss. LEXIS 133 (Miss. 1943).

A foreign corporation operating a motor transportation line for the conveyance of passengers through a county of this state, and having a resident agent for the service of process in this state, could be sued in such county by a passenger, seeking to recover damages for personal injury sustained notwithstanding that the cause of action arose in Louisiana and the plaintiff was a temporary resident of this state. Tri-State Transit Co. v. Mondy, 194 Miss. 714, 12 So. 2d 920, 1943 Miss. LEXIS 85 (Miss. 1943).

General rule that withdrawal of foreign corporation from state does not revoke local agent’s authority to receive service of process or deprive local courts of jurisdiction of actions arising out of business done within the state cannot be extended to actions not incidental to or connected with business done in state by such foreign corporation. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

Plea to jurisdiction of consumer’s action against foreign corporate manufacturer for injuries allegedly caused by glass in candy made by such manufacturer and purchased from retail merchant held properly sustained, where service was had on corporation’s former agent after corporation’s withdrawal from state and it did not appear that candy allegedly causing injuries before such withdrawal was in any way connected with business done by manufacturer within the state. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

D. Former § 79-4-15.10.

22. In general.

There was no statutory or other authority that would allow a Mississippi court to compel nonresident, non-parties to the litigation to produce documents in a breach of contract dispute between a seed company and a corporation. Syngenta Crop Prot., Inc. v. Monsanto Co., 908 So. 2d 121, 2005 Miss. LEXIS 466 (Miss. 2005).

Subarticle B. Withdrawal.

§79-4-15.20. Withdrawal of foreign corporations.

A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.

A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:

  1. The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
  2. That it is not transacting business in this state and that it surrenders its authority to transact business in this state;
  3. That it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to transact business in this state;
  4. A mailing address to which the Secretary of State may mail a copy of any process served on him under paragraph (3) of this subsection; and
  5. A commitment to notify the Secretary of State in the future of any change in its mailing address.

After the withdrawal of the corporation is effective, service of process on the Secretary of State under the Mississippi Rules of Civil Procedure is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the foreign corporation at the mailing address set forth in its application for withdrawal.

HISTORY: Laws, 2005, ch. 502, § 2; Laws, 2012, ch. 382, § 44, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-4-15.20 [Laws, 1987, ch. 486, § 15.20, eff from and after January 1, 1988; Repealed by Laws, 2004, ch. 495, § 12, eff from and after July 1, 2004] also provided for the withdrawal of foreign corporations.

Amendment Notes —

The 2012 amendment in (b)(4), substituted “paragraph” for “subdivision” preceding “(3)”, and inserted “of this subsection” thereafter; and substituted “the Mississippi Rules of Civil Procedure” for “this section” following “Secretary of State under” in (c).

Cross References —

Withdrawal of foreign corporation under Mississippi Nonprofit Corporation Act, see § 79-11-383.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 266- 268, 457- 461.

8A Am. Jur. Legal Forms 2d, Foreign Corporations §§ 122:45-122:47, 122:51.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-237.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-237.

11. In general.

It would appear that this section [Code 1942, § 5309-234] was enacted to prevent a corporation from withdrawing from the State of Mississippi after a citizen of this state acquires a right to sue the corporation, and that jurisdiction conferred upon a foreign corporation through the provisions of this section is predicated upon the fact that the cause of action accrued during the time that the corporation was qualified to do business within the State of Mississippi, regardless of the origin or genesis of the acts which gave rise to the cause of action, that is, whether or not they accrued or had their effect within or without the State of Mississippi. Hyde Constr. Co. v. Koehring Co., 321 F. Supp. 1193, 1969 U.S. Dist. LEXIS 13680 (D. Miss. 1969).

Where successor corporation agreed to assume the liabilities and obligations of the predecessor corporation which were due from the state, the successor corporation was liable for municipal privilege taxes in view of the statute providing for withdrawal of foreign corporation from the state and also in view of statute providing that a tax is a debt due by corporation and may be recovered by action. General Contract Corp. v. Bailey, 218 Miss. 484, 67 So. 2d 485, 1953 Miss. LEXIS 564 (Miss. 1953).

General rule that withdrawal of foreign corporation from state does not revoke local agent’s authority to receive service of process or deprive local courts of jurisdiction of actions arising out of business done within the state cannot be extended to actions not incidental to or connected with business done in state by such foreign corporation. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

Plea to jurisdiction of consumer’s action against foreign corporate manufacturer for injuries allegedly caused by glass in candy made by such manufacturer and purchased from retail merchant held properly sustained, where service was had on corporation’s former agent after corporation’s withdrawal from state and it did not appear that candy allegedly causing injuries was in any way connected with the business done by manufacturer within the state. Walters v. Curtis Candy Co., 172 Miss. 187, 159 So. 560, 1935 Miss. LEXIS 126 (Miss. 1935).

Subarticle C. Revocation of Certificate of Authority.

§79-4-15.30. Grounds for revocation.

The Secretary of State may commence a proceeding under Section 79-4-15.31 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:

  1. The foreign corporation does not deliver its annual report to the Secretary of State within sixty (60) days after it is due;
  2. The foreign corporation does not pay within sixty (60) days after they are due any franchise taxes or penalties imposed by Sections 79-4-1.01 et seq. or other law;
  3. The foreign corporation is without a registered agent in this state for sixty (60) days or more;
  4. The foreign corporation does not inform the Secretary of State by an appropriate filing that its registered agent has changed or that its registered agent has resigned, within sixty (60) days of the change or resignation;
  5. An incorporator, director, officer or agent of the foreign corporation signed a document he knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing;
  6. The Secretary of State receives a duly authenticated certificate from the Secretary of State or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or disappeared as the result of a merger.

HISTORY: Laws, 1987, ch. 486, § 15.30; Laws, 2012, ch. 382, § 45, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment deleted “or registered office” following “a registered agent” in (3); and in (4), deleted references to “registered office” and substituted ‘inform the Secretary of State by an appropriate filing‘ for ‘inform the Secretary of State under Section 79-4-15.08 or 79-4-15.09.”

Cross References —

Procedures for and effect of revocation of foreign corporation’s certificate of authority, see § 79-4-15.31.

Administrative revocation, under this section and §§ 79-4-15.31 and 79-4-15.32, of foreign professional corporations certificate of authority, see § 79-10-95.

Revocation of certificate of authority under Mississippi Nonprofit Corporation Act, see §§ 79-11-385 through 79-11-389.

RESEARCH REFERENCES

ALR.

Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to do business. 50 A.L.R.3d 1020.

State regulation of land ownership by alien corporation. 21 A.L.R.4th 1329.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176, 177, 398- 401.

CJS.

20 C.J.S., Corporations §§ 1810, 1843.

Law Reviews.

An analysis of Mississippi’s treatment of foreign corporations. 55 Miss L. J. 259, June, 1985.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-241.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-241.

11. In general.

A foreign corporation, whose certificate of authority to do business within the State was suspended after it filed a breach of lease action, was not required to become reinstated as a condition for proceeding to trial. Capital Associates, Inc. v. Sally Southland, Inc., 529 So. 2d 640, 1988 Miss. LEXIS 338 (Miss. 1988).

§79-4-15.31. Procedure for and effect of revocation.

If the Secretary of State determines that one or more grounds exist under Section 79-4-15.30 for revocation of a certificate of authority, he shall serve the foreign corporation with written notice of his determination under Section 79-4-15.10, except that such determination may be served by first class mail.

If the foreign corporation does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after service of the notice is perfected under Section 79-4-15.10, the Secretary of State may revoke the foreign corporation’s certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign corporation under Section 79-4-15.10, except that such certificate may be served by first-class mail.

The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.

The Secretary of State’s revocation of a foreign corporation’s certificate of authority appoints the Secretary of State the foreign corporation’s agent for service of process in any proceeding based on a cause of action which arose during the time the foreign corporation was authorized to transact business in this state. Service of process on the Secretary of State under the Mississippi Rules of Civil Procedure is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the secretary of the foreign corporation at its principal office shown in its most recent annual report or in any subsequent communication received from the corporation stating the current mailing address of its principal office, or, if none are on file, in its application for a certificate of authority.

Revocation of a foreign corporation’s certificate of authority does not terminate the authority of the registered agent of the corporation.

The administrative revocation of a foreign corporation’s certificate of authority shall not impair the validity of any contract, deed, mortgage, security interest, lien or act of such foreign corporation or prevent the foreign corporation from defending any action, suit or proceeding with any court of this state.

A foreign corporation whose registration has been administratively revoked may not maintain any action, suit or proceeding in any court of this state until such foreign corporation’s certificate of authority has been reinstated.

HISTORY: Laws, 1987, ch. 486, § 15.31; Laws, 1991, ch. 509, § 3; Laws, 2012, ch. 382, § 46; Laws, 2012, ch. 481, § 41, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 41 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 46 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 41 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-15.31 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The first 2012 amendment (ch. 382), substituted “the Mississippi Rules of Civil Procedure” for “this subsection” in the second sentence of (d).

The second 2012 amendment (ch. 481), effective January 1, 2013, substituted “the Mississippi Rules of Civil Procedure” for “this subsection” preceding “is service on the foreign corporation” in (d); and added (f) and (g).

Cross References —

Service of process, notice or demand on foreign corporation which has had its certificate of authority revoked under this section, see § 79-4-15.10.

Authority and grounds for Secretary of State to commence proceeding under § 79-4-15.31 to revoke certificate of authority of foreign corporation, see § 79-4-15.30.

Appeal from revocation, see § 79-4-15.32.

Administrative revocation, under this section and §§ 79-4-15.30 and 79-4-15.32, of foreign professional corporation’s certificate of authority, see § 79-10-95.

Revocation of certificate of authority under Mississippi Nonprofit Corporation Act, see §§ 79-11-385 through 79-11-389.

RESEARCH REFERENCES

ALR.

Foreign corporation’s leasing of personal property as doing business within statutes prescribing conditions of right to business. 50 A.L.R.3d 1020.

State regulation of land ownership by alien corporation. 21 A.L.R.4th 1329.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176, 177, 396 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31, 32.

8 Am. Jur. Legal Forms 2d, Foreign Corporations §§ 122:52.

CJS.

20 C.J.S., Corporations §§ 1843-1867.

Law Reviews.

An analysis of Mississippi’s treatment of foreign corporations. 55 Miss L. J. 259, June, 1985.

§79-4-15.32. Appeal from revocation.

A foreign corporation whose certificate of authority is administratively revoked under Section 79-4-15.31 may apply to the Secretary of State for reinstatement at any time after the effective date of such revocation. The application must:

  1. Recite the name of the corporation and the effective date of the administrative revocation;
  2. State that the ground or grounds for revocation either did not exist or have been eliminated;
  3. State that the corporation’s name satisfies the requirements of Section 79-4-4.01; and
  4. Contain a certificate from the Mississippi Department of Revenue reciting that the corporation has properly filed all reports and paid all taxes and penalties required by revenue laws of this state.

If the Secretary of State determines that the application contains the information required by subsection (a) and that the information is correct, he shall reinstate the certificate of authority, prepare a certificate that recites his determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the corporation under Section 79-35-13.

When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative revocation. Any liability incurred by the foreign corporation or a director, officer or shareholder after the administrative revocation and before the reinstatement shall be determined as if the administrative revocation had never occurred, and the corporation resumes carrying on its business as if the administrative revocation had never occurred.

HISTORY: Laws, 1987, ch. 486, § 15.32; Laws, 1991, ch. 509, § 4; Laws, 1993, ch. 368, § 14; Laws, 2009, ch. 527, § 3; Laws, 2009, ch. 530, § 4; Laws, 2012, ch. 382, § 47; Laws, 2012, ch. 481, § 42, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Section 3 of ch. 527, Laws of 2009, effective from and after July 1, 2009 (approved April 13, 2009), amended this section. Section 4 of ch. 530, Laws of 2009, effective from and after July 1, 2009 (approved April 14, 2009), also amended this section. As set out above, this section reflects the language of Section 3 of ch. 527, Laws of 2009, which contains language that specifically provides that it supersedes § 79-4-15.32 as amended by Chapter 530, Laws of 2009.

Section 42 of Chapter 481, Laws of 2012, effective January 1, 2013 (approved April 24, 2012), amended this section. Section 47 of Chapter 382, Laws of 2012, effective January 1, 2013 (approved April 17, 2012), also amended this section. As set out above, this section reflects the language of Section 42 of Chapter 481, Laws of 2012, which contains language that specifically provides that it supersedes § 79-4-15.32 as amended by Laws of 2012, ch. 382.

Amendment Notes —

The first 2009 amendment (ch. 527) substituted “at any time” for “within five (5) years” in the first sentence of the introductory language of (a).

The second 2009 amendment (ch. 530) substituted “at any time” for “within five (5) years” in the first sentence of the introductory language of (a).

The first 2012 amendment (ch. 382), substituted “Department of Revenue” for “State Tax Commission” in (a)(4); and substituted “Section 79-35-13” for “Section 79-4-5.04” at the end of (b).

The second 2012 amendment (ch. 481), effective January 1, 2013, substituted “Department of Revenue” for “State Tax Commission” in (a)(4); substituted “Section 79-35-13” for “Section 79-4-5.04” at the end of (b); and divided former (c) into two sentences by adding the period and “Any liability incurred...revocation had never occurred.”

Cross References —

Administrative revocation, under this section and §§ 79-4-15.30 and 79-4-15.32, of foreign professional corporation’s certificate of authority, see § 79-10-95.

Revocation of certificate of authority under Mississippi Nonprofit Corporation Act, see §§ 79-11-385 through 79-11-389.

RESEARCH REFERENCES

ALR.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176, 177, 399.

8 Am. Jur. Legal Forms 2d, Foreign Corporations §§ 122:74, 122:75.

§79-4-15.33. Appeal from denial of reinstatement.

If the Secretary of State denies a foreign corporation’s application for reinstatement following administrative revocation, he shall serve the corporation with a written communication that explains the reason or reasons for denial.

The corporation may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court of the county where the corporation is domiciled or where the corporation’s principal office is located within thirty (30) days after service of the communication of denial is perfected. The corporation appeals by petitioning the court to set aside the revocation and attaching to the petition copies of the Secretary of State’s communication of denial.

The court may summarily order the Secretary of State to reinstate the revoked corporation or may take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1991, ch. 509, § 5; Laws, 2009, ch. 527, § 4; Laws, 2012, ch. 382, § 48, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2009 amendment inserted “or the chancery court of the county where the corporation is domiciled” in (b).

The 2012 amendment deleted “under Section 79-4-5.04, Mississippi Code of 1972” following “serve the corporation” in (a); and inserted “or where the corporation’s principal office is located” near the end of the first sentence in (b).

Cross References —

Revocation of certificate of authority under Mississippi Nonprofit Corporation Act, see §§ 79-11-385 through 79-11-389.

Article 16. Records and Reports.

Subarticle A. Records.

§79-4-16.01. Corporate records.

A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.

A corporation shall maintain appropriate accounting records.

A corporation or its agent shall maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each.

A corporation shall maintain its records in the form of a document, including an electronic record, or in another form capable of conversion into paper form within a reasonable time.

A corporation shall keep a copy of the following records at its principal office:

  1. Its articles or restated articles of incorporation, all amendments to them currently in effect and any notices to shareholders referred to in Section 79-4-1.20(k)(5) regarding facts on which a filed document is dependent;
  2. Its bylaws or restated bylaws and all amendments to them currently in effect;
  3. Resolutions adopted by its board of directors creating one or more classes or series of shares, and fixing their relative rights, preferences and limitations, if shares issued pursuant to those resolutions are outstanding;
  4. The minutes of all shareholders’ meetings, and records of all action taken by shareholders without a meeting, for the past three (3) years;
  5. All written communications to shareholders generally within the past three (3) years, including the financial statements furnished for the past three (3) years under Section 79-4-16.20;
  6. A list of the names and business addresses of its current directors and officers; and
  7. Its most recent annual report delivered to the Secretary of State under Section 79-4-16.22.

HISTORY: Laws, 1987, ch. 486, § 1601; Laws, 2004, ch. 495, § 13; Laws, 2012, ch. 481, § 43, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2004 amendment added “and any notices to shareholders referred to in Section 79-4-1.20(k)(5) regarding facts on which a filed document is dependent” at the end of (e)(1).

The 2012 amendment, effective January 1, 2013, substituted “maintain its records in the form of a document, including an electronic record” for “maintain its records in written form” in (d).

Cross References —

Shareholder’s right to inspect and copy any corporate records required to be kept by this section, see § 79-4-16.02.

RESEARCH REFERENCES

ALR.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 278 et seq.

4 Am. Jur. Proof of Facts 2d 425, Reasonableness of Corporate Officer’s Compensation.

CJS.

18 C.J.S., Corporations § 253.

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss L. J. 271, August, 1987.

§79-4-16.02. Inspection of records by shareholders.

Subject to Section 79-4-16.03(c), a shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation’s principal office, any of the records of the corporation described in Section 79-4-16.01(e) if he gives the corporation a signed written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy.

A shareholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder meets the requirements of subsection (c) and gives the corporation a signed written notice of his demand at least five (5) business days before the date on which he wishes to inspect and copy:

  1. Excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the shareholders, and records of action taken by the shareholders or board of directors without a meeting, to the extent not subject to inspection under subsection (a) of this section;
  2. Accounting records of the corporation; and
  3. The record of shareholders.

A shareholder may inspect and copy the records identified in subsection (b) only if:

His demand is made in good faith and for a proper purpose;

He describes with reasonable particularity his purpose and the records he desires to inspect; and

The records are directly connected with his purpose.

The right of inspection granted by this section may not be abolished or limited by a corporation’s articles of incorporation or bylaws.

This section does not affect:

The right of a shareholder to inspect records under Section 79-4-7.20 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant;

The power of a court, independently of Section 79-4-1.01 et seq., to compel the production of corporate records for examination.

For purposes of this section, “shareholder” includes a beneficial owner whose shares are held in a voting trust or by a nominee on his behalf.

HISTORY: Laws, 1987, ch. 486, § 16.02; Laws, 1988, ch. 369, § 6; Laws, 2012, ch. 481, § 44, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, inserted “a signed” preceding “written notice of his demand” in (a) and (b).

Cross References —

Authority for shareholder, his agent or attorney to inspect and, subject to requirements of § 79-4-16.02, copy shareholders’ list, see § 79-4-7.20.

Scope of shareholder’s right to copy records under § 79-4-16.02, see § 79-4-16.03.

Court-ordered inspection in copying of records at corporation’s expense when corporation does not allow shareholder to inspect and copy records under § 79-4-16.02, see § 79-4-16.04.

RESEARCH REFERENCES

ALR.

Purposes for which stockholder or officer may exercise right to examine corporate books and records. 15 A.L.R.2d 11.

Stockholder’s right to inspect books and records of foreign corporation. 19 A.L.R.3d 869.

Who has possession, custody or control of corporate books or records for purposes of order to produce. 47 A.L.R.3d 676.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

Right of stockholder to inspect corporate books or records in pursuit of social or political interest, as distinguished from financial interest. 50 A.L.R.3d 1056.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 285 et seq.

6A Am. Jur. Legal Forms 2d, Corporations § 74:1035.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 239 et seq.

4 Am. Jur. Proof of Facts 2d 425, Reasonableness of Corporate Officer’s Compensation.

CJS.

18 C.J.S., Corporations §§ 590-600.

JUDICIAL DECISIONS

1. In general.

Attorney is not entitled to damages against professional association because of its failure to allow him access to corporate records, where he failed to specifically plead this item of special damages. Fuselier, Ott & McKee, P.A. v. Moeller, 507 So. 2d 63, 1987 Miss. LEXIS 2467 (Miss. 1987).

§79-4-16.03. Scope of inspection right.

A shareholder’s agent or attorney has the same inspection and copying rights as the shareholder represented.

The right to copy records under Section 79-4-16.02 includes, if reasonable, the right to receive copies by xerographic or other means, including copies through an electronic transmission if available and so requested by the shareholder.

The corporation may comply at its expense with a shareholder’s demand to inspect the record of shareholders under Section 79-4-16.02(b)(3) by providing the shareholder with a list of shareholders that was compiled no earlier than the date of the shareholder’s demand.

The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the shareholder. The charge may not exceed the estimated cost of production, reproduction or transmission of the records.

HISTORY: Laws, 1987, ch. 486, § 16.03; Laws, 2001, ch. 435, § 20, eff from and after July 1, 2001.

Amendment Notes —

The 2001 amendment, in (a), substituted “represented” for “he represents”; in (b), deleted “made” following “receive copies” and “photographic” preceding “xerographic,” added “including copies through an electronic transmission if available and so requested by the shareholder”; inserted (c); deleted former (d); and redesignated former (c) as present (d).

Cross References —

Shareholder’s right to inspect and copy any corporate records required to be kept by § 79-4-16.01(e), see § 79-4-16.02.

RESEARCH REFERENCES

ALR.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

§79-4-16.04. Court-ordered inspection.

If a corporation does not allow a shareholder who complies with Section 79-4-16.02(a) to inspect and copy any records required by that subsection to be available for inspection, the chancery court of the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the shareholder.

If a corporation does not within a reasonable time allow a shareholder to inspect and copy any other record, the shareholder who complies with Section 79-4-16.02(b) and (c) may apply to the chancery court in the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.

If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the shareholder’s costs (including reasonable counsel fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the shareholder to inspect the records demanded.

If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding shareholder.

HISTORY: Laws, 1987, ch. 486, § 16.04; Laws, 2012, ch. 382, § 49, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for “principal office (or, if none in this state, its registered office) is located” in (a) and (b).

RESEARCH REFERENCES

ALR.

Who has possession, custody, or control of corporate books or records for purposes of order to produce. 47 A.L.R.3d 676.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Attorneys’ fees; cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 339 et seq.

CJS.

18 C.J.S., Corporations § 600.

JUDICIAL DECISIONS

1. Restrictions.

Both the statute involving shareholders’ rights to inspect corporate records and the statute involving a director’s inspection of corporate records allow trial courts to impose reasonable restrictions on the use or distribution of the records; the chancery court did not abuse its discretion in imposing the restrictions in this case. Flowers v. Boolos (In re Estate of Smith), 204 So.3d 291, 2016 Miss. LEXIS 370 (Miss. 2016).

§79-4-16.05. Inspection of records by director.

A director of a corporation is entitled to inspect and copy the books, records and documents of the corporation at any reasonable time to the extent reasonably related to the performance of the director’s duties as a director, including duties as a member of a committee, but not for any other purpose or in any manner that would violate any duty to the corporation.

The chancery court of the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may order inspection and copying of the books, records and documents at the corporation’s expense, upon application of a director who has been refused such inspection rights, unless the corporation establishes that the director is not entitled to such inspection rights. The court shall dispose of an application under this subsection on an expedited basis.

If an order is issued, the court may include provisions protecting the corporation from undue burden or expense, and prohibiting the director from using information obtained upon exercise of the inspection rights in a manner that would violate a duty to the corporation, and may also order the corporation to reimburse the director for the director’s costs (including reasonable counsel fees) incurred in connection with the application.

HISTORY: Laws, 2001, ch. 435, § 21; Laws, 2012, ch. 382, § 50, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for “principal office (or if none in the state, its registered office) is located” preceding “may order inspection” in (b).

JUDICIAL DECISIONS

1. In general.

2. Restrictions.

1. In general.

Chancery court’s order complied with the relevant statutes by allowing the heir, as director, access to the books and records, with restrictions, and there was no abuse of discretion; she did not explain what documents she was prevented from reviewing, nor did she allege that the documents she was given were incomplete. Flowers v. Boolos (In re Estate of Smith), 204 So.3d 291, 2016 Miss. LEXIS 370 (Miss. 2016).

2. Restrictions.

Both the statute involving shareholders’ rights to inspect corporate records and the statute involving a director’s inspection of corporate records allow trial courts to impose reasonable restrictions on the use or distribution of the records; the chancery court did not abuse its discretion in imposing the restrictions in this case. Flowers v. Boolos (In re Estate of Smith), 204 So.3d 291, 2016 Miss. LEXIS 370 (Miss. 2016).

§79-4-16.06. Exception to notice requirement.

Whenever notice would otherwise be required to be given under any provision of this act to a shareholder, such notice need not be given if:

  1. Notices to the shareholders of two (2) consecutive annual meetings, and all notices of meetings during the period between such two (2) consecutive annual meetings, have been sent to such shareholder at such shareholder’s address as shown on the records of the corporation and have been returned undeliverable or could not be delivered; or
  2. All, but not less than two (2), payments or dividends on securities during a twelve-month period, or two (2) consecutive payments of dividends on securities during a period of more than twelve (12) months, have been sent to such shareholder at such shareholder’s address as shown on the records of the corporation and have been returned undeliverable or could not be delivered.

If any such shareholder shall deliver to the corporation a written notice setting forth such shareholder’s then current address, the requirement that notice be given to such shareholder shall be reinstated.

HISTORY: Laws, 2001, ch. 435, § 22; Laws, 2012, ch. 481, § 45, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “notice would otherwise be required” for “notice is required in” in (a); in (a)(1), substituted “Notices to the shareholders” for “Notice” at the beginning and inserted “or could not be delivered” at the end; and added “or could not be delivered” at the end of (a)(2).

Subarticle B. Reports.

§79-4-16.20. Financial statements for shareholders.

A corporation shall furnish its shareholders annual financial statements, which may be consolidated or combined statements of the corporation and one or more of its subsidiaries, as appropriate, that include a balance sheet as of the end of the fiscal year, an income statement for that year, and a statement of changes in shareholders’ equity for the year unless that information appears elsewhere in the financial statements. If financial statements are prepared for the corporation on the basis of generally accepted accounting principles, the annual financial statements must also be prepared on that basis.

If the annual financial statements are reported upon by a public accountant, his report must accompany them. If not, the statements must be accompanied by a statement of the president or the person responsible for the corporation’s accounting records:

  1. Stating his reasonable belief whether the statements were prepared on the basis of generally accepted accounting principles and, if not, describing the basis of preparation; and
  2. Describing any respects in which the statements were not prepared on a basis of accounting consistent with the statements prepared for the preceding year.

A corporation shall deliver the annual financial statements to each shareholder within one hundred twenty (120) days after the close of each fiscal year. Thereafter, on written request from a shareholder to whom the statements were not delivered, the corporation shall send the shareholder the latest financial statements. A public corporation may fulfill its responsibilities under this section by delivering the specified financial statements, or otherwise making them available, in any manner permitted by the applicable rules and regulations of the United States Securities and Exchange Commission.

HISTORY: Laws, 1987, ch. 486, § 16.20; Laws, 2004, ch. 495, § 14; Laws, 2012, ch. 481, § 46, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2004 amendment rewrote (c).

The 2012 amendment, effective January 1, 2013, in (c), substituted “send the shareholder” for “mail him” preceding “the latest financial statements” at the end of the next-to-last sentence, and added the last sentence.

Cross References —

Requirement that corporation keep copy of all financial statements furnished to shareholders under this section for past 3 years at its principal office, see § 79-4-16.01.

RESEARCH REFERENCES

ALR.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Liability of independent accountant to investors or shareholders. 48 A.L.R.5th 389.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 284, 330.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1032-74:1034.

CJS.

18 C.J.S., Corporations §§ 588-601.

§79-4-16.21. Repealed.

Repealed by Laws, 2012, ch. 481, § 48, effective January 1, 2013.

§79-4-16.21. [Laws, 1987, ch. 486, § 16.21; brought forward, Laws, 1996, ch. 459, § 13, eff from and after January 1, 1997.]

Editor’s Notes —

Former § 79-4-16.21 pertained to the reporting of the indemnification of or expense advances to a director in connection with a proceeding and certain issues of shares by the corporation.

§79-4-16.22. Annual report to secretary of state.

Each domestic corporation, and each foreign corporation authorized to transact business in this state, shall deliver within sixty (60) days of each anniversary date of its incorporation with respect to a domestic corporation or its authorization to transact business in this state with respect to a foreign corporation, or such other date as may be established by the Secretary of State, to the Secretary of State for filing an annual report that sets forth:

  1. The name of the corporation and the state or country under whose law it is incorporated;
  2. The information required by Section 79-35-5(a);
  3. The address of its principal office;
  4. The names and business addresses of its directors and principal officers;
  5. A brief description of the nature of its business;
  6. The total number of authorized shares, itemized by class and series, if any, within each class; and
  7. The total number of issued and outstanding shares, itemized by class and series, if any, within each class.

Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.

If an annual report does not contain the information required by this section, the Secretary of State shall notify promptly the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty (30) days after the effective date of notice, it is deemed to be timely filed.

HISTORY: Laws, 1987, ch. 486, § 16.22; Laws, 1992, ch. 361, § 1; Laws, 2012, ch. 382, § 51, eff from and after Jan. 1, 2013.

Editor’s Notes —

Laws of 1992, ch. 361, § 1, effective July 1, 1993, provides that every domestic corporation, and every foreign corporation authorized to transact business in this state shall deliver an annual report to the Secretary of State within sixty (60) days of the date of the anniversary date of its incorporation if it is a domestic corporation or its authorization to transact business in this state if it is a foreign corporation, or on such other date as may be established by the Secretary of State.

The Secretary of State has determined that the 1997 annual reports shall continue to be delivered to the Secretary of State between January 1 and April 1, 1997.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “[see Editor’s Note below]” following “established by the Secretary of State” near the end of (a); and substituted “information required by Section 79-35-5(a)” for “address of its registered office and the name of its registered agent at that office in this state” in (a)(2).

Cross References —

Requirement that most recent annual report required by this section have been delivered to Secretary of State in order for certificate of existence or authorization to be issued, see § 79-4-1.28.

Corporation’s failure to deliver its annual report to Secretary of State as grounds for administrative dissolution, see § 79-4-14.20.

Requirement that corporation keep copy of its most recent annual report delivered to Secretary of State under this section at its principal office, see § 79-4-16.01.

Annual report required by this section to include statement that all shareholders are qualified persons with respect to corporation or if foreign professional corporation, that all shareholders meet § 79-10-91(2)(c) requirement, see § 79-10-101.

RESEARCH REFERENCES

ALR.

Persons liable under statutes imposing, upon directors, officers, or trustees of a corporation, personal liability for its debts on account of their failure to file or publish reports, required by law, as to corporate matters. 39 A.L.R.3d 428.

Right of stockholder to have corporate books inspected by attorney, accountant, or other agent without stockholder’s presence. 48 A.L.R.3d 1072.

What corporate documents are subject to shareholder’s right to inspection. 88 A.L.R.3d 663.

Availability of sole shareholder’s Fifth Amendment privilege against self-incrimination to resist production of corporation’s books and records – modern status. 87 A.L.R. Fed. 177.

Am. Jur.

18A Am. Jur. 2d, Corporations § 284.

18B Am. Jur. 2d, Corporations §§ 1612-1617.

19 Am. Jur. 2d, Corporations § 2393.

Article 17. Transition Provisions.

§79-4-17.01. Application to existing domestic corporation.

Section 79-4-1.01 et seq. applies to all domestic corporations in existence on its effective date that were incorporated under any general statute of this state providing for incorporation of corporations for profit if power to amend or repeal the statute under which the corporation was incorporated was reserved.

HISTORY: Laws, 1987, ch. 486, § 17.01, eff from and after January 1, 1988.

RESEARCH REFERENCES

Law Reviews.

Holmes, The revised Model Business Corporation Act and corporate law reform in Mississippi. 57 Miss. L. J. 271, August, 1987.

§79-4-17.02. Application to qualified foreign corporations.

A foreign corporation authorized to transact business in this state on the effective date of Sections 79-4-1.01 et seq. is subject to Sections 79-4-1.01 et seq. but is not required to obtain a new certificate of authority to transact business under Sections 79-4-1.01 et seq.

HISTORY: Laws, 1987, ch. 486, § 17.02, eff from and after January 1, 1988.

§79-4-17.03. Saving provisions.

Except as provided in subsection (b), the repeal of a statute by Sections 79-4-1.01 et seq. does not affect:

  1. The operation of the statute or any action taken under it before its repeal;
  2. Any ratification, right, remedy, privilege, obligation or liability acquired, accrued or incurred under the statute before its repeal;
  3. Any violation of the statute, or any penalty, forfeiture or punishment incurred because of the violation, before its repeal;
  4. Any proceeding, reorganization or dissolution commenced under the statute before its repeal, and the proceeding, reorganization or dissolution may be completed in accordance with the statute as if it had not been repealed.

If a penalty or punishment imposed for violation of a statute repealed by Sections 79-4-1.01 et seq. is reduced by Sections 79-4-1.01 et seq., the penalty or punishment if not already imposed shall be imposed in accordance with Sections 79-4-1.01 et seq.

HISTORY: Laws, 1987, ch. 486, § 17.03, eff from and after January 1, 1988.

§79-4-17.04. Severability.

If any provision of Sections 79-4-1.01 et seq. or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions or applications of Sections 79-4-1.01 et seq. that can be given effect without the invalid provision or application, and to this end the provisions of Sections 79-4-1.01 et seq. are severable.

HISTORY: Laws, 1987, ch. 486, § 17.04, eff from and after January 1, 1988.

§79-4-17.05. Relation to Electronic Signatures in Global and National Commerce Act.

In the event that any provisions of this chapter are deemed to modify, limit or supersede the Federal Electronic Signatures in Global and National Commerce Act, 15 USCS Section 7001 et seq., the provisions of this chapter shall control to the maximum extent permitted by Section 102(a)(2) of that federal act.

HISTORY: Laws, 2012, ch. 481, § 47, eff from and after Jan. 1, 2013.

Federal Aspects—

Section 102(a)(2) of the Federal Electronic Signatures in Global and National Commerce Act, see 15 U.S.C. § 7002(a)(2).

Chapter 5. Business Development Corporations [Repealed]

§§79-5-1 through79-5-37. Repealed.

Repealed by Laws, 2006, ch. 377, § 1 effective from and after July 1, 2006.

§79-5-1. [Codes, 1942, § 5390-01; Laws, 1960, ch. 186, § 1, eff from and after passage (approved March 23, 1960).]

§79-5-3. [Codes, 1942, § 5390-02; Laws, 1960, ch. 186, § 2, eff from and after passage (approved March 23, 1960).]

§79-5-5. [Codes, 1942, § 5390-03; Laws, 1960, ch. 186, § 3, eff from and after passage (approved March 23, 1960).]

§79-5-7. [Codes, 1942, § 5390-04; Laws, 1960, ch. 186, § 4, eff from and after passage (approved March 23, 1960).]

§79-5-9. [Codes, 1942, § 5390-05; Laws, 1960, ch. 186, § 5, eff from and after passage (approved March 23, 1960).]

§79-5-11. [Codes, 1942, § 5390-06; Laws, 1960, ch. 186, § 6; Laws, 1968, ch. 278, § 1, eff from and after passage (approved August 7, 1968).]

§79-5-13. [Codes, 1942, § 5390-07; Laws, 1960, ch. 186, § 7, eff from and after passage (approved March 23, 1960).]

§79-5-15. [Codes, 1942, § 5390-08; Laws, 1960, ch. 186, § 8, eff from and after passage (approved March 23, 1960).]

§79-5-17. [Codes, 1942, § 5390-09; Laws, 1960, ch. 186, § 9, eff from and after passage (approved March 23, 1960).]

§79-5-19. [Codes, 1942, § 5390-10; Laws, 1960, ch. 186, § 10; Laws, 1970, ch. 312, § 1, eff from and after passage (approved February 19, 1970).]

§79-5-21. [Codes, 1942, § 5390-11; Laws, 1960, ch. 186, § 11, eff from and after passage (approved March 23, 1960).]

§79-5-23. [Codes, 1942, § 5390-12; Laws, 1960, ch. 186, § 12, eff from and after passage (approved March 23, 1960).]

§79-5-25. [Codes, 1942, § 5390-13; Laws, 1960, ch. 186, § 13, eff from and after passage (approved March 23, 1960).]

§79-5-27. [Codes, 1942, § 5390-14; Laws, 1960, ch. 186, § 14, eff from and after passage (approved March 23, 1960).]

§79-5-29. [Codes, 1942, § 5390-15; Laws, 1960, ch. 186, § 15; Laws, 1968, ch. 279, § 1, eff from and after passage (approved July 10, 1968).]

§79-5-31. [Codes, 1942, § 5390-16; Laws, 1960, ch. 186, § 16, eff from and after passage (approved March 23, 1960).]

§79-5-33. [Codes, 1942, § 5390-17; Laws, 1960, ch. 186, § 17; Laws, 1968, ch. 279, § 2, eff from and after passage (approved July 10, 1968).]

§79-5-35. [Codes, 1942, § 5390-18; Laws, 1960, ch. 186, § 18; Laws, 1969, Ex Sess, ch. 26, § 1, eff from and after passage (approved September 8, 1969).]

§79-5-37. [Codes, 1942, § 5390-19; Laws, 1960, ch. 186, § 19, eff from and after passage (approved March 23, 1960).]

Editor’s Notes —

Former § 79-5-1 was entitled “Short Title.”

Former § 79-5-3 was entitled “Definitions.”

Former § 79-5-5 was entitled “Incorporation; commencement of operations.”

Former § 79-5-7 was entitled “Purposes.”

Former § 79-5-9 was entitled “Powers.”

Former § 79-5-11 was entitled “Charter of incorporation; capital stock.”

Former § 79-5-13 was entitled “Authority conferred on existing and future corporations; who may deal in bonds and securities of corporation.”

Former § 79-5-15 was entitled “Financial institutions may become members; loans to corporations; limits; evidences of indebtedness; interest.”

Former § 79-5-17 was entitled “Duration of membership; withdrawal; calls for loans subsequent to withdrawal.”

Former § 79-5-19 was entitled “Management and control of corporation; board of directors; board of members; executive committee; elections, terms and qualifications; liability for losses.”

Former § 79-5-21 was entitled “Powers of stockholders; voting and meetings of stockholders and members; number of votes; dissolution.”

Former § 79-5-23 was entitled “Amendment of charter; approval and filing of amendments.”

Former § 79-5-25 was entitled “Earned surplus.”

Former § 79-5-27 was entitled “Designation of depository; corporation may not receive deposits.”

Former § 79-5-29 was entitled “Audits; reports.”

Former § 79-5-31 was entitled “First meeting of corporation; notice; minutes; business that may be transacted; quorum.”

Former § 79-5-33 was entitled “Securities of corporation subject to Mississippi Securities Law; sale of securities of previously chartered corporations regulated; legal investments.”

Former § 79-5-35 was entitled “Effect of failure to begin business.”

Former § 79-5-37 was entitled “Credit of state.”

Chapter 6. Foreign Limited Liability Companies [Repealed]

§§79-6-1 through79-6-39. Repealed.

Repealed by Laws, 1994, ch. 402, § 88, eff from and after July 1, 1994.

[Laws, 1993, ch. 530, § 1]

Editor’s Notes —

Former Chapter 6 related to the registration of foreign limited liability companies. For provisions of the Mississippi Limited Liability Company Act, see §§ 79-29-101. For the provisions governing foreign limited liability companies, see §§ 79-29-1001, et seq.

Chapter 7. Small Business Investment Companies

§79-7-1. Incorporation.

Small business investment companies organized under the provisions of the Small Business Investment Act of 1958, Public Law 699, 85th Congress, may be incorporated in this state under the provisions of Chapter 4, Title 79, Mississippi Code of 1972, except that the charter of any such corporation may include a statement of such powers and limitations as is acceptable to the Small Business Administration and not contrary to law and need not include a statement that the rights and powers that may be exercised by said corporation in addition thereto are those conferred by said Chapter 4, Title 79, Mississippi Code of 1972.

HISTORY: Codes, 1942, § 5359-51; Laws, 1960, ch. 183, § 1; Laws, 2013, ch. 419, § 4, eff from and after July 1, 2013.

Amendment Notes —

The 2013 amendment substituted “Chapter 4” for “Chapter 3” preceding “Title 79” twice in the section, and deleted “Sections 79-3-1 through 79-3-293” following “Mississippi Code of 1972” the first time it appears.

Cross References —

Regulation of transfer of investment securities under the Uniform Commercial Code, see § 75-8-101 et seq.

Federal Aspects—

Small Business Investment Act of 1958, P.L. 85-699, appears generally as 15 USCS §§ 681 et seq.

RESEARCH REFERENCES

ALR.

What is an “investment company” under § 3 of Investment Company Act of 1940 (15 USCS § 80a-3). 64 A.L.R. Fed. 337.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 156 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:392 et seq., 74:1300, 74:1301.

10A Am. Jur. Legal Forms 2d, Investment Companies and Advisers §§ 152:2 et seq. (investment companies; organizational documents).

§79-7-3. Powers.

Such corporations shall have the authority to exercise all the rights and powers set forth in the said Small Business Investment Act of 1958 as the same may be now or hereafter amended, subject to the limitations of the applicable statutes of this state and the limitations contained in the charter of any such corporation.

HISTORY: Codes, 1942, § 5359-52; Laws, 1960, ch. 183, § 2, eff from and after passage (approved April 30, 1960).

Cross References —

General powers of business corporations, see § 79-4-3.02.

Federal Aspects—

Small Business Investment Act of 1958, P.L. 85-699, appears generally as 15 USCS §§ 681 et seq.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1715 et seq.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:601 et seq.

CJS.

19 C.J.S., Corporations §§ 1018 et seq.

§79-7-5. Notes, etc., exempted from ad valorem taxes.

All notes or other evidences of indebtedness held by any small business investment company incorporated in this state bearing a rate of interest which is not usurious under the laws of this state shall be exempt from all ad valorem taxes.

HISTORY: Codes, 1942, § 5359-53; Laws, 1960, ch. 183, § 3, eff from and after passage (approved April 30, 1960).

Cross References —

Ad valorem tax exemptions generally, see §§ 27-31-1 et seq.

Regulation of interest on money, see §§ 75-17-1 et seq.

§79-7-7. Fees and charges for loans.

In addition to such interest charges as may be now or hereafter permitted by law, any small business investment company chartered under the laws of this state may charge to any person, corporation or association who may apply for any loan of money or extension of credit such reasonable fees or charges as may be necessary to cover the actual cost of handling, processing and investigating such applications and such fees or charges shall be exempt from the provisions of the statutes on usury. Provided, however, such fees or charges shall not exceed one percent (1%) of the principal amount of any such loan or credit up to and including the sum of Ten Thousand Dollars ($10,000.00) and one half of one percent (1/2 of 1%) of such principal amount in excess thereof; and no such charge shall exceed the sum of Three Hundred Fifty Dollars ($350.00) for any one transaction.

HISTORY: Codes, 1942, § 5359-54; Laws, 1960, ch. 183, § 4, eff from and after passage (approved April 30, 1960).

Cross References —

Regulation of interest on money, see §§ 75-17-1 et seq.

Chapter 9. Professional Corporations [Repealed]

§§79-9-1 through79-9-27. Repealed.

Repealed by Laws, 1995, ch. 494, § 35, eff from and after July 1, 1995.

§79-9-1. [Codes, 1942, § 5390-41; Laws, 1968, ch. 277, § 1]

§79-9-3. [Codes, 1942, § 5390-42; Laws, 1968, ch. 277, § 2; 1970, ch. 313, § 1]

§79-9-5. [Codes, 1942, § 5390-43; Laws, 1968, ch. 277, § 3; 1970, ch. 313, § 2]

§79-9-7. [Codes, 1942, § 5390-44; Laws, 1968, ch. 277, § 4]

§79-9-9. [Codes, 1942, § 5390-45; Laws, 1968, ch. 277, § 5]

§79-9-11. [Codes, 1942, § 5390-46; Laws, 1968, ch. 277, § 6]

§79-9-13. [Codes, 1942, § 5390-47; Laws, 1968, ch. 277, § 7]

§79-9-15. [Codes, 1942, § 5390-48; Laws, 1968, ch. 277, § 8]

§79-9-17. [Codes, 1942, § 5390-49; Laws, 1968, ch. 277, § 9]

§79-9-19. [Codes, 1942, § 5390-50; Laws, 1968, ch. 277, § 10]

§79-9-21. [Codes, 1942, § 5390-51; Laws, 1968, ch. 277, § 11; 1971, ch. 320]

§79-9-23. [Codes, 1942, § 5390-52; Laws, 1968, ch. 277, § 12]

§79-9-25. [Codes, 1942, § 5390-53; Laws, 1968, ch. 277, § 13]

§79-9-27. [Codes, 1942, § 5390-56; Laws, 1968, ch. 277, § 16]

Editor’s Notes —

Former § 79-9-1 was entitled: Legislative intent; title of law.

Former § 79-9-3 was entitled: Definitions.

Former § 79-9-5 was entitled: Who may form professional corporations.

Former § 79-9-7 was entitled: Corporations organized prior to passage of law.

Former § 79-9-9 was entitled: Occupations not included in term “employee.”

Former § 79-9-11 was entitled: Laws applicable to professional relationships and liabilities to remain in effect; accountability of corporation’s shareholders, officers, and agents; corporate liability.

Former § 79-9-13 was entitled: Limitation on corporate activities; investments.

Former § 79-9-15 was entitled: Who may become shareholders; voting trusts.

Former § 79-9-17 was entitled: Effect of professional disqualification of officer or shareholder; purchase of stock of deceased or disqualified shareholder.

Former § 79-9-19 was entitled: Sale and transfer of shares; restraints on alienation; redemption.

Former § 79-9-21 was entitled: Corporate name; annual report.

Former § 79-9-23 was entitled: Conflicts with business corporation law.

Former § 79-9-25 was entitled: Merger or consolidation of corporations.

Former § 79-9-27 was entitled: Construction of law.

For present provisions relating to professional corporations, see §§ 79-10-1 et seq.

Chapter 10. Mississippi Professional Corporation Act

Article 1. General Provisions.

§79-10-1. Short title.

This chapter shall be known and may be cited as the “Mississippi Professional Corporation Act.”

HISTORY: Laws, 1995, ch. 494, § 1, eff from and after July 1, 1995.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

Mississippi Limited Liability Company Act, see §§ 79-29-101 et seq.

Foreign limited liability companies, see §§ 79-29-1001 et seq.

§79-10-3. Application of Mississippi Business Corporation Act.

The Mississippi Business Corporation Act applies to professional corporations, both domestic and foreign, to the extent not inconsistent with the provisions of this chapter.

HISTORY: Laws, 1995, ch. 494, § 2, eff from and after July 1, 1995.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

JUDICIAL DECISIONS

1. In general.

Although the shareholders did not ratify the president’s act of terminating an attorney’s position as an employee until more than a year after the fact, the action was invalidated by the lack of yearly meeting under Miss. Code Ann. § 79-4-7.01 which applied to the corporation by Miss. Code Ann. § 79-10-3. Jowett v. Scruggs, 901 So. 2d 638, 2004 Miss. App. LEXIS 768 (Miss. Ct. App. 2004), cert. denied, 901 So. 2d 1273, 2005 Miss. LEXIS 312 (Miss. 2005).

§79-10-4. Uniform Partnership Act inapplicable to professional corporations.

Professional corporations are not subject to the provisions of the Uniform Partnership Act.

HISTORY: Laws, 2000, ch. 469, § 50, eff from and after July 1, 2000.

Cross References —

Mississippi Uniform Partnership Act, see §§ 79-13-101 et seq.

§79-10-5. Definitions.

As used in this chapter, unless the context requires otherwise:

“Disqualified person” means an individual, general partnership, professional corporation or other entity that for any reason is or becomes ineligible under this chapter to be issued shares by a professional corporation.

“Domestic professional corporation” means a professional corporation.

“Foreign professional corporation” means a corporation or association for profit incorporated for the purpose of rendering professional services under a law other than the law of this state.

“Law” includes rules promulgated in accordance with Section 79-10-103.

“Licensing authority” means the office, board, agency, court or other authority in this state empowered to license or otherwise authorize the rendition of a professional service.

“Professional corporation” means a corporation for profit, other than a foreign professional corporation, subject to the provisions of this chapter.

“Professional service” means a service that may be lawfully rendered only by a person licensed or otherwise authorized by a licensing authority in this state to render the service, including, without limitation, certified public accountants, dentists, architects, veterinarians, osteopaths, physicians, surgeons and attorneys-at-law.

“Qualified person” means an individual, general partnership, professional corporation or other entity that is eligible under this chapter to be issued shares by a professional corporation.

HISTORY: Laws, 1995, ch. 494, § 3, eff from and after July 1, 1995.

Article 2. Creation.

§79-10-11. Election of professional corporation status.

  1. One or more persons may incorporate a professional corporation by delivering to the Secretary of State for filing articles of incorporation which include a statement that (a) it is a professional corporation, and (b) its purpose is to render the specified professional services.
  2. A corporation incorporated under a general law of this state (other than a professional corporation in existence on July 1, 1995, which is subject to the provisions of Section 79-10-111) may elect professional corporation status by amending its articles of incorporation to comply with subsection (1) of this section and Section 79-10-21.
  3. Nothing in this chapter shall be construed to require a person rendering professional services in this state to render such services through a professional corporation or foreign professional corporation unless a law of this state other than this chapter so requires.

HISTORY: Laws, 1995, ch. 494, § 4, eff from and after July 1, 1995.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in subsection (2) by substituting “...subsection (1) of this section...” for “...section (1) of this subsection...” The correction was ratified by the Joint Legislative Committee on Compilation, Revision and Publication at its July 22, 2010, meeting.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 156 et seq.

CJS.

18 C.J.S., Corporations §§ 50 et seq.

§79-10-13. Purposes.

  1. Except to the extent authorized by subsection (2) of this section, a corporation may elect professional corporation status under Section 79-10-11 solely for the purpose of rendering professional services (including services ancillary to them) and solely within a single profession.
  2. A corporation may elect professional corporation status under Section 79-10-11 for the purpose of rendering professional services within two (2) or more professions, and for the purpose of engaging in any lawful business authorized by Section 79-4-3.01, Mississippi Code of 1972, to the extent the combination of professional purposes or of professional and business purposes is not prohibited by the licensing law of this state applicable to each profession in the combination.

HISTORY: Laws, 1995, ch. 494, § 5, eff from and after July 1, 1995.

Cross References —

Corporate name, see § 79-10-21.

Applicability of this section to foreign professional corporation, see § 79-10-91.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 156 et seq.

CJS.

18 C.J.S., Corporations §§ 50 et seq.

§79-10-15. General powers.

  1. Except as provided in subsection (2) of this section, a professional corporation has the powers enumerated in Section 79-4-3.02, Mississippi Code of 1972.
  2. A professional corporation may be a promoter, general partner, member, associate, or manager of a partnership, joint venture, trust, or other entity only if the entity is engaged solely in rendering professional services or in carrying on business authorized by the professional corporation’s articles of incorporation and not prohibited by the licensing laws applicable to each profession rendering services through the professional corporation.

HISTORY: Laws, 1995, ch. 494, § 6, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 164.

18B Am. Jur. 2d, Corporations §§ 1715-1866..

CJS.

19 C.J.S., Corporations §§ 651 et seq.

§79-10-17. Rendering professional services.

  1. A domestic or foreign corporation may render professional services in this state only through individuals licensed or otherwise authorized in this state to render the services.
  2. Subsection (1) does not:
    1. Require an individual employed by a professional corporation to be licensed to perform services for the corporation if a license is not otherwise required;
    2. Prohibit a licensed individual from rendering professional services in his individual capacity although he is a shareholder, director, officer, employee or agent of a domestic or foreign professional corporation;
    3. Prohibit an individual licensed in another state from rendering professional services for a domestic or foreign professional corporation in this state if not prohibited by the licensing authority.

HISTORY: Laws, 1995, ch. 494, § 7, eff from and after July 1, 1995.

Cross References —

Prohibited activities, see § 79-10-19.

§79-10-19. Prohibited activities.

  1. A professional corporation may not render any professional service other than the professional service authorized by its articles of incorporation.
  2. Subsection (1) does not prohibit a professional corporation from investing its funds in real estate, mortgages, securities, or any other type of investment or from owning real or personal property appropriate for carrying on its business.

HISTORY: Laws, 1995, ch. 494, § 8, eff from and after July 1, 1995.

§79-10-21. Corporate name.

  1. The name of a domestic professional corporation and of a foreign professional corporation authorized to transact business in this state, in addition to satisfying the requirements of Sections 79-4-4.01 and 79-4-15.06, Mississippi Code of 1972:
    1. Must contain the words “professional corporation” or “professional association” or the abbreviations “P.C.,” “PC,” “P.A.” or “PA”;
    2. May not contain language stating or implying that it is incorporated for a purpose other than that authorized by Section 79-10-13 and its articles of incorporation; and
    3. Must conform with any rule promulgated by the licensing authority having jurisdiction over a professional service described in the corporation’s articles of incorporation.
  2. Sections 79-4-4.01 and 79-4-15.06, Mississippi Code of 1972, do not prevent the use of a name otherwise prohibited by those sections if it is the personal name of a shareholder or former shareholder of the domestic or foreign professional corporation or the name of an individual who was associated with a predecessor of the corporation.

HISTORY: Laws, 1995, ch. 494, § 9, eff from and after July 1, 1995.

Cross References —

Name of foreign professional corporation, see § 79-10-21.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 228-250.

CJS.

18 C.J.S., Corporations §§ 132 et seq.

Article 3. Shares.

§79-10-31. Issuance of shares.

  1. A professional corporation may issue shares, fractional shares and rights or options to purchase shares only to:
    1. Individuals who are authorized by law in this or another state to render a professional service described in the corporation’s articles of incorporation;
    2. Professional corporations, domestic or foreign, authorized by law in this state to render a professional service described in the corporation’s articles of incorporation;
    3. General partnerships in which all the partners are individuals or entities otherwise authorized by paragraph (a), (b) or (d) of this subsection (1) to be shareholders of a professional corporation under this chapter;
    4. Any other individual or entity not included in paragraph (a), (b) or (c) of this subsection (1) if expressly authorized by the licensing authority having jurisdiction over the professional services described in the articles of incorporation of the professional corporation.
  2. A licensing authority with jurisdiction over a profession may by rule restrict or condition, or revoke in part, the authority of professional corporations subject to its jurisdiction to issue shares. A rule promulgated under this section does not, of itself, make a shareholder of a professional corporation at the time the rule becomes effective a disqualified person.
  3. The articles of incorporation may provide for additional limitations and restrictions on the ownership of shares or for additional qualifications of shareholders and such limitations, restrictions or qualifications shall be valid and enforceable in each instance.
  4. Shares issued in violation of this section or a rule promulgated under this section are void.

HISTORY: Laws, 1995, ch. 494, § 10, eff from and after July 1, 1995.

Cross References —

Disqualified person defined, see § 79-10-5.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 40.

18A Am. Jur. 2d, Corporations §§ 609-788.

CJS.

18 C.J.S., Corporations §§ 261 et seq.

§79-10-33. Notice of professional corporation status on shares.

  1. In addition to any other statement required or permitted by applicable law, the following statement must appear conspicuously on each share certificate issued by a professional corporation:

    The transfer of shares of a professional corporation is restricted by the Mississippi Professional Corporation Act. Shares of a professional corporation are also subject to a statutory compulsory repurchase obligation.

  2. Within a reasonable time after the issuance or transfer of uncertificated shares of a professional corporation, the corporation shall send the shareholders a written notice containing the statement required by subsection (1).

HISTORY: Laws, 1995, ch. 494, § 11, eff from and after July 1, 1995.

§79-10-35. Share transfer restriction.

  1. A shareholder of a professional corporation may transfer shares, fractional shares and rights or options to purchase shares of the corporation only to qualified persons. A shareholder of a professional corporation may pledge shares to a qualified person or to a disqualified person.
  2. A transfer of shares made in violation of subsection (1), except one made by operation of law or court judgment, is void.

HISTORY: Laws, 1995, ch. 494, § 12, eff from and after July 1, 1995.

Cross References —

Disqualified person and qualified person defined, see § 79-10-5.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 570, 572.

CJS.

18 C.J.S., Corporations, §§ 285 et seq.

§79-10-37. Compulsory acquisition of shares after death or disqualification of shareholder.

  1. A professional corporation must acquire (or cause to be acquired by a qualified person) the shares of its shareholder if:
    1. The shareholder dies and the successor in interest to the deceased shareholder is not a qualified person, except as provided in subsection (3);
    2. The shareholder becomes a disqualified person, except as provided in subsection (3); or
    3. The shares are transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (3).
  2. If a price for the shares is established in accordance with the articles of incorporation or bylaws or by private agreement, that price controls. If the price is not so established, the corporation shall acquire the shares in accordance with Section 79-10-39. If the disqualified person rejects the corporation’s purchase offer made pursuant to Section 79-10-39, either the person or the corporation may commence a proceeding under Section 79-10-41 to determine the price of the shares.
  3. This section does not require the acquisition of shares in the event of disqualification if the disqualification lasts no more than five (5) months from the date the disqualification or transfer occurs. A shareholder who becomes a disqualified person shall notify the corporation promptly.
  4. This section and Section 79-10-39 do not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to a former shareholder if otherwise permitted by law.
  5. A provision for the acquisition of shares contained in a professional corporation’s articles of incorporation or bylaws, or in a private agreement, is specifically enforceable.

HISTORY: Laws, 1995, ch. 494, § 13, eff from and after July 1, 1995.

Cross References —

Disqualified person and qualified person defined, see § 79-10-5.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2354-2355.

JUDICIAL DECISIONS

1. In general.

Where an employment agreement between an attorney and a law firm, which had previously been determined to be a valid agreement by a federal court, provided that the attorney had to relinquish her shares in the firm if she was terminated as an employee, the agreement was enforceable under Miss. Code Ann. § 79-10-37(5). Jowett v. Scruggs, 901 So. 2d 638, 2004 Miss. App. LEXIS 768 (Miss. Ct. App. 2004), cert. denied, 901 So. 2d 1273, 2005 Miss. LEXIS 312 (Miss. 2005).

§79-10-39. Acquisition procedure.

  1. If shares must be acquired under Section 79-10-37, the professional corporation shall deliver a written notice to the executor or administrator of the estate of its deceased shareholder, or to the disqualified person or transferee, offering to purchase the shares at a price the corporation believes represents their fair value as of the date of death, disqualification, or transfer. The offer notice must be accompanied by the corporation’s balance sheet for the most recent fiscal year ending prior to the date of death or disqualification, an income statement for that fiscal year, a statement of changes in shareholders’ equity for that fiscal year, and the latest available interim financial statements, if any.
  2. The disqualified person has thirty (30) days from the effective date of the notice to accept the corporation’s offer or demand that the corporation commence a proceeding under Section 79-10-41 to determine the fair value of his shares. If he accepts the offer, the corporation shall make payment for the shares within sixty (60) days from the effective date of the offer notice (unless a later date is agreed on) upon the disqualified person’s surrender of his shares to the corporation.
  3. After the corporation makes payment for the shares, the disqualified person has no further interest in them.

HISTORY: Laws, 1995, ch. 494, § 14, eff from and after July 1, 1995.

Cross References —

Disqualified person and qualified person defined, see § 79-10-5.

Cancellation of disqualified shares, see § 79-10-45.

Application of section to existing professional corporations, see § 79-10-111.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1697.

CJS.

18 C.J.S., Corporations §§ 380, 381.

§79-10-41. Court action to appraise shares.

  1. If the disqualified shareholder does not accept the professional corporation’s offer under Section 79-10-39(2) within the thirty-day period, the shareholder during the following thirty-day period may deliver a written notice to the corporation demanding that it commence a proceeding to determine the fair value of the shares. The corporation may commence a proceeding at any time during the sixty (60) days following the effective date of its offer notice. If it does not do so, the shareholder may commence a proceeding against the corporation to determine the fair value of his shares.
  2. The corporation or disqualified shareholder shall commence the proceeding in the chancery court of the county where the corporation’s principal office (or, if none in this state, its registered office) is located. The corporation shall make the disqualified person a party to the proceeding as in an action against his shares. The jurisdiction of the court in which the proceeding is commenced is plenary and exclusive.
  3. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the power described in the order appointing them, or in any amendment to it.
  4. The disqualified shareholder is entitled to judgment for the fair value of his shares determined by the court as of the date of death, disqualification or transfer together with interest from that date at a rate found by the court to be fair and equitable.
  5. The court may order the judgment paid in installments determined by the court.

HISTORY: Laws, 1995, ch. 494, § 15, eff from and after July 1, 1995.

Cross References —

Assessment of appraisal proceeding court costs and fees, see § 79-10-43.

Cancellation of disqualified shares, see § 79-10-45.

Application of section to existing professional corporations, see § 79-10-111.

§79-10-43. Court costs and fees of experts.

  1. The court in an appraisal proceeding commenced under Section 79-10-41 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court, and shall assess the costs against the professional corporation. But the court may assess costs against the disqualified shareholder, in an amount the court finds equitable, if the court finds the shareholder acted arbitrarily, vexatiously, or not in good faith in refusing to accept the corporation’s offer.
  2. The court may also assess the fees and expenses of counsel and experts for the disqualified shareholder against the corporation and in favor of the shareholder if the court finds that the fair value of his shares substantially exceeded the amount offered by the corporation or that the corporation did not make an offer.

HISTORY: Laws, 1995, ch. 494, § 16, eff from and after July 1, 1995.

Cross References —

Application of section to existing professional corporations, see § 79-10-111.

§79-10-45. Cancellation of disqualified shares.

If the shares of a disqualified person are not acquired under Section 79-10-39 or 79-10-41 within ten (10) months after the death of the shareholder or within five (5) months after the disqualification or transfer, the professional corporation shall immediately cancel the shares on its books and the disqualified person has no further interest as a shareholder in the corporation other than his right to payment of the fair value of the shares under Section 79-10-39 or 79-10-41.

HISTORY: Laws, 1995, ch. 494, § 17, eff from and after July 1, 1995.

Cross References —

Disqualified person defined, see § 79-10-5.

Article 4. Governance.

§79-10-61. Voting of shares.

  1. Only a qualified person may be appointed a proxy to vote shares of a professional corporation.
  2. A voting trust with respect to shares of a professional corporation is not valid unless all of its trustees and beneficiaries are qualified persons. But if a beneficiary who is a qualified person dies or becomes disqualified, a voting trust valid under this subsection continues to be valid for ten (10) months after the date of death or for five (5) months after the disqualification occurred.

HISTORY: Laws, 1995, ch. 494, § 18, eff from and after July 1, 1995.

Cross References —

Disqualified person and qualified person defined, see § 79-10-5.

§79-10-63. Confidential relationship.

  1. The relationship between an individual rendering professional services as an employee of a domestic or foreign professional corporation and his client or patient is the same as if the individual were rendering the services as a sole practitioner.
  2. The relationship between a domestic or foreign professional corporation and the client or patient for whom its employee is rendering professional services is the same as that between the client or patient and the employee.

HISTORY: Laws, 1995, ch. 494, § 19, eff from and after July 1, 1995.

Cross References —

Foreign professional corporations generally, see §§ 79-10-91 through 79-10-95.

JUDICIAL DECISIONS

1. Liability.

Given the conclusion that an affair between the client’s wife and the attorney was not related to the representation or arising therefrom, along with the client’s admission that the affair was not motivated by a desire to benefit the law firm and the absence of any evidence that anyone at the law firm, other than the attorney, was aware of the secret and covert affair prior to the client’s demand, that was the type of frolic so clearly beyond an employee’s course and scope of employment that it could not form the basis for a claim of vicarious liability on the part of the law firm, Miss. Code Ann. §§ 79-10-63(2), 79-10-67(2). Baker Donelson Bearman Caldwell & Berkowitz, P.C. v. Seay, 42 So.3d 474, 2010 Miss. LEXIS 291 (Miss. 2010).

§79-10-65. Privileged communications.

A privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statute or common law of this state is not affected by this chapter. The privilege applies to a domestic or foreign professional corporation and to its employees in all situations in which it applies to communications between an individual rendering professional services on behalf of the corporation and the person receiving the services.

HISTORY: Laws, 1995, ch. 494, § 20, eff from and after July 1, 1995.

Cross References —

Foreign professional corporations generally, see §§ 79-10-91 through 79-10-95.

§79-10-67. Responsibility for professional services.

  1. Each individual who renders professional services as an employee of a domestic or foreign professional corporation is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. An employee or shareholder of a domestic or foreign professional corporation is not liable, however, for the conduct of other employees or shareholders of the corporation, except a person under his direct supervision and control, while rendering professional services on behalf of the professional corporation to the person for whom such professional services were being rendered.
  2. A domestic or foreign professional corporation whose employees perform professional services within the scope of their employment or of their apparent authority to act for the corporation is liable to the same extent as its employees.

HISTORY: Laws, 1995, ch. 494, § 21, eff from and after July 1, 1995.

Cross References —

Foreign professional corporations generally, see §§ 79-10-91 through 79-10-95.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1715-1866.

CJS.

19 C.J.S., Corporations §§ 651 et seq.

JUDICIAL DECISIONS

1.-2. [Reserved for future use.]

3. Liability.

1.-2. [Reserved for future use.]

3. Liability.

Given the conclusion that an affair between the client’s wife and the attorney was not related to the representation or arising therefrom, along with the client’s admission that the affair was not motivated by a desire to benefit the law firm and the absence of any evidence that anyone at the law firm, other than the attorney, was aware of the secret and covert affair prior to the client’s demand, that was the type of frolic so clearly beyond an employee’s course and scope of employment that it could not form the basis for a claim of vicarious liability on the part of the law firm, Miss. Code Ann. §§ 79-10-63(2), 79-10-67(2). Baker Donelson Bearman Caldwell & Berkowitz, P.C. v. Seay, 42 So.3d 474, 2010 Miss. LEXIS 291 (Miss. 2010).

Appellate court could not, as a matter of law, determine that the entire liability was attributable to the errors of the architect; thus, it reversed and remanded for a new trial to determine what portion, if any, of the architectural firm’s liability may be imposed to the architect individually. Lambert Cmty. Hous. Group, L.P. v. Wenzel, 987 So. 2d 468, 2008 Miss. App. LEXIS 383 (Miss. Ct. App. 2008).

Article 5. Reorganization and Termination.

§79-10-81. Merger.

  1. If all the shareholders of the disappearing and surviving corporations are qualified to be shareholders of the surviving corporation, a professional corporation may merge with another domestic or foreign professional corporation or with a domestic or foreign business corporation.
  2. If the surviving corporation is to render professional services in this state, it must comply with this chapter.

HISTORY: Laws, 1995, ch. 494, § 22, eff from and after July 1, 1995.

Cross References —

Foreign professional corporations generally, see §§ 79-10-91 through 79-10-95.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2162-2347.

CJS.

19 C.J.S., Corporations §§ 885 et seq.

§79-10-83. Termination of professional activities.

If a professional corporation ceases to render professional services, it must amend its articles of incorporation to delete references to rendering professional services and to conform its corporate name to the requirements of Section 79-4-4.01, Mississippi Code of 1972. After the amendment becomes effective, the corporation may continue in existence as a business corporation under the Mississippi Business Corporation Act and it is no longer subject to this chapter.

HISTORY: Laws, 1995, ch. 494, § 23, eff from and after July 1, 1995.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 84-99, 179.

CJS.

18 C.J.S., Corporations §§ 139, 140 et seq.

§79-10-85. Judicial dissolution.

The Attorney General may commence a proceeding under Sections 79-4-14.30 through 79-4-14.33, Mississippi Code of 1972, to dissolve a professional corporation if:

The Secretary of State or a licensing authority with jurisdiction over a professional service described in the corporation’s articles of incorporation serves written notice on the corporation under Section 79-4-5.04, Mississippi Code of 1972, that it has violated or is violating a provision of this chapter;

The corporation does not correct each alleged violation, or demonstrate to the reasonable satisfaction of the Secretary of State or licensing authority that it did not occur, within sixty (60) days after service of the notice is perfected under Section 79-4-5.04, Mississippi Code of 1972; and

The Secretary of State or licensing authority certifies to the Attorney General a description of the violation, that it notified the corporation of the violation, and that the corporation did not correct it, or demonstrate that it did not occur, within sixty (60) days after perfection of service of the notice.

HISTORY: Laws, 1995, ch. 494, § 24, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2348-2515.

CJS.

19 C.J.S., Corporations §§ 914-916 et seq.

Article 6. Foreign Professional Corporations.

§79-10-91. Authority to transact business.

  1. A foreign professional corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
  2. A foreign professional corporation may not obtain a certificate of authority unless:
    1. Its corporate name satisfies the requirements of Section 79-10-21;
    2. It is incorporated for one or more of the purposes described in Section 79-10-13; and
    3. All of its shareholders would be qualified persons if the foreign professional corporation were a domestic professional corporation.

HISTORY: Laws, 1995, ch. 494, § 25, eff from and after July 1, 1995.

Cross References —

Domestic professional corporation qualified person defined, see § 79-10-5.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1715, 1730.

CJS.

19 C.J.S., Corporations §§ 992 et seq.

§79-10-93. Application for certificate of authority.

The application of a foreign professional corporation for a certificate of authority to render professional services in this state must contain the information called for by Section 79-4-15.03, Mississippi Code of 1972, and in addition include a statement that all of its shareholders meet the requirements of Section 79-10-91(2)(c).

HISTORY: Laws, 1995, ch. 494, § 26, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 204 et seq.

CJS.

19 C.J.S., Corporations §§ 968 et seq.

§79-10-95. Revocation of certificate of authority.

The Secretary of State may administratively revoke under Sections 79-4-15.30 through 79-4-15.32, Mississippi Code of 1972, the certificate of authority of a foreign professional corporation authorized to transact business in this state if a licensing authority with jurisdiction over a professional service described in the corporation’s articles of incorporation certifies to the Secretary of State that the corporation has violated or is violating a provision of this chapter and describes the violation. Such administrative revocation may be challenged by the professional corporation in the chancery court of the county where the professional corporation maintains its principal place of business.

HISTORY: Laws, 1995, ch. 494, § 27, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 261.

CJS.

19 C.J.S., Corporations §§ 968 et seq.

Article 7. Miscellaneous Regulatory Provisions.

§79-10-101. Annual report to Secretary of State.

The annual report required by Section 79-4-16.22, Mississippi Code of 1972, for each domestic professional corporation, and for each foreign professional corporation authorized to transact business in this state, must include a statement that all of its shareholders are qualified persons with respect to the corporation or in the case of a foreign professional corporation that all of its shareholders meet the requirements of Section 79-10-91(2)(c).

HISTORY: Laws, 1995, ch. 494, § 28, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 205, 275, 284.

18A Am. Jur. 2d, Corporations § 1612.

CJS.

19 C.J.S., Corporations §§ 968 et seq.

§79-10-103. Rulemaking by licensing authority.

Each licensing authority is empowered to promulgate rules expressly authorized by this chapter if the rules are consistent with the public interest or required by the public health or welfare or by generally recognized standards of professional conduct.

HISTORY: Laws, 1995, ch. 494, § 29, eff from and after July 1, 1995.

Cross References —

Rules promulgated in accordance with this section are included within the definition of “law” as used in this chapter, see § 79-10-5.

§79-10-105. Licensing authority’s regulatory jurisdiction.

This chapter does not restrict the jurisdiction of a licensing authority over individuals rendering a professional service within the jurisdiction of the licensing authority, nor does it affect the interpretation or application of any law pertaining to standards of professional conduct.

HISTORY: Laws, 1995, ch. 494, § 30, eff from and after July 1, 1995.

Article 8. Transitional Provisions.

§79-10-111. Application to existing corporations.

  1. Except as otherwise provided in this section, this chapter applies to professional corporations in existence on July 1, 1995. A professional corporation in existence on July 1, 1995, may, but is not required to, amend its articles of incorporation to comply with this chapter. If a professional corporation in existence on July 1, 1995, amends its articles of incorporation for any purpose after July 1, 1995, it must also amend its articles of incorporation to comply with this chapter.
  2. This chapter does not apply to a corporation now existing or later incorporated under a law of this state that is not a professional corporation unless the corporation elects professional corporation status under Section 79-10-11.
  3. This chapter does not affect an existing or future right or privilege to render professional services through the use of any other form of business entity.
  4. Unless otherwise specifically provided by an amendment to the articles of incorporation, for professional corporations in existence on July 1, 1995, Sections 79-10-39, 79-10-41 and 79-10-43 shall be applied by substituting the term “book value” for the term “fair value” in such sections only. Book value shall be determined from the books and records of the professional corporation in accordance with the regular method of accounting used by the professional corporation and shall be determined as of the end of the month immediately preceding the death or disqualification of the shareholder.

HISTORY: Laws, 1995, ch. 494, § 31, eff from and after July 1, 1995.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 84-99.

18A Am. Jur. 2d, Corporations § 179.

CJS.

18 C.J.S., Corporations §§ 139, 140 et seq.

§79-10-113. Reservation of power to amend or repeal.

The Mississippi Legislature has power to amend or repeal all or part of this chapter at any time and all domestic and foreign professional corporations subject to this chapter are governed by the amendment or repeal.

HISTORY: Laws, 1995, ch. 494, § 32, eff from and after July 1, 1995.

§79-10-115. Saving provisions.

  1. Except as provided in subsection (2), the repeal of a statute by this chapter does not affect:
    1. The operation of the statute or any action taken under it before its repeal;
    2. Any ratification, right, remedy, privilege, obligation or liability acquired, accrued or incurred under the statute before its repeal;
    3. Any violation of the statute, or any penalty, forfeiture or punishment incurred because of the violation, before its repeal;
    4. Any proceeding, reorganization or dissolution commenced under the statute before its repeal, and the proceeding, reorganization or dissolution may be completed in accordance with the statute as if it had not been repealed.
  2. If a penalty or punishment imposed for violation of a statute repealed by this chapter is reduced by this chapter, the penalty or punishment if not already imposed shall be imposed in accordance with this chapter.

HISTORY: Laws, 1995, ch. 494, § 33, eff from and after July 1, 1995.

§79-10-117. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

HISTORY: Laws, 1995, ch. 494, § 34, eff from and after July 1, 1995.

Chapter 11. Nonprofit, Nonshare Corporations and Religious Societies

General Provisions

§§79-11-1 through79-11-29. Repealed.

Repealed by Laws, 1987, ch. 485, § 153, eff from and after January 1, 1988.

§79-11-1. [Codes, 1942, § 5310.1; Laws, 1958, ch. 199, §§ 1-3; Laws, 1960, ch. 180, §§ 1-5; Laws, 1962, chs. 229, 230; Laws, 1964, ch. 267; Laws, 1968, ch. 275, §§ 1, 2; Laws, 1970, ch. 308, § 1; Laws, 1976, ch. 399; Laws, 1977, ch. 390]

§79-11-3. [Codes, 1930, § 4140; 1942, § 5319; Laws, 1928, ch. 90; Laws, 1954, ch. 199, § 1; Laws, 1958, ch. 200; Laws, 1962, ch. 235, § 150]

§79-11-5. [Codes, 1906, § 930; Hemingway’s 1917, § 4104; 1930, § 4141; 1942, § 5320; Laws, 1935, ch. 31; Laws, 1962, ch. 235, § 150]

§79-11-7. [Codes, 1906, § 936; Hemingway’s 1917, § 4114; 1930, § 4143; 1942, § 5322; Laws, 1928, ch. 78; Laws, 1962, ch. 235, § 150]

§79-11-9. [Codes, 1880, § 1029; 1892, § 834; 1906, § 899; Hemingway’s 1917, § 4071; 1930, § 4144; 1942, § 5323; Laws, 1962, ch. 235, § 150]

§79-11-11. [Codes, 1857, ch. 35, art. 2; 1871, § 2401; 1880, § 1030; 1892, § 835; 1906, § 900; Hemingway’s 1917, § 4072; 1930, § 4145; 1942, § 5324; Laws, 1962, ch. 235, § 150]

§79-11-13. [Codes, 1942, § 5324-01; Laws, 1964, ch. 268, § 1]

§79-11-15. [Codes, 1942, § 5324-02; Laws, 1964, ch. 268, § 2]

§79-11-17. [Codes, 1942, § 5324-03; Laws, 1964, ch. 268, § 3]

§79-11-19. [Codes, 1942, § 5324-04; Laws, 1964, ch. 268, § 4]

§79-11-21. [Codes, 1942, § 5324-05; Laws, 1964, ch. 268, § 5]

§79-11-23. [Codes, 1942, § 5324-06; Laws, 1964, ch. 268, § 6; Laws, 1986, ch. 309]

§§79-11-25 through79-11-29. [Codes, 1942, §§ 5324-07 to 5324-09; Laws, 1964, ch. 268, §§ 7-9]

Editor’s Notes —

For text of the Mississippi Nonprofit Corporation Act, which became effective January 1, 1988, see §§ 79-11-101 et seq.

§79-11-31. Religious societies.

  1. Any religious society, consisting of the members of any particular denomination or congregation, desiring to act as an organized body may do so by associating together and electing or appointing from its membership any number of officers, trustees, or managers, by whatever name known, for the purpose of managing the affairs of the society. Such society or association shall keep a record of its proceedings, which shall show the name of the society, its organization, and the election of the officers, trustees, or managers; but the society so organized at each particular locality shall be a distinct and independent society. Any society so organized may sue and be sued by its society name or appellation, and process may be served on its presiding or chief officer, or secretary, or on the trustees or manager.

    Upon the completion of the organization of any such society, the title to the real property theretofore owned by it shall thereupon vest in the society as hereunder organized, and shall not be divested out of the same, or encumbered, except by a deed, deed of trust, or mortgage duly executed under the authority of a resolution adopted by a majority vote of the members present at a meeting duly called for that purpose, at which meeting at least twenty percent (20%) of the members in good standing of such organized society must be present. The minutes of such meeting shall be entered in the official record book of such society, and the aforesaid resolution shall designate which officers, trustees or managers of such society are to execute such deed, deed of trust, or mortgage.

    The provisions of this subsection shall also apply to all real property acquired by any such society after its organization hereunder.

  2. Whenever any number of religious societies or organized bodies or congregations formed under subsection (1) of this section shall decide to act together as an organized body, they may do so in the manner provided in subsection (1) by and through representatives elected or appointed for that purpose, and when so organized shall likewise be a distinct and independent society or group, by whatever name called, and subject to sue and be sued and be served with process in the same manner.

    Any such body shall likewise have the right to own all, but only, those properties permitted under Section 79-11-33 of the Mississippi Code of 1972.

HISTORY: Codes, 1857, ch. 35, art. 52; 1871, § 2437; 1880, § 1071; 1892, § 859; 1906, § 933; Hemingway’s 1917, § 4109; 1930, § 4168; 1942, § 5350; Laws, 1952, ch. 343; Laws, 1956, ch. 177, §§ 1, 2.

Joint Legislative Committee Note —

In 2009, typographical errors in subsection (2) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “...by and through representatives elected...” for “by and through representative elected...” in the first paragraph, and inserting the word “the” following “...body shall likewise have.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Lease of church land by a board of education, see § 29-3-69.

Application to religious corporations, see § 79-11-401.

For the service of process, see Miss. Rule of Civil Proc. 4.

RESEARCH REFERENCES

ALR.

Necessity of delivery of stock certificate to complete valid gift of stock. 23 A.L.R.2d 1171.

Validity of restrictions on alienation or transfer of corporate stock. 61 A.L.R.2d 1318.

Determination of property rights between local church and parent church body: modern view. 52 A.L.R.3d 324.

Liability of religious association for damages for intentionally tortious conduct in recruitment, indoctrination, or related activity. 40 A.L.R.4th 1062.

Liability for personal injury or death allegedly caused by defect in church premises. 8 A.L.R.5th 1.

Am. Jur.

66 Am. Jur. 2d, Religious Societies §§ 3 et seq.

16 Am. Jur. Legal Forms 2d, Religious Societies §§ 224:1 et seq.

21 Am. Jur. Pl & Pr Forms (Rev), Religious Societies, Forms 1 et seq. (organization).

JUDICIAL DECISIONS

1. In general.

2. Incorporation and organization.

3. Effect of lack of incorporation.

4. Acquisition and ownership of property.

1. In general.

This section [Code 1942, § 5350] and Code of 1942, § 5351, were inapplicable to a dispute as to use and occupancy of church property between the majority members of a church, who desired to withdraw from the church conference and enter a new church organization, and the minority, who desired to continue the existing church under the faith and rules of discipline by which the church was formerly governed. Linton v. Flowers, 230 Miss. 838, 94 So. 2d 615, 1957 Miss. LEXIS 430 (Miss. 1957).

2. Incorporation and organization.

Proof showing that a church had been an active organization since about 1920, since 1950 had maintained records showing the names of the trustees, had employed a preacher since the latter date, had conducted regular church services, and that its parsonage had been occupied, was ample to show the existence of the church and that it was an organized religious congregation or society under this section [Code 1942, § 5350]. Casey v. Valentour, 218 So. 2d 863, 1969 Miss. LEXIS 1625 (Miss. 1969).

Church was operating as an unincorporated religious society under Miss. Code Ann. § 79-11-31 where it manifested a desire to act as an organized body and membership associating together, it had elected or appointed officers, trustees, or managers to manage its affairs, and it kept records of its proceedings even though most of the records had been lost in a recent fire. Coleman v. State, 947 So. 2d 878, 2006 Miss. LEXIS 681 (Miss. 2006).

Religious organization is not corporate body under statute without some affirmative action to avail itself of provisions of statute. Gullett v. First Christian Church, 154 Miss. 516, 122 So. 732, 1929 Miss. LEXIS 159 (Miss. 1929).

It is common knowledge that religious congregation maintain organizations and engage in church activities, and appoint or elect from membership officers to transact business. Gullett v. First Christian Church, 154 Miss. 516, 122 So. 732, 1929 Miss. LEXIS 159 (Miss. 1929).

For religious organization to become organized body under statute, it must elect from its membership officers, etc., and must keep record of its proceedings, showing among other things its organization. Gullett v. First Christian Church, 154 Miss. 516, 122 So. 732, 1929 Miss. LEXIS 159 (Miss. 1929).

Evidence held insufficient to show religious organization, sued for personal injuries, was legal entity organized under statute. Gullett v. First Christian Church, 154 Miss. 516, 122 So. 732, 1929 Miss. LEXIS 159 (Miss. 1929).

3. Effect of lack of incorporation.

Officer of religious congregation on whom process was served as agent could plead nul tiel corporation in his own name. Gullett v. First Christian Church, 154 Miss. 516, 122 So. 732, 1929 Miss. LEXIS 159 (Miss. 1929).

Unincorporated church society cannot be dealt with nor act as corporation. Paine's Chapel of African Methodist Episcopal Church v. Aberdeen Realty Co., 120 Miss. 12, 81 So. 650, 1919 Miss. LEXIS 61 (Miss. 1919).

4. Acquisition and ownership of property.

Where a deed named the grantee as “Church and Trustees” without naming any church organization or trustee, the deed was void for want of a grantee and the attempted qualification therein that the property should be “free for all denominations so as to not conflict with our meeting days” was likewise void and appellants, having acquired title by adverse possession for more than six times the statutory period, were not bound thereby. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

Because a resolution only authorized an exchange of deeds to correct an inaccurate property description, the inclusion of a reverter clause in land deeded to a church was not valid because there was no compliance with Miss. Code Ann. § 79-11-31(1). Sones v. Sones Chapel Baptist Church, 946 So. 2d 833, 2007 Miss. App. LEXIS 11 (Miss. Ct. App. 2007).

The strict rule applicable to ordinary property in respect of the character of adverse possession required is not applied in the case of property used for church purposes and there is sufficient possession of such property if it is used in the way that such property is ordinarily used. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

Unincorporated religious societies may acquire title by adverse possession even as against a grantor where property is openly diverted from a use specified in the grant. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

Religious society, having unlawfully acquired title to land, may continue in enjoyment thereof until right thereto is successfully questioned in direct proceeding by State. Peeples v. Enochs, 170 Miss. 472, 153 So. 796, 1934 Miss. LEXIS 93 (Miss. 1934), but see Stern v. Gatzaros, 1999 U.S. Dist. LEXIS 3755 (N.D. Miss. Mar. 3, 1999).

Deed to C. Schoolhouse and C. Graveyard, neither of which appeared on face to be religious society, held void for want of grantee, where such society never existed. Morgan v. Collins School, 157 Miss. 295, 127 So. 565, 1930 Miss. LEXIS 257 (Miss. 1930).

§79-11-33. Religious societies may own certain property.

Any religious society, ecclesiastical body and/or any congregation thereof may hold and own the following real property, but no other, viz.:

Each house or building used as a place of worship, with a reasonable quantity of ground annexed to such building or house.

Each house or building, together with a reasonable quantity of ground thereto annexed, used:

As a parish house;

As a community facility;

As a Sunday school facility;

As an educational facility;

For the care of children on a nonprofit basis.

Each house used for a place of residence for its minister, bishop or representative, together with a reasonable quantity of ground thereto annexed. For purposes of this paragraph, the term “minister” shall mean a minister, priest, pastor, rabbi, nun or other clergy who: (i) has been duly ordained, licensed or qualified according to the principles and procedures prescribed by his religious society, (ii) is regularly engaged as a vocation in preaching and teaching the beliefs of his religious society, in administering its rites and sacraments, and in conducting public worship services in the tradition of his religious society, and (iii) who discharges the duties of a minister in the tradition of his religious society.

A hospital or infirmary and a nurses’ home in connection therewith, together with a reasonable quantity of ground thereto annexed.

All buildings used by a school, college or seminary of learning contiguous to and/or a part of the college or seminary plant, for administration, classrooms, laboratories, observatories, dormitories, and for housing the faculty and students thereof, together with a reasonable quantity of land in connection therewith.

All buildings used for an orphan asylum or institution, together with a reasonable quantity of ground used in connection therewith.

All buildings used for a campground or assembly for religious purposes, together with a reasonable quantity of land in connection therewith.

Lands for a cemetery or cemeteries of sufficient dimensions.

All buildings and grounds used for denominational headquarters and/or administrative purposes, together with a reasonable quantity of ground annexed thereto. The title to any buildings and grounds heretofore acquired under this subsection shall not be hereafter held invalid because of the lack of authority of the owner thereof to obtain or hold such title. Provided, however, that the provisions of this subsection shall not affect any pending litigation.

Any land which is maintained and used as a parking area for the convenience of the members of the congregation, church, cathedral, mission or other unit or administrative unit from which the society receives no revenue, fee, charge or assessment. The land on which the parking area is located may be noncontiguous to the land on which the building used as the place of worship is located.

HISTORY: Codes, 1906, § 934; Hemingway’s 1917, § 4110; 1930, § 4169; 1942, § 5351; Laws, 1926, ch. 194; Laws, 1946, ch. 279, § 1; Laws, 1977, ch. 440, eff from and after January 1, 1978.

Cross References —

Lease of church land by a board of education, see § 29-3-69.

Trust funds for maintenance of cemeteries, see § 41-43-3.

Application to religious corporations, see § 79-11-401.

Applicability of burial associations law, see § 83-37-33.

RESEARCH REFERENCES

ALR.

Adverse possession by religious society. 4 A.L.R.2d 123.

Validity, as charitable trust, of gift to church, church society, or trustees or officers thereof, without declaration or restriction as to its use or purpose. 81 A.L.R.2d 819.

Determination of property rights between local church and parent church body: modern view. 52 A.L.R.3d 324.

Am. Jur.

66 Am. Jur. 2d, Religious Societies §§ 30 et seq.

4 Am. Jur. Legal Forms 2d, Cemeteries § 54:71.1 (rules – lot owners-restriction of burial to persons of certain religious faith).

16 Am. Jur. Legal Forms 2d, Religious Societies §§ 224:71 et seq.

21 Am. Jur. Pl & Pr Forms (Rev), Religious Societies, Forms 31 et seq. (property and financial management).

CJS.

76 C.J.S., Religious Societies §§ 72, 73 et seq.

JUDICIAL DECISIONS

1. In general.

2. Ownership of property, generally.

3. Acquisition of title by adverse possession.

4. Taxation and tax exemption.

1. In general.

A dispute as to who were the proper trustees of the property of a congregational church and the identity of the pastor and deacons were ecclesiastical questions rather than issues of property rights, and did not present proper questions for the court’s decisions, even though an issue concerning property was indirectly involved, such property issue being so collateral and insubstantial as not to warrant judicial interference with the freedom of the church. Blue v. Jones, 230 So. 2d 569, 1970 Miss. LEXIS 1555 (Miss. 1970).

Code 1942, § 5350, and this section [Code 1942, § 5351] were inapplicable to a dispute as to use and occupancy of church property between the majority members of the church, who desired to withdraw from the church conference and enter a new church organization, and the minority, who desired to continue the existing church under the faith and rules of discipline by which the church was formerly governed. Linton v. Flowers, 230 Miss. 838, 94 So. 2d 615, 1957 Miss. LEXIS 430 (Miss. 1957).

2. Ownership of property, generally.

Church which is incorporated under laws of this state is necessary party to suit when its physical assets held in its corporate capacity are involved. Conic v. Cobbins, 208 Miss. 203, 44 So. 2d 52, 1950 Miss. LEXIS 240 (Miss. 1950).

Unless some property rights are involved, civil courts have no jurisdiction over ecclesiastical controversies and are without jurisdiction to decide who is, or who ought to be, presiding bishop of the diocese. Conic v. Cobbins, 208 Miss. 203, 44 So. 2d 52, 1950 Miss. LEXIS 240 (Miss. 1950).

Religious society, having unlawfully acquired title to land, may continue in enjoyment thereof until right thereto is successfully questioned in direct proceeding by state. Peeples v. Enochs, 170 Miss. 472, 153 So. 796, 1934 Miss. LEXIS 93 (Miss. 1934), but see Stern v. Gatzaros, 1999 U.S. Dist. LEXIS 3755 (N.D. Miss. Mar. 3, 1999).

Deed to C. Schoolhouse and C. Graveyard, neither of which appeared on face to be religious society, held void for want of grantee, where such society never existed. Morgan v. Collins School, 157 Miss. 295, 127 So. 565, 1930 Miss. LEXIS 257 (Miss. 1930).

Religious society’s property holding in excess of statutory limit is not forfeited, statute not expressly requiring it. State ex rel. Knox v. Sisters of Mercy, 150 Miss. 559, 115 So. 323, 1928 Miss. LEXIS 100 (Miss. 1928).

Only the state can take advantage of restrictions imposed by statute on amount of property that religious society can hold. State ex rel. Knox v. Sisters of Mercy, 150 Miss. 559, 115 So. 323, 1928 Miss. LEXIS 100 (Miss. 1928).

State can merely force a sale of property held by religious society in excess of statutory limit. State ex rel. Knox v. Sisters of Mercy, 150 Miss. 559, 115 So. 323, 1928 Miss. LEXIS 100 (Miss. 1928).

3. Acquisition of title by adverse possession.

An unincorporated religious society is an entity, and it may acquire title to real estate by adverse possession; and there is sufficient possession of such property if it is used in the way such property is ordinarily used. Casey v. Valentour, 218 So. 2d 863, 1969 Miss. LEXIS 1625 (Miss. 1969).

Unincorporated religious societies may acquire title by adverse possession even as against a grantor where property is openly diverted from a use specified in the grant. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

The strict rule applicable to ordinary property in respect of the character of adverse possession required is not applied in the case of property used for church purposes and there is sufficient possession of such property if it is used in the way that such property is ordinarily used. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

Where a deed named the grantee as “Church and Trustees” without naming any church organization or trustee, the deed was void for want of a grantee and the attempted qualification therein that the property should be “free for all denominations so as to not conflict with our meeting days” was likewise void, and appellants, having acquired title by adverse possession for more than six times the statutory period, were not bound thereby. Ivey v. Geisler, 213 Miss. 212, 56 So. 2d 501, 1952 Miss. LEXIS 352 (Miss. 1952).

4. Taxation and tax exemption.

While the fact that a religious or charitable society chooses to act in the corporate form may not disqualify it for an exemption from ad valorem taxation under § 27-31-1(d), the general exemption provided in the first clause of § 27-31-1(d) is limited to property used for the activities of the society itself, and the amount of property is limited by the usages enumerated in § Hattiesburg Area Senior Servs. v. Lamar County, 633 So. 2d 440, 1994 Miss. LEXIS 38 (Miss. 1994).

Land owned by college, located about one-fourth of a mile from the campus and used for truck gardening and for growing corn and hay for the horses owned and used by the college, and not in excess of the maximum limitation on exempt holdings, was exempt from taxation. City of Jackson v. Belhaven College, 195 Miss. 734, 15 So. 2d 621, 1943 Miss. LEXIS 161 (Miss. 1943).

Attempted back assessment of taxes against tract of land owned by college, not in excess of maximum limitation, located about one-fourth of a mile from the campus and used for trucking purposes, as well as for growing corn and hay for the horses owned and used by the college, was void, since such tract was exempt from taxation. City of Jackson v. Belhaven College, 195 Miss. 734, 15 So. 2d 621, 1943 Miss. LEXIS 161 (Miss. 1943).

Religious society’s land used in connection with college held not taxable merely because platted and subdivided into lots for future sale. Chandler v. Executive Committee on Education, 165 Miss. 690, 146 So. 597, 1933 Miss. LEXIS 286 (Miss. 1933).

Injunction held not proper method to determine exemption of church property. North American Old Roman Catholic Diocese v. Havens, 164 Miss. 119, 144 So. 473, 1932 Miss. LEXIS 244 (Miss. 1932).

Property owned by church not exempt from taxation when it has no right to own it. Gunter v. Jackson, 130 Miss. 686, 94 So. 842, 1922 Miss. LEXIS 240 (Miss. 1923).

§§79-11-35 and79-11-37. Repealed.

Repealed by Laws of 1987, ch. 485, § 153, eff from and after January 1, 1988.

§79-11-35. [En, Laws, 1976, ch. 333, § 1]

§79-11-37. [En, Laws, 1976, ch. 333, § 2]

Editor’s Notes —

For text of the Mississippi Nonprofit Corporation Act which became effective January 1, 1988, see §§ 79-11-101 et seq.

§79-11-39. Repealed.

Repealed by Laws of 1987, ch. 333, § 3, eff from and after January 1, 1988.

[En, Laws, 1976, ch. 333, § 3]

Editor’s Notes —

For text of the Mississippi Nonprofit Corporation Act which became effective January 1, 1988, see §§ 79-11-101 et seq.

§79-11-41. Trust funds for church maintenance; election to be subject to provisions of §§79-11-41 through79-11-47; religious society defined.

Any religious society or any organization organized for the purpose of owning, maintaining or operating a church may elect to be subject to the provisions of Sections 79-11-41 through 79-11-47. For the purposes of Sections 79-11-41 through 79-11-47, religious society includes without limitation any church, temple, synagogue, religious congregation, ecclesiastical body or religious denomination.

HISTORY: Laws, 1994, ch. 483, § 1, eff from and after July 1, 1994.

§79-11-43. Designation as “perpetual religious society trust funds religious societies.”

All such organizations subject to the provisions of Sections 79-11-41 through 79-11-47 shall be, for the purposes hereof, designated as “perpetual religious society trust fund religious societies.”

HISTORY: Laws, 1994, ch. 483, § 2, eff from and after July 1, 1994.

§79-11-45. Operation and establishment of a perpetual religious society trust fund.

  1. Every religious society, subject to the provisions of Sections 79-11-41 through 79-11-47, which is organized, commences or continues to operate in the State of Mississippi after July 1, 1994, and desires to avail itself of the benefits of Sections 79-11-41 through 79-11-47, may provide for the creation and establishment of an irrevocable perpetual religious society trust fund, the principal of which shall permanently remain intact except as hereinafter provided and only the income thereof shall be devoted to the perpetual care of the grounds and buildings of such religious society or which may be used to further the religious purposes of such religious society, and which principal shall be known as the perpetual care fund of such religious society. This fund shall be created and established from funds collected by or donated to the religious society.
  2. The perpetual religious society trust fund shall be permanently set aside in trust to be administered under the jurisdiction of the chancery court of the chancery court district wherein the religious society is located. The chancery courts so having jurisdiction shall have full jurisdiction over the reports and accounting of trustees, amount of surety bond required, if any, and investment of funds. The courts may waive the surety bond and control of investments in the case of trusts placed with an established bank or corporate trustee. Only the income from such fund shall be used for the care and maintenance or to further the religious purposes of the religious society for which it was established.

HISTORY: Laws, 1994, ch. 483, § 3, eff from and after July 1, 1994.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities §§ 6, 9, 38-40.

CJS.

77 C.J.S., Religious Societies §§ 82, 83, 89-95.

§79-11-47. Accounting and reporting requirements for auditing procedures for certain records.

  1. The provisions of this section shall apply to every religious society that elects to establish and maintain a perpetual religious society trust fund as provided in Section 79-11-45.
  2. Within thirty (30) days after the end of the calendar or its fiscal year, each religious society covered hereunder shall file with the clerk of the chancery court having jurisdiction thereof an annual account, which account shall contain the following information:
    1. The name of the religious society, the date of organization and the location of the religious society;
    2. The amounts paid into the perpetual religious society trust fund, and the income earned therefrom during the preceding fiscal year;
    3. The names and addresses of the officers of the religious society and any change of control which has occurred during the past fiscal or calendar year.
  3. The custodian or trustee of the perpetual religious society trust fund of each religious society shall annually prepare and file with the religious society a detailed accounting and report of such fund on or before March 31 of each year for the calendar year ending the preceding December 31 or within ninety (90) days after the end of the fiscal year of the trust agreement, which report shall include, among other things, properly itemized, the securities in which the monies in the fund are then invested. The accounting and report shall be at all times available to inspection and copy by any member of the religious society at the usual place for transacting the regular affairs of the religious society. Within forty-five (45) days after the time by which the custodian or trustee’s accounting and report is required to be filed with the religious society officers, the religious society officers shall file a copy of such accounting and report with the clerk of the chancery court.
  4. As a condition to the transfer of any perpetual religious society trust fund monies from one trustee or trust institution to another, the religious society for which such fund is maintained shall, not less than thirty (30) days prior to the time when such transfer is to occur, file with the chancery clerk a written notice of intent to transfer accompanied with a letter of intent to receive such trust fund monies from the trustee or trust institution to which such trust fund monies are to be transferred. Such fund monies shall be transferred directly from the existing custodian or trustee to the receiving custodian or trustee.
  5. Each chancery clerk shall maintain a properly indexed book of record in which there shall be kept, preserved and open for public inspection a copy of each record, report and notice required to be filed with the chancery clerk under the provisions of this section. For filing and indexing the records, reports and notices under this section, the chancery clerk shall be authorized to charge such fees as are provided in Section 25-7-9 for the recording and indexing of deeds.
  6. The clerk of the chancery court having jurisdiction shall, upon the failure to timely receive any of the records, reports or notices provided for in this section, immediately give notice by registered letter to the religious society, its officers and directors, at their last known address, that such records, reports or notices have not been received.
  7. Whenever it reasonably appears to the court upon complaint filed with the chancery court having jurisdiction thereof by any religious society member, or the family, legal representative or next of kin of any such member participating in the perpetual care religious society, that (a) such perpetual religious society trust fund is insolvent or about to become insolvent; or (b) no perpetual religious society trust fund has been established for such religious society or, if established, the trust fund does not contain such funds as are required to be contained therein, the court shall order a private audit and examination of any perpetual religious society trust fund of such religious society.

    In the event that such audit and examination shows that the perpetual care religious society trust fund is insolvent or is about to become insolvent, or that a sufficient trust fund is not established or being maintained for such perpetual care religious society trust fund, the court shall exercise such jurisdiction and make and issue such orders and decrees as may be necessary to correct and enforce compliance with the provisions of Sections 79-11-41 through 79-11-47 and all such other orders and decrees as shall be just, equitable and in the public interest, including the appointment of receivers to continue or terminate the operation of such perpetual care trust fund of such religious society.

HISTORY: Laws, 1994, ch. 483, § 4, eff from and after July 1, 1994.

Conduct of Private Foundations

§79-11-51. Prohibited acts.

No corporation which is a “private foundation,” as defined in Section 509(a) of the United States Internal Revenue Code shall:

Engage in any act of “self-dealing,” as defined in Section 4941(d) of the United States Internal Revenue Code, which would give rise to any liability for the tax imposed by Section 4941(a) of the United States Internal Revenue Code;

Retain any “excess business holdings,” as defined in Section 4943(c) of the United States Internal Revenue Code, which would give rise to any liability for the tax imposed by Section 4943(a) of the United States Internal Revenue Code;

Make any investment which would jeopardize the carrying out of any of its exempt purposes, within the meaning of Section 4944 of the United States Internal Revenue Code, so as to give rise to any liability for the tax imposed by Section 4944(a) of the United States Internal Revenue Code; and

Make any “taxable expenditures,” as defined in Section 4945(d) of the United States Internal Revenue Code which would give rise to any liability for the tax imposed by Section 4945(a) of the United States Internal Revenue Code.

HISTORY: Codes, 1942, § 672-221; Laws, 1972, ch. 440, § 1, eff from and after passage (approved May 4, 1972).

Editor’s Notes —

Laws of 1972, ch. 440, § 6, provides as follows:

“SECTION 6. Because the requirements of the Federal Tax Reform Act of 1969 require charitable nonprofit foundations, whether trusts or corporations, to change their governing instruments to comply with said federal act or the state to adopt legislation which complies in lieu of each trust or corporation changing its instrument and because failure to comply by the deadline set in said federal act will result in the loss of tax exemption by such trusts and corporations, the immediate effectiveness of this act is necessary to relieve nonprofit corporations and trusts of the concern about changing their governing instruments and retaining the tax exempt status for such Mississippi organizations; therefore, this act shall take effect and be in force from and after its passage.”

Cross References —

Similar provisions applicable to private foundation trusts, charitable trusts, and split-interest trusts, see § 91-9-401.

Federal Aspects—

Section 509(a) of the United States Internal Revenue Code, codified as 26 USCS § 509(a).

Sections 4941, 4943-4945 of the United States Internal Revenue Code codified as 26 USCS §§ 4941, 4943-4945.

OPINIONS OF THE ATTORNEY GENERAL

Subject to the prohibitions of Sections 79-11-51 and 79-11-53 and the federal statutes, and provided that its articles of incorporation so allow and provide, a Mississippi nonprofit corporation does have the power and authority to sell its assets and redirect its charitable activities in accordance with the state statutes cited above. 1995 Miss. Op. Att'y Gen. 692.

RESEARCH REFERENCES

Am. Jur.

Am Jur Legal Forms 2d, Federal Tax Guide to Legal Forms ¶ 190-N.

§79-11-53. Distribution of amounts to avoid tax liability.

Each corporation which is a “private foundation,” as defined in Section 509 of the United States Internal Revenue Code shall distribute, for the purposes specified in its articles of organization, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by Section 4942(a) of the United States Internal Revenue Code.

HISTORY: Codes, 1942, § 672-222; Laws, 1972, ch. 440, § 2, eff from and after passage (approved May 4, 1972).

Cross References —

Similar provisions applicable to private foundation trusts, charitable trusts, and split-interest trusts, see § 91-9-403.

Federal Aspects—

Section 509 and Section 4942(a) of the United States Internal Revenue Code, codified as 26 USCS § 509 and 26 USCA § 4942(a).

OPINIONS OF THE ATTORNEY GENERAL

Subject to the prohibitions of Sections 79-11-51 and 79-11-53 and the federal statutes, and provided that its articles of incorporation so allow and provide, the Mississippi nonprofit corporation does have the power and authority to sell its assets and redirect its charitable activities in accordance with the state statutes cited above. 1995 Miss. Op. Att'y Gen. 692.

RESEARCH REFERENCES

Am. Jur.

Am Jur Legal Forms 2d, Federal Tax Guide to Legal Forms ¶ 190-N.

§79-11-55. Applicability of Sections79-11-51 and79-11-53 when contrary to articles of organization.

The provisions of Sections 79-11-51 and 79-11-53 shall not apply to any corporation to the extent that a court of competent jurisdiction shall determine that such application would be contrary to the terms of the articles of organization or other instrument governing such corporation or governing the administration of charitable funds held by it and that the same may not properly be changed to conform to such sections. The corporation shall not be liable to anyone for any payments made under Section 79-11-53 prior to such determination.

HISTORY: Codes, 1942, § 672-223; Laws, 1972, ch. 440, § 3, eff from and after passage (approved May 4, 1972).

Cross References —

Similar provisions applicable to private foundation trusts, charitable trusts, and split-interest trusts, see § 91-9-405.

RESEARCH REFERENCES

Am. Jur.

Am. Jur. Legal Forms 2d, Federal Tax Guide to Legal Forms ¶ 190-N.

§79-11-57. Amendment of articles of incorporation to exclude application of Sections79-11-51 and79-11-53.

Any corporation which is a “private foundation” (as defined in Section 509(a) of the United States Internal Revenue Code) may amend its articles of incorporation expressly to exclude the application of Sections 79-11-51 and 79-11-53, or any portion thereof, in the manner provided by Section 79-4-10.01 et seq. or Sections 79-11-101 through 79-11-399, whichever is applicable. The corporation shall not be liable to anyone for any payments made under Section 79-11-53 prior to such amendment.

HISTORY: Codes, 1942, § 672-223; Laws, 1972, ch. 440, § 3; Laws, 1987, ch. 485, § 152; Laws, 2013, ch. 419, § 5, eff from and after July 1, 2013.

Amendment Notes —

The 2013 amendment substituted “Section 79-4-10.01 et seq.” for “Section 79-3-117” following “in the manner provided by.”

Cross References —

Amendment of articles of incorporation under Business Corporation Law, see § 79-4-10.01 et seq.

Similar provisions applicable to private foundation trusts, charitable trusts, and split-interest trusts, see § 91-9-407.

Federal Aspects—

Section 509(a) of the United States Internal Revenue Code, codified as 26 USCS § 509(a).

RESEARCH REFERENCES

Am. Jur.

Am. Jur. Legal Forms 2d, Federal Tax Guide to Legal Forms ¶ 190-N.

§79-11-59. Rights and powers of courts and attorney general.

Nothing in Sections 79-11-51 through 79-11-61 shall impair the rights and powers of the courts or the attorney general of this state with respect to any corporation.

HISTORY: Codes, 1942, § 672-224; Laws, 1972, ch. 440, § 4, eff from and after passage (approved May 4, 1972).

Cross References —

Similar provisions applicable to private foundation trusts, charitable trusts, and split-interest trusts, see § 91-9-409.

Office and general powers and duties of attorney general, see Chapter 5 of Title 7.

§79-11-61. References to United States Internal Revenue Code.

All references to sections of the United States Internal Revenue Code shall be to such law as it exists as of May 4, 1972.

HISTORY: Codes, 1942, § 672-225; Laws, 1972, ch. 440, § 5, eff from and after passage (approved May 4, 1972).

Mississippi Nonprofit Corporation Act

§79-11-101. Short title.

Section 79-11-101 et seq. shall be known and may be cited as the “Mississippi Nonprofit Corporation Act.”

HISTORY: Laws of 1987, ch. 485, § 1, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Editor’s Notes —

Laws, 1987, ch. 485, § 154, provides as follows:

“SECTION 154. If any provision of this act or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions or applications of the act that can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.”

Cross References —

Power of water, sewer, garbage disposal, or fire protection districts to buy, lease or otherwise acquire assets and facilities of nonprofit corporation organized pursuant to the Mississippi Nonprofit Corporation Act (§§ 79-11-101 et seq.), see § 19-5-181.

Application of Mississippi Nonprofit Corporation Act (§§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Application to religious corporations, see § 79-11-401.

Use by volunteer fire departments incorporated under the provisions of the nonprofit corporation act of equipment purchased by a county with proceeds of the county volunteer fire department fund, see § 83-1-39.

Domestic mutual insurance holding company powers and compliance with nonprofit private corporation provisions, see § 83-31-149.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 33-37.

2A Am. Jur. Legal Forms 2d, Associations and Clubs §§ 27:5 et seq. (formation).

CJS.

14 C.J.S., Charities §§ 91, 107, 108.

Law Reviews.

Note, Developments in the law: nonprofit corporations. 105 Harv L. Rev. 1579.

§79-11-103. Amendments and repeals.

The Mississippi Legislature has power to amend or repeal all or part of Section 79-11-101 et seq. at any time and all domestic and foreign corporations subject to Section 79-11-101 et seq. are governed by the amendment or repeal.

HISTORY: Laws, 1987, ch. 485, § 2, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in the section were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” both times it appears. The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

§79-11-105. Requirements for filing of documents.

  1. A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.
  2. Section 79-11-101 et seq. must require or permit filing the document in the office of the Secretary of State.
  3. The document must contain the information required by Section 79-11-101 et seq. It may contain other information as well.
  4. The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced by the Secretary of State in typewritten or printed form.
  5. The document must be in the English language. However, a corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of a foreign corporation need not be in English if accompanied by a reasonably authenticated English translation.
  6. The document must be signed:
    1. By the presiding officer of its board of directors, its president or by another of its officers;
    2. If directors have not been selected or the corporation has not been formed, by an incorporator; or
    3. If the corporation is in the hands of a receiver, trustee or other court-appointed fiduciary, by that fiduciary.
  7. The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs. The document may, but need not, contain:
    1. A corporate seal;
    2. An attestation;
    3. An acknowledgement or verification. A document required or permitted to be filed under this chapter which contains a copy of a signature, however made, is acceptable for filing.
  8. If the Secretary of State has prescribed a mandatory form for a document under Section 79-11-107, the document must be in or on the prescribed form.
  9. The document must be delivered to the office of the Secretary of State for filing. Delivery may be made by electronic transmission if, to the extent, and in the manner permitted by the Secretary of State. If the document is filed in typewritten or printed form and not transmitted electronically, the Secretary of State may require one (1) exact or conformed copy to be delivered with the document except as otherwise provided in Sections 79-11-167 and 79-11-379.
  10. When the document is delivered to the office of the Secretary of State for filing, the correct filing fee and any franchise tax, license fee or penalty required by Section 79-11-101 et seq. or other law must be paid or provision for payment made in a manner permitted by the Secretary of State.

HISTORY: Laws, 1987, ch. 485, § 3; Laws, 1995, ch. 362, § 2; Laws, 1997, ch. 418, § 42, eff from and after July 1, 1997.

Editor’s Notes —

Sections 79-11-167 and 79-11-379, referred to in this section, were repealed by § 133, Chapter 382, Laws of 2012, effective January 1, 2013.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Requirements for filing of documents under Mississippi Business Corporation Act, see § 79-4-1.20.

Requirement that Secretary of State file all documents meeting requirements set forth in this section, see § 79-11-115.

§79-11-107. Secretary may prescribe forms.

  1. The Secretary of State may prescribe and furnish, on request, forms for: (a) an application for a certificate of existence; (b) a foreign corporation’s application for a certificate of authority to transact business in this state; (c) a foreign corporation’s application for a certificate of withdrawal; and (d) the status report. If the Secretary of State so requires, use of these forms is mandatory.
  2. The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by Section 79-11-101 et seq., but their use is not mandatory.

HISTORY: Laws, 1987, ch. 485, § 4, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Secretary of State may prescribe forms under Mississippi Business Corporation Act, see § 79-4-1.21.

Duties and authority of Secretary of State with respect to nonprofit corporations, see §§ 79-11-107, 79-11-109, 79-11-115, 79-11-125, 79-11-167, 79-11-307, 79-11-347 through 79-11-353, 79-11-379, 79-11-383 through 79-11-387, and 79-11-391.

Requirements for filing documents, see § 79-11-105.

§79-11-109. Filing fees; fee for serving process upon Secretary of State; fees for copying and certifying copy of filed document.

  1. Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect the following fees when the documents described in this subsection are delivered for filing:

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  2. Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) upon being served with process under Section 79-11-101 et seq. The party to a proceeding causing service of process is entitled to recover the fee paid the Secretary of State as costs if the party prevails in the proceeding.
  3. Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:
    1. One Dollar ($1.00) a page for copying; and
    2. Ten Dollars ($10.00) for the certificate.
  4. The Secretary of State may collect a filing fee greater than the fee set forth in subsections (1), (2) and (3) in an amount not to exceed twice the fee set forth in subsections (1), (2) and (3) of processing the filing, if the form prescribed by the Secretary of State for such filing has not been used.

Document Fee (a) Articles of incorporation $50.00 (b) [Reserved] (c) Application for reserved name 25.00 (d) Notice of transfer or cancellation of reserved name 25.00 (e) [Reserved] (f) [Reserved] (g) [Reserved] (h) [Reserved] (i) [Reserved] (j) Amendment of articles of incorporation 50.00 (k) Restatement of articles of incorporation with amendments 50.00 () l Articles of merger 50.00 (m) Articles of dissolution 25.00 (n) Articles of revocation of dissolution 25.00 (o) Certificate of administrative dissolution No Fee (p) Application for reinstatement following administrative dissolution 50.00 (q) Certificate of reinstatement No Fee (r) Certificate of judicial dissolution No Fee (s) Application for certificate of authority 100.00 (t) Application for amended certificate of authority 50.00 Application for certificate of withdrawal 25.00 (v) Certificate of revocation of authority to transact business No Fee (w) Status report 25.00 (x) Articles of correction 50.00 (y) Application for certificate of existence or authorization 25.00 (z) Any other document required or permitted to be filedby et seq 25.00 Section 79-11-101

HISTORY: Laws, 1987, ch. 485, § 5; Laws, 1988, ch. 417, § 1; Laws, 1995, ch. 323, § 1; Laws, 2012, ch. 382, § 52; Laws, 2014, ch. 468, § 6, eff from and after July 1, 2014.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted former (1)(g), (h) and (i), which read: “(g) Corporation’s statement of change of registered agent or registered office or both....10.00,” “(h) Agent’s statement of change of registered office for each affected corporation ....10.00, not to exceed a total of .....1,000.00” and “(i) Agent’s statement of resignation ...No Fee” and reserved (1)(g), (h) and (i) for future use.

The 2014 amendment, in (1)(b), substituted “[Reserved]” for “Application for use of indistinguishable name . . . 25.00”; in (1)(e), substituted “[Reserved]” for “Application for registered name . . . 50.00”; and in (1)(f), substituted “[Reserved]” for “Application for renewal of registered name . . . 50.00.”

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Filing fees under Mississippi Business Corporation Act, see § 79-4-1.22.

Applicability of this section to civil penalty a foreign corporation is liable for when it transacts business without certificate of authority, see § 79-11-365.

§79-11-111. Effective date of filed documents.

  1. Except as provided in subsection (2) of this section, a document is effective:
    1. At the date and time of filing, as evidenced by such means as the Secretary of State may use for the purpose of recording the date and time of filing; or
    2. At the time specified in the document as its effective time on the date it is filed.
  2. A document may specify a delayed effective time and date, and if it does so, the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is effective at the close of business on that date. A delayed effective date for a document may not be later than the ninetieth day after the date filed.
  3. Notwithstanding subsections (1) and (2) of this section, any document that has a delayed effective time and date shall not become effective if, prior to the effective time and date, the parties to the document file a certification of cancellation with the Secretary of State.

HISTORY: Laws, 1987, ch. 485, § 6; Laws, 1994, ch. 417, § 4; Laws, 1997, ch. 418, § 43, eff from and after July 1, 1997.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Effective date of corporation’s filed documents, see § 79-4-1.23.

§79-11-113. Correction of filed documents.

  1. A domestic or foreign corporation may correct a document filed by the Secretary of State if (a) the document contains an inaccuracy, or (b) the document was defectively signed, attested, sealed, verified or acknowledged, or (c) the electronic transmission was defective.
  2. A document is corrected:
    1. By preparing articles of correction that: (i) describe the document (including its filing date) or attach a copy of it to the articles, (ii) specify the inaccuracy or defect to be corrected, and (iii) correct the inaccuracy or defect; and
    2. By delivering the articles of correction to the office of the Secretary of State for filing.
  3. Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed.

HISTORY: Laws, 1987, ch. 485, § 7; Laws, 1997, ch. 418, § 44, eff from and after July 1, 1997.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

§79-11-115. Secretary of State to file documents; refusal to file document; filing of documents as ministerial.

  1. If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of Section 79-11-105, the Secretary of State shall file it.
  2. The Secretary of State files a document by recording it as filed on the date and time of receipt. After filing a document, except as provided in Section 79-35-11, the Secretary of State shall deliver to the domestic or foreign corporation or its representative a copy of the document with an acknowledgement of the date and time of filing.
  3. Upon refusing to file a document, the Secretary of State shall return it to the domestic or foreign corporation or its representative within five (5) days after the document was delivered, together with a brief, written explanation of the reason or reasons for the refusal.
  4. The Secretary of State’s duty to file documents under this section is ministerial. Filing or refusal to file a document does not:
    1. Affect the validity or invalidity of the document, in whole or in part;
    2. Relate to the correctness or incorrectness of information contained in the document; or
    3. Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

HISTORY: Laws, 1987, ch. 485, § 8; Laws, 1997, ch. 418, § 45; Laws, 2012, ch. 382, § 53, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “Section 79-35-11” for “Sections 79-11-167 and 79-11-379” in the last sentence of (2).

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Duty of Secretary of State to file business corporation documents, refusal to file, see § 79-4-1.25.

§79-11-117. Appeal of refusal to file document.

  1. If the Secretary of State refuses to file a document delivered for filing to the Secretary of State’s office, the domestic or foreign corporation may appeal the refusal to the chancery court in the county where the corporation’s principal office is or will be located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State’s explanation of the refusal to file.
  2. The court may summarily order the Secretary of State to file the document or take other action the court considered appropriate.
  3. The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1987, ch. 485, § 9; Laws, 2012, ch. 382, § 54, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in the first sentence of (1), substituted “principal office is or will be located” for “principal office (or, if there is none in this state, its registered office) is or will be located” and added “or the Chancery Court . . . in this state” at the end..

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Appeal from refusal to file business corporation document, see § 79-4-1.26.

§79-11-119. Certified copy of document as conclusive evidence of filing.

A certificate from the Secretary of State delivered with a copy of a document filed by the Secretary of State is conclusive evidence that the original document is on file with the Secretary of State.

HISTORY: Laws, 1987, ch. 485, § 10; Laws, 1997, ch. 418 § 46, eff from and after July 1, 1997.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

§79-11-121. Certificate of existence, application for; contents of; conclusive evidence of good standing.

  1. Any person may apply to the Secretary of State to furnish a certificate of existence for a domestic or foreign corporation.
  2. The certificate of existence sets forth:
    1. The domestic corporation’s corporate name or the foreign corporation’s corporate name used in this state;
    2. That (i) the domestic corporation is duly incorporated under the law of this state, the date of its incorporation and the period of its duration if less than perpetual; or (ii) that the foreign corporation is authorized to transact business in this state;
    3. That all fees, taxes, and penalties owed to this state have been paid, if (i) payment is reflected in the records of the Secretary of State and (ii) nonpayment affects the good standing of the domestic or foreign corporation;
    4. That its most recent status report required by Section 79-11-391 has been delivered to the Secretary of State;
    5. That articles of dissolution have not been filed; and
    6. Other facts of record in the Office of the Secretary of State that may be requested by the application.
  3. Subject to any qualification stated in the certificate, a certificate of existence issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in existence or is authorized to conduct activities in this state.

HISTORY: Laws, 1987, ch. 485, § 11; Laws, 2011, ch. 440, § 1, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, substituted “existence or is authorized to conduct activities” for ”good standing” near the end of (3).

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Application for and contents of certificate of existence for corporation, see § 79-4-1.28.

Filing fees, see § 79-11-109.

§79-11-123. Signing false document which is to be filed as offense; penalty.

  1. A person commits an offense by signing a document such person knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.
  2. An offense under this section is a misdemeanor punishable by a fine of not more than Five Hundred Dollars ($500.00).

HISTORY: Laws, 1987, ch. 485, § 12, eff from and after January 1, 1988.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Penalty for signing false document, corporations, see § 79-4-1.29.

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

§79-11-125. Secretary granted power to perform duties.

The Secretary of State has the power reasonably necessary to perform the duties required of the Secretary of State’s office by Section 79-11-101 et seq.

HISTORY: Laws, 1987, ch. 485, § 13, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

§79-11-127. Definitions.

Unless the context otherwise requires in Section 79-11-101 et seq., the following terms shall have the meaning ascribed herein:

“Approved by (or approval by) the members” means approved or ratified by the affirmative vote of a majority of the votes represented and voting at a duly held meeting at which a quorum is present (which affirmative votes also constitute a majority of the required quorum) or by a written ballot or written consent in conformity with Section 79-11-101 et seq. or by the affirmative vote, written ballot or written consent of such greater proportion, including the votes of all the members of any class, unit or grouping as may be provided in the articles, bylaws or Section 79-11-101 et seq. for any specified member action.

“Articles of incorporation” or “articles” include amended and restated articles of incorporation and articles of merger.

“Board” or “board of directors” means the board of directors except that no person or group of persons are the board of directors because of powers delegated to that person or group pursuant to Section 79-11-231.

“Bylaws” means the code or codes of rules (other than the articles) adopted pursuant to Section 79-11-101 et seq. for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.

“Class” means a group of memberships which have the same rights with respect to voting, dissolution, redemption and transfer. For the purposes of this section, rights shall be considered the same if they are determined by a formula applied uniformly.

“Conspicuous” means so written, displayed, or presented that a reasonable person against whom the record is to operate should have noticed it. For example, text in italics, boldface, contrasting color or capitals, or that is underlined, is conspicuous.

“Corporation” means a nonprofit corporation subject to the provisions of Section 79-11-101 et seq., except a foreign corporation.

“Delegates” means those persons elected or appointed to vote in a representative assembly for the election of a director or directors or on other matters.

“Deliver” or “delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and electronic transmission, except that delivery to the Secretary of State means actual receipt by the Secretary of State.

“Directors” means individuals, designated in the articles or bylaws or elected by the incorporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board.

“Distribution” means the payment of a dividend or any part of the income or profit of a corporation to its members, directors or officers. Payment of reasonable compensation, fees, or expenses incurred in the performance of duties on behalf of the corporation is not a distribution.

“Domestic corporation” means a corporation.

“Effective date of notice” is defined in Section 79-11-129.

“Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

“Electronic transmission” or “electronically transmitted” means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval and reproduction of information by the recipient.

“Employee” includes an officer but not a director. A director may accept duties that make the director an employee.

“Entity” includes corporation and foreign corporation; business corporation and foreign business corporation; profit and nonprofit unincorporated association; corporation sole; business trust, estate, partnership, trust and two (2) or more persons having a joint or common economic interest; and state, United States and foreign government.

“File,” “filed” or “filing” means filed in the Office of the Secretary of State.

“Foreign corporation” means a corporation organized under a law other than the law of this state which would be a nonprofit corporation if formed under the laws of this state.

“Governmental subdivision” includes authority, county, district and municipality.

“Includes” denotes a partial definition.

“Individual” includes the estate of an incompetent individual.

“Means” denotes a complete definition.

“Member” means (without regard to what a person is called in the articles or bylaws) any person or persons who on more than one (1) occasion, pursuant to a provision of a corporation’s articles or bylaws, have the right to vote for the election of a director or directors.

A person is not a member by virtue of any of the following:

Any rights such person has as a delegate;

Any rights such person has to designate a director or directors; or

Any rights such person has as a director.

“Membership” refers to the rights and obligations a member or members have pursuant to a corporation’s articles, bylaws and Section 79-11-101 et seq.

“Nonprofit corporation” means a corporation, no part of the assets, income or profit of which is distributed to or enures to the benefit of its members, directors or officers, except as otherwise provided under this chapter. In a corporation all of whose members are nonprofit corporations, distribution to members does not deprive it of the status of a nonprofit corporation.

“Notice” is defined in Section 79-11-129.

“Person” includes any individual or entity.

“Principal office” means the office (in or out of this state) where the principal executive offices of a domestic or foreign corporation are located.

“Proceeding” includes civil suit and criminal, administrative and investigatory action.

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“Record date” means the date established under Section 79-11-209 on which a corporation determines the identity of its members for the purposes of Section 79-11-101 et seq.

“Religious corporation” means a corporation organized and operating primarily or exclusively for religious purposes.

“Secretary” means the corporate officer to whom the board of directors has delegated responsibility under Section 79-11-273 for custody of the minutes of the directors’ and members’ meetings and for authenticating the records of the corporation.

“Sign” means with present intent to authenticate or adopt a record:

To execute or adopt a tangible symbol; or

To attach to or logically associate with the record an electronic sound, symbol, or process as defined under Mississippi law.

“State,” when referring to a part of the United States, includes a state and commonwealth (and their agencies and governmental subdivisions) and a territory, and insular possession (and their agencies and governmental subdivisions) of the United States.

“United States” includes any district, authority, bureau, commission, department and any other agency of the United States.

“Vote” includes authorization by written ballot and written consent.

“Voting power” means the total number of votes entitled to be cast for the election of directors at the time the determination of voting power is made, excluding a vote which is contingent upon the happening of a condition or event that has not occurred at the time. Where a class is entitled to vote as a class for directors, the determination of voting power of the class shall be based on the percentage of the number of directors the class is entitled to elect out of the total number of authorized directors.

HISTORY: Laws, 1987, ch. 485, § 14; Laws, 1997, ch. 418, § 47; Laws, 2011, ch. 440, § 2, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (f), (n), (z) and (ee); redesignated former (f) through ( l ) as present (g) through (m), former (m) through (w) as present (o) through (y), former (x) through (aa) as present (aa) through (dd), and former (bb) through (ii) as present (ff) through (mm), added “except that delivery to the Secretary of State means actual receipt by the Secretary of State” at the end of (i), added the last sentence in (k), and rewrote (ii).

OPINIONS OF THE ATTORNEY GENERAL

A community hospital board of trustees would have authority to cause to be incorporated a nonprofit foundation to solicit contributions and raise funds to support the hospital and its activities, but would be subject to the prohibitions against having any financial interest in the foundation; since such boards are entities and persons authorized to act as incorporators of Mississippi nonprofit corporations, a board would be authorized to act as an incorporator of a nonprofit foundation which would solicit contributions to support hospital activities. O’1998 Miss. Op. Att'y Gen. 169.

A community hospital may act as the sole member of a Mississippi nonprofit corporation engaged in the delivery of health care services, including ambulatory surgery services, to the citizens of its service area. 1998 Miss. Op. Att'y Gen. 269.

For purposes of creating a nonprofit corporation, a county is an “entity” within the meaning of subsection (o) of this section, and is therefore a “person” within the meaning of subsection (y) of this section; thus, a county qualifies as a “member” pursuant to subsection (v) of this section and may serve as a member of a nonprofit corporation as permitted by § 79-11-175. 1999 Miss. Op. Att'y Gen. 370.

JUDICIAL DECISIONS

1. Corporate member.

Citizens who intervened after a city’s case against a non-profit corporation for negligent entrustment of trust properties was dismissed also lacked standing to pursue the claims regarding the corporation’s sale of a hospital to a for-profit corporation because under Miss. Code Ann. § 79-11-155, the citizens were not corporate members under Miss. Code Ann. § 79-11-127, nor was the action pursued in the name of the State. City of Picayune v. Southern Reg'l Corp., 916 So. 2d 510, 2005 Miss. LEXIS 810 (Miss. 2005).

§79-11-129. Notice, types; when effective; how addressed; electronic communications.

  1. Notice under this chapter must be in the form of a record unless oral notice is authorized by this chapter or is reasonable under the circumstances.
  2. Notice may be communicated in person or by delivery. If these forms of communication are impracticable, notice may be communicated by a newspaper of general circulation in the area where published; or by radio, television or other form of public broadcast communication.
  3. Oral notice is effective when communicated if communicated in a comprehensible manner.
  4. Written notice by a domestic or foreign corporation to a member, if in a comprehensible form, is effective:
    1. Upon deposit in the United States mail, if the postage or delivery charge is paid and the notice is correctly addressed to the member’s address shown in the corporation’s current record of members, or
    2. When given if the notice is delivered in any other manner that the member has authorized.
  5. Except as provided in subsection (4) of this section, written notice, if in a comprehensible form, is effective at the earliest of the following:
    1. When received;
    2. Five (5) days after its deposit in the United States mail, if mailed postpaid and correctly addressed;
    3. On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
  6. Written notice is correctly addressed to a member of a domestic or foreign corporation if addressed to the member’s address shown in the corporation’s current list of members.
  7. A written notice or report delivered as part of a newsletter, magazine or other publication regularly sent to members shall constitute a written notice or report if addressed or delivered to the member’s address shown in the corporation’s current list of members, or in the case of members who are residents of the same household and who have the same address in the corporation’s current list of members, if addressed or delivered to one of such members, at the address appearing on the current list of members.
  8. Written notice is correctly addressed to a domestic or foreign corporation (authorized to transact business in this state), other than in its capacity as a member, if addressed to its registered agent or to its secretary at its principal office shown in its most recent status report or, in the case of a foreign corporation that has not yet delivered a status report, in its application for a certificate of authority.
  9. If Section 79-11-205 or any other provision of Section 79-11-101 et seq. prescribes notice requirements for particular circumstances, those requirements govern. If articles or bylaws prescribe notice requirements, not inconsistent with this section or other provisions of Section 79-11-101 et seq., those requirements govern.
  10. With respect to electronic communications:
    1. Unless otherwise provided in the articles of incorporation or bylaws, or otherwise agreed between the sender and the recipient, an electronic communication is received when:
      1. It enters an information processing system that the recipient has designated or uses for the purpose of receiving electronic records or information of the type sent and from which the recipient is able to retrieve the electronic record; and
      2. It is in a form capable of being processed by that system.
    2. An electronic communication is received under subsection (10)(a) even if no individual is aware of its receipt.
    3. Receipt of an electronic acknowledgement from an information processing system described in subsection (10)(a) establishes that a record was received but, by itself, does not establish that the content sent corresponds to the content received.
  11. An authorization by a member of delivery of notices or communications by e-mail or similar electronic means may be revoked by the member by notice to the nonprofit corporation in the form of a record. Such an authorization is deemed revoked if (a) the corporation is unable to deliver two (2) consecutive notices or other communications to the member in the manner authorized; and (b) the inability becomes known to the secretary or other person responsible for giving the notice or other communication; but the failure to treat the inability as a revocation does not invalidate any meeting or other action.

HISTORY: Laws, 1987, ch. 485, § 15; Laws, 1997, ch. 418, § 48; Laws, 2011, ch. 440, § 3, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, rewrote (1); substituted “or by delivery” for “by mail or other method of delivery; or by telephone, voice mail or other electronic means” in the first sentence in (2); rewrote (4); and added (10) and (11).

Cross References —

Notice under the Mississippi Business Corporation Act, see § 79-4-1.41.

Applicability of this section to definition of “effective date of notice” for purposes of Mississippi Nonprofit Corporation Act, see § 79-11-127.

§79-11-131. Petition to chancery court for alternative method for calling or conducting meeting of corporation members, delegates, or directors, or for obtaining their consent.

  1. If for any reason it is impractical or impossible for any corporation to call or conduct a meeting of its members, delegates or directors, or otherwise obtain their consent, in the manner prescribed by its articles, bylaws or Section 79-11-101 et seq., then upon petition of a director, officer, delegate, member or the Attorney General, the chancery court of the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may order that such a meeting be called or that a written ballot or other form of obtaining the vote of members, delegates or directors be authorized in such a manner as the court finds fair and equitable under the circumstances.
  2. The court shall, in an order issued pursuant to this section, provide for a method of notice reasonably designed to give actual notice to all persons who would be entitled to notice of a meeting held pursuant to the articles, bylaws and Section 79-11-101 et seq., whether or not the method results in actual notice to all such persons or conforms to the notice requirements that would otherwise apply. In a proceeding under this section the court may determine who the members or directors are.
  3. The order issued pursuant to this section may dispense with any requirement relating to the holding of or voting at meetings or obtaining votes, including any requirement as to quorums or as to the number or percentage of votes needed for approval, that would otherwise be imposed by the articles, bylaws or Section 79-11-101 et seq.
  4. Whenever practical any order issued pursuant to this section shall limit the subject matter of meetings or other forms of consent authorized to items, including amendments to the articles or bylaws, the resolution of which will or may enable the corporation to continue managing its affairs without further resort to this section; provided, however, that an order under this section may also authorize the obtaining of whatever votes and approvals are necessary for the dissolution, merger or sale of assets.
  5. Any meeting or other method of obtaining the vote of members, delegates or directors conducted pursuant to an order issued under this section, and which complies with all the provisions of such order, is for all purposes a valid meeting or vote, as the case may be, and shall have the force and effect as if it complied with every requirement imposed by the articles, bylaws and Section 79-11-101 et seq.

HISTORY: Laws, 1987, ch. 485, § 16; brought forward and amended, Laws, 2012, ch. 382, § 55, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1), (2) (3) and (5) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, brought forward and amended the section by substituting “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for “principal office (or, if none in this state, its registered office) is located” near the end of (1).

Cross References —

Attorney General generally, see §§ 7-5-1 et seq.

JUDICIAL DECISIONS

1. Authority to order election.

Chancery court had the authority to order a congregational church to compile a list of qualified voters and hold an election to decide whether to retain its pastor, as the church’s bylaws did not provide a means for resolving the dispute; and the court merely established a procedure for voting and did not decide an ecclesiastical issue. Pilgrim Rest Missionary Baptist Church v. Wallace, 835 So. 2d 67, 2003 Miss. LEXIS 28 (Miss. 2003).

§79-11-133. Notice to Attorney General of commencement of certain proceedings.

  1. The Attorney General shall be given notice of the commencement of any proceeding which Section 79-11-101 et seq. authorize the Attorney General to bring but which has been commenced by another person.
  2. Whenever any provision of Section 79-11-101 et seq. requires that notice be given to the Attorney General or permits the Attorney General to commence a proceeding:
    1. If no proceeding has been commenced, the Attorney General may take appropriate action including, but not limited to, seeking injunctive relief.
    2. If a proceeding has been commenced by a person other than the Attorney General, the Attorney General, as of right, may intervene in such proceeding.

HISTORY: Laws, 1987, ch. 485, § 17, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1) and (2) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Attorney General generally, see §§ 7-5-1 et seq.

Application to religious corporations, see § 79-11-403.

§79-11-135. Persons who may act as incorporators.

One or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the Secretary of State for filing.

HISTORY: Laws, 1987, ch. 485, § 18, eff from and after January 1, 1988.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Incorporators under Mississippi Business Corporation Act, see § 79-4-2.01.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-137. Contents of articles of incorporation.

  1. The articles of incorporation must set forth:
    1. A corporate name for the corporation that satisfies the requirements of Section 79-11-157;
    2. The period of duration, which may be perpetual;
    3. The information required by Section 79-35-5(a);
    4. The name and address of each incorporator;
    5. If the corporation is incorporated on or after January 1, 2012, the corporation’s initial planned, primary nonprofit activity; and
    6. Any other information the Secretary of State may reasonably require by rule, including, without limitation, the contact name, electronic mail address, telephone number or business or mailing address of the corporation or that can be used to contact the corporation.
  2. The articles of incorporation may set forth:
    1. The names and addresses of the individuals who are to serve as the initial directors;
    2. Provisions not inconsistent with law regarding:
      1. The purpose or purposes for which the corporation is organized;
      2. Managing the business and regulating the affairs of the corporation;
      3. Defining, limiting and regulating the powers of the corporation, its board of directors and members;
    3. Any provision that under Section 79-11-101 et seq. is required or permitted to be set forth in the bylaws; and
    4. A provision permitting or making obligatory indemnification of a director for liability (as defined in Section 79-11-281(1)(c)) to any person for any action taken, or any failure to take any action as a director, except liability for:
      1. Receipt of a financial benefit to which the director is not entitled;
      2. An intentional infliction of harm;
      3. A violation of Section 79-11-270; or
      4. An intentional violation of criminal law.
  3. The articles of incorporation need not set forth any of the corporate powers enumerated in Section 79-11-101 et seq.
  4. The liability of a director of a corporation that is not a charitable organization as defined in Section 79-11-501 may be eliminated or limited by a provision of the articles of incorporation that a director shall not be liable to the corporation or its members for money damages for any action taken or any failure to take any action as a director, except liability for:
    1. The amount of a financial benefit received by the director to which the director is not entitled;
    2. An intentional infliction of harm;
    3. A violation of Section 79-11-270; or
    4. An intentional violation of criminal law.

HISTORY: Laws, 1987, ch. 485, § 19; Laws, 2011, ch. 440, § 4; Laws, 2012, ch. 382, § 56, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (2)(c) and (3) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (1)(e) and (f); added (2)(d); added (4); and made minor stylistic changes.

The 2012 amendment, effective January 1, 2013, rewrote (1)(c), which formerly read: “The street address of the corporation’s initial registered office and the name of its initial registered office and the name of its initial registered agent at that office.”

Cross References —

Articles of incorporation under Mississippi Business Corporation Act, see § 79-4-2.02.

Filing fees, see § 79-11-109.

Purposes for which nonprofit corporation may be organized, see § 79-11-149.

General powers of corporation, see § 79-11-151.

Restrictions on corporate names, see § 79-11-157.

Articles of incorporation may provide for electronic annual or regular meetings, see § 79-11-197.

Articles of incorporation may provide for electronic special meetings, see § 79-11-199.

Amendments to articles of incorporation, see §§ 79-11-295 through 79-11-311.

Applicability of this section to amendment of articles of incorporation to carry out plan of court ordered reorganization, see § 79-11-309.

Obtaining articles of incorporation through fraud as grounds for judicial dissolution, see § 79-11-355.

OPINIONS OF THE ATTORNEY GENERAL

A nonprofit corporation may provide either in the articles of incorporation or its bylaws the method for appointment or election of directors, which may include some manner of appointment by specified individuals. 2000 Miss. Op. Att'y Gen. 674.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities §§ 163, 169 and 170, 171.

18 Am. Jur. 2d, Corporations § 37.

18A Am. Jur. 2d, Corporations §§ 166, 174.

4 Am. Jur. Legal Forms 2d, Charities §§ 55:144, 55:145.

6 Am. Jur. Legal Forms 2d, Corporations §§ 74:824 et seq.

CJS.

14 C.J.S., Charities § 91.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-11-1.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-11-1.

11. In general.

A landowner who willfully purchases property subject to control of residential property owners association and derives benefits from membership implies his consent to be charged assessment and dues common to all other members, and the provisions of Mississippi Code § 79-11-1(2)(g), requiring non-profit corporations to make expulsion the only remedy for non-payment of dues, were not controlling. Perry v. Bridgetown Community Asso., 486 So. 2d 1230, 1986 Miss. LEXIS 2889 (Miss. 1986).

It is the duty of state officials to act without unreasonable delays on applications either for charter amendments or for new charters, and if such action is unduly delayed or arbitrarily or discriminatorily made, the doors may be opened to federal jurisdiction. Williams v. Tri-County Community Center, 323 F. Supp. 286, 1971 U.S. Dist. LEXIS 14935 (S.D. Miss.), aff'd, 452 F.2d 221, 1971 U.S. App. LEXIS 6768 (5th Cir. Miss. 1971).

Where quo warranto proceedings were brought seeking forfeiture of a nonprofit corporation’s franchises and privileges on the ground that such corporation, which operated programs providing services for poor people in certain counties in Mississippi, and which had received a federal grant for a health care delivery program, had exceeded its corporate powers, and such proceedings were removed to federal court, allegations of the corporation that state officials had refused to act on proposed amendments to its charter that set forth the powers of the corporation to operate a health services program and on an application of the health center for a charter as a nonprofit, nonstock corporation, did not preclude remand of the case, but if the state court should fail to give relief on this issue and if the action by state officials should be unduly delayed or arbitrarily or discriminatorily named, the doors would then be open to federal jurisdiction. Williams v. Tri-County Community Center, 323 F. Supp. 286, 1971 U.S. Dist. LEXIS 14935 (S.D. Miss.), aff'd, 452 F.2d 221, 1971 U.S. App. LEXIS 6768 (5th Cir. Miss. 1971).

Code 1942, § 5310.1, as formerly enacted, which gave to the governor unlimited discretion to deny a charter to a non-profit corporation was unconstitutional for the reason that it conferred an absolute and arbitrary discretion in a state official to grant or deny a right or privilege. Smith v. Ladner, 288 F. Supp. 66, 1968 U.S. Dist. LEXIS 9386 (S.D. Miss. 1968).

This section [Code 1942, § 5310.1] has no application to foreign corporations seeking domestication in Mississippi, but applies only to persons seeking an original state charter. NAACP v. Thompson, 357 F.2d 831, 1966 U.S. App. LEXIS 6953 (5th Cir. Miss.), cert. denied, 385 U.S. 820, 87 S. Ct. 45, 17 L. Ed. 2d 58, 1966 U.S. LEXIS 643 (U.S. 1966).

§79-11-139. When corporate existence begins; filing of articles of incorporation as conclusive proof that conditions of incorporation satisfied.

  1. Unless a delayed effective date is specified, the corporate existence begins when the articles of incorporation are filed.
  2. The Secretary of State’s filing of the articles of incorporation is conclusive proof that the incorporators satisfied all conditions precedent to incorporation except in a proceeding by the state to cancel or revoke the incorporation or involuntarily dissolve the corporation.

HISTORY: Laws, 1987, ch. 485, § 20, eff from and after January 1, 1988.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Incorporation under Mississippi Business Corporation Act, see § 79-4-2.03.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 182- 183.

CJS.

14 C.J.S., Charities § 91.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-11-5.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-11-5.

11. In general.

Creditor who participated in bankruptcy proceedings in which debtor petitioned as corporation held precluded from suing incorporators as partners. Natalbany Lumber Co. v. Countiss, 134 Miss. 511, 99 So. 262, 1924 Miss. LEXIS 294 (Miss. 1924).

The requirement of this section [Code 1942, § 5320] as to report of organization may be dispensed with by law passed after corporation has failed to comply with its provisions. Southern Coal Co. v. Yazoo Ice & Coal Co., 118 Miss. 860, 80 So. 334, 1918 Miss. LEXIS 140 (Miss. 1918).

Law authorizing corporation to file report of organization after time limited by this section [Code 1942, § 5320] held not to violate Const. § 180. Southern Coal Co. v. Yazoo Ice & Coal Co., 118 Miss. 860, 80 So. 334, 1918 Miss. LEXIS 140 (Miss. 1918).

Stockholders including one purchasing stock in the corporation after it had lost its right to do business for failure to report organization held to have done business under the charter within this section [Code 1942, § 5320]. Hessig-Ellis Drug Co. v. Wilkerson, 115 Miss. 668, 76 So. 570, 1917 Miss. LEXIS 248 (Miss. 1917).

Incorporators must see that their report is received as required by statute. Ragland v. Doolittle, 100 Miss. 498, 56 So. 445, 1911 Miss. LEXIS 35 (Miss. 1911).

Corporation held liable where only report of incorporators shows on its face that it had been organized and doing business several months before the report was made. Ragland v. Doolittle, 100 Miss. 498, 56 So. 445, 1911 Miss. LEXIS 35 (Miss. 1911).

Creditors doing business with void corporation held not estopped from setting up liability of incorporators as partners. Ragland v. Doolittle, 100 Miss. 498, 56 So. 445, 1911 Miss. LEXIS 35 (Miss. 1911).

§79-11-141. Liability for purporting to act for corporation where incorporation has not occurred.

All persons purporting to act as or on behalf of a corporation, knowing there was no incorporation under Section 79-11-101 et seq., are jointly and severally liable for all liabilities created while so acting.

HISTORY: Laws, 1987, ch. 485, § 21, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Liability for purporting to act for corporation prior to incorporation under Mississippi Business Corporation Act, see § 79-4-2.04.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-143. Organizational meeting after incorporation; written consents in lieu of organizational meeting.

  1. After incorporation:
    1. If initial directors are named in the articles of incorporation, the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws and carrying on any other business brought before the meeting;
    2. If initial directors are not named in the articles, the incorporator or incorporators shall hold an organizational meeting at the call of a majority of the incorporators:
      1. To elect directors and complete the organization of the corporation; or
      2. To elect a board of directors who shall complete the organization of the corporation.
  2. Action required or permitted by Section 79-11-101 et seq. to be taken by incorporators at an organizational meeting may be taken without a meeting if the action taken is evidenced by one or more written consents describing the action taken and signed by each incorporator.
  3. An organizational meeting may be held in or out of this state.

HISTORY: Laws, 1987, ch. 485, § 22, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Organizational meeting after incorporation under Mississippi Business Corporation Act, see § 79-4-2.05.

Amendments to corporate bylaws, see §§ 79-11-313 through 79-11-317.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 575, 615, 774, 781.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1025, 74:1042-74:1045.

§79-11-145. Bylaws.

  1. The incorporators or board of directors of a corporation shall adopt bylaws for the corporation.
  2. The bylaws may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

HISTORY: Laws, 1987, ch. 485, § 23, eff from and after January 1, 1988.

Cross References —

Bylaws under Mississippi Business Corporation Act, see § 79-4-2.06.

RESEARCH REFERENCES

Am. Jur.

2A Am. Jur. Legal Forms 2d, Associations and Clubs §§ 27:46, 27:52 et seq.

§79-11-147. Emergency bylaws; emergency defined.

  1. Unless the articles provide otherwise, the directors of a corporation may adopt bylaws to be effective only in an emergency defined in subsection (4) of this section. The emergency bylaws, which are subject to amendment or repeal by the members, may provide special procedures necessary for managing the corporation during the emergency, including:
    1. How to call a meeting of the board;
    2. Quorum requirements for the meeting; and
    3. Designation of additional or substitute directors.
  2. All provisions of the regular bylaws consistent with the emergency bylaws remain effective during the emergency. The emergency bylaws are not effective after the emergency ends.
  3. Corporate action taken in good faith in accordance with the emergency bylaws:
    1. Binds the corporation; and
    2. May not be used to impose liability on a corporate director, officer, employee or agent.
  4. An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event.

HISTORY: Laws, 1987, ch. 485, § 24, eff from and after January 1, 1988.

Cross References —

Emergency bylaws under Mississippi Business Corporation Act, see § 79-4-2.07.

§79-11-149. Activities for which corporations may be organized.

Corporations may be organized under Section 79-11-101 et seq. for any lawful activity. A corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under Section 79-11-101 et seq. only if permitted by, and subject to all limitations of, the other statute.

HISTORY: Laws, 1987, ch. 485, § 25, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Purposes for which corporations may be organized under Mississippi Business Corporation Act, see § 79-4-3.01.

Restrictions on corporate names, see § 79-11-157.

RESEARCH REFERENCES

ALR.

Nonprofit purposes and character which warrant creation of nonprofit corporation. 16 A.L.R.2d 1345.

Am. Jur.

15 Am. Jur. 2d, Charities §§ 173, 174.

CJS.

14 C.J.S., Charities §§ 72, 73.

§79-11-151. Powers of corporation.

Each corporation shall have and exercise all powers necessary or convenient to effect any or all of the purposes for which the corporation is organized including, without limitation, power:

To have perpetual succession by its corporate name unless a limited period of duration is stated in its articles of incorporation.

To sue and be sued, complain and defend, in its corporate name.

To have a corporate seal which may be altered at will, and to use the same by causing it, or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.

To purchase, take, receive, lease, take by gift, devise or bequest, or otherwise acquire, own, hold, improve, use and otherwise deal in and with real or personal property, or any interest therein, wherever situated.

To sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose of all or any part of its property and assets.

To lend money to its employees other than its officers and directors and otherwise assist its employees, officers and directors.

To purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in, or obligations of, other domestic or foreign corporations, whether business or nonprofit, associations, partnerships or individuals, or direct or indirect obligations of the United States, or of any other government, state, territory, governmental district or municipality or of any instrumentality thereof.

To make contracts and guarantees, incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds and other obligations and secure any of its obligations by mortgage or pledge of all or any of its property, franchises and income, and make contracts of guaranty and suretyship.

To lend money for its corporate purposes, invest and reinvest its funds and take and hold real and personal property as security for the payment of funds so lent or invested.

To conduct its affairs, carry on its operations and have offices and exercise the powers granted by Section 79-11-101 et seq. in any state, territory, district or possession of the United States or in any foreign country.

To elect or appoint officers and agents of the corporation, who may be directors or members, and define their duties and fix their compensation.

To make and alter bylaws, not inconsistent with its articles of incorporation or with the laws of this state, for the administration and regulation of the affairs of the corporation.

Unless otherwise provided in the articles of incorporation, to make donations for the public welfare or for charitable, scientific or educational purposes.

To pay pensions and establish pension plans or pension trusts for any or all of its directors, officers and employees.

To cease its corporate activities and surrender its corporate franchise.

To impose dues, assessments, admission and transfer fees upon its members.

To establish conditions for admission to membership, admit members and issue memberships.

To carry on a business.

To do all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation.

HISTORY: Laws, 1987, ch. 485, § 26; Laws, 1997, ch. 418, § 54, eff from and after July 1, 1997.

Cross References —

Power of water, sewer, garbage disposal, or fire protection districts to buy, lease or otherwise acquire assets and facilities of nonprofit corporation organized pursuant to the Mississippi Nonprofit Corporation Act (§§ 79-11-101 et seq.), see § 19-5-181.

General powers of corporation under Mississippi Business Corporation Act, see § 79-4-3.02.

Lack of necessity of setting forth the powers enumerated in this section in the articles of incorporation, see § 79-11-137.

Liability of director for unlawful distribution, see § 79-11-270.

Effect of merger on the title to real estate and other property, see § 79-11-325.

Effect of dissolution on the title to corporation’s property, see § 79-11-341.

RESEARCH REFERENCES

ALR.

Nonprofit charitable institutions as within operation of labor statutes. 26 A.L.R.2d 1020.

Power of a business corporation to donate to a charitable or similar institution. 39 A.L.R.2d 1192.

Distribution of funds by nonprofit corporation absent dissolution. 51 A.L.R.3d 1318.

Liability of charitable organization under respondeat superior doctrine for tort of unpaid volunteer. 82 A.L.R.3d 1213.

Am. Jur.

15 Am. Jur. 2d, Charities §§ 173, 176.

18B Am. Jur. 2d, Corporations § 1718.

19 Am. Jur. 2d, Corporations § 2397.

CJS.

14 C.J.S., Charities §§ 72, 73.

Law Reviews.

Note, Developments in the law: nonprofit corporations. 105 Harv L. Rev. 1579.

§79-11-153. Emergency powers of board of directors; notice during emergency; officers may be deemed directors during emergency; effect of emergency corporate action; emergency defined.

  1. In anticipation of or during an emergency defined in subsection (4) of this section, the board of directors of a corporation may:
    1. Modify lines of succession to accommodate the incapacity of any director, officer, employee or agent; and
    2. Relocate the principal office, designate alternative principal offices or regional offices, or authorize the officer to do so.
  2. During an emergency defined in subsection (4) of this section, unless emergency bylaws provide otherwise:
    1. Notice of a meeting of the board of directors need be given only to those directors whom it is practicable to reach and may be given in any practicable manner, including by publication and radio; and
    2. One or more officers of the corporation present at a meeting of the board of directors may be deemed to be directors for the meeting, in order of rank and within the same rank in order of seniority, as necessary to achieve a quorum.
  3. Corporate action taken in good faith during an emergency under this section to further the ordinary affairs of the corporation:
    1. Binds the corporation; and
    2. May not be used to impose liability on a corporate director, officer, employee or agent.
  4. An emergency exists for purposes of this section if a quorum of the corporation’s directors cannot readily be assembled because of some catastrophic event.

HISTORY: Laws, 1987, ch. 485, § 27, eff from and after January 1, 1988.

Cross References —

Liability of director for unlawful distribution, see § 79-11-270.

§79-11-155. Challenge to corporation’s power to act.

  1. Except as provided in subsection (2) of this section, the validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act.
  2. A corporation’s power to act may be challenged in a proceeding against the corporation to enjoin an act where a third party has not acquired rights. The proceeding may be brought by the Attorney General, a director or by a member or members in a derivative proceeding.
  3. A corporation’s power to act may be challenged in a proceeding against an incumbent or former director, officer, employee or agent of the corporation. The proceeding may be brought by a director, the corporation, directly, derivatively, or through a receiver or by a trustee or other legal representative.

HISTORY: Laws, 1987, ch. 485, § 28, eff from and after January 1, 1988.

Cross References —

Attorney General generally, see §§ 7-5-1 et seq.

Challenge to corporation’s power to act under Mississippi Business Corporation Act, see § 79-4-3.04.

JUDICIAL DECISIONS

1. Corporate member.

Citizens who intervened after a city’s case against a non-profit corporation for negligent entrustment of trust properties was dismissed also lacked standing to pursue the claims regarding the corporation’s sale of a hospital to a for-profit corporation because under Miss. Code Ann. § 79-11-155, the citizens were not corporate members under Miss. Code Ann. § 79-11-127, nor was the action pursued in name of the State. City of Picayune v. Southern Reg'l Corp., 916 So. 2d 510, 2005 Miss. LEXIS 810 (Miss. 2005).

§79-11-157. Corporate name.

  1. A corporate name may not contain language stating or implying that the corporation is organized for a purpose other than that permitted by Section 79-11-149 and its articles of incorporation.
  2. Except as authorized by subsections (3) and (4), a corporate name must be distinguishable upon the records of the Secretary of State from:
    1. The corporate name of a nonprofit or business corporation incorporated or authorized to do business in this state;
    2. A corporate name reserved or registered under Sections 79-11-159, 79-11-161, 79-4-4.02 or 79-4-4.03; or
    3. The fictitious name of a foreign business or nonprofit corporation authorized to transact business in this state because its real name is unavailable.
  3. A corporation may apply to the Secretary of State for authorization to use a name that is not distinguishable upon the Secretary of State’s records from one or more of the names described in subsection (2). The Secretary of State shall authorize use of the name applied for if:
    1. The other corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation; or
    2. The applicant delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.
  4. A corporation may use the name, including the fictitious name, of another domestic or foreign business or nonprofit corporation that is used in this state if the other corporation is incorporated or authorized to do business in this state and the proposed user corporation:
    1. Has merged with the other corporation;
    2. Has been formed by reorganization of the other corporation; or
    3. Has acquired all or substantially all of the assets, including the corporate name, of the other corporation.
  5. Section 79-11-101 et seq. do not control the use of fictitious names.

HISTORY: Laws, 1987, ch. 485, § 29; Laws, 1988, ch. 417, § 2, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting ‘ Section 79-11-101 et seq.” for ‘ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Editor’s Notes —

Section 79-4-4.03 referred to in (2)(b) was repealed by Laws, 2014, ch. 468, § 9, effective July 1, 2014.

Cross References —

Corporate name under Mississippi Business Corporation Act, see § 79-4-4.01.

Applicability of this section to the information which must be set forth in the articles of incorporation, see § 79-11-137.

Amendment changing corporation’s name does not abate proceedings brought by or against the corporation in its former name, see § 79-11-311.

Applicability of this section to corporation’s application for reinstatement after administrative dissolution, see § 79-11-351.

Effect of name of foreign corporation not satisfying requirements of this section, see § 79-11-373.

RESEARCH REFERENCES

ALR.

Right of benevolent or fraternal society or organization to protection against use of same or similar name, insignia, or ritual by another organization. 76 A.L.R.2d 1396.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

Right of charitable or religious association or corporation to protection against use of same or similar name by another. 37 A.L.R.3d 277.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 240, 241, 244.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 1-14.

Law Reviews.

Walker, Common law protection of economic expectancies: “Business Torts” in Mississippi. 50 Miss. L. J. 335, March, 1979.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-11-7.

11. Applicability.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-11-7.

11. Applicability.

This provision does not apply in the case of cooperative associations. Staple Cotton Cooperative Asso. v. Federal Staple Cotton Co-op Asso., 249 Miss. 465, 162 So. 2d 867, 1964 Miss. LEXIS 407 (Miss. 1964).

§79-11-159. Reserving exclusive use of corporate name; transferring reserved corporate name.

  1. A person may reserve the exclusive use of a legal corporate name that complies with Section 79-11-157, including a fictitious name for a foreign corporation whose corporate name is not available, by delivering an application to the Secretary of State for filing. Upon finding that the corporate name applied for is available, the Secretary of State shall reserve the name for the applicant’s exclusive use for a period of one hundred eighty (180) days. The one-hundred-eighty-day period may be renewed once by the applicant by filing a renewal application within thirty (30) days before the expiration of the initial one-hundred-eighty-day period.
  2. The owner of a reserved corporate name may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.

HISTORY: Laws, 1987, ch. 485, § 30; Laws, 2014, ch. 468, § 2, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment, in (1), inserted “legal” following “the exclusive use of a” and “that complies with Section 79-11-157” following “corporate name” in the first sentence; deleted “nonrenewable” following “applicant’s exclusive use for” near the end of the second sentence; added the last sentence; and in (2), inserted “to” following “another person by delivering.”

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Reserving exclusive use of corporate name under Mississippi Business Corporation Act, see § 79-4-4.02.

Filing Fees, see § 79-11-109.

Restrictions on corporate names, see § 79-11-157.

Applicability of this section to requirements for corporate name of foreign corporation, see § 79-11-373.

RESEARCH REFERENCES

ALR.

Right of benevolent or fraternal society or organization to protection against use of same or similar name, insignia, or ritual by another organization. 76 A.L.R.2d 1396.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

Right of charitable or religious association or corporation to protection against use of same or similar name by another. 37 A.L.R.3d 277.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 240, 241, 244.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 1-14.

Law Reviews.

Walker, Common law protection of economic expectancies: “Business Torts” in Mississippi. 50 Miss. L. J. 335, March, 1979.

§79-11-161. Repealed.

Repealed by Laws 2014, ch. 468, § 10, effective from and after July 1, 2014.

§79-11-161. [Laws, 1987, ch. 485, § 31, eff from and after January 1, 1988.]

Editor’s Notes —

Former § 79-11-161 provided for the registration of a foreign corporation’s corporate name.

§79-11-163. Repealed.

Repealed by Laws, 2012, ch. 382, § 130, effective January 1, 2013.

§79-11-163. [Laws, 1987, ch. 485, § 32; Laws, 1988, ch. 417, § 3, eff from and after July 1, 1988.]

Editor’s Notes —

Former § 79-11-163 pertained to the requirement that corporation maintain registered office and registered agent within state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-165. Repealed.

Repealed by Laws, 2012, ch. 382, § 131, effective January 1, 2013.

§79-11-165. [Laws, 1987, ch. 485, § 33; Laws, 2011, ch. 440, § 5, eff from and after Jan. 1, 2012.]

Editor’s Notes —

Former § 79-11-165 pertained to change of registered office or registered agent of nonprofit corporation. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-167. Repealed.

Repealed by Laws, 2012, ch. 382, § 132, effective January 1, 2013.

§79-11-167. [Laws, 1987, ch. 485, § 34, eff from and after Jan. 1, 1988.]

Editor’s Notes —

Former § 79-11-167 pertained to the resignation of registered agent of nonprofit corporation. For present similar see § 79-35-11.

§79-11-169. Repealed.

Repealed by Laws, 2012, ch. 382, § 133, effective January 1, 2013.

§79-11-169. [Laws, 1987, ch. 485, § 35, eff from and after Jan. 1, 1988.]

Editor’s Notes —

Former § 79-11-169 pertained to registered agent as agent for service of process, notice, or demand. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-171. Admission of person as member of corporation.

  1. A corporation may admit any person as a member. The articles or bylaws may establish criteria or procedures for admission.
  2. No person shall be admitted as a member without his or her consent.

HISTORY: Laws, 1987, ch. 485, § 36, eff from and after January 1, 1988.

OPINIONS OF THE ATTORNEY GENERAL

A community hospital may act as the sole member of a Mississippi nonprofit corporation engaged in the delivery of health care services, including ambulatory surgery services, to the citizens of its service area. 1998 Miss. Op. Att'y Gen. 269.

RESEARCH REFERENCES

ALR.

Suspension or expulsion from professional association and the remedies therefor. 20 A.L.R.2d 531.

Right to damages for exclusion from membership in social or fraternal organization. 59 A.L.R.2d 1290.

Compelling admission to membership in professional association or society. 89 A.L.R.2d 964.

Exclusion or expulsion from association or club as violation of state civil rights act. 38 A.L.R.4th 628.

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:1042-74:1045.

CJS.

14 C.J.S., Charities § 91.

§79-11-173. Consideration for admission of members to corporation.

Except as provided in its articles or bylaws, a corporation may admit members for no consideration or for such consideration as is determined by the board.

HISTORY: Laws, 1987, ch. 485, § 37, eff from and after January 1, 1988.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-175. Corporation not required to have members.

A corporation is not required to have members.

HISTORY: Laws, 1987, ch. 485, § 38, eff from and after January 1, 1988.

OPINIONS OF THE ATTORNEY GENERAL

A community hospital may act as the sole member of a Mississippi nonprofit corporation engaged in the delivery of health care services, including ambulatory surgery services, to the citizens of its service area. 1998 Miss. Op. Att'y Gen. 269.

For purposes of creating a nonprofit corporation, a county is an “entity” within the meaning of § 79-11-127(o), and is therefore a “person” within the meaning of § 79-11-127(y); thus, a county qualifies as a “member” pursuant to § 79-11-127(v) and may serve as a member of a nonprofit corporation as permitted by § 79-11-175. 1999 Miss. Op. Att'y Gen. 370.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-177. Rights and obligations of members.

All members shall have the same rights and obligations with respect to voting, dissolution, redemption and transfer, unless the articles or bylaws establish classes of membership with different rights or obligations. All members shall have the same rights and obligations with respect to any other matters, except as set forth in or authorized by the articles or bylaws.

HISTORY: Laws, 1987, ch. 485, § 39, eff from and after January 1, 1988.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

JUDICIAL DECISIONS

1. Illustrative cases.

The assessment of security fees against owners of improved lots in an association did not violate the statute since owners of improved lots were more likely to use and need the benefits of security than owners of unimproved parcels of land and the distinction did not affect the other rights or obligations of the members in any way. Longanecker v. Diamondhead Country Club, 760 So. 2d 764, 2000 Miss. LEXIS 148 (Miss. 2000).

§79-11-179. Transfer of membership or right arising therefrom.

  1. Except as set forth or authorized by the articles or bylaws, no member of a corporation may transfer a membership or any right arising therefrom.
  2. Where transfer rights have been provided, no restriction on them shall be binding with respect to a member holding a membership issued prior to the adoption of the restriction unless the restriction is approved by the members and the affected member.

HISTORY: Laws, 1987, ch. 485, § 40, eff from and after January 1, 1988.

§79-11-181. Liability of members for acts, debts, liabilities, or obligations of corporation.

A member of a corporation is not, as such, personally liable for the acts, debts, liabilities, or obligations of the corporation.

HISTORY: Laws, 1987, ch. 485, § 41, eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 50.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 43.1 (complaint, petition, or declaration – to collect on corporate debt-corporation the alter ego of individual).

CJS.

14 C.J.S., Charities §§ 73-75.

§79-11-183. Liability of members for dues, assessments or fees.

A member may become liable to the corporation for dues, assessments or fees; provided, however, that an article or bylaw provision or a resolution adopted by the board authorizing or imposing dues, assessments or fees does not, of itself, create liability.

HISTORY: Laws, 1987, ch. 485, § 42, eff from and after January 1, 1988.

§79-11-185. Actions by creditors to reach liability of member to corporation.

  1. No proceeding may be brought by a creditor to reach the liability, if any, of a member to the corporation unless final judgment has been rendered in favor of the creditor against the corporation and execution has been returned unsatisfied in whole or in part or unless such proceeding would be useless.
  2. All creditors of the corporation, with or without reducing their claims to judgment, may intervene in any creditor’s proceeding brought under subsection (1) of this section to reach and apply unpaid amounts due the corporation. Any or all members who owe amounts to the corporation may be joined in such proceeding.

HISTORY: Laws, 1987, ch. 485, § 43, eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations § 50.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 43.1 (complaint, petition, or declaration – to collect on corporate debt-corporation the alter ego of individual).

§79-11-187. Resignation of member.

  1. A member may resign at any time.
  2. The resignation of a member does not relieve the member from any obligations the member may have to the corporation.

HISTORY: Laws, 1987, ch. 485, § 44, eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 776.

19 Am. Jur. 2d, Corporations § 2354.

§79-11-189. Expulsion or suspension of member or termination or suspension of membership.

  1. No member may be expelled or suspended, and no membership or memberships may be terminated or suspended except pursuant to a procedure which is fair and reasonable and is carried out in good faith.
  2. A procedure is fair and reasonable when either:
    1. The articles or bylaws set forth a procedure which provides:
      1. Not less than fifteen (15) days prior written notice of the expulsion, suspension or termination and the reasons therefore; and
      2. An opportunity for the member to be heard, orally or in writing, not less than five (5) days before the effective date of the expulsion, suspension or termination by a person or persons authorized to decide that the proposed expulsion, termination or suspension not take place; or
    2. It is fair and reasonable taking into consideration all of the relevant facts and circumstances.
  3. Any written notice given by mail must be given by first-class or certified mail sent to the last address of the member shown on the corporation’s records.
  4. Any proceeding challenging an expulsion, suspension or termination, including a proceeding in which defective notice is alleged, must be commenced within one (1) year after the effective date of the expulsion, suspension or termination.
  5. A member who has been expelled or suspended may be liable to the corporation for dues, assessments or fees.

HISTORY: Laws, 1987, ch. 485, § 45, eff from and after January 1, 1988.

Cross References —

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

ALR.

Suspension or expulsion from professional association and the remedies therefor. 20 A.L.R.2d 531.

Right to damages for exclusion from membership in social or fraternal organization. 59 A.L.R.2d 1290.

Exclusion or expulsion from association or club as violation of state civil rights act. 38 A.L.R.4th 628.

What constitutes private club or association not otherwise open to public that is exempt from state civil rights statute. 83 A.L.R.5th 467.

§79-11-191. Purchase by corporation of membership of member who resigns or whose membership is terminated.

A corporation may purchase the membership of a member who resigns or whose membership is terminated for the amount and pursuant to the conditions set forth in or authorized by its articles or bylaws. No payment shall be made in violation of Section 79-11-293.

HISTORY: Laws, 1987, ch. 485, § 46, eff from and after January 1, 1988.

Cross References —

Conditions for corporation to purchase memberships, see § 79-11-293.

§79-11-193. Proceedings brought on behalf of domestic or foreign corporation.

  1. A proceeding may be brought in the right of a domestic or foreign corporation to procure a judgment in its favor by:
    1. Any member or members having five percent (5%) or more of the voting power or by fifty (50) members, whichever is less; or
    2. Any director.
  2. In any such proceeding, each complainant shall be a member or director at the time of bringing the proceeding.
  3. A complaint in a proceeding brought in the right of a corporation must be verified and allege with particularity the demand made, if any, to obtain action by the directors and either why the complainants could not obtain the action or why they did not make the demand. If a demand for action was made and the corporation’s investigation of the demand is in progress when the proceeding is filed, the court may stay the suit until the investigation is completed.
  4. On termination of the proceeding the court may require the complainants to pay any defendant’s reasonable expenses (including counsel fees) incurred in defending the suit if it finds that the proceeding was commenced frivolously or in bad faith.
  5. If the proceeding on behalf of the corporation results in the corporation taking some action requested by the complainants or otherwise was successful, in whole or in part, or if anything was received by the complainants as the result of a judgment, compromise or settlement of an action or claim, the court may award the complainants reasonable expenses (including counsel fees).

HISTORY: Laws, 1987, ch. 485, § 47, eff from and after January 1, 1988.

Cross References —

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

ALR.

Allowance of punitive damages in stockholder’s derivative action. 67 A.L.R.3d 350.

Negligence, nonfeasance, or ratification of wrongdoing as excusing demand on directors as prerequisite to bringing of stockholder’s derivative suit on behalf of corporation. 99 A.L.R.3d 1034.

Propriety of termination of properly initiated derivative action by “independent committee” appointed by board of directors whose actions (or inaction) are under attack. 22 A.L.R.4th 1206.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 1867, 1874 et seq.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 21 et seq.

Lawyers’ Edition.

Pleading and verification requirements in stockholders’ derivative suits in federal courts. 15 L. Ed. 2d 1120.

JUDICIAL DECISIONS

1. Demand.

A demand requires some meaningful opportunity for the directors to act after learning of a threat of suit on the issue. Longanecker v. Diamondhead Country Club, 760 So. 2d 764, 2000 Miss. LEXIS 148 (Miss. 2000).

Substantial evidence supported the determination that the plaintiffs failed to make demand upon the defendant association as one plaintiff even admitted in his testimony that no written demand was ever made on the association. Longanecker v. Diamondhead Country Club, 760 So. 2d 764, 2000 Miss. LEXIS 148 (Miss. 2000).

§79-11-195. Delegates.

  1. A corporation may provide in its articles or bylaws for delegates having some or all of the authority of members.
  2. The articles or bylaws may set forth provisions relating to:
    1. The characteristics, qualifications, rights, limitations and obligations of delegates including their selection and removal;
    2. Calling, noticing, holding and conducting meetings of delegates; and
    3. Carrying on corporate activities during and between meetings of delegates.

HISTORY: Laws, 1987, ch. 485, § 48, eff from and after January 1, 1988.

Cross References —

As to petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

§79-11-197. Annual membership meeting.

  1. A corporation with members shall hold a membership meeting annually at a time stated in or fixed in accordance with the bylaws.
  2. Annual membership meetings may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated in or fixed in accordance with the bylaws, annual meetings shall be held at the corporation’s principal office.
  3. At the annual meeting:
    1. The president and chief financial officer shall report on the activities and financial condition of the corporation; and
    2. The members shall consider and act upon such other matters as may be raised consistent with the requirements of Sections 79-11-205 and 79-11-219.
  4. The failure to hold an annual meeting at a time stated in or fixed in accordance with a corporation’s bylaws does not affect the validity of any corporate action.
  5. The articles of incorporation or bylaws may provide that an annual or regular meeting of members does not need to be held at a geographic location if the meeting is held by means of the Internet or other electronic communications technology in a fashion pursuant to which the members have the opportunity to read or hear the proceedings substantially concurrently with their occurrence, vote on matters submitted to the members, pose questions, and make comments.

HISTORY: Laws, 1987, ch. 485, § 49; Laws, 2011, ch. 440, § 6, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (5).

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 797, 829.

§79-11-199. Special meetings of members.

  1. A corporation with members shall hold a special meeting of members:
    1. On call of its board or the person or persons authorized to do so by the articles or bylaws; or
    2. If the holders of at least five percent (5%) of the voting power sign, date and deliver to any corporate officer one or more written demands for the meeting describing the purpose or purposes for which it is to be held.
  2. The close of business on the thirtieth day before delivery of the demand for a special meeting to any corporate officer is the record date for the purpose of determining whether the five percent (5%) requirement of subsection (1) of this section has been met.
  3. If a notice for a special meeting demanded under subsection (1)(b) of this section is not given pursuant to Section 79-11-205 within thirty (30) days after the date the written demand or demands are delivered to a corporate officer, regardless of the requirements of subsection (4) of this section, a person signing the demand or demands may set the time and place of the meeting and give notice pursuant to Section 79-11-205.
  4. Special meetings of members may be held in or out of this state at the place stated in or fixed in accordance with the bylaws. If no place is stated or fixed in accordance with the bylaws, special meetings shall be held at the corporation’s principal office.
  5. Only those matters that are within the purpose or purposes described in the meeting notice required by Section 79-11-205 may be conducted at a special meeting of members.
  6. The articles of incorporation or bylaws may provide that a special meeting of members does not need to be held at a geographic location if the meeting is held by means of the Internet or other electronic communications technology in a fashion pursuant to which the members have the opportunity to read or hear the proceedings substantially concurrently with their occurrence, vote on matters submitted to the members, pose questions, and make comments.

HISTORY: Laws, 1987, ch. 485, § 50; Laws, 2011, ch. 440, § 7, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (6).

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to requirements for a court-ordered meeting of members, see § 79-11-201.

§79-11-201. Court-ordered meeting of members.

  1. The chancery court of the county where a corporation’s principal office is or will be located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may summarily order a meeting to be held:
    1. On application of any member or other person entitled to participate in the annual meeting, if an annual meeting was not held within the earlier of six (6) months after the end of the corporation’s fiscal year or fifteen (15) months after its last annual meeting; or
    2. On application of a member who signed a demand for a special meeting valid under Section 79-11-199, or a person or persons entitled to call a special meeting, if:
      1. Notice of the special meeting was not given within thirty (30) days after the date the demand was delivered to a corporate officer; or
      2. The special meeting was not held in accordance with the notice.
  2. The court may fix the time and place of the meeting, specify a record date for determining members entitled to notice of and to vote at the meeting, prescribe the form and content of the meeting notice, fix the quorum required for specific matters to be considered at the meeting (or direct that the votes represented at the meeting constitute a quorum for action on those matters), and enter other orders necessary to accomplish the purpose or purposes of the meeting.
  3. If the court orders a meeting, it may also order the corporation to pay the member’s cost (including reasonable counsel fees) incurred to obtain the order.

HISTORY: Laws, 1987, ch. 485, § 51; Laws, 2012, ch. 382, § 57, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is or will be located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may summarily” for “principal office (or, if none in this state, its registered office) is located may summarily” in (1).

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to requirements for approval of corporate action by members without holding a meeting of members, see § 79-11-203.

RESEARCH REFERENCES

ALR.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

Am. Jur.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Form 297.

§79-11-203. Approval of action by members without holding meeting of members.

  1. Unless limited or prohibited by the articles or bylaws, action required or permitted by Section 79-11-101 et seq. to be approved by the members may be approved without a meeting of members if the action is approved by members holding at least eighty percent (80%) of the voting power. The action must be evidenced by one or more consents in the form of a record bearing the date of signature and describing the action taken, signed by those members representing at least eighty percent (80%) of the voting power, and delivered to the corporation for inclusion in the minutes or filing with the corporate records.
  2. If not otherwise determined under Section 79-11-201 or 79-11-209, the record date for determining members entitled to take action without a meeting is the date the first member signed the consent under subsection (1) of this section.
  3. A consent signed under this section has the effect of a meeting vote and may be described as such in any document filed with the Secretary of State.
  4. Written notice of member approval pursuant to this section shall be given to all members who have not signed the written consent. If written notice is required, member approval pursuant to this section shall be effective ten (10) days after such written notice is given.

HISTORY: Laws, 1987, ch. 485, § 52; Laws, 2011, ch. 440, § 8, eff from and after Jan. 1, 2012.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, inserted “in the form of a record bearing the date of signature and” following “The action must be evidenced by one or more consents” in the second sentence in (1).

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

§79-11-205. Notice of meetings of members; notice of adjourned meetings.

  1. A corporation shall give notice consistent with its bylaws of meetings of members in a fair and reasonable manner.
  2. Any notice which conforms to the requirements of subsection (3) of this section is fair and reasonable, but other means of giving notice may also be fair and reasonable when all the circumstances are considered.
  3. Notice is fair and reasonable if:
    1. The corporation notifies its members of the place, date and time of each annual and special meeting of members no fewer than ten (10) (or if notice is mailed by other than first-class or registered mail, thirty (30)) nor more than sixty (60) days before the meeting date;
    2. Notice of an annual meeting includes a description of any matter or matters which must be approved by the members under Sections 79-11-269, 79-11-281, 79-11-301, 79-11-315, 79-11-323, 79-11-331, 79-11-333 or 79-11-335; and
    3. Notice of a special meeting includes a description of the matter or matters for which the meeting is called.
  4. Unless the bylaws require otherwise, if an annual or special meeting of members is adjourned to a different date, time or place, notice need not be given of the new date, time or place, if the new date, time or place is announced at the meeting before adjournment. If a new record date for the adjourned meeting is or must be fixed under Section 79-11-209, however, notice of the adjourned meeting must be given under this section to the members of record as of the new record date.
  5. When giving notice of an annual or special meeting of members, a corporation shall give notice of a matter a member intends to raise at the meeting if:
    1. requested in writing to do so by a person entitled to call a special meeting; and
    2. the request is received by the secretary or president of the corporation at least ten (10) days before the corporation gives notice of the meeting.

HISTORY: Laws, 1987, ch. 485, § 53, eff from and after January 1, 1988.

Cross References —

Notice requirements in general, see § 79-11-129.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to matters which may be considered by and acted upon by members of corporation at annual meeting, see § 79-11-197.

Applicability of this section to requirements for holding of special meeting of members of corporation, see § 79-11-199.

Applicability of this section to restatement of corporation’s articles of incorporation, see § 79-11-307.

Applicability of this section to notice requirements for meeting of members to approve amendments to bylaws, see § 79-11-315.

Applicability of this section to notice requirements for meeting of members to approve plan of merger, see § 79-11-321.

Applicability of this section to notice requirements for meeting of members to approve the sale or other disposition of a corporation’s property not in the usual course of business, see § 79-11-331.

Applicability of this section to notice requirements for meeting of members to approve dissolution of corporation, see § 79-11-335.

§79-11-207. Waiver of notice requirements by member.

  1. A member may waive any notice required by Section 79-11-101 et seq., the articles or bylaws before or after the date and time stated in the notice. The waiver must be in writing, be signed by the member entitled to the notice, and be delivered to the corporation for inclusion in the minutes or filing with the corporate records.
  2. A member’s attendance at a meeting:
    1. Waives objection to lack of notice or defective notice of the meeting, unless the member at the beginning of the meeting objects to holding the meeting or transacting business at the meeting;
    2. Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member objects to considering the matter when it is presented.

HISTORY: Laws, 1987, ch. 485, § 54, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

§79-11-209. Record date.

  1. The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to notice of a members’ meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members at the close of business on the business day preceding the day on which notice is given or, if notice is waived, at the close of business on the business day preceding the day on which the meeting is held are entitled to notice of the meeting.
  2. The bylaws of a corporation may fix or provide the manner of fixing a date as the record date for determining the members entitled to vote at a members’ meeting. If the bylaws do not fix or provide for fixing such a record date, the board may fix a future date as such a record date. If no such record date is fixed, members on the date of the meeting who are otherwise eligible to vote are entitled to vote at the meeting.
  3. The bylaws may fix or provide the manner for determining a date as the record date for the purpose of determining the members entitled to exercise any rights in respect of any other lawful action. If the bylaws do not fix or provide for fixing such a record date, the board may fix in advance such a record date. If no such record date is fixed, members at the close of business on the day on which the board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later, are entitled to exercise such rights.
  4. A record date fixed under this section may not be more than seventy (70) days before the meeting or action requiring a determination of members occurs.
  5. A determination of members entitled to notice of or to vote at a membership meeting is effective for any adjournment of the meeting unless the board fixes a new date for determining the right to notice or the right to vote, which it must do if the meeting is adjourned to a date more than seventy (70) days after the record date for determining members entitled to notice of the original meeting.
  6. If a court orders a meeting adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting, it may provide that the original record date for notice or voting continues in effect or it may fix a new record date for notice of voting.

HISTORY: Laws, 1987, ch. 485, § 55, eff from and after January 1, 1988.

Cross References —

Applicability of this section to definition of “record date” for purposes of Mississippi Nonprofit Corporation Act, see § 79-11-127.

Applicability of this section to the requirements for approval of corporate action by members without holding a meeting of members, see § 79-11-203.

Applicability of this section to the requirement of notice of adjourned meetings of members, see § 79-11-205.

§79-11-211. Corporate action taken by ballot without meeting.

  1. Except as provided in subsection (5) of this section and unless prohibited or limited by the articles or bylaws, any action which may be taken at any annual or special meeting of members may be taken without a meeting if the corporation delivers a written ballot to every member entitled to vote on the matter.
  2. A ballot shall:
    1. Be in the form of a record;
    2. Set forth each proposed action; and
    3. Provide an opportunity to vote for or against each proposed action.
  3. Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the matter at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot.
  4. All solicitations for votes by written ballot shall:
    1. Indicate the number of responses needed to meet the quorum requirements;
    2. State the percentage of approvals necessary to approve each matter other than election of directors; and
    3. Specify the time by which a ballot must be received by the corporation in order to be counted.
  5. Except as otherwise provided in the articles or bylaws, a written ballot may not be revoked.

HISTORY: Laws, 1987, ch. 485, § 56; Laws, 2011, ch. 440, § 9, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, deleted “written” preceding “ballot shall” in (2); and redesignated former (2)(a) and (b) as (2)(b) and (c).

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

§79-11-213. Preparation of list of members entitled to notice of meeting and members entitled to vote at meeting; list to be open for inspection; court may order inspection and copying of lists.

  1. After fixing a record date for a notice of a meeting, a corporation shall prepare an alphabetical list of the names of all its members who are entitled to notice of the meeting. The list must show the address and number of votes each member is entitled to vote at the meeting. The corporation shall prepare on a current basis through the time of the membership meeting a list of members, if any, who are entitled to vote at the meeting, but not entitled to notice of the meeting. This list shall be prepared on the same basis and be part of the list of members.
  2. The list of members must be available for inspection by any member for the purpose of communication with other members concerning the meeting, beginning two (2) business days after notice is given of the meeting for which the list was prepared and continuing through the meeting, at the corporation’s principal office or at a reasonable place identified in the meeting notice in the city where the meeting will be held. A member, a member’s agent, or attorney is entitled on written demand to inspect and, subject to the limitations of Sections 79-11-285(c) and 79-11-291, to copy the list, at a reasonable time and at the member’s expense, during the period it is available for inspection.
  3. The corporation shall make the list of members available at the meeting, and any member, a member’s agent, or attorney is entitled to inspect the list at any time during the meeting or any adjournment.
  4. If the corporation refuses to allow a member, a member’s agent, or attorney to inspect the list of members before or at the meeting (or copy the list as permitted by subsection (2) of this section); the chancery court of the county where a corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, on application of the member, may summarily order the inspection or copying at the corporation’s expense and may postpone the meeting for which the list was prepared until the inspection or copying is complete and may order the corporation to pay the member’s costs (including reasonable counsel fees) incurred to obtain the order.
  5. Unless a written demand to inspect and copy a membership list has been made under subsection (2) of this section prior to the membership meeting and a corporation improperly refuses to comply with the demand, refusal or failure to comply with this section does not affect the validity of action taken at the meeting.

HISTORY: Laws, 1987, ch. 485, § 57; Laws, 2012, ch. 382, § 58, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, on application of the member, may summarily” for “principal office (or if none in this state, its registered office) is located, on application of the member, may summarily” in (4).

Cross References —

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

ALR.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership lists. 37 A.L.R.4th 1206.

§79-11-215. Each member to have one vote.

  1. Unless the articles or bylaws provide otherwise, each member is entitled to one (1) vote on each matter voted on by the members.
  2. Unless the articles or bylaws provide otherwise, if a membership stands of record in the names of two (2) or more persons, their acts with respect to voting shall have the following effect:
    1. If only one (1) votes, such act binds all; and
    2. If more than one (1) votes, the vote shall be divided on a pro rata basis.

HISTORY: Laws, 1987, ch. 485, § 58, eff from and after January 1, 1988.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:1025.

§79-11-217. Quorum requirements.

  1. Unless Section 79-11-101 et seq., the articles, or the bylaws provide for a higher or lower quorum, ten percent (10%) of the votes entitled to be cast on a matter must be represented at a meeting of members to constitute a quorum on that matter.
  2. A bylaw amendment to decrease the quorum for any member action may be approved by the members, or, unless prohibited by the bylaws, by the board.
  3. A bylaw amendment to increase the quorum required for any member action must be approved by the members.
  4. Unless one-third (1/3) or more of the voting power is present in person or by proxy, the only matters that may be voted upon at an annual meeting of members are those matters that are described in the meeting notice.

HISTORY: Laws, 1987, ch. 485, § 59, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

§79-11-219. Votes required for member action.

  1. Unless Section 79-11-101 et seq., the articles, or the bylaws require a greater vote or voting by class, if a quorum is present, the affirmative vote of the votes represented and voting (which affirmative votes also constitute a majority of the required quorum) is the act of the members.
  2. A bylaw amendment to increase or decrease the vote required for any member action must be approved by the members.

HISTORY: Laws, 1987, ch. 485, § 60, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to matters which may be considered by and acted upon by members of corporation at annual meeting, see § 79-11-197.

§79-11-221. Voting by proxy.

  1. Unless the articles or bylaws prohibit or limit proxy voting, a member may appoint a proxy to vote or otherwise act for the member by signing an appointment form either personally or by an attorney-in-fact in the form of a record.
  2. An appointment of a proxy is effective when received by the secretary or other officer or agent authorized to tabulate votes. An appointment is valid for eleven (11) months unless a different period is expressly provided in the appointment form; provided, however, that no proxy shall be valid for more than three (3) years from its date of execution.
  3. An appointment of a proxy is revocable by the member.
  4. The death or incapacity of the member appointing a proxy does not affect the right of the corporation to accept the proxy’s authority unless notice of the death or incapacity is received by the secretary or other officer or agent authorized to tabulate votes before the proxy exercises authority under the appointment.
  5. Appointment of a proxy is revoked by the person appointing the proxy:
    1. Attending any meeting and voting in person; or
    2. Signing and delivering to the secretary or other officer or agent authorized to tabulate proxy votes either a writing in the form of a record stating that the appointment of the proxy is revoked or a subsequent appointment form.
  6. Subject to Section 79-11-227 and any express limitation on the proxy’s authority appearing on the face of the appointment form, a corporation is entitled to accept the proxy’s vote or other action as that of the member making the appointment.

HISTORY: Laws, 1987, ch. 485, § 61; Laws, 2011, ch. 440, § 10, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, inserted “in the form of a record” at the end of (1) and in (5)(b).

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agency § 172.

18A Am. Jur. 2d, Corporations § 904.

§79-11-223. Cumulative voting.

  1. If the articles or bylaws provide for cumulative voting by members, members may so vote, by multiplying the number of votes the members are entitled to cast by the number of directors for whom they are entitled to vote, and cast the product for a single candidate or distribute the product among two (2) or more candidates.
  2. Cumulative voting is not authorized at a particular meeting unless:
    1. The meeting notice or statement accompanying the notice states that cumulative voting will take place; or
    2. A member gives notice during the meeting and before the vote is taken of the member’s intent to cumulate votes, and if one (1) member gives this notice all other members participating in the election are entitled to cumulate their votes without giving further notice.
  3. A director elected by cumulative voting may be removed by the members without cause if the requirements of Section 79-11-245 are met and the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written ballot, all memberships entitled to vote were voted) and the entire number of directors authorized at the time of the director’s most recent election were then being elected.
  4. Members may not cumulatively vote if the directors and members are identical.

HISTORY: Laws, 1987, ch. 485, § 62, eff from and after January 1, 1988.

§79-11-225. Method of election of directors.

A corporation may provide in its articles or bylaws for election of directors by members or delegates: (a) on the basis of chapter or other organization unit; (b) by region or other geographic unit; (c) by preferential voting; or (d) by any other reasonable method.

HISTORY: Laws, 1987, ch. 485, § 63, eff from and after January 1, 1988.

§79-11-227. Acceptance or rejection of vote, consent, waiver or proxy appointment.

  1. If the name signed on a vote, consent, waiver or proxy appointment corresponds to the name of a member, the corporation if acting in good faith is entitled to accept the vote, consent, waiver or proxy appointment and give it effect as the act of the member.
  2. If the name signed on a vote, consent, waiver or proxy appointment does not correspond to the record name of a member, the corporation if acting in good faith is nevertheless entitled to accept the vote, consent, waiver or proxy appointment and give it effect as the act of the member if:
    1. The member is an entity and the name signed purports to be that of an officer or agent of the entity;
    2. The name signed purports to be that of an administrator, executor, guardian or conservator representing the member and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver or proxy appointment;
    3. The name signed purports to be that of a receiver or trustee in bankruptcy of the member, and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver or proxy appointment;
    4. The name signed purports to be that of a pledgee, beneficial owner, or attorney-in-fact of the member and if the corporation requests, evidence acceptable to the corporation of the signatory’s authority to sign for the member has been presented with respect to the vote, consent, waiver or proxy appointment; or
    5. Two (2) or more persons hold the membership as cotenants or fiduciaries and the name signed purports to be the name of at least one (1) of the co-holders and the person signing appears to be acting on behalf of all the co-holders.
  3. The corporation is entitled to reject a vote, consent, waiver or proxy appointment if the secretary or other officer or agent authorized to tabulate votes, acting in good faith, has reasonable basis for doubt about the validity of the signature on it or about the signatory’s authority to sign for the member.
  4. The corporation and its officer or agent who accepts or rejects a vote, consent, waiver or proxy appointment in good faith and in accordance with the standards of this section are not liable in damages to the member for the consequences of the acceptance or rejection.
  5. Corporate action based on the acceptance or rejection of a vote, consent, waiver or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise.

HISTORY: Laws, 1987, ch. 485, § 64, eff from and after January 1, 1988.

Cross References —

Applicability of this section to acceptance by a corporation of a proxy’s votes or other action, see § 79-11-221.

§79-11-229. Voting agreements between members.

  1. Two (2) or more members may provide for the manner in which they will vote by signing an agreement for that purpose. Such agreements may be valid for a period of up to ten (10) years.
  2. A voting agreement created under this section is specifically enforceable.

HISTORY: Laws, 1987, ch. 485, § 65, eff from and after January 1, 1988.

§79-11-231. Board of directors; persons authorized to exercise some or all of powers of board.

  1. Each corporation must have a board of directors.
  2. Except as provided in Section 79-11-101 et seq. or subsection (3) of this section, all corporate powers shall be exercised by or under the authority of, and the affairs of the corporation managed under the direction of, its board.
  3. The articles may authorize a person or persons to exercise some or all of the powers which would otherwise be exercised by a board. To the extent so authorized any such person or persons shall have the duties and responsibilities of the directors, and the directors shall be relieved to that extent from such duties and responsibilities.

HISTORY: Laws, 1987, ch. 485, § 66, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The section as set out in the bound volume reflects this correction, which was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Requirement for and duties of board of directors under Mississippi Business Corporation Act, see § 79-4-8.01.

Applicability of this section to definition of “board” or “board of directors” for purposes of Mississippi Nonprofit Corporation Act, see § 79-11-127.

Authority of committee of board to exercise board’s authority under this section, see § 79-11-265.

Liability of director for unlawful distribution, see § 79-11-270.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1314.

CJS.

14 C.J.S., Charities § 81.

§79-11-233. Qualifications for directors.

All directors must be individuals. The articles or bylaws may prescribe other qualifications for directors.

HISTORY: Laws, 1987, ch. 485, § 67, eff from and after January 1, 1988.

Cross References —

Qualifications of directors under Mississippi Business Corporation Act, see § 79-4-8.02.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-235. Number of directors.

    1. Except as provided in paragraph (b) of this subsection, the number of directors shall be specified in or fixed in accordance with the articles or bylaws.
    2. If the corporation: (i) is a charitable organization as defined in Section 79-11-501; (ii) which solicits contributions or intends to solicit contributions in the state by any means whatsoever; and (iii) is incorporated on or after January 1, 2012, the board must consist of not less than three (3) directors, with the number of directors specified in or fixed in accordance with the articles or bylaws.
  1. The number of directors may be increased or decreased in conformance with law from time to time by amendment to or in the manner prescribed in the articles or bylaws.

HISTORY: Laws, 1987, ch. 485, § 68; Laws, 2011, ch. 440, § 11, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added “Except as provided in paragraph (b) of this subsection” at the beginning of (1)(a); added (1)(b); inserted “in conformance with law” following “The number of directors may be increased or decreased” in (2).

Cross References —

Number and election of directors under Mississippi Business Corporation Act, see §§ 79-4-8.03, 79-4-8.04.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-237. Election, appointment or designation of directors.

  1. If the corporation has members, all the directors (except the initial directors) shall be elected at the first annual meeting of members, and at each annual meeting thereafter, unless the articles or bylaws provide some other time or method of election or provide that some of the directors are appointed by some other person or designated.
  2. If the corporation does not have members, all the directors (except the initial directors) shall be elected, appointed or designated as provided in the articles or bylaws. If no method of designation or appointment is set forth in the articles or bylaws, the directors (other than the initial directors) shall be elected by the board.

HISTORY: Laws, 1987, ch. 485, § 69, eff from and after January 1, 1988.

Cross References —

Number and election of directors under Mississippi Business Corporation Act, see §§ 79-4-8.03, 79-4-8.04.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1189, 1216.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 293, 294.

CJS.

14 C.J.S., Charities § 81.

JUDICIAL DECISIONS

1. Election of directors.

Substantial evidence supported chancellor’s ruling that the best evidence was the corporate minutes and that there was no evidence in the minutes to support appellants’ claim that they had been elected as members of corporation and had authority to replace the board of directors because corporate records constitute best evidence of corporate acts. Because there was no evidence that there were any members of the corporation, the corporation’s board of directors had the authority to elect the directors and the board became self-perpetuating under Miss. Code Ann. § 79-11-237(2). His Way, Inc. v. McMillin, 909 So. 2d 738, 2005 Miss. App. LEXIS 529 (Miss. Ct. App. 2005).

§79-11-239. Term of office of directors.

  1. The articles or bylaws must specify the terms of directors. Except for designated or appointed directors, the terms of directors may not exceed five (5) years. In the absence of any term specified in the articles or bylaws, the term of each director shall be one (1) year. Directors may be elected for successive terms.
  2. A decrease in the number of directors or term of office does not shorten an incumbent director’s term.
  3. Except as provided in the articles or bylaws:
    1. The term of a director filling a vacancy in the office of a director elected by members expires at the next election of directors by members; and
    2. The term of a director filling any other vacancy expires at the end of the unexpired term which such director is filling.
  4. Despite the expiration of a director’s term, the director continues to serve until the director’s successor is elected, designated or appointed and qualifies, or until there is a decrease in the number of directors.

HISTORY: Laws, 1987, ch. 485, § 70, eff from and after January 1, 1988.

Cross References —

Terms of office of directors under Mississippi Business Corporation Act, see §§ 79-4-8.05, 79-4-8.06.

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-241. Staggering terms of directors.

The articles or bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups. The terms of office of the several groups need not be uniform.

HISTORY: Laws, 1987, ch. 485, § 71, eff from and after January 1, 1988.

Cross References —

Terms of office of directors under Mississippi Business Corporation Act, see §§ 79-4-8.05, 79-4-8.06.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 1216.

§79-11-243. Resignation of director.

  1. A director may resign at any time by delivering written notice to the board of directors, its presiding officer or to the president or secretary.
  2. A resignation is effective when the notice is effective unless the notice specifies a later effective date. If a resignation is made effective at a later date, the board may fill the pending vacancy before the effective date if the board provides that the successor does not take office until the effective date.

HISTORY: Laws, 1987, ch. 485, § 72, eff from and after January 1, 1988.

Cross References —

Resignation of director under Mississippi Business Corporation Act, see § 79-4-8.07.

Filling of vacancy in board of directors caused by resignation of director effective at later date under this section, see § 79-11-251.

§79-11-245. Removal of directors.

  1. The members may remove one or more directors elected by them without cause.
  2. If a director is elected by a class, chapter or other organization unit or by region or other geographic grouping, the director may be removed only by the members of that class, chapter, unit or grouping.
  3. Except as provided in subsection (9) of this section, a director may be removed under subsection (1) or (2) of this section only if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.
  4. If cumulative voting is authorized, a director may not be removed if the number of votes, or if the director was elected by a class, chapter, unit or grouping of members, the number of votes of that class, chapter, unit or grouping, sufficient to elect the director under cumulative voting is voted against the director’s removal.
  5. A director elected by members may be removed by the members only at a meeting called for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.
  6. In computing whether a director is protected from removal under subsections (2) through (4) of this section, it should be assumed that the votes against removal are cast in an election for the number of directors of the class to which the director to be removed belonged on the date of that director’s election.
  7. An entire board of directors may be removed under subsections (1) through (5) of this section.
  8. The board of directors of a corporation may remove a director without cause who has been elected by the board by the vote of a two-thirds (2/3) of the directors then in office or such greater number as is set forth in the articles or bylaws.
  9. If at the beginning of a director’s term on the board, the articles or bylaws provide that the director may be removed for missing a specified number of board meetings, the board may remove the director for failing to attend the specified number of meetings. The director may be removed only if a majority of the directors then in office vote for the removal.

HISTORY: Laws, 1987, ch. 485, § 73, eff from and after January 1, 1988.

Cross References —

Removal of directors under Mississippi Business Corporation Act, see §§ 79-4-8.08, 79-4-8.09.

Applicability of this section to removal of director elected by cumulative voting, see § 79-11-223.

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-247. Removal of designated director or appointed director.

  1. A designated director may be removed by an amendment to the article or bylaws deleting or changing the designation.
  2. Appointed directors:
    1. Except as otherwise provided in the articles or bylaws, an appointed director may be removed without cause by the person appointing the director;
    2. The person removing the director shall do so by giving written notice of the removal to the director and either the presiding officer of the board or the corporation’s president or secretary;
    3. A removal is effective when the notice is effective unless the notice specifies a future effective date.

HISTORY: Laws, 1987, ch. 485, § 74, eff from and after January 1, 1988.

Cross References —

Removal of directors under Mississippi Business Corporation Act, see §§ 79-4-8.08, 79-4-8.09.

§79-11-249. Removal of director by court proceeding.

  1. The chancery court of the county where a corporation’s principal office is located may remove any director of the corporation from office in a proceeding commenced either by the corporation or its members holding at least ten percent (10%) of the voting power of any class if the court finds that:
    1. the director engaged in fraudulent or dishonest conduct, or gross abuse of authority or discretion, with respect to the corporation, or a final judgment has been entered finding that the director has violated a duty set forth in Sections 79-11-267 and 79-11-269, and
    2. removal is in the best interest of the corporation.
  2. The court that removes a director may bar the director from serving on the board for a period prescribed by the court.
  3. If members commence a proceeding under subsection (1) of this section, the corporation shall be made a party defendant.

HISTORY: Laws, 1987, ch. 485, § 75, eff from and after January 1, 1988.

Cross References —

Removal of directors under Mississippi Business Corporation Act, see §§ 79-4-8.08, 79-4-8.09.

RESEARCH REFERENCES

Am. Jur.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 291, 300, 301.

§79-11-251. Filling of vacancy in board of directors.

  1. Unless the articles or bylaws provide otherwise, and except as provided in subsections (2) and (3) of this section, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:
    1. The members, if any, may fill the vacancy; provided that if the vacant office was held by a director elected by a class, chapter or other organizational unit or by region or other geographic grouping, only members of the class, chapter, unit or grouping are entitled to vote to fill the vacancy if it is filled by the members;
    2. The board of directors may fill the vacancy; or
    3. If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.
  2. Unless the articles or bylaws provide otherwise, if a vacant office was held by an appointed director, only the person who appointed the director may fill the vacancy.
  3. If a vacant office was held by a designated director, the vacancy shall be filled as provided in the articles or bylaws. In the absence of an applicable article or bylaw provision, the vacancy may not be filled by the board.
  4. A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date under Section 79-11-243(2) or otherwise) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

HISTORY: Laws, 1987, ch. 485, § 76, eff from and after January 1, 1988.

Cross References —

Filling vacancy on board under Mississippi Business Corporation Act, see § 79-4-8.10.

§79-11-253. Compensation of directors.

Unless the articles or bylaws provide otherwise, a board of directors may fix the compensation of directors.

HISTORY: Laws, 1987, ch. 485, § 77, eff from and after January 1, 1988.

Cross References —

Compensation of directors under Mississippi Business Corporation Act, see § 79-4-8.11.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-255. Meetings of board of directors.

  1. The board of directors may hold regular or special meetings in or out of this state.
  2. Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

HISTORY: Laws, 1987, ch. 485, § 78, eff from and after January 1, 1988.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to committees of the board and their members, see § 79-11-265.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1257.

§79-11-257. Action taken by board of directors without meeting.

  1. Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by Section 79-11-101 et seq. to be taken at a board of directors’ meeting may be taken without a meeting if the action is taken by all members of the board. The action must be evidenced by one or more written consents describing the action taken, signed by each director, and included in the minutes or filed with the corporate records reflecting the action taken.
  2. Action taken under this section is effective when the last director signs the consent, unless the consent specifies a different effective date.
  3. A consent signed under this section has the effect of a meeting vote and may be described as such in any document.

HISTORY: Laws, 1987, ch. 485, § 79, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to committees of the board and their members, see § 79-11-265.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1257.

§79-11-259. Notice of regular and special meetings of board of directors.

  1. Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place or purpose of the meeting.
  2. Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors must be preceded by at least two (2) days’ notice of the date, time and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.

HISTORY: Laws, 1987, ch. 485, § 80, eff from and after January 1, 1988.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to committees of the board and their members, see § 79-11-265.

Applicability of this section to notice requirements for meeting of directors to amend bylaws of corporation with no members, see § 79-11-313.

Applicability of this section to notice requirements for meeting of board of directors to approve plan of merger, see § 79-11-321.

Applicability of this section to notice requirements for meeting of board of directors to approve the sale or other disposition of a corporation’s property not in the usual course of business, see § 79-11-331.

Notice requirements for meeting of board of directors or incorporators of corporation without members to dissolve the corporation, see § 79-11-333 and § 79-11-335.

§79-11-261. Waiver of notice of meeting of board of directors.

  1. A director may waive any notice required by Section 79-11-101 et seq., the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by subsection (2) of this section, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.
  2. A director’s attendance at or participation in a meeting waives any required notice to him of the meeting unless the director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

HISTORY: Laws, 1987, ch. 485, § 81, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Applicability of this section to committees of the board and their members, see § 79-11-265.

§79-11-263. Quorum of board of directors; director present at meeting deemed to have assented to action taken; exceptions.

  1. Except as otherwise provided in Section 79-11-101 et seq., the articles or bylaws, a quorum of a board of directors consists of a majority of the directors in office immediately before a meeting begins.
  2. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board unless Section 79-11-101 et seq., the articles or bylaws, require the vote of a greater number of directors.
  3. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless: (a) he objects at the beginning of the meeting, or promptly upon his arrival, to holding it or transacting business at the meeting; (b) his dissent or abstention from the action taken is entered in the minutes of the meeting; or (c) he delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.

HISTORY: Laws, 1987, ch. 485, § 82; Laws, 1988, ch. 417, § 4, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1) and (2) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Applicability of this section to committees of the board and their members, see § 79-11-265.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations § 1257.

§79-11-265. Committees of board of directors.

  1. Unless prohibited or limited by the articles or bylaws, a board of directors may create one or more committees of the board and appoint members of the board to serve on them. Each committee shall have two (2) or more directors who serve at the pleasure of the board.
  2. The creation of a committee and appointment of directors to it must be approved by the greater of:
    1. A majority of all the directors in office when the action is taken; or
    2. The number of directors required by the articles or bylaws to take action under Section 79-11-263.
  3. Sections 79-11-255 through 79-11-263, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board, apply to committees of the board and their members as well.
  4. To the extent specified by the board of directors or in the articles or bylaws, each committee of the board may exercise the board’s authority under Section 79-11-231.
  5. A committee of the board may not, however:
    1. Authorize distributions;
    2. Approve or recommend to members dissolution, merger or the sale, pledge or transfer of all or substantially all of the corporation’s assets;
    3. Elect, appoint or remove directors or fill vacancies on the board or on any of its committees; or
    4. Adopt, amend or repeal the articles or bylaws.
  6. The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in Section 79-11-267.

HISTORY: Laws, 1987, ch. 485, § 83, eff from and after January 1, 1988.

Cross References —

Meetings and actions of the board under Mississippi Business Corporation Act, see §§ 79-4-8.20 through 79-4-8.25.

Requirement that corporation keep permanent record of all actions taken by committees of board of directors as authorized by this section, see § 79-11-283.

§79-11-267. Director to act in best interests of corporation; director’s reliance upon others for information; liability of directors.

  1. A director shall discharge his duties as a director, including his duties as a member of a committee, in accordance with his good faith belief that he is acting in the best interests of the corporation.
  2. Unless he has knowledge or information concerning the matter in question that makes reliance unwarranted, a director is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:
    1. One or more officers or employees of the corporation whom the director believes, in good faith, to be reliable and competent in the matters presented;
    2. Legal counsel, public accountants or other persons as to matters the director believes, in good faith, are within the person’s professional or expert competence; or
    3. A committee of the board of directors of which he is not a member if the director believes, in good faith, that the committee merits confidence.
  3. A director is not liable for any action taken as a director, or any failure to take any action, if he performed the duties of his office in compliance with this section.
  4. A person alleging a violation of this section has the burden of proving the violation.
  5. Notwithstanding any other provision of this section, a director of a corporation that is a charitable organization as defined in Section 79-11-501 shall not be liable to the corporation or its members for money damages for any action taken, or any failure to take any action, as a director, except liability for:
    1. The amount of a financial benefit received by the director to which the director is not entitled;
    2. An intentional infliction of harm;
    3. A violation of Section 79-11-270; or
    4. An intentional violation of criminal law.

HISTORY: Laws, 1987, ch. 485, § 84; Laws, 2011, ch. 440, § 12, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (5).

Cross References —

General standards for directors under Mississippi Business Corporation Act, see §§ 79-4-8.30 through 79-4-8.33.

Violation of duty set forth in this section as ground for removal of director, see § 79-11-249.

Provision that creation of, delegation of authority to, or action by committee does not alone constitute compliance by director with standards of conduct described in this section, see § 79-11-265.

Liability of director for unlawful distribution, see § 79-11-270.

Inability of corporation to indemnify director against his or her failure to act in accordance with standard of conduct provided in this section, see § 79-11-281.

Applicability of this section to conduct of directors after dissolution of corporation, see § 79-11-341.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1314, 1460, 1480, 1540.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 311-336.

CJS.

14 C.J.S., Charities § 81.

§79-11-269. Conflict of interest transaction.

  1. A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation solely because of the director’s interest in the transaction if any one (1) of the following is true:
    1. The material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved or ratified the transaction;
    2. The material facts of the transaction and the director’s interest were disclosed or known to the members entitled to vote and they authorized, approved or ratified the transaction; or
    3. The transaction was fair to the corporation.
  2. For purposes of this section, a director of the corporation has an indirect interest in a transaction if (a) another entity in which he has a material financial interest or in which he is a general partner is a party to the transaction, or (b) another entity of which he is a director, officer or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the corporation.
  3. For purposes of subsection (1)(a) of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the affirmative vote of a majority of the directors on the board of directors (or on the committee) who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection (1)(a) of this section if the transaction is otherwise authorized, approved or ratified as provided in that subsection.
  4. For purposes of subsection (1)(b) of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the vote of a majority of the members whose votes are entitled to be counted under this subsection. The vote of a member who is a director who has a direct or indirect interest in the transaction, and the vote of a member who is under the control of an entity described in subsection (2)(a) of this section, may not be counted in a vote of members to determine whether to authorize, approve or ratify a conflict of interest transaction under subsection (1)(b) of this section. The vote of those members, however, shall be counted in determining whether the transaction is approved under other sections of Section 79-11-101 et seq. A majority of the members, whether or not present, whose votes are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.

HISTORY: Laws, 1987, ch. 485, § 85, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (4) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

General standards for directors under Mississippi Business Corporation Act, see §§ 79-4-8.30 through 79-4-8.33.

Director’s conflict of interest under Mississippi Business Corporation Act, see §§ 79-4-8.60 through 79-4-8.70.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

Violation of duty set forth in this section as ground for removal of director, see § 79-11-249.

§79-11-270. Liability of director for unlawful distribution.

  1. A director who votes for or assents to a distribution made in violation of Section 79-11-101 et seq. is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating Section 79-11-101 et seq., if it is established that he did not perform his duties in compliance with Section 79-11-267. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.
  2. A director held liable under subsection (1) for an unlawful distribution is entitled to contribution:
    1. From every other director who could be held liable under subsection (1) for the unlawful distribution; and
    2. From each person who received an unlawful distribution for the amount of the distribution whether or not the person receiving the distribution knew it was made in violation of Section 79-11-101 et seq.

HISTORY: Laws, 1988, ch. 417, § 5, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1) and (2)(b) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

General standards for directors under Mississippi Business Corporation Act, see §§ 79-4-8.30 through 79-4-8.33.

§79-11-271. Officers of corporation.

  1. A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.
  2. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the bylaws or the board of directors.
  3. The bylaws or the board of directors shall delegate to one (1) of the officers responsibility for preparing minutes of the directors’ and members’ meetings and for authenticating records of the corporation.
  4. The same individual may simultaneously hold more than one (1) office in a corporation.

HISTORY: Laws, 1987, ch. 485, § 86, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Business Corporation Act, see §§ 79-4-8.40 through 79-4-8.44.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1534 et seq.

CJS.

14 C.J.S., Charities § 81.

§79-11-273. Duties of officers.

Each officer has the authority and shall perform the duties set forth in the bylaws or, to the extent consistent with the bylaws, the duties prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the duties of other officers.

HISTORY: Laws, 1987, ch. 485, § 87, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Business Corporation Act, see §§ 79-4-8.40 through 79-4-8.44.

Applicability of this section to definition of “secretary” for purposes of Mississippi Nonprofit Corporation Act, see § 79-11-127.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1328 et seq.

CJS.

14 C.J.S., Charities § 81.

§79-11-275. Officers to act in best interests of corporation; reliance upon others for information; liability of officers.

  1. An officer with discretionary authority shall discharge his duties under that authority, in accordance with his good faith belief that he is acting in the best interests of the corporation.
  2. Unless he has knowledge or information concerning the matter in question that makes reliance unwarranted, an officer is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:
    1. One or more officers or employees of the corporation whom the officer believes, in good faith, to be reliable and competent in the matters presented; or
    2. Legal counsel, public accountants or other persons as to matters the officer believes, in good faith, are within the person’s professional or expert competence.
  3. An officer is not liable for any action taken as an officer, or any failure to take any action, if he performed the duties of his office in compliance with this section.
  4. A person alleging a violation of this section has the burden of proving the violation.

HISTORY: Laws, 1987, ch. 485, § 88, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Business Corporation Act, see §§ 79-4-8.40 through 79-4-8.44.

Inability of corporation to indemnify officer against his or her failure to act in accordance with standard of conduct provided in this section, see § 79-11-281.

Applicability of this section to conduct of officers after dissolution of corporation, see § 79-11-341.

RESEARCH REFERENCES

Am. Jur.

18B Am. Jur. 2d, Corporations §§ 1314, 1333, 1460, 1480, 1540.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 311-336.

CJS.

14 C.J.S., Charities § 81.

§79-11-277. Resignation or removal of officer.

  1. An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the corporation accepts the future effective date, its board of directors may fill the pending vacancy before the effective date if the board of directors provides that the successor does not take office until the effective date.
  2. A board of directors may remove any officer at any time with or without cause.

HISTORY: Laws, 1987, ch. 485, § 89, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Business Corporation Act, see §§ 79-4-8.40 through 79-4-8.44.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-279. Contract rights between officer and corporation.

  1. The appointment of an officer does not itself create contract rights between the officer and the corporation.
  2. An officer’s removal does not affect the officer’s contract rights, if any, with the corporation. An officer’s resignation does not affect the corporation’s contract rights, if any, with the officer.

HISTORY: Laws, 1987, ch. 485, § 90, eff from and after January 1, 1988.

Cross References —

Officers of corporation under Mississippi Business Corporation Act, see §§ 79-4-8.40 through 79-4-8.44.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 81.

§79-11-281. Indemnification of director, officer, employee, or agent.

  1. In this section:
    1. “Director” means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation’s request as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. A director is considered to be serving an employee benefit plan at the corporation’s request if his duties to the corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. “Director” includes, unless the context requires otherwise, the estate or personal representative of a director.
    2. “Expenses” includes counsel fees.
    3. “Liability” means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan) or reasonable expenses incurred with respect to a proceeding.
    4. “Official capacity” means: (i) when used with respect to a director, the office of director in a corporation; or (ii) when used with respect to an individual other than a director, as contemplated in subsection (8) of this section, the office in a corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation. “Official capacity” does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise.
    5. “Party” includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
    6. “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal.
  2. Except as provided in subsection (3) of this section, a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if:
    1. He conducted himself in good faith; and
    2. He in good faith believed:
      1. In the case of conduct in his official capacity with the corporation that his conduct was in its best interests; and
      2. In all other cases, that his conduct was at least not opposed to its best interests; and
    3. In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.

      A director’s conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (2)(b)(ii) of this section.

      The termination of a proceeding by judgment, order, settlement or conviction is not, of itself, determinative that the director did not meet the standard of conduct described in this section.

  3. A corporation may not indemnify a director under this section:
    1. In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or
    2. In connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him.

      Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.

  4. Unless limited by its articles of incorporation, a corporation shall indemnify a director who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding.
  5. A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
    1. The director furnishes the corporation a written statement of his good faith belief that he has met the standard of conduct described in subsection (2) of this section;
    2. The director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and
    3. A determination is made that the facts then known to those making the determination would not preclude indemnification under Section 79-11-101 et seq.

      The undertaking required by subsection (5)(b) of this section shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.

      Determinations and authorizations of payment under this section shall be made in the manner specified in subsection (7) of this section.

  6. Unless limited by a corporation’s articles of incorporation, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or seek indemnification in another court of competent jurisdiction. The court may order indemnification if it determines:
    1. The director is entitled to mandatory indemnification under subsection (4) of this section, in which case the court shall also order the corporation to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification; or
    2. With respect to a proceeding by or in the right of the corporation, the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, even though he was adjudged liable, but any indemnification shall be limited to reasonable expenses incurred.
  7. A corporation may not indemnify a director under subsection (2) of this section unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in subsection (2) of this section.
    1. The determination shall be made:

      1. Selected by the board of directors or its committee in the manner prescribed in subparagraph (i) or (ii) of this paragraph; or

      2. If a quorum of the board of directors cannot be obtained under subparagraph (i) of this paragraph and a committee cannot be designated under subparagraph (ii) of this paragraph selected by majority vote of the full board of directors (in which selection directors who are parties may participate); or

      1. By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
      2. If a quorum cannot be obtained under subparagraph (i) of this paragraph, by a majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two (2) or more directors not at the time parties to the proceeding;
      3. By special legal counsel:
      4. By the members but with the parties to the proceeding not being permitted to vote on the determination.
    2. Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (7)(a)(iii) of this section to select counsel.
  8. Unless limited by a corporation’s articles of incorporation:
    1. An officer of the corporation is entitled to mandatory indemnification under subsection (2) of this section and is entitled to apply for court-ordered indemnification under subsection (6) of this section, in each case to the same extent as a director;
    2. The corporation may indemnify and advance expenses under Section 79-11-101 et seq. to an officer, employee or agent of the corporation to the same extent as to a director.
  9. A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee or agent, whether or not the corporation would have power to indemnify him against the same liability under subsection (1) or (2) of this section.
  10. Unless the articles of incorporation or bylaws provide otherwise, any authorization of indemnification in the articles of incorporation or bylaws shall not be deemed to prevent the corporation from providing the indemnity permitted or mandated by this section.
  11. Any corporation shall have power to make any further indemnity, including advance of expenses, to and to enter into contracts of indemnity with any director, officer, employee or agent that may be authorized by the articles of incorporation or any bylaw made by the members (or if there are no members, by the board of directors) or any resolution adopted, before or after the event, by the members (or if there are no members, by the board of directors), except an indemnity against his failure to act in accordance with the standard of conduct provided in Section 79-11-267 or 79-11-275, as applicable. Unless the articles of incorporation, or any such bylaw or resolution provide otherwise, any determination as to any further indemnity shall be made in accordance with subsection (7)(a) of this section. Each such indemnity may continue as to a person who has ceased to have the capacity referred to above and may inure to the benefit of the heirs, executors and administrators of such a person.

HISTORY: Laws, 1987, ch. 485, § 91, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (5)(c) and (8)(b) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error near the end of the first sentence in subsection (11) by substituting “ Section 79-11-267 or 79-11-275” for “ Sections 79-11-267 or 79-11-275.” The Joint Committee ratified the correction at its August 1, 2013, meeting.

Cross References —

Indemnification of directors, officers under Mississippi Business Corporation Act, see §§ 79-4-8.50 through 79-4-8.59.

Indemnification of corporation director, see §§ 79-4-8.51, 79-4-8.52, 79-4-8.54.

Indemnification of corporation officer, see § 79-4-8.56.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities § 178.

JUDICIAL DECISIONS

1. Adjudged liable.

2. Defense to indemnification.

1. Adjudged liable.

Director who was acquitted on indictment charging embezzlement for personal benefit was not “adjudged liable” within meaning of statute which prohibits corporation from indemnifying director in connection with proceeding charging improper personal benefit, if director was adjudged liable on basis that personal benefit was improperly received. Murphree v. Federal Ins. Co., 707 So. 2d 523, 1997 Miss. LEXIS 145 (Miss. 1997).

Mere indictment of director for embezzlement for personal profit or advantage does not entitle corporation to deny indemnification on basis of statute permitting corporation to reimburse reasonable expenses incurred by director in advance of final disposition of proceeding, if determination is made that facts then known to those making determination would not preclude indemnification; another portion of statute called for director to be adjudged liable before indemnification could be denied, and indictment was not equal to being adjudged liable. Murphree v. Federal Ins. Co., 707 So. 2d 523, 1997 Miss. LEXIS 145 (Miss. 1997).

2. Defense to indemnification.

Advice of counsel was not valid excuse for corporation’s denial of director’s request for indemnification after director was indicted for embezzlement for personal benefit; attorneys misread plain language of statute that called for director to be adjudged liable before indemnification could be denied, and corporation heeded attorneys’ advice at its own risk. Murphree v. Federal Ins. Co., 707 So. 2d 523, 1997 Miss. LEXIS 145 (Miss. 1997).

Corporation’s motivation in denying director’s request for indemnification before his acquittal on charge of embezzlement for personal benefit presented question of fact precluding summary judgment on claim of bad faith breach of contractual duty to indemnify director, even though no judicial interpretation existed concerning statute on indemnification of director, and case allegedly presented matter of first impression. Murphree v. Federal Ins. Co., 707 So. 2d 523, 1997 Miss. LEXIS 145 (Miss. 1997).

§79-11-282. Restrictions on corporate loans; borrower’s liability.

  1. A corporation may not lend money to or guarantee the obligation of a director or officer of the corporation.
  2. The fact that a loan or guarantee is made in violation of this section does not affect the borrower’s liability on the loan.

HISTORY: Laws, 1988, ch. 417, § 6, eff from and after July 1, 1988.

Cross References —

Application to religious corporations, see § 79-11-403.

§79-11-283. Recordkeeping requirements.

  1. A corporation shall keep as permanent records minutes of all meetings of its members and board of directors, a record of all actions taken by the members or directors without a meeting, and a record of all actions taken by committees of the board of directors as authorized by Section 79-11-265.
  2. A corporation shall maintain appropriate accounting records.
  3. A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the names and addresses of all members, in alphabetical order by class showing the number of votes each member is entitled to vote.
  4. A corporation shall maintain its records in written form or in any other form of a record.
  5. A corporation shall keep a copy of the following records at its principal office:
    1. Its articles or restated articles of incorporation and all amendments to them currently in effect;
    2. Its bylaws or restated bylaws and all amendments to them currently in effect;
    3. Resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations and obligations of members or any class or category of members;
    4. The minutes of all meetings of members and records of all actions approved by the members for the past three (3) years;
    5. All written communications to members generally within the past three (3) years;
    6. A list of the names and business or home addresses of its current directors and officers; and
    7. Its most recent status report delivered to the Secretary of State under Section 79-11-391.

HISTORY: Laws, 1987, ch. 485, § 92; Laws, 2011, ch. 440, § 13, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, substituted “any other form of a record” for “another form capable of conversion into written form within a reasonable time” at the end of (4).

Cross References —

Member’s right to inspect and copy corporation records, see § 79-11-285.

RESEARCH REFERENCES

ALR.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership lists. 37 A.L.R.4th 1206.

§79-11-285. Members’ right to inspect and copy corporation records; requirements.

  1. Subject to Section 79-11-287(3), a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in Section 79-11-283(5) if the member gives the corporation written notice of his demand at least five (5) business days before the date on which the member wishes to inspect and copy.
  2. A member is entitled to inspect and copy, at a reasonable time and reasonable location specified by the corporation, any of the following records of the corporation if the member meets the requirements of subsection (3) of this section and gives the corporation written notice at least five (5) business days before the date on which the member wishes to inspect and copy:
    1. Excerpts from any records required to be maintained under Section 79-11-283(1), to the extent not subject to inspection under subsection (1) of this section;
    2. Accounting records of the corporation; and
    3. Subject to Section 79-11-291, the membership list.
  3. A member may inspect and copy the records identified in subsection (2) of this section only if:
    1. The member’s demand is made in good faith and for a proper purpose;
    2. The member describes with reasonable particularity the purpose and the records the member desires to inspect; and
    3. The records are directly connected with this purpose.
  4. This section does not affect:
    1. The right of a member to inspect records if the member is in litigation with the corporation, to the same extent as any other litigant; or
    2. The power of a court, independently of Section 79-11-101 et seq., to compel the production of corporate records for examination.

HISTORY: Laws, 1987, ch. 485, § 93, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (4)(b) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Applicability of this section to member’s right to copy corporation’s list of members entitled to notice of meeting, see § 79-11-213.

Inspection and copying of corporate records, see § 79-11-287.

Authority of chancery court to order inspection and copying of records if corporation does not allow member to inspect and copy records under this section, see § 79-11-289.

RESEARCH REFERENCES

ALR.

Stockholder’s right to inspect books and records of foreign corporation. 19 A.L.R.3d 869.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 291, 298, 335.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 231-251.

§79-11-287. Conditions on right to inspect; member’s agent or attorney has right to inspect and copy records; means of copying records; charges for copying documents by corporation; lists which satisfy demand for record of members.

  1. A member’s agent or attorney has the same inspection and copying rights as the member the agent or attorney represents.
  2. The right to copy records under Section 79-11-285 includes, if reasonable, the right to receive copies. Copies may be provided through an electronic transmission if available and so requested by the member.
  3. The corporation may impose a reasonable charge, covering the costs of labor and material, for copies of any documents provided to the member. The charge may not exceed the estimated cost of production or reproduction of the records.
  4. The corporation may comply with a member’s demand to inspect the record of members under Section 79-11-285(2)(c) by providing the member with a list of its members that was compiled no earlier than the date of the member’s demand.

HISTORY: Laws, 1987, ch. 485, § 94; Laws, 2011, ch. 440, § 14, eff from and after Jan. 1, 2012.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, deleted “made by photographic, xerographic or other means” at the end of the first sentence and added the second sentence in (2).

Cross References —

Member’s right to inspect and copy corporation records, see § 79-11-285.

RESEARCH REFERENCES

ALR.

Stockholder’s right to inspect books and records of foreign corporation. 19 A.L.R.3d 869.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 291, 298, 335.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 231-251.

§79-11-289. Court-ordered inspection where corporation does not allow member to inspect and copy records.

  1. If a corporation does not allow a member who complies with Section 79-11-285(1) to inspect and copy any records required by that subsection to be available for inspection, the chancery court in the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may summarily order inspection and copying of the records demanded at the corporation’s expense upon application of the member.
  2. If a corporation does not within a reasonable time allow a member to inspect and copy any other record, the member who complies with Section 79-11-285(2) and (3) may apply to the chancery court in the county where the corporation’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, for an order to permit inspection and copying of the records demanded. The court shall dispose of an application under this subsection on an expedited basis.
  3. If the court orders inspection and copying of the records demanded, it shall also order the corporation to pay the member’s costs (including reasonable attorney’s fees) incurred to obtain the order unless the corporation proves that it refused inspection in good faith because it had a reasonable basis for doubt about the right of the member to inspect the records demanded.
  4. If the court orders inspection and copying of the records demanded, it may impose reasonable restrictions on the use or distribution of the records by the demanding member.

HISTORY: Laws, 1987, ch. 485, § 95; Laws, 2012, ch. 382, § 59, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for “principal office (or, if none in this state, its registered office) is located” in (1) and (2).

RESEARCH REFERENCES

ALR.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 291, 298, 335.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 231-251.

§79-11-291. Restrictions on use of membership lists.

Without consent of the board, a membership list or any part thereof may not be obtained or used by any person for any purpose unrelated to a member’s interest as a member. Without limiting the generality of the foregoing, without the consent of the board a membership list or any part thereof may not be:

Used to solicit money or property unless such money or property will be used solely to solicit the votes of the members in an election to be held by the corporation;

Used for any commercial purpose; or

Sold to or purchased by any person.

HISTORY: Laws, 1987, ch. 485, § 96, eff from and after January 1, 1988.

Cross References —

Applicability of this section to member’s right to copy corporation’s list of members entitled to notice of meeting, see § 79-11-213.

Member’s right to inspect and copy corporation records, see § 79-11-285.

RESEARCH REFERENCES

ALR.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 291, 228, 335.

§79-11-293. Authorization for making distributions; conditions for corporation to purchase memberships.

  1. Except as authorized under subsections (2) and (3) of this section, a corporation shall not make any distributions.
  2. A corporation may purchase its memberships if after the purchase is completed:
    1. The corporation would be able to pay its debts as they become due in the usual course of its activities; and
    2. The corporation’s total assets would at least equal the sum of its total liabilities.
  3. A corporation may make distributions upon dissolution in accordance with the provisions of Section 79-11-101 et seq. relating to dissolution.

HISTORY: Laws, 1987, ch. 485, § 97, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (3) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Authorization for corporation to purchase membership of member who resigns or whose membership is terminated, see § 79-11-191.

Liability of director for unlawful distribution, see § 79-11-270.

RESEARCH REFERENCES

ALR.

Distribution of funds by nonprofit corporation absent dissolution. 51 A.L.R.3d 1318.

Am. Jur.

6 Am. Jur. 2d, Associations and Clubs § 60.

19 Am. Jur. 2d, Corporations §§ 2279, 2281, 2298, 2299, 2418, 2488.

36 Am. Jur. 2d, Fraternal Orders and Benefit Societies §§ 153, 156.

6A Am. Jur. Legal Forms 2d, Corporations §§ 74:863, 74:866.

§79-11-295. Authorization to amend articles of incorporation.

A corporation may amend its articles of incorporation, from time to time, in any and as many respects as may be desired, so long as its articles of incorporation as amended contain only such provisions as are lawful under Section 79-11-101 et seq.

HISTORY: Laws, 1987, ch. 485, § 98, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Filing fees, see § 79-11-109.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-297. Amendment of articles of incorporation prior to corporation’s acquisition of members.

If a corporation has not yet acquired members, its incorporators or board of directors may adopt one or more amendments to the corporation’s articles of incorporation.

HISTORY: Laws, 1987, ch. 485, § 99, eff from and after January 1, 1988.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Filing fees, see § 79-11-109.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Manner of making amendments to articles of incorporation where provisions of this section are not applicable, see § 79-11-301.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-299. Amendments to articles of incorporation which may be adopted by board of directors without action by members.

Unless the articles of incorporation provide otherwise, a corporation’s board of directors may adopt one or more amendments to the corporation’s articles of incorporation without action by members:

To extend the duration of the corporation if it was incorporated at a time when limited duration was required by law;

To delete the names and addresses of the initial directors;

To change the information required by Section 79-35-5(a);

To make any other change expressly permitted by Section 79-11-101 et seq. to be made without member action.

HISTORY: Laws, 1987, ch. 485, § 100; Laws, 2012, ch. 382, § 60, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, a typographical error in paragraph (d) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (c), which previously read: “To delete the name and address of the initial registered agent or registered office, if a statement of change is on file with the Secretary of State.”

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Manner of making amendments to articles of incorporation where provisions of this section are not applicable, see § 79-11-301.

Manner of making amendments to articles of incorporation in a restatement, where provisions of this section are not applicable, see § 79-11-307.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-301. Procedures for making amendments to articles of incorporation.

Except as provided in Sections 79-11-297 and 79-11-299, amendments to the articles of incorporation shall be made in the following manner:

If there are members entitled to vote thereon, the board of directors shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote at a meeting of members entitled to vote thereon, which may be either an annual or a special meeting. Written notice setting forth the proposed amendment or a summary of the changes to be effected thereby shall be given to each member entitled to vote at such meeting within the time and in the manner provided in Section 79-11-101 et seq. for the giving of notice of meetings of members. The proposed amendment shall be adopted upon receiving at least two-thirds (2/3) of votes cast or a majority of the voting power, whichever is less.

If there are no members, or no members entitled to vote thereon, an amendment shall be adopted at a meeting of the board of directors upon receiving the vote of a majority of the directors in office.

Any number of amendments may be submitted and voted upon at any one meeting.

HISTORY: Laws, 1987, ch. 485, § 101, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in paragraph (a) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

Applicability of this section to restatement of corporation’s articles of incorporation, see § 79-11-307.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-11-9.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-11-9.

11. In general.

Board of trustees of orphanage organized as nonprofit corporation are members of corporation entitled to adopt and approve amendment to corporate charter, to exclusion of governing body of church which created corporation, where corporate charter contains no provision regarding membership in corporation and trustees have assumed all powers of membership. Allgood v. Bradford, 473 So. 2d 402, 1985 Miss. LEXIS 2145 (Miss. 1985).

A charter amendment changing the domicil of a corporation from one county to another is not required to be recorded in the former county. Bob Milner Rentals, Inc. v. Moon, 246 Miss. 326, 149 So. 2d 473, 1963 Miss. LEXIS 446 (Miss. 1963).

Contention that religious organization’s charter, granted prior to adoption of Constitution in 1890, exempting property from taxation violated Constitution prohibiting passage of local, private, or special laws exempting property from taxation involved question of effect of amendment of organization’s charter after adoption of Biloxi v. Trustees of Mississippi Annual Conference Endowment Fund, 179 Miss. 47, 173 So. 797, 1937 Miss. LEXIS 9 (Miss. 1937).

§79-11-303. Amendments to articles affecting members of class to be voted on by members of such class.

  1. The members of a class are entitled to vote as a class on a proposed amendment to the articles if the amendment would:
    1. Affect the rights, privileges, preferences, restrictions or conditions of that class as to voting, dissolution, redemption or transfer of memberships in a manner different than such amendment would affect another class;
    2. Change the rights, privileges, preferences, restrictions or conditions of that class as to voting, dissolution, redemption or transfer by changing the rights, privileges, preferences, restrictions or conditions of another class;
    3. Increase or decrease the number of memberships authorized for that class;
    4. Increase the number of memberships authorized for another class;
    5. Effect an exchange, reclassification or termination of the memberships of that class; or
    6. Authorize a new class of memberships.
  2. If a class is to be divided into two (2) or more classes as a result of an amendment to the articles, the amendment must be approved by the members of each class that would be created by the amendment.
  3. If a class vote is required to approve an amendment to the articles the amendment must be approved by the members of the class by two-thirds (2/3) of the votes cast by the class or a majority of the voting power of the class, whichever is less.
  4. A class of members is entitled to the voting rights granted by this section although the articles and bylaws provide that the class may not vote on the proposed amendment.

HISTORY: Laws, 1987, ch. 485, § 102, eff from and after January 1, 1988.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to approval by class of members of plan of merger, see § 79-11-321.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-305. Filing of amendments to articles of incorporation.

A corporation amending its articles of incorporation shall deliver to the Secretary of State for filing articles of amendment setting forth:

The name of the corporation;

The text of each amendment adopted;

The date of each amendment’s adoption;

If an amendment was adopted by the incorporators or board of directors without action by members, a statement to that effect and that action by members was not required;

If an amendment was approved by the members:

The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the amendment, and number of votes of each class indisputably represented at the meeting;

Either the total number of votes cast for and against the amendment by each class entitled to vote separately on the amendment or the total number of undisputed votes cast for the amendment by each class and a statement that the number cast for the amendment by each class was sufficient for approval by that voting group.

HISTORY: Laws, 1987, ch. 485, § 103, eff from and after January 1, 1988.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

Applicability of this section to filing of corporation’s articles of restatement, see § 79-11-307.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-11-11.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-11-11.

11. In general.

A charter amendment changing the domicil of a corporation from one county to another is not required to be recorded in the former county. Bob Milner Rentals, Inc. v. Moon, 246 Miss. 326, 149 So. 2d 473, 1963 Miss. LEXIS 446 (Miss. 1963).

§79-11-307. Restatement of articles of incorporation.

  1. A corporation’s board of directors may restate its articles of incorporation at any time with or without approval by members.
  2. The restatement may include one or more amendments to the articles. If the restatement includes an amendment requiring approval by members, it must be adopted as provided in Section 79-11-301.
  3. If the board of directors submits a restatement for approval by members, the corporation shall notify each member of the proposed meeting in accordance with Section 79-11-205. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed restatement and contain or be accompanied by a copy of the restatement that identifies any amendment or other change it would make in the articles.
  4. A corporation restating its articles of incorporation shall deliver to the Secretary of State for filing articles of restatement setting forth the name of the corporation and the text of the restated articles of incorporation together with a certificate setting forth:
    1. Whether the restatement contains an amendment to the articles requiring approval by the members and, if it does not, that the board of directors adopted the restatement; or
    2. If the restatement contains an amendment to the articles requiring approval by the members, the information required by Section 79-11-305.
  5. Duly adopted restated articles of incorporation supersede the original articles of incorporation and all amendments to them.
  6. The Secretary of State may certify restated articles of incorporation, as the articles of incorporation currently in effect, without including the certificate information required by subsection (4) of this section.

HISTORY: Laws, 1987, ch. 485, § 104, eff from and after January 1, 1988.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of the Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-309. Amendments to articles of incorporation to carry out court ordered reorganization.

  1. A corporation’s articles of incorporation may be amended without action by the board of directors or members to carry out a plan of reorganization ordered or decreed by a court of competent jurisdiction under federal statute if the articles of incorporation after amendment contain only provisions required or permitted by Section 79-11-137.
  2. The individual or individuals designated by the court shall deliver to the Secretary of State for filing articles of amendment setting forth:
    1. The name of the corporation;
    2. The text of each amendment approved by the court;
    3. The date of the court’s order or decree approving the articles of amendment;
    4. The title of the reorganization proceeding in which the order or decree was entered; and
    5. A statement that the court had jurisdiction of the proceeding under federal statute.
  3. Members of a corporation undergoing reorganization do not have dissenters’ rights except as and to the extent provided in the reorganization plan.
  4. This section does not apply after entry of a final decree in the reorganization proceeding even though the court retains jurisdiction of the proceeding for limited purposes unrelated to consummation of the reorganization plan.

HISTORY: Laws, 1987, ch. 485, § 105, eff from and after January 1, 1988.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

Filing fees, see § 79-11-109.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-311. Amendments to articles of incorporation not to affect legal status of corporation.

An amendment to articles of incorporation does not affect a cause of action existing against or in favor of the corporation, a proceeding to which the corporation is a party, any requirement or limitation imposed upon the corporation or any property held by it by virtue of any trust upon which such property is held by the corporation or the existing rights of persons other than members of the corporation. An amendment changing a corporation’s name does not abate a proceeding brought by or against the corporation in its former name.

HISTORY: Laws, 1987, ch. 485, § 106, eff from and after January 1, 1988.

Cross References —

Amendment of articles of incorporation under Mississippi Business Corporation Act, see §§ 79-4-10.01 through 79-4-10.09.

Application of Mississippi Nonprofit Corporation Act (§ 79-11-101 et seq.) to amendment of articles of incorporation of “private foundations” (as defined in 26 USCS § 509(a)), see § 79-11-57.

RESEARCH REFERENCES

Am. Jur.

6A Am. Jur. Legal Forms 2d, Corporations § 74:936.

§79-11-313. Adoption of amendments to bylaws where corporation has no members.

If a corporation has no members, its incorporators, until directors have been chosen, and thereafter its board of directors may adopt one or more amendments to the corporation’s bylaws. The corporation shall provide notice of any meeting of directors at which an amendment is to be approved. The notice shall be in accordance with Section 79-11-259. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider a proposed amendment to the bylaws and contain or be accompanied by a copy or summary of the amendment or state the general nature of the amendment. The amendment must be approved by a majority of the directors in office at the time the amendment is adopted.

HISTORY: Laws, 1987, ch. 485, § 107, eff from and after January 1, 1988.

Cross References —

Amendment of bylaws under Mississippi Business Corporation Act, see §§ 79-4-10.20 through 79-4-10.22.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

§79-11-315. Approval of amendments to bylaws where corporation has members.

  1. Unless Section 79-11-101 et seq., the articles, bylaws, the members (acting pursuant to subsection (2) of this section), or the board of directors (acting pursuant to subsection (3) of this section) require a greater vote or voting by class, an amendment to a corporation’s bylaws to be adopted must be approved:
    1. By the board if the amendment does not relate to the number of directors, the composition of the board, the term of office of directors, or the method or way in which directors are elected or selected; and
    2. By the members of two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.
  2. The members may condition the amendment’s adoption on its receipt of a higher percentage of affirmative votes or on any other basis.
  3. If the board initiates an amendment to the bylaws or board approval is required by subsection (1) of this section to adopt an amendment to the bylaws, the board may condition the amendment’s adoption on receipt of a higher percentage of affirmative votes or on any other basis.
  4. If the board or the members seek to have the amendment approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in writing in accordance with Section 79-11-205. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed amendment and contain or be accompanied by a copy or summary of the amendment.
  5. If the board or the members seek to have the amendment approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the amendment.

HISTORY: Laws, 1987, ch. 485, § 108, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Amendment of bylaws under Mississippi Business Corporation Act, see §§ 79-4-10.20 through 79-4-10.22.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

§79-11-317. Amendments to bylaws affecting class of members to be voted on by such class.

  1. The members of a class are entitled to vote as a class on a proposed amendment to the bylaws if the amendment would:
    1. Affect the rights, privileges, preferences, restrictions or conditions of that class as to voting, dissolution, redemption or transfer of memberships in a manner different than such amendment would affect another class;
    2. Change the rights, privileges, preferences, restrictions or conditions of that class as to voting, dissolution, redemption or transfer by changing the rights, privileges, preferences, restrictions or conditions of another class;
    3. Increase or decrease the number of memberships authorized for that class;
    4. Increase the number of memberships authorized for another class;
    5. Effect an exchange, reclassification or termination of all or part of the memberships of that class; or
    6. Authorize a new class of memberships.
  2. If a class is to be divided into two (2) or more classes as a result of an amendment to the bylaws, the amendment must be approved by the members of each class that would be created by the amendment.
  3. If a class vote is required to approve an amendment to the bylaws, the amendment must be approved by the members of the class of two-thirds (2/3) of the votes cast by the class or a majority of the voting power of the class, whichever is less.
  4. A class of members is entitled to the voting rights granted by this section although the articles and bylaws provide that the class may not vote on the proposed amendment.

HISTORY: Laws, 1987, ch. 485, § 109, eff from and after January 1, 1988.

Cross References —

Amendment of bylaws under Mississippi Business Corporation Act, see §§ 79-4-10.20 through 79-4-10.22.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Applicability of this section to approval by class of members of plan of merger, see § 79-11-321.

§79-11-319. Plan of merger of corporations.

  1. One or more nonprofit corporations may merge into a business or nonprofit corporation, if the plan of merger is approved as provided in Section 79-11-321.
  2. The plan of merger must set forth:
    1. The name of each corporation planning to merge and the name of the surviving corporation into which each plans to merge; and
    2. The terms and conditions of the planned merger.
  3. The plan of merger may set forth:
    1. Any amendments to the articles of incorporation or bylaws of the surviving corporation to be effected by the planned merger; and
    2. Other provisions relating to the planned merger.

HISTORY: Laws, 1987, ch. 485, § 110, eff from and after January 1, 1988.

Cross References —

Merger of corporations under Mississippi Business Corporation Act, see §§ 79-4-11.02 through 79-4-11.08.

Filing fees, see § 79-11-109.

Applicability of this section to merger of foreign business or nonprofit corporation with domestic nonprofit corporation, see § 79-11-327.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2320.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 401-406.

CJS.

14 C.J.S., Charities § 91.

§79-11-321. Approval of plan of merger; abandonment of plan of merger.

  1. Unless Section 79-11-101 et seq., the articles of incorporation, the bylaws or the board of directors or members (acting pursuant to subsection (3) of this section) require a greater vote or voting by class, a plan of merger to be adopted must be approved:
    1. By the board of directors; and
    2. By the members, if any, by two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.
  2. If the corporation does not have members, the merger must be approved by a majority of the directors in office at the time the merger is approved. In addition, the corporation shall provide notice of any directors’ meeting at which such approval is to be obtained in accordance with Section 79-11-259. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the proposed merger.
  3. The board may condition its submission of the proposed merger, and the members may condition their approval of the merger, on receipt of a higher percentage of affirmative votes or on any other basis.
  4. If the board seeks to have the plan approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with Section 79-11-205. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the plan of merger and contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing corporation shall include a copy or summary of the articles and bylaws which will be in effect immediately after the merger takes effect.
  5. If the board seeks to have the plan approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan. The copy or summary of the plan for members of the surviving corporation shall include any provision that, if contained in a proposed amendment to the articles of incorporation or bylaws, would entitle members to vote on the provision. The copy or summary of the plan for members of the disappearing corporation shall include a copy or summary of the articles and bylaws which will be in effect immediately after the merger takes effect.
  6. Voting by a class of members is required on a plan of merger if the plan contains a provision that, if contained in a proposed amendment to articles of incorporation or bylaws, would entitle the class of members to vote as a class on the proposed amendment under Section 79-11-303 or 79-11-317. The plan is approved by a class of members by two-thirds (2/3) of the votes cast by the class or a majority of the voting power of the class, whichever is less.
  7. After a merger is adopted, and at any time before articles of merger are filed, the planned merger may be abandoned (subject to any contractual rights) without further action by members or other persons who approved the plan in accordance with the procedure set forth in the plan of merger or, if none is set forth, in the manner determined by the board of directors.

HISTORY: Laws, 1987, ch. 485, § 111, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Merger of corporations under Mississippi Business Corporation Act, see §§ 79-4-11.02 through 79-4-11.08.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Authority for one or more nonprofit corporations to merge and contents of plan of merger, see § 79-11-319.

Articles of merger and filing thereof, see § 79-11-323.

Applicability of this section to merger of foreign business or nonprofit corporation with domestic nonprofit corporation, see § 79-11-327.

§79-11-323. Filing of articles of merger.

After a plan of merger is approved by the board of directors, and if required by Section 79-11-321, by the members, the surviving or acquiring corporation shall deliver to the Secretary of State articles of merger setting forth:

The plan of merger;

If approval of members was not required, a statement to that effect and a statement that the plan was approved by a sufficient vote of the board of directors;

If approval by members was required:

The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on the plan, and number of votes of each class indisputably voting on the plan; and

Either the total number of votes cast for and against the plan by each class entitled to vote separately on the plan or the total number of undisputed votes cast for the plan by each class and a statement that the number cast for the plan by each class was sufficient for approval by that class.

HISTORY: Laws, 1987, ch. 485, § 112, eff from and after January 1, 1988.

Cross References —

Merger of corporations under Mississippi Business Corporation Act, see §§ 79-4-11.02 through 79-4-11.08.

Filing fees, see §§ 79-11-109.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

Applicability of this section to merger of foreign business or nonprofit corporation with domestic nonprofit corporation, see § 79-11-327.

§79-11-325. Effects of merger.

  1. When a merger takes effect:
    1. Every other corporation party to the merger merges into the surviving corporation and the separate existence of every corporation except the surviving corporation ceases;
    2. The title to all real estate and other property owned by each corporation party to the merger is vested in the surviving corporation without reversion or impairment;
    3. The surviving corporation has all liabilities and obligations of each corporation party to the merger, provided that trust obligations upon property of a disappearing corporation shall be limited to the property affected thereby immediately prior to the time the merger is effective;
    4. A proceeding pending against any corporation party to the merger may be continued as if the merger did not occur or the surviving corporation may be substituted in the proceeding for the corporation whose existence ceased;
    5. The articles of incorporation and bylaws of the surviving corporation are amended to the extent provided in the plan of merger.

HISTORY: Laws, 1987, ch. 485, § 113, eff from and after January 1, 1988.

Cross References —

Merger of corporations under Mississippi Business Corporation Act, see §§ 79-4-11.02 through 79-4-11.08.

§79-11-327. Merger of foreign corporation with domestic corporation.

  1. One or more foreign business or nonprofit corporations may merge with one or more domestic nonprofit corporations if:
    1. The merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger;
    2. The foreign corporation complies with Section 79-11-323 if it is the surviving corporation of the merger; and
    3. Each domestic nonprofit corporation complies with the applicable provisions of Sections 79-11-319 and 79-11-321 and, if it is the surviving corporation of the merger, with Section 79-11-323.
  2. Upon the merger taking effect, the surviving foreign business or nonprofit corporation may be served with process in any proceeding brought against it as provided in the Mississippi Rules of Civil Procedure.

HISTORY: Laws, 1987, ch. 485, § 114; Laws, 2012, ch. 382, § 61, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “nonprofit corporation may be served with process in any proceeding brought against it as provided in the Mississippi Rules of Civil Procedure” for “nonprofit corporation is deemed to have irrevocably appointed the Secretary of State as its agent for service of process in any proceeding brought against it” in (2).

Cross References —

Merger of one or more domestic corporations with a domestic or foreign corporation, see § 79-4-11.02.

Merger of corporations under Mississippi Business Corporation Act, see §§ 79-4-11.02 through 79-4-11.08.

Filing fees, see § 79-11-109.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2320.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 401-406.

CJS.

14 C.J.S., Charities § 91.

§79-11-329. Sale, lease, exchange, or other disposition of property in regular course of business; mortgaging or otherwise encumbering property.

  1. A corporation may on the terms and conditions and for the consideration determined by the board of directors:
    1. Sell, lease, exchange or otherwise dispose of all, or substantially all, of its property in the usual and regular course of its activities; or
    2. Mortgage, pledge, dedicate to the repayment of indebtedness (with or without recourse), or otherwise encumber any or all of its property whether or not in the usual and regular course of its activities.
  2. Unless the articles of incorporation require it, approval by the members of a transaction described in subsection (1) of this section is not required.

HISTORY: Laws, 1987, ch. 485, § 115, eff from and after January 1, 1988.

Cross References —

Power of water, sewer, garbage disposal, or fire protection districts to buy, lease or otherwise acquire assets and facilities of nonprofit corporation organized pursuant to the Mississippi Nonprofit Corporation Act (§§ 79-11-101 et seq.), see § 19-5-181.

Disposition of corporation assets under Mississippi Business Corporation Act, see §§ 79-4-12.01, 79-4-12.02.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Effect of merger on the title to real estate and other property, see § 79-11-325.

Effect of dissolution on the title to corporation’s property, see § 79-11-341.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2289, 2299.

CJS.

14 C.J.S., Charities § 72.

§79-11-331. Sale, lease, exchange, or other disposition of property not in regular course of business.

  1. A corporation may sell, lease, exchange or otherwise dispose of all, or substantially all, of its property (with or without the goodwill) other than in the usual and regular course of its activities on the terms and conditions and for the consideration determined by the corporation’s board if the proposed transaction is authorized by subsection (2) of this section.
  2. Unless Section 79-11-101 et seq., the articles of incorporation, the bylaws, or the board of directors or members (acting pursuant to subsection (4) of this section) require a greater vote or voting by class, the proposed transaction to be authorized must be approved:
    1. By the board of directors; and
    2. By the members of two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.
  3. If the corporation does not have members the transaction must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition the corporation shall provide notice of any directors’ meeting at which such approval is to be obtained in accordance with Section 79-11-259. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.
  4. The board may condition its submission of the proposed transaction, and the members may condition their approval of the transaction, on receipt of a higher percentage of affirmative votes or on any other basis.
  5. If the corporation seeks to have the transaction approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with Section 79-11-205. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange or other disposition of all, or substantially all, of the property or assets of the corporation and contain or be accompanied by a copy or summary of a description of the transaction.
  6. If the board needs to have the transaction approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of a description of the transaction.
  7. After a sale, lease, exchange or other disposition of property is authorized, the transaction may be abandoned (subject to any contractual rights) without further action by the members or any other person who approved the transaction in accordance with the procedure set forth in the resolution proposing the transaction or, if none is set forth, in the manner determined by the board of directors.

HISTORY: Laws, 1987, ch. 485, § 116, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Disposition of corporation assets under Mississippi Business Corporation Act, see §§ 79-4-12.01, 79-4-12.02.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Effect of merger on the title to real estate and other property, see § 79-11-325.

Effect of dissolution on the title to corporation’s property, see § 79-11-341.

Requirement that notice of meetings of members include a description of any matters which must be approved by the members under this section, see § 79-11-205.

RESEARCH REFERENCES

ALR.

Right to assets of voluntarily dissolved lodge or club. 70 A.L.R.4th 897.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2289, 2299.

CJS.

14 C.J.S., Charities § 72.

§79-11-333. Dissolution by incorporators or directors of corporation that has no members.

  1. A majority of the incorporators or directors of a corporation that has no members may, subject to any approval required by the articles or bylaws, dissolve the corporation by delivering to the Secretary of State articles of dissolution.
  2. The corporation shall give notice of any meeting at which dissolution will be approved. The notice shall be in accordance with Section 79-11-259. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation.
  3. The incorporators or directors in approving dissolution shall adopt a plan of dissolution indicating to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

HISTORY: Laws, 1987, ch. 485, § 117, eff from and after January 1, 1988.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09.

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Requirement that notice of meetings of members include a description of any matters that must be approved by the members under this section, see § 79-11-205.

Application and distribution of assets of corporation in the process of voluntary dissolution pursuant to this section or § 79-11-335, see § 79-11-336.

RESEARCH REFERENCES

ALR.

Distribution of funds by nonprofit corporation absent dissolution. 51 A.L.R.3d 1318.

Am. Jur.

18A Am. Jur. 2d, Corporations § 776.

19 Am. Jur. 2d, Corporations § 2354.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 461, 462, 471-473.

6 Am. Jur. Legal Forms 2d, Corporations § 74:866.

CJS.

14 C.J.S., Charities § 91.

§79-11-335. Approval of dissolution by board of directors or members; notice requirements.

  1. Unless Section 79-11-101 et seq., the articles of incorporation, the bylaws or the board of directors or members (acting pursuant to subsection (3) of this section) require a greater vote or voting by class, dissolution is authorized if it is approved:
    1. By the board of directors; and
    2. By the members, if any, by two-thirds (2/3) of the votes cast, or a majority of the voting power, whichever is less.
  2. If the corporation does not have members, dissolution must be approved by a vote of a majority of the directors in office at the time the transaction is approved. In addition, the corporation shall provide notice of any directors’ meeting at which such approval is to be obtained in accordance with Section 79-11-259. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolution of the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.
  3. The board may condition its submission of the proposed dissolution, and the members may condition their approval of the dissolution on receipt of a higher percentage of affirmative votes or on any other basis.
  4. If the board seeks to have dissolution approved by the members at a membership meeting, the corporation shall give notice to its members of the proposed membership meeting in accordance with Section 79-11-205. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation and contain or be accompanied by a copy or summary of the plan of dissolution.
  5. If the board seeks to have dissolution approved by the members by written consent or written ballot, the material soliciting the approval shall contain or be accompanied by a copy or summary of the plan of dissolution.
  6. The plan of dissolution shall indicate to whom the assets owned or held by the corporation will be distributed after all creditors have been paid.

HISTORY: Laws, 1987, ch. 485, § 118, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting ‘ Section 79-11-101 et seq.” for ‘ Sections 79-11-101 et seq.” The section as set out in the bound volume reflects this correction, which was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09

Petition to chancery court for alternative method for calling or conducting meetings of members, delegates or directors, or for obtaining their consent, see § 79-11-131.

Requirement that notice of meetings of members include a description of any matters that must be approved by the members under this section, see § 79-11-205.

Application and distribution of assets of corporation in the process of voluntary dissolution pursuant to § 79-11-333 or this section, see § 79-11-336.

RESEARCH REFERENCES

ALR.

Right to assets of voluntarily dissolved lodge or club. 70 A.L.R.4th 897.

Am. Jur.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 451-453, 461, 462, 471-473, 481.

6 Am. Jur. Legal Forms 2d, Corporations § 74:866.

CJS.

14 C.J.S., Charities § 91.

§79-11-336. Application and distribution of assets of voluntarily dissolving corporation.

The assets of a corporation in the process of voluntary dissolution pursuant to Section 79-11-333 or Section 79-11-335 shall be applied and distributed as follows:

All liabilities and obligations of the corporation shall be paid, satisfied and discharged; in case its property and assets are not sufficient to satisfy or discharge all the corporation’s liabilities and obligations, the corporation shall apply them so far as they will go to the just and equitable payment of the liabilities and obligations.

Assets held by the corporation upon condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution, shall be returned, transferred or conveyed in accordance with such requirements.

If the corporation to be dissolved is a charitable organization, as defined in Section 79-11-501, the remaining assets shall be transferred to another charitable organization or other charitable organizations, as defined in Section 79-11-501, either domestic or foreign, engaged in activities substantially similar to those of the dissolving corporation, or to the federal government, or to a state or local government, for a public purpose. For all other nonprofit corporations, assets received and held by the corporation subject to limitations permitting their use only for charitable, religious, eleemosynary, benevolent, educational or similar purposes, but not held upon a condition requiring return, transfer or conveyance by reason of the dissolution, shall be transferred or conveyed to one or more domestic or foreign corporations, societies or organizations engaged in activities substantially similar to those of the dissolving corporation.

Other assets not described above, if any, shall be distributed in accordance with the provisions of the articles of incorporation or the bylaws to the extent that the articles of incorporation or bylaws determine the distributive right of members, or any class or classes of members, or provide for distribution to others.

HISTORY: Laws, 2009, ch. 547, § 1, eff from and after July 1, 2009.

§79-11-337. Contents and filing of articles of dissolution.

  1. At any time after dissolution is authorized, the corporation may dissolve by delivering to the Secretary of State articles of dissolution setting forth:
    1. The name of the corporation;
    2. The date dissolution was authorized;
    3. A statement that dissolution was approved by a sufficient vote of the board;
    4. That all debts, obligations and liabilities of the corporation have been paid and discharged or that adequate provision has been made therefor;
    5. That all remaining property and assets of the corporation have been distributed among its members in accordance with their respective rights and interest, or have been otherwise distributed pursuant to the articles or bylaws of the corporation; or, in the case of a corporation which is also a charitable organization, as defined in Section 79-11-501, that the remaining property and assets of the corporation have been transferred to another charitable organization or other charitable organizations, as defined in Section 79-11-501, either domestic or foreign, engaged in activities substantially similar to those of the dissolving corporation, or to the federal government, or to a state or local government, for a public purpose;
    6. If approval of members was not required, a statement to that effect and a statement that dissolution was approved by a sufficient vote of the board of directors or incorporators;
    7. If approval by members was required:
      1. The designation, number of memberships outstanding, number of votes entitled to be cast by each class entitled to vote separately on dissolution, and number of votes of each class indisputably voting on dissolution; and
      2. Either the total number of votes cast for and against dissolution by each class entitled to vote separately on dissolution or the total number of undisputed votes cast for dissolution by each class and a statement that the number cast for dissolution by each class was sufficient for approval by that class.
  2. A corporation is dissolved upon the effective date of its articles of dissolution.

HISTORY: Laws, 1987, ch. 485, § 119; Laws, 2009, ch. 547, § 2, eff from and after July 1, 2009.

Amendment Notes —

The 2009 amendment, in (1), added (d) and (e), and redesignated former (d) and (e) as present (f) and (g).

Cross References —

Filing fees; see § 79-11-109.

Applicability of this section to filing requirements for revocation of dissolution, see § 79-11-339.

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2352, 2354.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 500, 501.

6 Am. Jur. Legal Forms 2d, Corporations § 74:866.

CJS.

14 C.J.S., Charities § 91.

§79-11-339. Revocation of dissolution.

  1. A corporation may revoke its dissolution within one hundred twenty (120) days of its effective date.
  2. Revocation of dissolution must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without action by the members or any other person.
  3. After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the Secretary of State for filing articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:
    1. The name of the corporation;
    2. The effective date of the dissolution that was revoked;
    3. The date that the revocation of dissolution was authorized;
    4. If the corporation’s board of directors (or incorporators) revoked the dissolution, a statement to that effect;
    5. If the corporation’s board of directors revoked a dissolution authorized by the members alone or in conjunction with another person or persons, a statement that revocation was permitted by action by the board of directors alone pursuant to that authorization; and
    6. If member action was required to revoke the dissolution, the information required by Section 79-11-337.
  4. Revocation of dissolution is effective upon the effective date of the articles of revocation of dissolution.
  5. When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution and the corporation resumes carrying on its activities as if dissolution had never occurred.

HISTORY: Laws, 1987, ch. 485, § 120, eff from and after January 1, 1988.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09.

Filing fees, see § 79-11-109.

Dissolution effective upon the effective date of the articles of dissolution, see § 79-11-339.

§79-11-341. Winding up and liquidation.

  1. A dissolved corporation continues its corporate existence but may not carry on any activities except those appropriate to wind up and liquidate its affairs, including:
    1. Preserving and protecting its assets and minimizing its liabilities;
    2. Discharging or making provision for discharging its liabilities and obligations;
    3. Disposing of its properties that will not be distributed in kind;
    4. Returning, transferring or conveying assets held by the corporation upon a condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution, in accordance with such condition;
    5. Transferring, subject to any contractual or legal requirements, its assets as provided in or authorized by its articles of incorporation or bylaws; and
    6. Doing every other act necessary to wind up and liquidate its assets and affairs.
  2. Dissolution of a corporation does not:
    1. Transfer title to the corporation’s property;
    2. Subject its directors or officers to standards of conduct different from those prescribed in Sections 79-11-267 and 79-11-275;
    3. Change quorum or voting requirements for its board of directors or members; change provisions for selection, resignation or removal of its directors or officers or both; or change provisions for amending its bylaws;
    4. Prevent commencement of a proceeding by or against the corporation in its corporate name;
    5. Abate or suspend a proceeding pending by or against the corporation on the effective date of dissolution; or
    6. Terminate the authority of the registered agent.

HISTORY: Laws, 1987, ch. 485, § 121, eff from and after January 1, 1988.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09.

Applicability of this section to administrative dissolution by Secretary of State, see § 79-11-349.

Applicability of this section to judicial dissolution of corporation, see § 79-11-361.

RESEARCH REFERENCES

ALR.

Dissolving or winding up affairs of corporation domiciled in another state. 19 A.L.R.3d 1279.

Am. Jur.

19 Am. Jur. 2d, Corporations §§ 2299, 2488.

CJS.

14 C.J.S., Charities § 91.

§79-11-343. Disposition of known claims against dissolved corporation.

  1. A dissolved corporation may dispose of the known claims against it by following the procedure described in this section.
  2. The dissolved corporation shall notify its known claimants in writing of the dissolution at any time after its effective date. The written notice must:
    1. Describe information that must be included in a claim;
    2. Provide a mailing address where a claim may be sent;
    3. State the deadline, which may not be fewer than one hundred twenty (120) days from the effective date of the written notice, by which the dissolved corporation must receive the claim; and
    4. State that the claim will be barred if not received by the deadline.
  3. A claim against the dissolved corporation is barred:
    1. If a claimant who was given written notice under subsection (2) of this section does not deliver the claim to the dissolved corporation by the deadline;
    2. If a claimant whose claim was rejected by the dissolved corporation does not commence a proceeding to enforce the claim within ninety (90) days from the effective date of the rejection notice.
  4. For purposes of this section “claim” does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

HISTORY: Laws, 1987, ch. 485, § 122, eff from and after January 1, 1988.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09

Dissolution effective upon the effective date of the articles of dissolution, see § 79-11-339.

Barring of claim against dissolved corporation where claimant did not receive written notice under this section, see § 79-11-345.

Applicability of this section to administrative dissolution by Secretary of State, see § 79-11-349.

Applicability of this section to judicial dissolution of a corporation, see § 79-11-361.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-345. Notice of dissolution and request for presentation of claims against corporation; statute of limitations; enforcement of claims.

  1. A dissolved corporation may also publish notice of its dissolution and request that persons with claims against the corporation present them in accordance with the notice.
  2. The notice must:
    1. Be published one (1) time in a newspaper of general circulation in the county where the dissolved corporation’s principal office is or was located, or in Hinds County if the corporation does not have a principal office in this state;
    2. Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
    3. State that a claim against the corporation will be barred unless a proceeding to enforce the claim is commenced within two (2) years after publication of this notice.
  3. If the dissolved corporation publishes a newspaper notice in accordance with subsection (2) of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved corporation within two (2) years after the publication date of the newspaper notice:
    1. A claimant who did not receive written notice under Section 79-11-343;
    2. A claimant whose claim was timely sent to the dissolved corporation but not acted on; and
    3. A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.
  4. A claim may be enforced under this section:
    1. Against the dissolved corporation, to the extent of its undistributed assets; or
    2. If the assets have been distributed in liquidation, against any person, other than a creditor of the corporation, to whom the corporation distributed its property to the extent of the distributee’s pro rata share of the claim or the corporate assets distributed to such person in liquidation, whichever is less, but the distributee’s total liability for all claims under this section may not exceed the total amount of assets distributed to the distributee.

HISTORY: Laws, 1987, ch. 485, § 123; Laws, 2012, ch. 382, § 62, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (2)(a), substituted “principal office is or was located, or in Hinds County if the corporation does not have a principal office in this state” for “(or, if none in this state, its registered office) is or was last located” at the end.

Cross References —

Voluntary dissolution of corporation under Mississippi Business Corporation Act, see §§ 79-4-14.01 through 79-4-14.09

Dissolution effective upon effective date of articles of dissolution, see § 79-11-339.

Applicability of this section to administrative dissolution by Secretary of State, see § 79-11-349.

Applicability of this section to judicial dissolution of a corporation, see § 79-11-361.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities §§ 76, 77.

§79-11-347. Administrative dissolution by Secretary of State, grounds for.

The Secretary of State may commence a proceeding under Section 79-11-349 to administratively dissolve a corporation if:

The corporation does not pay within sixty (60) days after they are due any taxes or penalties imposed by Section 79-11-101 et seq. or other law;

The corporation does not deliver a requested status report to the Secretary of State within sixty (60) days after it is due;

The corporation is without a registered agent in this state for sixty (60) days or more;

The corporation does not notify the Secretary of State within one hundred twenty (120) days that its registered agent has been changed or that its registered agent has resigned;

The corporation’s period of duration, if any, stated in its articles of incorporation expires;

The corporation fails to report within the time period specified in Section 79-11-405 the suspension or revocation of its tax-exempt status under Section 501(c)(3) of the Internal Revenue Code; or

An incorporator, director, officer or agent of the corporation signed a document he knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing.

HISTORY: Laws, 1987, ch. 485, § 124; Laws, 2011, ch. 440, § 15; Laws, 2012, ch. 382, § 63, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, a typographical error in paragraph (a) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (f) and made related changes.

The 2012 amendment, effective January 1, 2013, deleted “or registered office” following “registered agent” in (c) and the first time it appears in (d); deleted “or that its registered office has been discontinued” from the end of (d); added (g); and made minor stylistic changes.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Administrative dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.20 through 79-4-14.23.

Application by corporation for reinstatement after administrative dissolution, see § 79-11-351.

Federal Aspects—

Section 501(c)(3) of the Internal Revenue Code, see 26 USCS § 501(c)(3).

RESEARCH REFERENCES

Am. Jur.

19 Am. Jur. 2d, Corporations § 2397.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 511-525.

CJS.

14 C.J.S., Charities § 107.

§79-11-349. Administrative dissolution, procedures.

  1. Upon determining that one or more grounds exist under Section 79-11-347 for dissolving a corporation, the Secretary of State shall notify the corporation in the form of a record of that determination.
  2. If the corporation does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within at least sixty (60) days after service of the notice is perfected, the Secretary of State may administratively dissolve the corporation by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the corporation.
  3. A corporation administratively dissolved continues its corporate existence but may not carry on any activities except those necessary to wind up and liquidate its affairs under Section 79-11-341 and notify its claimants under Sections 79-11-343 and 79-11-345.
  4. The administrative dissolution of a corporation does not terminate the authority of its registered agent.

HISTORY: Laws, 1987, ch. 485, § 125; Laws, 2011, ch. 440, § 16; Laws, 2012, ch. 382, § 64, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, in (1), substituted “notify the corporation in form of a record of that determination” for “serve the corporation with written notice of that determination under Section 79-11-169” at the end of the first sentence, and added the last sentence; in (2), deleted “under Section 79-11-169” following “service of the notice is perfected” in the first sentence and rewrote the last sentence.

The 2012 amendment, effective January 1, 2013, deleted “For purpose of this section, notice may be made by publication by newspaper of general circulation in the area of the corporation’s last-known location” from the end of (1); deleted “if the corporation has filed a valid address or registered agent with the Secretary of State within the previous calendar year” from the end of (2).

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Administrative dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.20 through 79-4-14.23.

Filing fees, see § 79-11-109.

Application by corporation for reinstatement after administrative dissolution, see § 79-11-351.

RESEARCH REFERENCES

Am. Jur.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 511-525.

§79-11-351. Reinstatement after administrative dissolution.

  1. A corporation administratively dissolved under Section 79-11-349 may apply to the Secretary of State for reinstatement at any time after the effective date of dissolution. The application must:
    1. Recite the name of the corporation and the effective date of its administrative dissolution;
    2. State that the ground or grounds for dissolution either did not exist or have been eliminated;
    3. State that the corporation’s name satisfies the requirements of Section 79-11-157; and
    4. Contain a certificate from the Department of Revenue reciting that all taxes owed by the corporation have been paid.
  2. If the Secretary of State determines that the application contains the information required by subsection (1) of this section and that the information is correct, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of reinstatement reciting that determination and the effective date of reinstatement, file the original of the certificate and serve a copy on the corporation.
  3. When reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the corporation shall resume carrying on its activities as if the administrative dissolution had never occurred.

HISTORY: Laws, 1987, ch. 485, § 126; Laws, 1993, ch. 368, § 15; Laws, 2009, ch. 527, § 5; Laws, 2012, ch. 382, § 65, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2009 amendment substituted “at any time” for “within five (5) years” in the first sentence of the introductory language of (1).

The 2012 amendment, effective January 1, 2013, substituted “Department of Revenue” for “State Tax Commission” in (1)(d); and deleted “under Section 79-11-169” at the end of (2).

Cross References —

Department of Revenue generally, see §§ 27-3-1 et seq.

Administrative dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.20 through 79-4-14.23.

Filing fees, see § 79-11-109.

RESEARCH REFERENCES

ALR.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

§79-11-353. Denial of application for reinstatement following administrative dissolution; appeals.

  1. The Secretary of State, upon denying a corporation’s application for reinstatement following administrative dissolution, shall serve the corporation with a written notice that explains the reason or reasons for denial.
  2. The corporation may appeal the denial of reinstatement to the chancery court of the county where the corporation’s principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, within ninety (90) days after service of the notice of denial is perfected. The corporation appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State’s certificate of dissolution, the corporation’s application for reinstatement and the Secretary of State’s notice of denial.
  3. The court may summarily order the Secretary of State to reinstate the dissolved corporation or may take other action the court considers appropriate.
  4. The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1987, ch. 485, § 127; Laws, 2012, ch. 382, § 66, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “under Section 79-11-169” preceding “with a written notice that explains” near the end of (1); and substituted “principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for “principal office for if none in the state, its registered office) is located” in (2).

Cross References —

Administrative dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.20 through 79-4-14.23.

Chancery court’s power to dissolve nonprofit corporation and to hear appeal from Secretary of State’s denial of reinstatement following administrative dissolution, see §§ 79-11-353 and 79-11-355.

§79-11-355. Dissolution by court order; parties who may bring action; grounds for court-ordered dissolution.

  1. The chancery court of the county where the corporation’s principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state, may dissolve a corporation:
    1. In a proceeding by the Attorney General or the Secretary of State if it is established that:
      1. The corporation obtained its articles of incorporation through fraud;
      2. The corporation has continued to exceed or abuse the authority conferred upon it by law; or
      3. If the corporation is a charitable organization, as defined in Section 79-11-501, that:

      1. The corporate assets are being misapplied or wasted;

      2. The corporation is unable to carry out its purpose(s); or

      3. The corporation has violated the laws regulating the solicitation of charitable contributions, Section 79-11-501 et seq.;

    2. In a proceeding by fifty (50) members or members holding five percent (5%) of the voting power, whichever is less, or by a director if it is established that:
      1. The directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to breach the deadlock;
      2. The directors or those in control of the corporation have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent;
      3. The members are deadlocked in voting power and have failed, for a period that includes at least two (2) consecutive annual meeting dates, to elect successors to directors whose terms have, or would otherwise have, expired; or
      4. The corporate assets are being misapplied or wasted;
    3. In a proceeding by a creditor if it is established that:
      1. The creditor’s claim has been reduced to judgment, the execution on the judgment returned unsatisfied and the corporation is insolvent; or
      2. The corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent; or
    4. In a proceeding by the corporation to have its voluntary dissolution continued under court supervision.
  2. Prior to dissolving a corporation, the court shall consider whether there are reasonable alternatives to dissolution.

HISTORY: Laws, 1987, ch. 485, § 128; Laws, 2009, ch. 547, § 3; Laws, 2012, ch. 382, § 67, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2009 amendment rewrote (1)(a).

The 2012 amendment, rewrote (1), effective January 1, 2013, effective January 1, 2013, substituted ‘principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for ‘principal office (or if none in the state, its registered office) is located.”

Cross References —

Judicial dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.30 through 79-4-14.34.

Filing fees, see § 79-11-109.

Decree of judicial dissolution, see § 79-11-361.

RESEARCH REFERENCES

ALR.

Relief other than by dissolution in cases of intracorporate deadlock or dissension. 34 A.L.R.4th 13.

Am. Jur.

19 Am. Jur. 2d, Corporations § 2397.

CJS.

14 C.J.S., Charities § 91.

§79-11-357. Court-ordered dissolution, venue; appropriate party defendants; authority of court with respect to.

  1. Venue for a proceeding to dissolve a corporation lies in the county where a corporation’s principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state.
  2. It is not necessary to make directors or members parties to a proceeding to dissolve a corporation unless relief is sought against them individually.
  3. A court in a proceeding brought to dissolve a corporation may issue injunctions, appoint a receiver or custodian pendente lite with all powers and duties the court directs, take other action required to preserve the corporate assets wherever located and carry on the activities of the corporation until a full hearing can be held.

HISTORY: Laws, 1987, ch. 485, § 129; Laws, 2012, ch. 382, § 68, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (1), effective January 1, 2013, substituted ‘principal office is or was located, or in the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the corporation does not have a principal office in this state” for ‘principal office (or if none in the state, its registered office) is or was located.”

Cross References —

Judicial dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.30 through 79-4-14.34.

RESEARCH REFERENCES

ALR.

Relief other than by dissolution in cases of intracorporate deadlock or dissension. 34 A.L.R.4th 13.

Place where corporation is doing business for purposes of state venue statute. 42 A.L.R.5th 221.

Am. Jur.

7A Am. Jur. Pl & Pr Forms (Rev), Corporations, Forms 511-525.

CJS.

14 C.J.S., Charities § 91.

§79-11-359. Issuance of injunctions; appointment of receivers or custodians; application and distribution of corporation assets or proceeds from sale or other disposition.

  1. A court in a judicial proceeding brought to dissolve a corporation shall have the power to issue injunctions and may appoint one or more receivers to wind up and liquidate, or one or more custodians to manage, the affairs of the corporation. The court shall hold a hearing, after notifying all parties to the proceeding and any interested persons designated by the court, before appointing a receiver or custodian. The court appointing a receiver or custodian has exclusive jurisdiction over the corporation and all of its property wherever located.
  2. The court may appoint an individual or a domestic or foreign business or nonprofit corporation (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.
  3. The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:
    1. The receiver (i) may dispose of all or any part of the assets of the corporation wherever located, at a public or private sale, if authorized by the court; provided, however, that the receiver’s power to dispose of the assets of the corporation is subject to any trust and other restrictions that would be applicable to the corporation; and (ii) may sue and defend in the receiver’s or custodian’s name as receiver or custodian of the corporation in all courts of this state;
    2. The custodian may exercise all of the powers of the corporation, through or in place of its board of directors or officers, to the extent necessary to manage the affairs of the corporation in the best interests of its members and creditors.
  4. The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the corporation, its members and creditors.
  5. The assets of the corporation or the proceeds resulting from a sale, conveyance or other disposition thereof shall be applied and distributed as the court may order, after taking into account the following standards:
    1. All costs and expenses of the court proceedings and all liabilities and obligations of the corporation shall, to the extent that unencumbered assets are available therefor, be paid first toward the payment of costs and expenses of the court proceedings, and then toward other liabilities and obligations of the corporation.
    2. All liabilities and obligations of the corporation shall be paid, satisfied and discharged; in case its property and assets are not sufficient to satisfy or discharge all the corporation’s liabilities and obligations, the court shall apply them so far as they will go to the just and equitable payment of the liabilities and obligations.
    3. Assets held by the corporation upon condition requiring return, transfer or conveyance, which condition occurs by reason of the dissolution or liquidation, shall be returned, transferred or conveyed in accordance with such requirements.
    4. If the corporation to be dissolved is a charitable organization, as defined in Section 79-11-501, the remaining assets shall be transferred to another charitable organization or other charitable organizations, as defined in Section 79-11-501, either domestic or foreign, engaged in activities substantially similar to those of the dissolving corporation, or to the federal government, or to a state or local government, for a public purpose. For all other nonprofit corporations, assets received and held by the corporation subject to limitations permitting their use only for charitable, religious, eleemosynary, benevolent, educational or similar purposes, but not held upon a condition requiring return, transfer or conveyance by reason of the dissolution, shall be transferred or conveyed to one or more domestic or foreign corporations, societies or organizations engaged in activities substantially similar to those of the dissolving corporation as the court may direct.
    5. Other assets, if any, shall be distributed in accordance with the provisions of the articles of incorporation or the bylaws to the extent that the articles of incorporation or bylaws determine the distributive right of members, or any class or classes of members, or provide for distribution to others.
    6. Any remaining assets may be distributed to such persons, societies, organizations or domestic or foreign corporations, whether for profit or not for profit, specified in the plan of distribution adopted as provided in this chapter, or where no plan of distribution has been adopted, as the court may direct.

HISTORY: Laws, 1987, ch. 485, § 130; Laws, 2009, ch. 547, § 4, eff from and after July 1, 2009.

Amendment Notes —

The 2009 amendment inserted “shall have the power to issue injunctions and” in the first sentence of (1); and added (5).

Cross References —

Judicial dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.30 through 79-4-14.34.

Application to religious corporations, see § 79-11-403.

RESEARCH REFERENCES

CJS.

14 C.J.S., Charities § 91.

§79-11-361. Decree of judicial dissolution.

  1. If after the hearing the court determines that one or more grounds for judicial dissolution described in Section 79-11-355 exist, it may enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State, who shall file it.
  2. After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation’s affairs in accordance with Section 79-11-341 and the notification of its claimants in accordance with Sections 79-11-343 and 79-11-345.

HISTORY: Laws, 1987, ch. 485, § 131, eff from and after January 1, 1988.

Cross References —

Judicial dissolution under Mississippi Business Corporation Act, see §§ 79-4-14.30 through 79-4-14.34.

Filing fees, see § 79-11-109.

§79-11-363. Foreign corporations, authority to transact business; transacting business defined.

  1. A foreign corporation may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
  2. The following activities, among others, do not constitute transacting business within the meaning of subsection (1) of this section:
    1. Maintaining, defending or settling any proceeding;
    2. Holding meetings of the board of directors or members or carrying on other activities concerning internal corporate affairs;
    3. Maintaining bank accounts;
    4. Maintaining offices or agencies for the transfer, exchange and registration of memberships or securities or maintaining trustees or depositaries with respect to those securities;
    5. Selling through independent contractors;
    6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
    7. Creating or acquiring indebtedness, mortgages and security interests in real or personal property;
    8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts;
    9. Owning, without more, real or personal property;
    10. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature;
    11. Transacting business in interstate commerce.
  3. The list of activities in subsection (2) of this section is not exhaustive.

HISTORY: Laws, 1987, ch. 485, § 132, eff from and after January 1, 1988.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Foreign corporation authorized to transact business in this state on the effective date of §§ 79-11-101 et seq. is not required to obtain new certificate of authority, see § 79-11-397.

RESEARCH REFERENCES

ALR.

Effect of execution of foreign corporation’s contract which, while executory, was unenforceable because of noncompliance with conditions of doing business in state. 7 A.L.R.2d 256.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 157 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31, 32.

4 Am. Jur. Proof of Facts 483, Doing Business.

Lawyers’ Edition.

State venue provisions for civil actions as violating equal protection clause of Federal Constitution’s Fourteenth Amendment – Supreme Court cases. 119 L. Ed. 2d 665.

§79-11-365. Foreign corporation transacting business without certificate of authority not to maintain proceeding in any court; stay of proceeding until certificate obtained; penalty for transacting business without certificate of authority.

  1. A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.
  2. The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding on that cause of action in any court in this state until the foreign corporation or its successor obtains a certificate of authority.
  3. A court may stay a proceeding commenced by a foreign corporation, its successor or assignee until it determines whether the foreign corporation, its successor or assignee requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains the certificate.
  4. A foreign corporation is liable for a civil penalty of Five Dollars ($5.00) for each day, but not to exceed a total of two (2) times the fee required under Section 79-11-109 for securing articles of incorporation for each year, it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection.

HISTORY: Laws, 1987, ch. 485, § 133, eff from and after January 1, 1988.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Foreign corporation authorized to transact business in this state on the effective date of §§ 79-11-101 et seq. is not required to obtain new certificate of authority, see § 79-11-397.

RESEARCH REFERENCES

ALR.

Construction work by foreign corporation as doing business for purposes of statute requiring foreign corporation to qualify as condition of access to local courts. 90 A.L.R.3d 937.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action. 23 A.L.R.5th 744.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 157 et seq., 225, 230 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31, 32.

Lawyers’ Edition.

State venue provisions for civil actions as violating equal protection clause of Federal Constitution’s Fourteenth Amendment – Supreme Court cases. 119 L. Ed. 2d 665.

§79-11-367. Foreign corporation, application for certificate of authority.

  1. A foreign corporation may apply for a certificate of authority to transact business in this state by delivering an application to the Secretary of State. The application must set forth:
    1. The name of the foreign corporation or, if its name is unavailable for use in this state, a corporate name that satisfies the requirements of Section 79-11-373;
    2. The name of the state or country under whose law it is incorporated;
    3. The date of incorporation and period of duration;
    4. The street address of its principal office;
    5. The information required under Section 79-35-5(a);
    6. The names and usual business or home addresses of its current directors and officers; and
    7. Whether the foreign corporation has members.
  2. The foreign corporation shall deliver with the completed application a certificate of existence (or a document of similar import), dated not more than sixty (60) days prior to the date the application is filed in this state, duly authenticated by the Secretary of State or other official having custody of corporate records in the state or country under whose law it is incorporated.

HISTORY: Laws, 1987, ch. 485, § 134; Laws, 2012, ch. 382, § 69, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (1)(e), which previously read “The address of its registered office in this state and the name of its registered agent at that office.‘

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Filing fees, see § 79-11-109.

Applicability of this section to a foreign corporation’s obtaining an amended certificate of authority, see § 79-11-369.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 205 et seq.

Lawyers’ Edition.

State venue provisions for civil actions as violating equal protection clause of Federal Constitution’s Fourteenth Amendment – Supreme Court cases. 119 L. Ed. 2d 665.

§79-11-369. Foreign corporation, amended certificate of authority.

  1. A foreign corporation authorized to transact business in this state must obtain an amended certificate of authority from the Secretary of State if it changes:
    1. Its corporate name;
    2. The period of its duration;
    3. Any information required by Section 79-35-5(a); or
    4. The state or country or its incorporation.
  2. The requirements of Section 79-11-367 for obtaining an original certificate of authority apply to obtaining an amended certificate under this section.

HISTORY: Laws, 1987, ch. 485, § 135; Laws, 2012, ch. 382, § 70, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, added (1)(d); and make a related stylistic change.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Filing fees, see § 79-11-109.

Applicability of this section to change of name of foreign corporation authorized to transact business, see § 79-11-373.

§79-11-371. Effect of certificate of authority.

  1. A certificate of authority authorizes the foreign corporation to which it is issued to transact business in this state subject, however, to the right of the state to revoke the certificate as provided in Section 79-11-101 et seq.
  2. A foreign corporation with a valid certificate of authority has the same rights and enjoys the same privileges as, and except as otherwise provided by Section 79-11-101 et seq. is subject to the same duties, restrictions, penalties, liabilities now or later imposed on, a domestic corporation of like character.
  3. Section 79-11-101 et seq. do not authorize this state to regulate the organization or internal affairs of a foreign corporation authorized to transact business in this state.

HISTORY: Laws, 1987, ch. 485, § 136, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1), (2) and (3) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 173 et seq..

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, §§ 11 et seq.

§79-11-373. Corporate name of foreign corporation.

  1. If the corporate name of a foreign corporation does not satisfy the requirements of Section 79-11-157, the foreign corporation to obtain or maintain a certificate of authority to transact business in this state may use a fictitious name to transact business in this state if its real name is unavailable and it delivers to the Secretary of State for filing a copy of the resolution of its board of directors, certified by its secretary, adopting the fictitious name.
  2. Except as authorized by subsections (3) and (4) of this section, the corporate name (including a fictitious name) of a foreign corporation must be distinguishable upon the records of the Secretary of State from:
    1. The corporate name of a nonprofit or business corporation incorporated or authorized to transact business in this state;
    2. A corporate name reserved or registered under Section 79-11-159 or 79-11-161 or pursuant to the Mississippi Business Corporation Act;
    3. The fictitious name of another foreign business or nonprofit corporation authorized to transact business in this state.
  3. A foreign corporation may apply to the Secretary of State for authorization to use in this state the name of another corporation (incorporated or authorized to transact business in this state) that is not distinguishable upon the records of the Secretary of State from the name applied for. The Secretary of State shall authorize use of the name applied for if:
    1. The other corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying corporation; or
    2. The applicant delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.
  4. A foreign corporation may use in this state the name (including the fictitious name) of another domestic or foreign business or nonprofit corporation that is used in this state if the other corporation is incorporated or authorized to transact business in this state and the foreign corporation:
    1. Has merged with the other corporation;
    2. Has been formed by reorganization of the other corporation; or
    3. Has acquired all or substantially all of the assets, including the corporate name, of the other corporation.
  5. If a foreign corporation authorized to transact business in this state changes its corporate name to one that does not satisfy the requirements of Section 79-11-157, it shall not transact business in this state under the changed name until it adopts a name satisfying the requirements of Section 79-11-157 and obtains an amended certificate of authority under Section 79-11-369.

HISTORY: Laws, 1987, ch. 485, § 137, eff from and after January 1, 1988.

Editor’s Notes —

Section 79-11-161 referred to in (2)(b), was repealed by Laws, 2014, ch. 468, § 10, effective July 1, 2014.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Filing fees, see § 79-11-109.

Applicability of this section to application by foreign corporation for certificate of authority to transact business, see § 79-11-367.

RESEARCH REFERENCES

ALR.

Right of benevolent or fraternal society or organization to protection against use of same or similar name, insignia, or ritual by another organization. 76 A.L.R.2d 1396.

Right to protection of corporate name, as between domestic corporation and foreign corporation not qualified to do business in state. 26 A.L.R.3d 994.

Right of charitable or religious association or corporation to protection against use of same or similar name by another. 37 A.L.R.3d 277.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 240, 241, 244.

36 Am. Jur. 2d, Foreign Corporations §§ 150 et seq.

Law Reviews.

Walker, Common law protection of economic expectancies: “Business Torts” in Mississippi. 50 Miss. L. J. 335, March, 1979.

§79-11-375. Repealed.

Repealed by Laws, 2012, ch. 382, § 134, effective January 1, 2013.

§79-11-375. [Laws, 1987, ch. 485, § 138; Laws, 1988, ch. 417, § 7, eff from and after July 1, 1988.]

Editor’s Notes —

Former § 79-11-375 required a foreign nonprofit corporation to maintain a registered office and registered agent in the state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-377. Repealed.

Repealed by Laws, 2012, ch. 382, § 135, effective January 1, 2013.

§79-11-377. [Laws, 1987, ch. 485, § 139; Laws, 2011, ch. 440, § 17, eff from and after Jan. 1, 2012.]

Editor’s Notes —

Former § 79-11-377 required a foreign nonprofit corporation to maintain a registered office and registered agent in the state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-379. Repealed.

Repealed by Laws, 2012, ch. 382, § 136, effective January 1, 2013.

§79-11-379. [Laws, 1987, ch. 485, § 140 eff from and after Jan. 1, 1988.]

Editor’s Notes —

Former § 79-11-379 provided for the resignation of a foreign nonprofit corporation’s registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-11-381. Service of process, demand or notice on foreign corporation.

Notice or demand required or permitted by law on a foreign corporation authorized to transact business in this state is governed by Section 79-35-13. Service of process is governed by the Mississippi Rules of Civil Procedure.

HISTORY: Laws, 1987, ch. 485, § 141; Laws, 2012, ch. 382, § 71, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote the section.

Cross References —

Foreign corporations, certificate of authority to transact business in state, corporate name, etc., under Mississippi Business Corporation Act, see §§ 79-4-15.01 through 79-4-15.10.

Applicability of this section to time period for foreign corporation to appeal revocation of its certificate of authority, see § 79-11-389.

RESEARCH REFERENCES

ALR.

Federal or state law as controlling, in diversity action, whether foreign corporation is amenable to service of process in state. 6 A.L.R.3d 1103.

Who is “general” or “managing” agent of foreign corporation under statute authorizing service of process on such agent. 17 A.L.R.3d 625.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 215-219.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, §§ 11 et seq.

§79-11-383. Withdrawal of foreign corporation.

  1. A foreign corporation authorized to transact business in this state may not withdraw from this state until it obtains a certificate of withdrawal from the Secretary of State.
  2. A foreign corporation authorized to transact business in this state may apply for a certificate of withdrawal by delivering an application to the Secretary of State for filing. The application must set forth:
    1. The name of the foreign corporation and the name of the state or country under whose law it is incorporated;
    2. A representation that it is not transacting business in this state and that it surrenders its authority to transact business in this state;
    3. A representation that it revokes the authority of its registered agent to accept service on its behalf and appoints the Secretary of State as its agent for service of process in any proceeding based on a cause of action arising during the time it was authorized to do business in this state;
    4. A mailing address to which the Secretary of State may mail a copy of any process served on him or her under paragraph (c) of this subsection; and
    5. A commitment to notify the Secretary of State in the future of any change in the mailing address.
  3. After the withdrawal of the corporation is effective, service of process on the Secretary of State under the Mississippi Rules of Civil Procedure is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the foreign corporation at the address set forth in its application for withdrawal.

HISTORY: Laws, 1987, ch. 485, § 142; Laws, 2012, ch. 382, § 72, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (3), substituted “the Mississippi Rules of Civil Procedure” for “this section” and deleted “post-office” preceding “address set forth” near the end.

Cross References —

Withdrawal of foreign corporation under Mississippi Business Corporation Act, see § 79-4-15.20.

Filing fees, see § 79-11-109.

Applicability of this section to service of process on a foreign corporation, see § 79-11-381.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 396 et seq.

§79-11-385. Revocation of certificate of authority of foreign corporation, grounds.

  1. The Secretary of State may commence a proceeding under Section 79-11-387 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if:
    1. The foreign corporation does not deliver the status report to the Secretary of State within sixty (60) days after it is due;
    2. The foreign corporation does not pay within sixty (60) days after they are due any franchise taxes or penalties imposed by Section 79-11-101 et seq. or other law;
    3. The foreign corporation is without a registered agent in this state for sixty (60) days or more;
    4. The foreign corporation does not inform the Secretary of State by an appropriate filing that its registered agent has changed or that its registered agent has resigned within ninety (90) days of the change or resignation;
    5. An incorporator, director, officer or agent of the foreign corporation signed a document such person knew was false in any material respect with intent that the document be delivered to the Secretary of State for filing; or
    6. The Secretary of State receives a duly authenticated certificate from the Secretary of State or other official having custody of corporate records in the state or country under whose law the foreign corporation is incorporated stating that it has been dissolved or has disappeared as the result of a merger.
  2. The Attorney General may commence a proceeding under Section 79-11-387 to revoke the certificate of authority of a foreign corporation authorized to transact business in this state if the corporation has continued to exceed or abuse the authority conferred upon it by law.

HISTORY: Laws, 1987, ch. 485, § 143; Laws, 2012, ch. 382, § 73, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (1)(b) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “a registered office” following “a registered agent” in (1)(c); and in (1)(d), deleted references to “registered office” and substituted “inform the Secretary of State by an appropriate filing” for “inform the Secretary of State under Section 79-4-15.08 or 79-4-15.09.”

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Revocation of certificate of authority under Mississippi Business Corporation Act, see §§ 79-4-15.30 through 79-4-15.33.

Applicability of this section to notice requirements for issuance of revocation of certificate of authority, see § 79-11-387.

RESEARCH REFERENCES

ALR.

Reinstatement of repealed, forfeited, expired, or suspended corporate charter as validating interim acts of corporation. 42 A.L.R.4th 392.

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31, 32.

Lawyers’ Edition.

State venue provisions for civil actions as violating equal protection clause of Federal Constitution’s Fourteenth Amendment – Supreme Court cases. 119 L. Ed. 2d 665.

§79-11-387. Issuance of certificate of revocation.

  1. The Secretary of State upon determining that one or more grounds exist under Section 79-11-385 for revocation of a certificate of authority shall serve the foreign corporation with written notice of that determination under Section 79-11-381.
  2. The Attorney General upon determining that grounds exist under Section 79-11-385(2) for revocation of a certificate of authority shall request the Secretary of State to serve, and the Secretary of State shall serve the foreign corporation with written notice of that determination under Section 79-11-381.
  3. If the foreign corporation does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State or Attorney General that each ground for revocation determined by the Secretary of State or Attorney General does not exist within sixty (60) days after service of the notice is perfected under Section 79-11-381, the Secretary of State may revoke the foreign corporation’s certificate of authority by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign corporation under Section 79-11-381.
  4. The authority of a foreign corporation to transact business in this state ceases on the date shown on the certificate revoking its certificate of authority.
  5. The Secretary of State’s revocation of a foreign corporation’s certificate of authority appoints the Secretary of State the foreign corporation’s agent for service of process in any proceeding based on a cause of action which arose during the time the foreign corporation was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign corporation. Upon receipt of process, the Secretary of State shall mail a copy of the process to the secretary of the foreign corporation at its principal office shown in its most recent status report or in any subsequent communications received from the corporation stating the current mailing address of its principal office, or, if none is on file, in its application for a certificate of authority.
  6. Revocation of a foreign corporation’s certificate of authority does not terminate the authority of the registered agent of the corporation.

HISTORY: Laws, 1987, ch. 485, § 144, eff from and after January 1, 1988.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Attorney General generally, see §§ 7-5-1 et seq.

Revocation of certificate of authority under Mississippi Business Corporation Act, see §§ 79-4-15.30 through 79-4-15.33.

Filing fees, see § 79-11-109.

Applicability of this section to service of process on a foreign corporation, see § 79-11-381.

Grounds for revocation of certificate of authority of foreign corporation, see § 79-11-385.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176 et seq.

12 Am. Jur. Pl & Pr Forms (Rev), Foreign Corporations, Forms 31, 32.

§79-11-389. Appeal of revocation.

  1. A foreign corporation may appeal the Secretary of State’s revocation of its certificate of authority to the Chancery Court of the First Judicial District of Hinds County, Mississippi, or the chancery court of the county where the corporation’s principal office is located within thirty (30) days after the service of the certificate of revocation is perfected under Section 79-11-381. The foreign corporation applies by petitioning the court to set aside the revocation and attaching to the petition copies of its certificate of authority and the Secretary of State’s certificate of revocation.
  2. The court may summarily order the Secretary of State to reinstate the certificate of authority or may take any other action the court considers appropriate.
  3. The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 1987, ch. 485, § 145; Laws, 2012, ch. 382, § 74, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “Chancery Court of the First Judicial District of Hinds County, Mississippi, or the chancery court of the county where the corporation’s principal office is located” for “chancery court of the county in which its registered office in this state is located” in the first sentence of (1).

Cross References —

Revocation of certificate of authority under Mississippi Business Corporation Act, see §§ 79-4-15.30 through 79-4-15.33.

RESEARCH REFERENCES

Am. Jur.

36 Am. Jur. 2d, Foreign Corporations §§ 176 et seq.

§79-11-391. Status report of corporation.

  1. Each domestic corporation, and each foreign corporation authorized to transact business in this state, shall upon request deliver to the Secretary of State a status report on a form prescribed and furnished by the Secretary of State that sets forth:
    1. The name of the corporation and the jurisdiction under whose law it is incorporated;
    2. The information required by Section 79-35-5(a);
    3. The address of its principal office;
    4. The names and business or residence addresses of its directors and principal officers;
    5. A brief description of the nature of its activities; and
    6. Whether or not it has members.
  2. Upon receiving the request for a status report, a domestic or foreign corporation shall have ninety (90) days to deliver the report to the Secretary of State.
  3. The information in the status report must be current on the date the status report is executed on behalf of the corporation.
  4. The Secretary of State may request a status report from time to time, but not more frequently than once every five (5) years, beginning five (5) years from the date upon which a domestic corporation was incorporated or a foreign corporation was authorized to transact business.
  5. If a status report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction. If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty (30) days after the effective date of notice, it is deemed to be timely filed.

HISTORY: Laws, 1987, ch. 485, § 146; Laws, 1988, ch. 417, § 8; Laws, 2012, ch. 382, § 75, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “jurisdiction” for “state or country” in (1)(a); and rewrote, which formerly read: “The address of its registered office and the name of its registered agent at the office in this state or the address and name of the person designated as its resident agent prior to January 1, 1988.”

Cross References —

Filing fees, see § 79-11-109.

Requirement that corporation keep copy of most recent status report delivered to Secretary of State under this section, see § 79-11-283.

Applicability of this section to service of process on a foreign corporation, see § 79-11-381.

§79-11-393. Rural water companies, special requirements.

Rural water companies organized pursuant to Section 79-11-101 et seq. shall be subject to the following requirements in order to obtain federal tax exemptions:

Each rural water company shall maintain a roster of all members which shall include the date upon which each member joined.

Each rural water company shall maintain a roster of patrons which shall include periodic data as to services rendered by the water company. Such roster shall be the basis for any distribution of excess revenues of the water company. Any such distribution shall be to the members and shall be based upon patronage for the time period over which such excess revenues to be distributed were collected, and the loss of membership by death or otherwise shall not terminate the rights and interest of such member in any patronage distribution due him at the termination of his membership. Any amount to be distributed shall be net income or funds in excess of those needed to meet current losses and operating expenses; provided, that such amount to be distributed shall be in excess of that needed for normal, reasonable business purposes.

Before a rural water company shall construct, operate or maintain a water transmission or distribution system for the sale of water to the public, it shall obtain a certificate of public convenience and necessity from the Public Service Commission, pursuant to the provisions of Sections 77-3-1 through 77-3-87.

HISTORY: Laws, 1987, ch. 485, § 147, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the introductory language was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

§79-11-394. Rural waterworks corporations; financial reports; contents; notice; failure to file report; notice of annual meeting.

    1. Any nonprofit, nonshare corporation chartered under the Mississippi Nonprofit Corporation Act, Section 79-11-101 et seq., for the purpose of owning and operating rural waterworks annually shall prepare a financial report showing the financial condition of the corporation. The financial report shall be prepared on forms provided by the State Auditor within ninety (90) days following the close of the fiscal year of that corporation. Each report shall contain a certification signed by the president of the board of directors of the corporation that the president has reviewed the information contained in the financial report and that the information is true and correct.
    2. As part of the billing statement received by the subscriber immediately before the annual meeting of the corporation, each corporation owning and operating rural waterworks shall notify each subscriber provided water service by the corporation of the availability of the most recently completed annual financial report, how that report may be obtained and where the report may be reviewed. If requested in writing, the corporation shall provide a copy of the financial report to any subscriber.
    3. Before July 1, 1999, and July 1 of each subsequent year, each corporation required to prepare a financial report under this section shall submit the most recently completed annual financial report to the State Auditor. In addition, the corporation shall provide a copy of that financial report to the public library in the county seat of the county in which the corporation’s principal office is located. If no public library is located in the county seat, the corporation shall provide that report to the public library serving the largest population in the county of the corporation’s principal office. If requested in writing, the State Auditor shall provide a copy of the financial report to any subscriber of a water system owned and operated by that corporation and may recover the costs of providing that report.
  1. In addition to the information required under subsection (1) of this section, each financial report shall contain the following:
    1. A statement certifying that an annual meeting was held in accordance with the corporation’s bylaws, as required under Section 79-11-197, including the date of the most recent annual meeting;
    2. A list of the directors currently serving on the board of the corporation; and
    3. A list of those directors required who have failed to meet the management training requirements under Section 41-26-101.
    1. Before July 15, 1999, and July 15 of each subsequent year, the State Auditor shall provide the State Department of Health a list of all corporations failing to file a report as required under subsection (1) of this section. The State Department of Health shall notify the president of the board of directors of each listed system in writing and shall require that the financial report be submitted to the State Auditor within thirty (30) days after the date of the letter.
    2. If any corporation required to prepare a financial report under this section fails to notify subscribers of the availability of the financial report, no corporate action taken after the date of the annual meeting shall be valid. If any corporation required to prepare a financial report under this section fails to submit the most recently completed annual financial report to the State Auditor, no corporate action taken after the date for submission specified in the letter from the State Department of Health, as required under paragraph (a) of this subsection, shall be valid.
    1. Each nonprofit, nonshare corporation chartered under Section 79-11-101 et seq. for the purpose of owning and operating rural waterworks shall mail to each subscriber provided water service by the corporation, as part of the billing statement received by the subscriber immediately before the annual meeting of the corporation, a notice of the annual meeting of the corporation. Each corporation also shall submit, at the time the notice is provided to the subscribers, a copy of that notice to the State Department of Health.
    2. If any corporation fails to provide notice as required under this subsection, no corporate action taken after the date stated in or fixed in accordance with the corporation’s bylaws for the annual meeting shall be valid.
  2. If any nonprofit, nonshare corporation chartered under Section 79-11-101 et seq. for the purpose of owning and operating rural waterworks fails to hold an annual meeting, no corporate action taken after the date stated in or fixed in accordance with the corporation’s bylaws for the annual meeting shall be valid.

HISTORY: Laws, 1998, ch. 569, § 1, eff from and after July 1, 1998.

Editor’s Notes —

Section 7-7-2 provides that the words “State Auditor of Public Accounts,” “State Auditor” and “Auditor” appearing in the laws of this state in connection with the performance of the Auditor’s functions shall mean the State Fiscal Officer whenever they appear. Section 27-104-6 provides that wherever the term “State Fiscal Officer” appears in any law it shall mean “Executive Director of the Department of Finance and Administration.”

§79-11-395. Application to pre-existing domestic nonprofit, nonshare corporations.

Section 79-11-101 et seq. apply to all domestic nonprofit, nonshare corporations in existence on its effective date that were incorporated under Section 79-11-1 or any predecessor thereto.

HISTORY: Laws of 1987, ch. 485, § 148, eff from and after January 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Editor’s Notes —

Former § 79-11-1, referred to in this section, was repealed by Laws of 1987, ch. 485, § 153 eff from and after January 1, 1988.

§79-11-397. Application to pre-existing foreign corporations authorized to transact business.

  1. A foreign corporation authorized to transact business in this state on January 1, 1988, Section 79-11-101 et seq. is subject to Section 79-11-101 et seq. but is not required to obtain a new certificate of authority to transact business under Section 79-11-101 et seq.
  2. A foreign corporation domesticated in this state on January 1, 1988, is subject to Section 79-11-101 et seq., and its status shall automatically change from a foreign corporation domesticated in this state to that of a foreign corporation authorized to transact business in this state, and such corporation is not required to obtain a new certificate of authority to transact business under Section 79-11-101 et seq.

HISTORY: Laws, 1987, ch. 485, § 149; Laws, 1988, ch. 417, § 9, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1) and (2) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

§79-11-399. Effect of repeal of prior statutes.

  1. Except as provided in subsection (2) of this section, the repeal of a statute by Section 79-11-101 et seq. does not affect:
    1. The operation of the statute or any action taken under it before its repeal;
    2. Any ratification, right, remedy, privilege, obligation or liability acquired, accrued or incurred under the statute before its repeal;
    3. Any violation of the statute or any penalty, forfeiture or punishment incurred because of the violation before its repeal;
    4. Any proceeding, reorganization or dissolution commenced under the statute before its repeal, and the proceeding, reorganization or dissolution may be completed in accordance with the statute as if it had not been repealed; or
    5. Any meeting of members or directors or action by written consent noticed or any action taken before its repeal as a result of a meeting of members or directors or action by written consent.
  2. If a penalty or punishment imposed for violation of a statute repealed by Section 79-11-101 et seq. is reduced by Section 79-11-101 et seq., the penalty or punishment, if not already imposed, shall be imposed in accordance with Section 79-11-101 et seq.
  3. This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001 et seq., but this chapter does not modify, limit, or supersede Section 101(c) of that act or authorize electronic delivery of any of the notices described in Section 103(b) of that act.

HISTORY: Laws, 1987, ch. 485, § 150; Laws, 2011, ch. 440, § 18, eff from and after Jan. 1, 2012.

Joint Legislative Committee Note —

In 2009, typographical errors in subsections (1) and (2) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Amendment Notes —

The 2011 amendment, effective January 1, 2012, added (3).

Federal Aspects—

Sections 101(c) and 103(b) of the federal Electronic Signature in Global and National Commerce Act, see 15 USCS §§ 7001(c) and 7003(b), respectively.

§79-11-401. Application to religious corporations.

Except as may be otherwise provided in Sections 79-11-31, 79-11-33 and 79-11-403, Section 79-11-101 et seq. apply to religious corporations.

HISTORY: Laws, 1988, ch. 417, § 10, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in the section was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

§79-11-403. Certain provisions inapplicable to religious corporations; religious doctrine controlling in case of inconsistencies.

  1. The following provisions shall not apply to religious corporations unless otherwise provided in their articles or bylaws:
    1. Section 79-11-133
    2. Section 79-11-189
    3. Section 79-11-193
    4. Section 79-11-213
    5. Section 79-11-239
    6. Section 79-11-245
    7. Section 79-11-282
    8. Section 79-11-359
  2. If religious doctrine governing the affairs of a religious corporation is inconsistent with the provisions of Section 79-11-101 et seq. on the same subject, the religious doctrine shall control to the extent required by the Constitution of the United States or the Constitution of this state or both.

HISTORY: Laws, 1988, ch. 417, § 11, eff from and after July 1, 1988.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (2) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “ Section 79-11-101 et seq.” for “ Sections 79-11-101 et seq.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Application to religious corporations, generally, see § 79-11-401.

§79-11-405. Nonprofit corporation to notify Secretary of State of determination, suspension or revocation of exemption from tax as Section 501(c)(3) organization.

  1. A nonprofit corporation granted a determination of exemption from tax as an organization described in Section 501(c)(3) of the Internal Revenue Code shall notify the Secretary of State, in the form and manner prescribed by the Secretary of State, within thirty (30) calendar days of the determination of exemption.
  2. If a nonprofit corporation’s exemption from tax as an organization described in Section 501(c)(3) of the Internal Revenue Code is suspended or revoked, the nonprofit corporation shall notify the Secretary of State of the suspension or revocation, in the form and manner prescribed by the Secretary of State, within thirty (30) calendar days of the suspension or revocation.

HISTORY: Laws, 2011, ch. 440, § 19, eff from and after Jan. 1, 2012.

Federal Aspects—

Section 501(c)(3) of the Internal Revenue Code, see 26 USCS § 501(c)(3).

Regulation of Charitable Solicitations

§79-11-501. Definitions.

The following words and phrases as used in Sections 79-11-501 through 79-11-529 shall have the meanings ascribed herein unless a different meaning is required by the context:

(i) “Charitable organization” means either of the following:

Any person determined by the Internal Revenue Service to be a tax exempt organization pursuant to Section 501(c)(3) of the Internal Revenue Code; or

Any person actually or purporting to be established for any voluntary health and welfare, benevolent, philanthropic, patriotic, educational, humane, scientific, public health, environmental conservation, civic, or other eleemosynary purpose or for the benefit of law enforcement personnel, fire fighters, or other public safety organizations, or any person employing in any manner a charitable appeal as the basis of any solicitation or an appeal that suggests that there is a charitable purpose to any solicitation and includes each local, county or area division within this state of such charitable organization, provided such local, county or area division has authority and discretion to disburse funds or property otherwise than by transfer to any parent organization.

“Charitable organization” is not limited to only those organizations to which contributions are tax deductible under Section 170 of the Internal Revenue Code.

“Charitable organization” does not include any bona fide duly constituted religious institutions and such separate groups or corporations which form an integral part of religious institutions, provided that:

Such religious institutions, groups or corporations are tax exempt pursuant to the Internal Revenue Code;

No part of their net income inures to the direct benefit of any individual; and

Their conduct is primarily supported by government grants or contracts, funds solicited from their own membership, congregations or previous donors, and fees charged for services rendered.

“Charitable purpose” means either of the following:

Any purpose described in Section 501(c)(3) of the Internal Revenue Code; or

Any voluntary health and welfare, charitable, benevolent, philanthropic, patriotic, educational, humane, scientific, public health, environmental conservation, civic, or other eleemosynary purpose or for the benefit of law enforcement personnel, fire fighters, or other public safety organizations;

“Charitable purpose” is not limited to only those purposes for which contributions are tax deductible under Section 170 of the Internal Revenue Code.

“Container” means any box, carton, package, receptacle, canister, jar, dispenser, or machine that offers a product for sale or distribution which is or purports to be a solicitation of contributions for a charitable purpose.

“Contribution” means the promise or grant of any money or property of any kind or value, including the promise to pay, except payments by members of an organization for membership fees, dues, fines, assessments or for services rendered to individual members, if membership in such organization confers a bona fide right, privilege, professional standing, honor or other direct benefit, other than the right to vote, elect officers or hold offices, and except money or property received from any governmental authority. Reference to the dollar amount of “contributions” in Sections 79-11-501 through 79-11-529 means in the case of promises to pay, or payments for merchandise or rights of any other description, the value of the total amount promised to be paid or paid for such merchandise or rights and not merely that portion of the purchase price to be applied to a charitable purpose.

“Fund-raising counsel” means a person (i) who for a fixed fee or rate under a written agreement plans, manages, advises or consults with respect to the solicitation in this state of contributions by a charitable organization, (ii) who neither solicits contributions nor directly or indirectly employ, procure or engage any person compensated to solicit contributions, and (iii) who does not at any time, whether directly or indirectly, receive or have custody or control of contributions. A bona fide nontemporary salaried officer or employee of a charitable organization shall not be deemed to be a fund-raising counsel. No attorney, accountant or banker who renders professional services to a charitable organization or advises a person to make a charitable contribution during the course of rendering professional services to that person shall be deemed, as a result of the professional service or advice rendered, to be a fund-raising counsel.

“Person” means any individual, organization, group, association, partnership, corporation, trust or any combination of them or any other entity however established within or without this state.

“Professional fund-raiser” means any person who for compensation or other consideration is retained by a charitable organization to solicit in or from this state contributions for charitable purposes directly or in the form of payment for goods, services or admission to fund-raising events, whether such solicitation is performed personally or through his agents, servants or employees or through agents, servants or employees especially employed by or for a charitable organization who are engaged in the solicitation of contributions, the sale of goods or services or the production of fund-raising events under the direction of such person, or a person who plans, conducts, manages, carries on, advises or consults, whether directly or indirectly, in connection with the solicitation of contributions, sale of goods or services or the production of fund-raising events for or on behalf of any charitable organization, but does not qualify as a fund-raising counsel within the meaning of Sections 79-11-501 through 79-11-529, or who engages in the business of or holds himself out as independently engaged in the business of soliciting contributions for such purposes. A bona fide officer or employee of a charitable organization shall not be deemed a professional fund-raiser unless his salary or other compensation is paid as a commission which is computed on the basis of funds to be raised or actually raised.

“Professional solicitor” means any person who is employed or retained for compensation by a professional fund-raiser to solicit contributions for charitable purposes from persons in this state.

“Public safety organization” means a nongovernmental organization that uses in its name, whether in a publication of the organization, in a solicitation for contributions to the organizations, for membership in the organization, or to purchase advertising in a publication of the organization, or in a solicitation to purchase products or tickets to an event sponsored by or for the benefit of the organization by a solicitor, the term officer, peace officer, police officer, police law enforcement, reserve officer, deputy, deputy sheriff, constable, deputy constable, fireman, fire fighter, volunteer fireman, emergency medical service provider, civil employee or any other term in a manner that reasonably implies that the organization or that a contribution, purchase or membership will benefit public safety personnel.

“Solicitation” or “solicit” means the request, directly or indirectly, for money, credit, property, financial assistance, or any other thing of value on the plea or representation that such money, credit, property, financial assistance, or any other thing of value or a portion of it will be used for a charitable purpose or will benefit a charitable organization. “Solicitation” or “solicit” includes, but is not limited to, the following methods of requesting or securing money, credit, property, financial assistance or any other thing of value:

Any oral or written request.

The making of any announcement in the press, over the radio or television, by telephone, through the mail or any other media concerning an appeal or campaign by or for any charitable organization or purpose.

The distribution, circulation, posting or publishing of any handbill, written advertisement or other publication which directly or by implication seeks to obtain a contribution.

The offer of, attempt to sell, or sale of any advertising space, book, card, tag, coupon, device, magazine, membership, merchandise, subscription, flower, ticket, candy, cookies or other tangible item in connection with which any appeal is made for any charitable organization or purpose, or where the name of any charitable organization is used or referred to in any appeal as an inducement or reason for making any sale, or where any statement is made that the whole or any part of the proceeds from the sale will be used for any charitable purpose or will benefit any charitable organization.

The use or employment of container, canisters, cards, receptacles or similar devices for the collection of money or other thing of value in connection with which any appeal is made for any charitable organization or purpose.

Any announcement requesting the public to attend an appeal, assemblage, athletic or competitive event, carnival, circus, concert, contest, dance, entertainment, exhibition, exposition, game, lecture, meal, party, show, social gathering or other performance or event of any kind.

A solicitation shall take place whether or not the person making the solicitation receives any contribution, except that a charitable organization’s use of its own name in any communication shall not alone be sufficient to constitute a solicitation.

HISTORY: Laws, 1991, ch. 515, § 1; reenacted, Laws, 1992, ch. 446, § 1; Laws, 1997, ch. 444, § 1, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Cross References —

Requirement that board of charitable organization defined in this section, incorporated on or after January 1, 2012, and soliciting contributions in Mississippi, consist of not less than three directors, see § 79-11-235.

Assets of dissolved charitable organization, as defined in this section, to be transferred to another charitable organization, as defined in this section, see § 79-11-336.

Filing annual registration statement, see § 79-11-503.

Federal Aspects—

Provisions of Section 170 of the Internal Revenue Code, see 26 USCS § 170.

Provisions of Section 501(c)(3) of the Internal Revenue Code, see 26 USCS § 501(c)(3).

RESEARCH REFERENCES

ALR.

Criminal offenses under statutes and ordinances regulating charitable solicitations. 76 A.L.R.3d 924.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

Lack of consideration as barring enforcement of promise to make charitable contribution or subscription – modern cases. 86 A.L.R.4th 241.

Am. Jur.

15 Am. Jur. 2d, Charities §§ 162 et seq.

3 Am. Jur. Proof of Facts 187, Charities.

CJS.

14 C.J.S., Charities §§ 15 et seq.

§79-11-503. Registration statement; filing fee; forms; records; exceptions; final report upon expiration of registration of corporation opting not to renew registration; report contents.

  1. Except as otherwise provided in Section 79-11-505 and prior to any solicitation of contributions, every charitable organization as defined in Section 79-11-501 which solicits or intends to solicit contributions by any means whatsoever shall file a registration statement with, and pay a filing fee of Fifty Dollars ($50.00) to, the Secretary of State. A registration statement that contains false, misleading, deceptive or incomplete information or documentation shall not be considered sufficient. The registration statement shall be on forms prescribed by the Secretary of State and shall contain the following information and such other information that the Secretary of State may require by rule:
    1. The name of the organization and the name or names under which it intends to solicit contributions;
    2. The names and addresses of the officers, directors, trustees and chief executive officer of the organization;
    3. The addresses of the organization and any offices in this state. If the organization does not maintain a principal office, the name and address of the person having custody of its financial records;
    4. Where and when the organization was legally established, the form of its organization and its tax-exempt status;
    5. The purpose for which the organization and the purpose or purposes for which the contributions to be solicited will be used;
    6. The date on which the fiscal year of the organization ends;
    7. Whether the organization is authorized by any other governmental authority to solicit contributions and a statement of (i) whether the charitable organization or any of its present officers, directors, executive personnel or trustees have ever had a license or registration denied, suspended, revoked or enjoined by any court or other governmental authority in this state or any other state, or (ii) whether the charitable organization has voluntarily entered into an assurance or voluntary discontinuance or agreement with any jurisdiction or federal agency or officer;
    8. The names and addresses of any professional fundraisers or fund-raising counsel who are acting or have agreed to act on behalf of the organization;
    9. Methods by which solicitation will be made;
    10. Copies of contracts between charitable organizations and professional fundraisers or fund-raising counsel relating to financial compensation or profit to be derived by the professional fundraisers or fund-raising counsel. If any such contract is executed after filing of a registration statement, a copy thereof shall be filed within ten (10) days of the date of execution;
    11. The board, group or individual having final authority over the distribution, custody and use of contributions received;
    12. A financial report as required by Section 79-11-507;
    13. With the initial registration only, a copy of the current charter, articles of incorporation, agreement of association, instrument of trust, constitution, or other organizational instrument and a copy of the bylaws of the charitable organization; and
    14. With the initial registration or, if after registration, within thirty (30) days after its receipt, a copy of any federal tax exemption determination letter, any correspondence rescinding the charitable organization’s tax-exempt status, or any notification from the Internal Revenue Service of any challenge to or investigation of the charitable organization’s continued entitlement to federal tax exemption.
  2. The registration statement shall be signed and sworn to under penalties of perjury by the president or other authorized officer and the chief fiscal officer of the organization.
  3. The Secretary of State shall issue a certificate of registration to a charitable organization once the Secretary of State determines that such organization has complied with all provisions of this chapter. No charitable organization required to be registered under this section shall solicit funds without a valid certificate of registration.
    1. Such registration shall remain in effect until the time for annual renewal. A charitable organization shall renew registration by filing forms prescribed by the Secretary of State and paying the Fifty Dollar ($50.00) renewal fee on or before the fifteenth day of the fifth month following the close of the charitable organization’s taxable year.
    2. The Secretary of State pursuant to Section 79-11-509 may promulgate rules to provide for extensions of the due date for filing of the annual renewal required by this section and may impose an administrative penalty against any organization which fails to comply with this section within the time prescribed, or fails to furnish such additional information as is requested by the Secretary of State within the required time.
  4. Every registered organization shall notify the Secretary of State within thirty (30) days of any change in the information required to be furnished by such organization under Sections 79-11-501 through 79-11-529.
  5. In no event shall a registered charitable organization continue to solicit contributions in or from this state after the date such organization should have filed, but failed to file, a renewal and the financial report in accordance with the requirements of Sections 79-11-501 through 79-11-529.
  6. If any local, county or area division of a charitable organization is supervised and controlled by a superior or parent organization, incorporated, qualified to do business, or doing business within this state, such local, county or area division shall not be required to register under this section if the superior or parent organization files a registration statement on behalf of the local, county or area division in addition to or as part of its own registration statement. If a registration statement has been filed by a superior or parent organization as provided in Section 79-11-503(1), it shall file the annual report required under Section 79-11-507 on behalf of the local, county or area division in addition to or as part of its own report, but the accounting information required under Section 79-11-507 shall be set forth separately and not in consolidated form with respect to every local, county or area division which raises or expends more than Twenty-five Thousand Dollars ($25,000.00).
  7. Any registered charitable organization which for any reason opts not to renew its registration must, upon the expiration of its registration, provide to the Secretary of State a final report including the following, in addition to such other information the Secretary of State may require by rule:
    1. For domestic charitable organizations which have dissolved pursuant to the Mississippi Nonprofit Corporation Act;
      1. All financial statements and reports required by Section 79-11-507;
      2. Articles of dissolution and certified minutes reflecting the dissolution;
      3. A list of officers and trustees of the corporation, including their addresses and telephone numbers; and
      4. A statement signed by an officer of the corporation providing details of the final distribution of assets.
    2. For all other charitable organizations, foreign or domestic, which opt not to renew for any other reason:
      1. All financial statements and reports required by Section 79-11-507; and
      2. A statement signed by an officer of the charitable organization certifying that the organization has ceased charitable solicitations within the state.

HISTORY: Laws, 1991, ch. 515, § 2; reenacted and amended, Laws, 1992, ch. 446, § 2; Laws, 1997, ch. 444, § 2; Laws, 2009, ch. 547, § 5; Laws, 2016, ch. 313, § 1, eff from and after July 1, 2016.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2009 amendment substituted “Twenty-five Thousand Dollars ($25,000.00)” for “Four Thousand Dollars ($4,000.00)” at the end of (7); and added (8).

The 2016 amendment rewrote (4), which read: “Such registration shall remain in effect for one (1) year, unless renewed by the filing of forms as prescribed by the Secretary of State and upon payment of the Fifty Dollars ($50.00) renewal fee.”

Cross References —

Mississippi Administrative Procedures Law, see §§ 25-4-1.101 et seq.

Mississippi Nonprofit Corporation Act, see §§ 79-11-101 et seq.

Organizations excepted from application of registration provisions of this section and reporting provisions of § 79-11-507, see § 79-11-505.

Filing annual financial statements, see § 79-11-507.

Filing reports with Secretary of State, see § 79-11-507.

Reasons for denial, suspension, or revocation of registration or exemption applied for under this section, see § 79-11-509.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities §§ 162 et seq.

3 Am. Jur. Proof of Facts 187, Charities.

CJS.

14 C.J.S., Charities §§ 15 et seq.

§79-11-504. Authority of Secretary of State to promulgate rules and regulations.

The Secretary of State shall have the authority to:

Promulgate rules of procedure and regulations necessary for the administration of Sections 79-11-501 through 79-11-529, Mississippi Code of 1972, subject to the provisions of the Mississippi Administrative Procedures Law.

Honor written requests from interested person for interpretative opinions regarding registration and exemptions from registration.

Publish and disseminate information to the public concerning persons subject to Sections 79-11-501 through 79-11-529, Mississippi Code of 1972.

Perform any other functions and duties which may be necessary to carry out the provisions of Sections 79-11-501 through 79-11-529, Mississippi Code of 1972.

HISTORY: Laws, 1997, ch. 444, § 3, eff from and after July 1, 1997.

Cross References —

Mississippi Administrative Procedures Law, see §§ 25-4-1.101 et seq.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities § 162 et seq.

§79-11-505. Exemption from provisions; notice of exemption; burden of proof.

  1. The registration provisions of Section 79-11-503 and the reporting provisions of Section 79-11-507 shall not apply to the following organizations:
    1. All educational institutions that are recognized by the State Board of Education or that are accredited by a regional accrediting association or by an organization affiliated with the National Commission on Accrediting, any foundation having an established identity with any of the aforementioned educational institutions, any other educational institution which makes the solicitation of contributions solely by its student body, alumni, faculty and trustees and their families or a library established under the laws of this state.
    2. Fraternal, patriotic, social, educational, alumni organizations and historical societies when solicitation of contributions is made solely by their membership; however, posts of the American Legion and posts of the Veterans of Foreign Wars of the United States may utilize nonmembers to assist designated supervisors in the conduct of bingo under the Charitable Bingo Law and qualify for this exemption. This exemption shall be extended to any subsidiary of a parent or superior organization if such solicitation is made solely by the membership of the subsidiary, parent or superior organization.
    3. Persons requesting any contributions for the relief or benefit of any individual, specified by name at the time of the solicitation, if the contributions collected are turned over to the named beneficiary, first deducting reasonable expenses for costs of banquets or social gatherings, if any, provided all fundraising functions are carried on by persons who are unpaid, directly or indirectly, for such services.
    4. Any charitable organization which does not intend to solicit and receive and does not actually receive contributions in excess of Twenty-five Thousand Dollars ($25,000.00) during any twelve-month period ending June 30 of any year or on such other date as prescribed by rule, provided all of its fundraising functions are carried on by persons who are unpaid for such services. However, if the gross contributions received by such charitable organization during any twelve-month period ending June 30 of any year or other date as prescribed by rule shall be in excess of Twenty-five Thousand Dollars ($25,000.00) it shall, within thirty (30) days after the date it shall have received total contributions in excess of Twenty-five Thousand Dollars ($25,000.00), register with and report to the Secretary of State as required by this chapter.
    5. Any charitable organization receiving an allocation from an incorporated community chest or united fund, provided such chest or fund is complying with the provisions of Sections 79-11-501 through 79-11-529 relating to registration and filing of annual reports with the Secretary of State, and provided such organization does not actually receive, in addition to such allocation, contributions in excess of Twenty-five Thousand Dollars ($25,000.00) during any twelve-month period ending June 30 of any year or such other date as prescribed by rule, and provided further, that all the fundraising functions of such organization are carried on by persons who are unpaid for such services. However, if the gross contributions other than such allocation received by such charitable organization during any twelve-month period ending June 30 of any year or on such other date as prescribed by rule shall be in excess of Twenty-five Thousand Dollars ($25,000.00), it shall, within thirty (30) days after the date it shall have received such contributions in excess of Twenty-five Thousand Dollars ($25,000.00), register with and report to the Secretary of State as required by this chapter.
    6. All volunteer fire departments or rescue units, rural or otherwise, chartered under the laws and statutes of the State of Mississippi as nonprofit corporations.
    7. Any humane society organized under the laws of Mississippi which receives not less than fifty percent (50%) of its annual funding from contracts with counties or municipalities for the care and keeping of estrays.
    8. Any other organization which the Secretary of State by rule or order exempts from the registration requirements of this chapter upon finding that (i) such registration is neither necessary in the public interest nor for the protection of contributors, or (ii) such exemption shall further the objectives of compatibility with uniformity among the states.
  2. Prior to any solicitations for contributions, each charitable organization claiming to be exempt shall file a Notice of Exemption on the forms prescribed by the Secretary of State. In any proceeding under this chapter, the burden of proving an exemption, or an exception from a definition, is upon the person claiming it.

HISTORY: Laws, 1991, ch. 515, § 3; reenacted and amended, Laws, 1992, ch. 446, § 3; Laws, 1994, ch. 393, § 1; Laws, 1997, ch. 444, § 4; Laws, 2007, ch. 360, § 1; Laws, 2009, ch. 547, § 6, eff from and after July 1, 2009; Laws, 2018, ch. 370, § 1, eff from and after July 1, 2018.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2007 amendment added the language following “by their membership” in the first sentence of (1)(b); and made a minor stylistic change in (2).

The 2009 amendment rewrote the introductory paragraph of (1); substituted “Twenty-five Thousand Dollars ($25,000.00)” for “Four Thousand Dollars ($4,000.00)” throughout (1)(d) and (e); and inserted “or on such other date as prescribed by rule” following “June 30 of any year” throughout (1)(d) and (e).

The 2018 amendment inserted “receives not less than fifty percent (50%) of its annual funding from” in (1)(g).

Cross References —

Requirement that charitable organization soliciting contributions file registration statement, see § 79-11-503.

Reasons for denial, suspension, or revocation of registration or exemption applied for under this section, see § 79-11-509.

Powers and duties of Secretary of State and the Attorney General with respect to charitable organizations, see § 79-11-519.

Powers and duties of district attorneys and county prosecuting attorneys relating to charitable solicitations, see § 79-11-519.

Charitable Bingo Law generally, see §§ 97-33-51 et seq.

Federal Aspects—

Section 501(c)(3) of United States Internal Revenue Code, see 26 USCS § 501(c)(3).

§79-11-507. Reports to Secretary of State; financial statements; extension of due date for filing financial statements; administrative penalties.

  1. Every charitable organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions in excess of Five Hundred Thousand Dollars ($500,000.00) and all of whose fund-raising functions are carried on by persons who are unpaid for such services, and every charitable organization registered pursuant to Section 79-11-503 whose fund-raising functions are not carried on solely by persons who are unpaid for such services shall file a financial statement for its most recently completed fiscal year with the Secretary of State. The financial statement shall be filed along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter. The financial statement shall include a balance sheet and statement of income and expense and shall be consistent with forms furnished by the Secretary of State clearly setting forth the following: gross receipts and gross income from all sources, broken down into total receipts and income from each separate solicitation project or source; cost of administration; cost of solicitation; cost of programs designed to inform or educate the public; total net amount disbursed or dedicated for each major purpose, charitable or otherwise. The statement shall be signed by the president or other authorized officer and the chief fiscal officer of the organization, and shall be accompanied by an opinion signed by an independent certified public accountant that the financial statement therein fairly represents the financial operations of the organization in sufficient detail to permit public evaluation of its operations. The financial statement shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service.
  2. Every organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions of at least Two Hundred Fifty Thousand Dollars ($250,000.00) but not more than Five Hundred Thousand Dollars ($500,000.00) and all of whose fund-raising functions are carried on by persons who are unpaid for their services shall file a financial statement reviewed by an independent certified public accountant along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter with the Secretary of State upon forms prescribed by him. The reviewed financial statement shall cover the most recently completed fiscal year and include such information as required by the Secretary of State by rule or otherwise, including, but not limited to, the gross receipts from contributions and the use of the proceeds of such contributions. The statement shall be signed by the president or other authorized officer of the organization who shall certify under penalties of perjury that the statements therein are true and correct to the best of the signer’s knowledge. The reviewed financial statement shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service.
  3. Every organization registered pursuant to Section 79-11-503 that shall receive in any fiscal year contributions not in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) and all of whose fund-raising functions are carried on by persons who are unpaid for their services shall file a financial report along with the registration statement required by Section 79-11-503 and any renewals or final report thereafter with the Secretary of State upon forms prescribed by him. Such financial report shall cover the most recently completed fiscal year and include such information as required by the Secretary of State by rule or otherwise, including, but not limited to, the gross receipts from contributions and the use of the proceeds of such contributions. The report shall be signed by the president or other authorized officer of the organization who shall certify under penalties of perjury that the statements therein are true and correct to the best of the signer’s knowledge. Such financial report shall be accompanied by any and all forms required to be filed by a charitable organization with the United States Internal Revenue Service.
  4. Any charitable organization receiving more than Twenty-five Thousand Dollars ($25,000.00) but less than Five Hundred Thousand Dollars ($500,000.00) shall, at the request of the Secretary of State, submit additional financial information, including, but not limited to, an audited financial statement prepared in accordance with generally accepted accounting principles and accompanied by an opinion signed by an independent certified public accountant that the financial statement therein fairly represents the financial operations of the organization in sufficient detail to permit public evaluation of its operations.
  5. The Secretary of State pursuant to Section 79-11-509 may promulgate rules to provide for extensions of the due date for filing of the financial statements required by this chapter and may impose an administrative penalty against any organization which fails to comply with this section within the time prescribed, or fails to furnish such additional information as is requested by the Secretary of State within the required time.

HISTORY: Laws, 1991, ch. 515, § 4; reenacted and amended, Laws, 1992, ch. 446, § 4; Laws, 1997, ch. 444, § 5; Laws, 2008, ch. 559, § 1; Laws, 2009, ch. 547, § 7, eff from and after July 1, 2009.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2008 amendment rewrote the section to increase the amount in contributions charitable organizations may receive in a fiscal year before having to file a financial statement and opinion signed by independent certified CPA and to revise the threshold amounts that trigger the requirements to file.

The 2009 amendment added “or final report” following “required by Section 79-11-503 and any renewals” in the second sentence of (1) and in the first sentences of (2) and (3); and rewrote (5).

Cross References —

Filing annual registration statement, see § 79-11-503.

Annual registration statement, see § 79-11-503.

Organizations excepted from application of registration provisions of § 79-11-503 and reporting provisions of this section, see § 79-11-505.

§79-11-509. Effective date of registration; denial, suspension or revocation of registration or exemption; grounds for denial, suspension or revocation; procedure; violations and penalties; appeal.

  1. The Secretary of State shall deny, suspend or revoke a registration or an exemption for the following reasons:
    1. The application for registration or renewal is incomplete.
    2. The application or renewal fee (where applicable) has not been paid.
    3. A document filed with the Secretary of State contains one or more false or misleading statements or omits material facts.
    4. The charitable contributions have not been or are not being applied for the purpose or purposes stated in the documents filed with the Secretary of State.
    5. The applicant or registrant has violated or failed to comply with any provisions of this chapter or any rule or order thereunder.
    6. Any applicant, registrant, officer, director, or partner of the applicant or registrant, or any agent or employee thereof who has been convicted of a felony or a misdemeanor involving misrepresentation, misapplication or misuse of the money or property of another maintains a position where he or she has access to or control over the funds of the charitable organization.
    7. The applicant or registrant has engaged in the use or employment of dishonesty, fraud, deception, misrepresentation, false promise or false pretense.
    8. The applicant or registrant has had the authority to engage in charitable or fund-raising activities denied, revoked or suspended by the Secretary of State or any other state or jurisdiction.
    9. The applicant or registrant has been convicted of any criminal offense committed in connection with the performance of activities regulated under Sections 79-11-501 through 79-11-529 or any criminal offense involving untruthfulness or dishonesty or any criminal offense relating adversely to the registrant’s or applicant’s fitness to perform activities regulated by Sections 79-11-501 through 79-11-529. For the purposes of this paragraph, a plea of guilty, non vult, nolo contendere or any other similar disposition of alleged criminal activity shall be deemed a conviction.
    10. Any applicant, registrant, officer, director, or partner of the applicant or registrant, or any agent, volunteer or employee thereof, who has been convicted under federal or state law of any criminal offense involving acts against children maintains a position where he or she is in close contact with children.
    11. Any officer, director, partner, employee, agent or volunteer has accrued three (3) or more unremediated citations issued by the Secretary of State pursuant to this section.
    12. The applicant or registrant has engaged in other forms of misconduct as may be determined by the rules adopted by the Secretary of State.
  2. The Secretary of State shall notify the applicant or licensee of his intent to deny, suspend or revoke a license. The notification shall contain the reasons for the action and shall inform him of his right to request an administrative hearing within thirty (30) days of receipt of the notification. The denial, suspension or revocation shall become effective thirty (30) days after receipt of the notification unless a request for an administrative hearing is received by the Secretary of State before the expiration of the thirty (30) days. If a hearing is requested and the denial, suspension or revocation is upheld, the denial, suspension or revocation shall become effective upon the service of the final administrative decision on the applicant or licensee.
  3. Registration shall become effective no later than noon of the thirtieth day after a completed application is filed, if no denial order is in effect and no proceeding is pending under this chapter. The Secretary of State may, by rule or order, specify an earlier effective date, and the Secretary of State may, by order, defer the effective date until noon of the thirtieth day after the filing of any amendment.
  4. Whenever it appears to the Secretary of State that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, he may, in his discretion, seek one or more of the following remedies in addition to other remedies authorized by law:
    1. Issue a cease and desist order, with or without a prior hearing against the person or persons engaged in the prohibited activities, directing them to cease and desist from further illegal activity;
    2. Administratively dissolve or seek the judicial dissolution of a domestic corporation that is a charitable organization, or revoke the certificate of authority of a foreign corporation that is a charitable organization; or
    3. Issue an order imposing an administrative penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, each violation to be considered as a separate offense in a single proceeding or a series of related proceedings;
    4. For the purpose of determining the amount or extent of a sanction, if any, to be imposed under paragraph (b) or (c) of this subsection, the Secretary of State shall consider, among other factors, the frequency, persistence and willfulness of the conduct constituting a violation of this chapter or a rule promulgated thereunder or an order of the Secretary of State, the number of persons adversely affected by the conduct, and the resources of the person committing the violation.
  5. In addition to the above remedies, the Secretary of State may issue a citation to any person engaging in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder. The Secretary of State shall establish rules providing remediation of certain citations, and the decision whether to allow such remediation will be within the Secretary of State’s discretion.
  6. Whenever it appears to the Secretary of State or Attorney General that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder, either official may, in his discretion, take any or all of the following actions: bring an action in chancery court to obtain a temporary restraining order or injunction to enjoin the acts or practices and enforce compliance with Sections 79-11-501 through 79-11-529 or any rule or order thereunder; collect administrative penalties imposed under this section; or obtain on behalf of a charitable organization the return or repayment of any property or consideration received as private inurement or an excess benefit in violation of Section 79-11-519(3) (j). Upon a proper showing a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant’s assets. In addition, upon a proper showing, the court may enter an order of rescission, restitution or disgorgement directed to any person who has engaged in any act constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder. In addition the court may impose a civil penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings. The court may not require the Secretary of State or Attorney General to post a bond.
  7. Any person aggrieved by a final order of the Secretary of State may obtain a review of the order in the Chancery Court of the First Judicial District of Hinds County, Mississippi, by filing in the court, within thirty (30) days after the entry of the order, a written petition praying that the order be modified or set aside, in whole or in part. A copy of the petition shall be forthwith served upon the Secretary of State and thereupon the Secretary of State shall certify and file in court a copy of the filing and evidence upon which the order was entered. When these have been filed, the court has exclusive jurisdiction to affirm, modify, enforce or set aside the order, in whole or in part.

HISTORY: Laws, 1991, ch. 515, § 5; reenacted and amended, Laws, 1992, ch. 446, § 5; Laws, 1997, ch. 444, § 6; Laws, 2009, ch. 547, § 8; Laws, 2016, ch. 447, § 4, eff from and after July 1, 2016.

Joint Legislative Committee Note —

In 2009, an error in a statutory reference in subsection (4)(d) was corrected at the direction of co-counsel of the Joint Legislative Committee on Compilation, Revision and Publication by substituting “paragraph (b) or (c) of this subsection” for “paragraph (b) or (c) of this section.” The correction was ratified by the Joint Committee at its July 22, 2010, meeting.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

The reference in (4)(d) to “paragraph (b) or (c) of this section” has been changed to “paragraph (b) or (c) of this subsection” at the direction of the co-counsel of the Joint Committee on Compilation, Revision and Publication of Legislation.

Amendment Notes —

The 2009 amendment rewrote the section.

The 2016 amendment added (7).

Cross References —

Imposition, by Secretary of State, of administrative penalty under this section for failure to file required statements, see § 79-11-507.

§79-11-511. Out-of-state organization; service of process.

Any charitable organization, person, professional fund-raiser, fund-raising counsel or professional solicitor, which or who solicits contributions in this state, but does not maintain an office within the state, shall be subject to service of process by designating a registered agent upon which process may be served in the State of Mississippi, or if no designation has been made, then service of process shall be upon the Secretary of State of Mississippi.

HISTORY: Laws, 1991, ch. 515, § 6; reenacted, Laws, 1992, ch. 446, § 6; Laws, 1997, ch. 444, § 7, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

§79-11-513. Registration as professional fund-raiser or fund-raising counsel; bond; filing annual report.

No person shall act as a professional fund-raiser or fund-raising counsel for a charitable organization before he has registered with the Secretary of State or after the expiration or cancellation of such registration or any renewal thereof. Applications for registration and renewals shall be in writing sworn to under penalties of perjury in the form prescribed by the Secretary of State and accompanied by the filing of a fee of Two Hundred Fifty Dollars ($250.00). The professional fund-raiser applicant, at the time of making application, shall file with the State Treasurer and have approved by the Secretary of State a bond in which the applicant shall be the principal obligor in the sum of Ten Thousand Dollars ($10,000.00) with one or more corporate sureties licensed to do business in this state whose liability in the aggregate will at least equal such sum. The bond shall run to the Secretary of State for the use of the state and to any person who may have a cause of action against the obligor of the bond for any malfeasance or misfeasance in the conduct of such solicitation; provided, that the aggregate limit of liability of the surety to the state and to all such persons shall, in no event, exceed the sum of such bond. Such limitation of liability, as to the sum of the bond, as to the surety, shall not otherwise affect any liability to any person by any charitable organization, professional fund-raiser, professional solicitor or any other person for a violation of this chapter. Registration when effected shall be for a period of one (1) year, or a part thereof, expiring on June 30 or on such other date as prescribed by rule and may be renewed upon written application, under oath, in the form prescribed by the Secretary of State and upon the remittance of the renewal fee of Two Hundred Fifty Dollars ($250.00) and the filing of the bond for additional one-year periods. Every professional fund-raiser and fund-raising counsel required to register pursuant to Sections 79-11-501 through 79-11-529 shall file an annual written report with the Secretary of State containing such information and documentation as he may require by rule.

HISTORY: Laws, 1991, ch. 515, § 7; reenacted and amended, Laws, 1992, ch. 446, § 7; Laws, 1997, ch. 444, § 8; Laws, 2009, ch. 547, § 9, eff from and after July 1, 2009.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2009 amendment rewrote the next-to-last sentence of the section.

Cross References —

Reasons for denial, suspension or revocation of registration or exemption applied for under this section, see § 79-11-509.

Registration as professional solicitor in employ of professional fund-raiser, see § 79-11-517.

§79-11-515. Contracts; filing with Secretary of State.

  1. All contracts entered into between professional fund-raisers or fund-raising counsel and charitable organizations shall be in writing and a true and correct copy of such contract shall be filed by the professional fund-raiser or fund-raising counsel who is a party thereto with the Secretary of State at least ten (10) days prior to the performance by the professional fund-raiser or fund-raising counsel of any service. The contract must be signed by two (2) authorized officials of the charitable organization, one (1) of whom must be a member of the organization’s governing body, and the authorized contracting officer for the professional fund-raiser or fund-raising counsel. True and correct copies of such contracts shall be kept on file in the offices of the charitable organization and the professional fund-raiser or fund-raising counsel during the term thereof and until the expiration of a period of three (3) years subsequent to the date the solicitation of contributions provided for therein actually terminates. The contract shall contain all of the following provisions:
    1. The legal name and address of the charitable organization as registered with the Secretary of State, unless that charitable organization is exempt from registration;
    2. A statement of the charitable purpose for which the solicitation campaign is being conducted;
    3. A statement of the respective obligations of the professional fund-raiser or fund-raising counsel and the charitable organization;
    4. A clear statement of the fees or rate which will be paid to the professional fund-raiser or fund-raising counsel;
    5. The effective and termination dates of the contract and the date services will commence with respect to the solicitation in this state of contributions for a charitable organization;
    6. For fund-raising counsel, a statement that the fund-raising counsel will not at any time have custody or control of contributions;
    7. A statement that the charitable organization exercises control and approval over the content and volume of any solicitation; and
    8. Any other information required by the rules of the Secretary of State.
  2. Prior to the commencement of any solicitation, the professional fund-raiser shall file all of the following with the Secretary of State and such other information that the Secretary of State may, by rule, require a written report on forms prescribed by the Secretary of State containing information about the solicitation campaign, including, but not limited to, the following:
    1. The fund-raising methods to be used;
    2. The projected dates when the solicitation campaign will commence and terminate;
    3. The location and telephone number from where the solicitation campaign will be conducted if it will be conducted by telephone;
    4. The name and residence address of each person responsible for directing and supervising the conduct of the solicitation campaign;
    5. A statement of whether the professional fund-raiser will at any time have custody of any contributions;
    6. The account number and location of each bank account where receipts from the campaign are to be deposited;
    7. A full and fair description of the charitable program for which the solicitation campaign is being carried out; and
    8. The written and signed consent of every charitable organization on whose behalf the professional fund-raiser will be soliciting contributions or whose name will be mentioned during the solicitation.
  3. Not later than ninety (90) days after a solicitation campaign has been completed and on the anniversary of the commencement of a solicitation campaign lasting more than one (1) year, the professional fund-raiser shall furnish an accounting of all contributions collected and expenses paid to the charitable organization with which the professional fund-raiser has contracted. The accounting shall be in writing and shall be retained by the professional fund-raiser and charitable organization for three (3) years. The professional fund-raiser shall file a final report of the accounting with the Secretary of State on forms prescribed by him and containing such information he may, by rule, require not later than seven (7) days after it is furnished to the charitable organization. This report shall be signed by the contracting agent with the professional fund-raiser and also by an authorized officer of the charitable organization.
  4. Not later than two (2) days after receipt of each contribution, the professional fund-raiser shall deposit the entire amount of the contribution in an account at a bank or other federally insured financial institution which shall be in the name of the charitable organization with which the professional fund-raiser has contracted. Each contribution collected by the professional fund-raiser shall be solely in the name of that charitable organization. The charitable organization shall have sole control of all withdrawals from the account and the professional fund-raiser shall not be given the authority to withdraw any deposited funds from the account.
  5. During each solicitation campaign and for not less than three (3) years after its completion, the professional fund-raiser shall maintain the following records that shall be made available to the Attorney General or the Secretary of State upon request:
    1. A record of each contribution that at any time is in the custody of the professional fund-raiser, including the name and address of each contributor and the date and amount of the contribution; and
    2. The location of each bank or financial institution in which the professional fund-raiser has deposited revenue from the solicitation campaign and the account number of each account into which the deposits were made.
  6. Any material change in any information filed with the Secretary of State pursuant to this section shall be reported in writing by the professional fund-raiser or fund-raising counsel to the Secretary of State not more than seven (7) days after such change occurs.

HISTORY: Laws, 1991, ch. 515, § 8; reenacted and amended, Laws, 1992, ch. 446, § 8; Laws, 1997, ch. 444, § 9, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

§79-11-517. Registration as professional solicitor in employ of professional fund-raiser.

No person shall act as a professional solicitor in the employ of a professional fund-raiser required to register pursuant to Section 79-11-513 before he has registered with the Secretary of State or after the expiration or cancellation of such registration or any renewal thereof. Application for registration or renewal shall be in writing sworn to under penalties of perjury in the form prescribed by the Secretary of State. Such registration when effected shall be for a period of one (l) year, or a part thereof, expiring on June 30 or such other date as prescribed by rule, and may be renewed upon written application, sworn to under penalties of perjury, in the form prescribed by the Secretary of State for additional one-year periods.

HISTORY: Laws, 1991, ch. 515, § 9; reenacted, Laws, 1992, ch. 446, § 9; Laws, 1997, ch. 444, § 10; Laws, 2009, ch. 547, § 10, eff from and after July 1, 2009.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2009 amendment rewrote the last sentence.

Cross References —

Reasons for denial, suspension or revocation of registration or exemption applied for under this section, see § 79-11-509.

§79-11-518. Records of solicitation activities.

Every charitable organization, professional fund-raiser, professional solicitor, or fund-raising counsel, whether or not required to register pursuant to Sections 79-11-501 through 79-11-529, Mississippi Code of 1972, shall keep true and correct books and records of solicitation activities that are covered by Sections 79-11-501 through 79-11-529, Mississippi Code of 1972, or any rule or order adopted under Sections 79-11-501 through 79-11-529, Mississippi Code of 1972. All such books and records shall be open to inspection at all reasonable times by the Secretary of State or the Attorney General, or their duly authorized representatives. The records shall be retained for a period of at least three (3) years.

HISTORY: Laws, 1997, ch. 444, § 11, eff from and after July 1, 1997.

RESEARCH REFERENCES

Am. Jur.

15 Am. Jur. 2d, Charities § 162 et seq.

§79-11-519. Powers and duties of district attorneys and county prosecuting attorneys; violations of Sections79-11-501 through79-11-529.

  1. It is the duty of the district attorneys and county prosecuting attorneys of this state to prosecute all violations of the provisions of Sections 79-11-501 through 79-11-529. In addition, actions for violations of Sections 79-11-501 through 79-11-529 may be prosecuted by the Attorney General.
  2. Sections 79-11-501 through 79-11-529 shall not be construed to limit or restrict the exercise of the powers or the performance of the duties of the Attorney General which he otherwise is authorized to exercise or perform under any other provision of law by statute or otherwise except the rendering of interpretative opinions in accordance with Section 79-11-503 which shall be limited to the Secretary of State.
  3. It shall be a violation of Sections 79-11-501 through 79-11-529 for any person:
    1. To misrepresent:
      1. The purpose or beneficiary of a solicitation;
      2. The purpose or nature of a charitable organization; or
      3. That any other person sponsors or endorses a solicitation.
    2. To use or exploit the fact of registration so as to lead the public to believe that such registration constitutes an endorsement or approval by the state;
    3. To use the name of a charitable organization, or to display any emblem, device or printed matter belonging to or associated with a charitable organization without the express written permission of the charitable organization;
    4. To make any false or misleading statement on any document required by Sections 79-11-501 through 79-11-529 or any rule or order thereunder;
    5. To fail to comply with the requirements of Sections 79-11-501 through 79-11-529 or any rule or order thereunder;
    6. To commit any unfair or deceptive act or practice; to employ any device, scheme or artifice to defraud; to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or to obtain money or property by means of any false pretense, representation or promise;
    7. To fail to provide complete and timely payment to a charitable organization of the proceeds from a solicitation campaign or a charitable sales promotion;
    8. To make any false or misleading statements in the solicitations of contributions in this state or to omit to state any fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;
    9. To refuse or fail, after notice, to produce any records required to be kept under Sections 79-11-501 through 79-11-529, or any rule or order promulgated thereunder;
    10. To benefit, directly or indirectly, from any transaction in which an economic benefit is provided by a charitable organization where the value of the benefit provided by the organization exceeds the fair market value of the consideration received by the organization.
  4. It shall be a violation of Sections 79-11-501 through 79-11-529 for any charitable organization:
    1. To engage in any financial transaction which is not related to the accomplishment of a charitable purpose, or which jeopardizes or interferes with the ability of the charitable organization to accomplish a charitable purpose;
    2. To expend an unreasonable amount of money for solicitation or management;
    3. To use the name which is the same as or confusingly similar to the name of another charitable organization unless the latter organization shall consent in writing to its use;
    4. To represent itself as being associated with another charitable organization without the express written acknowledgment and endorsement of such other charitable organization;
    5. To use the services of an unregistered professional fund-raiser or fund-raising counsel or professional solicitor;
    6. To fail to comply with any provisions of Sections 79-11-501 through 79-11-529 or any rule or order thereunder;
    7. To employ as an officer, director, partner, employee, agent or volunteer, any person who has accrued three (3) or more unremediated citations issued by the Secretary of State pursuant to Section 79-11-509;
    8. To employ as an officer, director, partner, employee or agent any person who has been convicted of a felony or misdemeanor involving misrepresentation, misapplication or misuse of the money or property of another, in a capacity where that person has access to or control over the funds of the charitable organization;
    9. To employ as an officer, director, partner, employee, volunteer or agent any person who has been convicted under federal or state law of any criminal offense involving acts against children, where such position will bring the person into close contact with children; or
    10. To apply the charitable organization’s funds or assets for private inurement or excess benefits which exceed the fair market value of the property or services received in return from directors, officers, or those persons who are deemed disqualified persons or insiders under applicable federal law for tax-exempt organizations.
  5. It shall be a violation of Sections 79-11-501 through 79-11-529 for any professional fund-raiser, professional fund-raising counsel or any professional solicitor:
    1. To perform any services on behalf of an unregistered charitable organization; or
    2. To fail to comply with any provisions of Sections 79-11-501 through 79-11-529 or any rule or order thereunder.
  6. It shall be a violation of Sections 79-11-501 through 79-11-529 for any person, in connection with a public safety organization solicitation:
    1. To use any representation that implies that the contribution is for or on behalf of a public safety agency or a public safety organization, or using any emblem, device, or printed matter belonging to or associated with a public safety agency or organization, unless authorized in writing to do so by the agency or organization;
    2. To use a name, symbol, or statement that is similar to that used by a public safety agency or organization in a manner that is intended to confuse or mislead a person being solicited;
    3. To represent or imply that the solicitor is a peace officer or member of a public safety agency or public safety organization if the solicitor is not;
    4. To solicit for a public safety organization, independent promoter, public safety publication, or cause by representing that those who respond affirmatively to the solicitation will receive favored treatment by public safety personnel; or
    5. To fail to comply with any provisions of Sections 79-11-501 through 79-11-529 or any rule or order thereunder.
  7. A misrepresentation may be accomplished by words or conduct or failure to disclose a material fact. Regardless of a person’s intent or the lack of injury, the above acts and practices are prohibited in the planning, conduct or execution of any solicitation or charitable sales promotion.
  8. The Secretary of State or the Attorney General may exercise the authority granted in this section against any charitable organization or person which or who operates under the guise or pretense of being an organization exempted by the provisions of Section 79-11-505, and is not in fact an organization entitled to such an exemption.

HISTORY: Laws, 1991, ch. 515, § 10; reenacted and amended, Laws, 1992, ch. 446, § 10; Laws, 1997, ch. 444, § 12; Laws, 2009, ch. 547, § 11, eff from and after July 1, 2009.

Joint Legislative Committee Note —

In 2009, typographical errors in subsection (6) were corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “(b) To use a name...” for “(b) Using a name...,” “(c) To represent or imply...” for “(c) Representing or implying...” and “(d) To solicit...” for “(d) Soliciting...” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2009 amendment rewrote the section.

Cross References —

Fines and penalties for violations of §§ 79-11-501 through 79-11-527, see § 79-11-529.

§79-11-521. Investigations of violations; written statements as to facts and circumstances; publication of information concerning violations; authority to administer oaths, subpoena witnesses, take evidence, require production of books, papers, etc.

Either the Secretary of State or Attorney General, in his discretion: (a) may make such public or private investigations within or outside of this state as deemed necessary by the Secretary of State or Attorney General to determine whether any person has violated or is about to violate any provision of this chapter or any rule or order hereunder, or to aid in the enforcement of Sections 79-11-501 through 79-11-529 or in the prescribing of rules and forms hereunder; (b) may require or permit any person to file a statement in writing, under oath or otherwise, as to all the facts and circumstances concerning the matter to be investigated; and (c) may publish information concerning any violation of Sections 79-11-501 through 79-11-529 or any rule or order hereunder.

For the purpose of any investigation or proceeding under Sections 79-11-501 through 79-11-529, the Secretary of State or Attorney General, or any designated officer may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the Secretary of State or Attorney General deems relevant or material to the inquiry.

HISTORY: Laws, 1991, ch. 515, § 11; reenacted and amended, Laws, 1992, ch. 446, § 11; Laws, 1997, ch. 444, § 13; Laws, 2009, ch. 547, § 12, eff from and after July 1, 2009.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Amendment Notes —

The 2009 amendment rewrote the section.

§79-11-523. Use of names, symbol or statement during solicitations for contributions; disclosure requirements for professional fund raisers.

    1. Prior to orally requesting a contribution or contemporaneously with written requests for a contribution, a professional fund-raiser and professional solicitor shall be responsible for clearly and conspicuously disclosing:
      1. The name of the professional fund-raiser as on file with the Secretary of State and that the solicitation is being conducted by a professional fund-raiser who is being paid for his services;
      2. If the professional solicitor acting on behalf of the professional fund-raiser identifies himself by name, the professional solicitor’s legal name; and
      3. The name of the charitable organization as on file with the Secretary of State and a description of how the contributions raised by the solicitation will be utilized for a charitable purpose or, if no charitable organization exists, a description as to how the contributions raised by the solicitation will be utilized for a charitable purpose.
    2. All responses given by a professional fund-raiser and professional solicitor to an oral or written request for information shall be truthful.
    3. In the case of a solicitation campaign conducted orally, whether by telephone or otherwise, any written confirmation, receipt or reminder sent to any person who has contributed or has pledged to contribute shall include a clear and conspicuous disclosure of the information required under paragraph (1)(a) of this section.
  1. If requested by the person being solicited, the professional fund-raiser and professional solicitor shall inform that person orally and then in writing within fourteen (14) days of the request of the fixed percentage of the gross revenue or the reasonable estimate of the percentage of the gross revenue that the charitable organization or sponsor will receive as benefit from the solicitation campaign.
  2. In addition to the information required by subsection (1), any written confirmation, receipt and reminder of a contribution made pursuant to an oral solicitation and any written solicitation shall conspicuously state verbatim:

    The official registration and financial information of (insert the legal name of the charity as registered with the Secretary of State) may be obtained from the Mississippi Secretary of State’s office by calling 1-888-236-6167. Registration by the Secretary of State does not imply endorsement by the Secretary of State.

  3. Prior to orally requesting or contemporaneously with written requests for advertising to appear in a for-profit publication which relates to, purports to relate to or which could reasonably be construed to relate to any charitable purpose, the professional fund-raiser or fund-raising counsel shall be responsible for clearly and conspicuously disclosing:
    1. That the publication is a for-profit, commercial enterprise;
    2. The true name of the solicitor and the fact that the solicitor is being paid for his services; and
    3. The publication is not directly affiliated or sponsored by any charitable organization.
  4. Every container, as defined in Section 79-11-501, shall have a printed or typed notice affixed to the container, in a conspicuous place and accessible to the public, that is easily readable and legible that informs the public of the following:
    1. The approximate annual percentage paid, if any, to any person to maintain, service or collect the contributions raised by the solicitation;
    2. The net percentage or sum annually paid for the most recent calendar year paid to the specific charitable purpose; and
    3. If the maintenance, service and collection from the container is done by volunteers or by paid individuals.

      The disclosure as required in this provision shall not apply to persons requesting any contributions for the relief or benefit of any individual, specified by name at the time of the solicitation, if all of the contributions collected are turned over to the named beneficiary, and provided all fund-raising functions are carried on by persons who are unpaid, directly or indirectly, for such services.

HISTORY: Laws, 1991, ch. 515, § 12; reenacted, Laws, 1992, ch. 446, § 12; Laws, 1997, ch. 444, § 14, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

RESEARCH REFERENCES

ALR.

Right of member of nonprofit association or corporation to possession, inspection, or use of membership list. 37 A.L.R.4th 1206.

§79-11-524. Restrictions on hours of telephone solicitation.

Any fund-raising counsel, professional fund-raiser, professional solicitor or employee of any of these who makes a telephone solicitation subject to the provisions of this chapter to a residential telephone number shall make calls only between the hours of 9:00 a.m. and 9:00 p.m., Monday through Saturday. No calls shall be made on Sundays.

HISTORY: Laws, 1997, ch. 444, § 18, eff from and after July 1, 1997.

RESEARCH REFERENCES

ALR.

Validity, construction, and application of state statute or law pertaining to telephone solicitation. 44 A.L.R.5th 619.

Am. Jur.

15 Am. Jur. 2d, Charities § 162 et seq.

§79-11-525. Fiduciary responsibility of person soliciting, collecting, or expending contributions.

Every person who solicits, collects or expends contributions on behalf of a charitable organization or for a charitable purpose, or who conducts a charitable sales promotion, and every officer, director, trustee or employee of that person who is concerned with the solicitation, collection or expenditure of those contributions shall be considered a fiduciary and as acting in a fiduciary capacity. This section does not supersede or otherwise alter the standard of care or the limitations on the liability of volunteers.

HISTORY: Laws, 1991, ch. 515, § 13; reenacted and amended, Laws, 1992, ch. 446, § 13; Laws, 1997, ch. 444, § 15, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

§79-11-526. Sponsors and advertisers of events liable only when having control or supervision of events.

  1. For purposes of this section, the following words and phrases shall have the meanings ascribed in this section unless the context clearly indicates otherwise:
    1. “Sponsor” or “advertiser” means any person, corporation or legal entity who, for charitable purposes or for the promotion of the health, peace and welfare of the community, donates or contributes products, material, money or pays fees for advertising or displaying trademarks in order that an event may be held or conducted.
    2. “Event” means a concert, benefit, fundraiser, auction or other occasion at which entertainment, food or beverages are provided.
  2. A sponsor or advertiser of an event shall not be held vicariously liable for the negligence of another in connection with or as a consequence of his involvement as a sponsor or advertiser of an event if he does not exercise any control or supervision over any aspect of the event.
  3. This section shall not confer immunity on a sponsor or advertiser of an event for willful acts or gross negligence, and a sponsor or advertiser of an event shall not be considered to be a part of a joint venture or the principal of an agent, with regard to any other person, corporation or legal entity which is participating in the event in a capacity other than that of a sponsor or advertiser.

HISTORY: Laws, 2003, ch. 448, § 1, eff from and after passage (approved Mar. 18, 2003.).

§79-11-527. Reciprocal agreements with other states; public access to registration records.

The Secretary of State may enter into reciprocal agreements with a like authority of any other state or states for the purpose of exchanging information made available to the Secretary of State or to such other like authority.

The information contained in or filed with any registration application, renewal or report may be made available to the public under such rules as the Secretary of State prescribes. Information in the possession of, filed with or obtained by the Secretary of State in connection with any investigation or examination under Sections 79-11-501 through 79-11-529 shall be confidential and exempt from the requirements of the Mississippi Public Records Act of 1983. No such information may be disclosed by the Secretary of State or any of his officers or employees unless necessary or appropriate in connection with a particular investigation or proceeding under Sections 79-11-501 through 79-11-529 or for any law enforcement purpose.

HISTORY: Laws, 1991, ch. 515, § 14; reenacted, Laws, 1992, ch. 446, § 14; Laws, 1997, ch. 444, § 16, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Cross References —

Mississippi Public Records Act, see §§ 25-61-1 et seq.

§79-11-529. Fines and penalties.

Any person who knowingly and willingly violates the provisions of Sections 79-11-501 through 79-11-527 shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine not exceeding Two Thousand Dollars ($2,000.00) or by imprisonment in the county jail for not more than one (1) year or both. In connection with any solicitation, any person employing a device, scheme or artifice to defraud; or engaging in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person, or obtaining money or property by means of any false pretense, representation or promise shall be guilty of a felony and, upon conviction, shall be punished by a fine not exceeding Twenty-five Thousand Dollars ($25,000.00) or imprisoned not more than five (5) years, or both. No indictment or information may be returned under Sections 79-11-501 through 79-11-529 more than five (5) years after the alleged violation.

HISTORY: Laws, 1991, ch. 515, § 15; reenacted, Laws, 1992, ch. 446, § 15; Laws, 1997, ch. 444, § 17, eff from and after July 1, 1997.

Editor’s Notes —

Laws of 1991, ch. 515, § 16, provided for the repeal of this section effective July 1, 1992. Subsequently, Laws of 1992, ch. 446, § 16, amended Laws of 1991, ch. 515, § 16, deleting the repeal provision.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

OPINIONS OF THE ATTORNEY GENERAL

A violation of Section 79-11-529 could be processed and prosecuted by a municipality as a violation of a municipal ordinance, pursuant to Section 21-13-19, to be heard by the municipal judge under the authority provided in Section 21-23-7. 2006 Miss. Op. Att'y Gen. 474.

RESEARCH REFERENCES

ALR.

Criminal offenses under statutes and ordinances regulating charitable solicitations. 76 A.L.R.3d 924.

Uniform Management of Institutional Funds Act

§§79-11-601 through79-11-617. Repealed.

Repealed by Laws of 2012, ch. 356, § 11, effective from and after July 1, 2012.

§79-11-601. [Laws, 1998, ch. 417, § 1, eff from and after July 1, 1998.]

§79-11-603. [Laws, 1998, ch. 417, § 2, eff from and after July 1, 1998.]

§79-11-605. [Laws, 1998, ch. 417, § 3, eff from and after July 1, 1998.]

§79-11-607. [Laws, 1998, ch. 417, § 4, eff from and after July 1, 1998.]

§79-11-609. [Laws, 1998, ch. 417, § 5, eff from and after July 1, 1998.]

§79-11-611. [Laws, 1998, ch. 417, § 6, eff from and after July 1, 1998.]

§79-11-613. [Laws, 1998, ch. 417, § 7, eff from and after July 1, 1998.]

§79-11-615. [Laws, 1998, ch. 417, § 8, eff from and after July 1, 1998.]

§79-11-617. [Laws, 1998, ch. 417, § 9, eff from and after July 1, 1998.]

Editor’s Notes —

Former § 79-11-601 provided definitions of terms used in §§ 79-11-601 through 79-11-617.

Former § 79-11-603 related to appropriations by the governing board for expenditures for the uses and purposes for which an endowment fund was established.

Former § 79-11-605 related to the application of § 79-11-603 to certain gift instruments.

Former § 79-11-607 related to the powers and duties of the governing board regarding investments.

Former § 79-11-609 related to the powers and duties of the governing board regarding delegation, contracting and payment of compensation.

Former § 79-11-611 related to the governing board’s duty of care.

Former § 79-11-613 related to the release of restrictions imposed by gift instruments, donor consent, and application to the chancery court for release of a restriction.

Former § 79-11-615 related to the application and construction of §§ 79-1-601 through 79-11-617.

Former § 79-11-617 provided that §§ 79-11-601 through 79-11-617 may be cited as the “Uniform Management of Institutional Funds Act.”

For present similar provisions, see §§ 79-11-701 through 79-11-719.

Charitable Gift Annuities

§79-11-651. Definitions.

  1. “Charitable gift annuity” means a transfer of cash or other property by a donor to a charitable organization in return for an annuity payable over one (1) or two (2) lives, under which the actuarial value of the annuity is less than the value of the cash or other property transferred and the difference in value constitutes a charitable deduction for federal tax purposes.
  2. “Charitable organization” means an entity described by:
    1. Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3)); or
    2. Section 170(c), Internal Revenue Code of 1986 (26 U.S.C. Section 170(c)).
  3. “Qualified charitable gift annuity” means a charitable gift annuity described in Section 501(m)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 501(m)(5)), and Section 514(c)(5), Internal Revenue Code of 1986 (26 U.S.C. Section 514(c)(5)), that is issued by a charitable organization that on the date of the annuity agreement:
    1. Has a minimum of Three Hundred Thousand Dollars ($300,000.00) in unrestricted cash, cash equivalents, or publicly traded securities, exclusive of the assets funding the annuity agreement; and
    2. Has been in continuous operation for at least three (3) years or is a successor or affiliate of a charitable organization that has been in continuous operation for at least three (3) years.

HISTORY: Laws, 2001, ch. 332, § 1, eff from and after July 1, 2001.

§79-11-653. Charitable gift annuity is not insurance.

  1. The issuance of a qualified charitable gift annuity does not constitute engaging in the business of insurance in this state.
  2. A charitable gift annuity issued before July 1, 2001, is a qualified charitable gift annuity for purposes of Sections 79-11-651 through 79-11-661, and the issuance of that charitable gift annuity does not constitute engaging in the business of insurance in this state.

HISTORY: Laws, 2001, ch. 332, § 2, eff from and after July 1, 2001.

Cross References —

Business of insurance, generally, see §§ 83-5-1 et seq.

Regulation of trade practices in the business of insurance, see §§ 83-5-29 through 83-5-51.

§79-11-655. Notice to donor.

  1. When entering into an agreement for a qualified charitable gift annuity, the charitable organization shall disclose to the donor in writing in the annuity agreement that a qualified charitable gift annuity is not insurance under the laws of this state and is not subject to regulation by the insurance commissioner or protected by an insurance guaranty association.
  2. The notice provisions required by this section must be in a separate paragraph in a print size no smaller than that employed in the annuity agreement generally.

HISTORY: Laws, 2001, ch. 332, § 3, eff from and after July 1, 2001.

Cross References —

Effect of failure to comply with notice requirements imposed under this section, see § 79-11-659.

Procedure for enforcement of performance of requirements of this section by Secretary of State, see § 79-11-659.

§79-11-657. Notice to department.

  1. A charitable organization that issues qualified charitable gift annuities shall notify the Secretary of State in writing by the later of ninety (90) days after July 1, 2001, or the date on which it enters into the organization’s first qualified charitable gift annuity agreement. The notice shall:
    1. Be signed by an officer or director of the organization;
    2. Identify the organization; and
    3. Certify that:
      1. The organization is a charitable organization; and
      2. The annuities issued by the organization are qualified charitable gift annuities.
  2. The organization shall not be required to submit additional information except to determine appropriate penalties that may be applicable under Section 79-11-659.

HISTORY: Laws, 2001, ch. 332, § 4, eff from and after July 1, 2001.

Cross References —

Effect of failure to comply with notice requirements imposed under this section, see § 79-11-659.

Procedure for enforcement of performance of requirements of this section by Secretary of State, see § 79-11-659.

§79-11-659. Effect of failure to provide required notice.

The failure of a charitable organization to comply with the notice requirements imposed under Section 79-11-655 or 79-11-657 does not prevent a charitable gift annuity that otherwise meets the requirements of 79-11-651 through 79-11-661 from constituting a qualified charitable gift annuity. The Secretary of State may enforce performance of the requirements of Sections 79-11-655 and 79-11-657 by sending a letter by certified mail, return receipt requested, demanding that the charitable organization comply with the requirements of Sections 79-11-655 and 79-11-657. The Secretary of State may fine the charitable organization in an amount not to exceed One Thousand Dollars ($1,000.00) per qualified charitable gift annuity agreement issued until such time as the charitable organization complies with Sections 79-11-655 and 79-11-657.

HISTORY: Laws, 2001, ch. 332, § 5, eff from and after July 1, 2001.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference. The reference to “this act” in the first sentence was changed to “79-11-651 through 79-11-661”. The Joint Committee ratified the correction at its June 3, 2003 meeting, and the section has been reprinted in the supplement to reflect the corrected language.

§79-11-661. Not unfair or deceptive trade practice.

The issuance of a qualified charitable gift annuity does not constitute a violation of Sections 83-5-29 through 83-5-51 which regulate trade practices in the business of insurance.

HISTORY: Laws, 2001, ch. 332, § 6, eff from and after July 1, 2001.

Cross References —

Regulation of trade practices in the business of insurance, see §§ 83-5-29 through 83-5-51.

Uniform Prudent Management of Institutional Funds Act

§79-11-701. Short title.

Sections 79-11-701 through 79-11-719 may be cited as the Uniform Prudent Management of Institutional Funds Act.

HISTORY: Laws, 2012, ch. 356, § 1, eff from and after July 1, 2012.

Editor’s Notes —

The Uniform Prudent Management of Institutional Funds Act, enacted by §§ 1 through 10 of Chapter 356, Laws of 2012, and codified as §§ 79-11-701 through 79-11-719, replaces the Uniform Management of Institutional Funds Act (former §§ 79-11-601 through 79-11-617), which was repealed by § 11 of Chapter 356, Laws of 2012.

§79-11-703. Definitions.

In Sections 79-11-701 through 79-11-719:

“Charitable purpose” means either:

Any purpose described in Section 501(c)(3) of the Internal Revenue Code; or

Any voluntary health and welfare, charitable, benevolent, philanthropic, patriotic, educational, humane, scientific, public health, environmental conservation, civic, or other eleemosynary purpose.

“Endowment fund” means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution designates as an endowment fund for its own use.

“Gift instrument” means a record or records, including an institutional solicitation, under which property is granted to, transferred to, or held by an institution as an institutional fund.

“Institution” means:

A person, other than an individual, organized and operated exclusively for charitable purposes;

A government or governmental subdivision, agency, or instrumentality, to the extent that it holds funds exclusively for a charitable purpose;

A trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated; or

The term “institution” does not include any bank, trust company, or other regulated financial institution.

“Institutional fund” means a fund held by an institution exclusively for charitable purposes. The term does not include:

Program-related assets;

A fund held for an institution by a trustee that is not an institution; or

A fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund.

“Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

“Program-related asset” means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment.

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

HISTORY: Laws, 2012, ch. 356, § 2, eff from and after July 1, 2012.

Federal Aspects—

Section 501(c)(3) of the Internal Revenue Code, see 26 USCS § 501(c)(3).

§79-11-705. Standard of conduct in managing and investing institutional fund.

  1. Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.
  2. In addition to complying with the duty of loyalty imposed by law other than Sections 79-11-701 through 79-11-719, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
  3. In managing and investing an institutional fund, an institution:
    1. May incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the institution, and the skills available to the institution; and
    2. Shall make a reasonable effort to verify facts relevant to the management and investment of the fund.
  4. Subject to the intent of a donor expressed in a gift instrument, an institution may pool two (2) or more institutional funds for purposes of management and investment.
  5. Except as otherwise provided by a gift instrument, the following rules apply:
    1. In managing and investing an institutional fund, the following factors, if relevant, must be considered:
      1. General economic conditions;
      2. The possible effect of inflation or deflation;
      3. The expected tax consequences, if any, of investment decisions or strategies;
      4. The role that each investment or course of action plays within the overall investment portfolio of the fund;
      5. The expected total return from income and the appreciation of investments;
      6. Other resources of the institution;
      7. The needs of the institution and the fund to make distributions and to preserve capital; and
      8. An asset’s special relationship or special value, if any, to the charitable purposes of the institution.
    2. Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund’s portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution.
    3. Except as otherwise provided by law other than Sections 79-11-701 through 79-11-719, an institution may invest in any kind of property or type of investment consistent with this section.
    4. An institution shall reasonably manage the risk of concentrated holdings of assets by diversifying the investments of the institutional fund or by using some other appropriate mechanism, except as provided as follows:
      1. The duty imposed by this subsection (5) shall not apply if the institution reasonably determines that, because of special circumstances, or because of the specific purposes, terms, distribution requirements, and other circumstances of the institutional fund, the purposes of such fund are better served without complying with the duty. For purposes of this subparagraph, special circumstances shall include an asset’s special relationship or special value, if any, to the charitable purposes of the institution or to the donor;
      2. No person responsible for managing and investing an institutional fund shall be liable for failing to comply with the duty imposed by this subsection (5) to the extent that the terms of the gift instrument or express written agreement between the donor and the institution limit or waive the duty; and
      3. The governing board of an institution may retain property contributed by a donor to an institutional fund for as long as the governing board deems advisable.
    5. Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms, and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of Sections 79-11-701 through 79-11-719.
    6. A person who has special skills or expertise, or is selected in reliance upon the person’s representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds. This paragraph does not apply to a volunteer who is not compensated beyond reimbursement for expenses.

HISTORY: Laws, 2012, ch. 356, § 3, eff from and after July 1, 2012.

§79-11-707. Appropriation for expenditure or accumulation of endowment fund; rules of construction.

  1. Subject to the intent of a donor expressed in the gift instrument or to any express written agreement between a donor and an institution, an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which the endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, and shall consider, if relevant, the following factors:
    1. The duration and preservation of the endowment fund;
    2. The purposes of the institution and the endowment fund;
    3. General economic conditions;
    4. The possible effect of inflation or deflation;
    5. The expected total return from income and the appreciation of investments;
    6. Other resources of the institution; and
    7. The investment policy of the institution.
  2. In order to limit the authority to appropriate for expenditure or accumulate under subsection (1) of this section, a gift instrument must specifically state the limitation.
  3. Terms in a gift instrument designating a gift as an endowment, or a direction or authorization in the gift instrument to use only “income,” “interest,” “dividends,” or “rents, issues, or profits,” or “to preserve the principal intact,” or words of similar import:
    1. Create an endowment fund of permanent duration unless other language in the gift instrument limits the duration or purpose of the fund; and
    2. Do not otherwise limit the authority to appropriate for expenditure or accumulate under subsection (1) of this section.

HISTORY: Laws, 2012, ch. 356, § 4, eff from and after July 1, 2012.

§79-11-709. Delegation of management and investment.

  1. Except as otherwise provided in a gift instrument or by law other than Sections 79-11-701 through 79-11-719, an institution may delegate to an external agent the management and investment of an institutional fund to the extent that an institution could prudently delegate under the circumstances. An institution shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in:
    1. Selecting an agent;
    2. Establishing the scope and terms of the delegation, consistent with the purposes of the institution and the institutional fund; and
    3. Periodically reviewing the agent’s actions in order to monitor the agent’s performance and compliance with the scope and terms of the delegation.
  2. In performing a delegated function, an agent owes a duty to the institution to exercise reasonable care to comply with the scope and terms of the delegation.
  3. Absent gross negligence, wantonness, recklessness, or deliberate misconduct, an institution that complies with subsection (1) of this section is not liable for the decisions or actions of an agent to which the function was delegated.
  4. By accepting delegation of a management or investment function from an institution that is subject to the laws of this state, an agent submits to the jurisdiction of the courts of this state in all proceedings arising from or related to the delegation or the performance of the delegated function.
  5. An institution may delegate management and investment functions to its committees, officers, or employees as otherwise authorized by law.

HISTORY: Laws, 2012, ch. 356, § 5, eff from and after July 1, 2012.

§79-11-711. Release or modification of restrictions on management, investment, or purpose.

  1. If the donor consents in a record, an institution may release or modify, in whole or in part, a restriction contained in a gift instrument on the management, investment, or purpose of an institutional fund. A release or modification may not allow a fund to be used for a purpose other than a charitable purpose of the institution.
  2. The court, upon application of an institution, may modify a restriction contained in a gift instrument regarding the management or investment of an institutional fund if the restriction has become impracticable or wasteful, if it impairs the management or investment of the fund, or if, because of circumstances not anticipated by the donor, a modification of a restriction will further the purposes of the fund. To the extent practicable, any modification must be made in accordance with the donor’s probable intention.
  3. If a particular charitable purpose or a restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful, the court, upon application of an institution, may modify the purpose of the fund or the restriction on the use of the fund in a manner consistent with the charitable purposes expressed in the gift instrument.
  4. An application to the court under subsection (2) or (3) of this section shall be made in the name of the institution to the chancery court of the county in which the principal activities of the institution are conducted.

HISTORY: Laws, 2012, ch. 356, § 6, eff from and after July 1, 2012.

§79-11-713. Reviewing compliance.

Compliance with Sections 79-11-701 through 79-11-719 is determined in light of the facts and circumstances existing at the time a decision is made or action is taken, and not by hindsight.

HISTORY: Laws, 2012, ch. 356, § 7, eff from and after July 1, 2012.

§79-11-715. Application to existing institutional funds.

Sections 79-11-701 through 79-11-719 applies to institutional funds existing on or established after July 1, 2012. As applied to institutional funds existing on July 1, 2012, this act governs only decisions made or actions taken on or after that date.

HISTORY: Laws, 2012, ch. 356, § 8, eff from and after July 1, 2012.

§79-11-717. Relation to Electronic Signatures in Global and National Commerce Act.

Sections 79-11-701 through 79-11-719 modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USCS Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 USCS Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 USCS Section 7003(b).

HISTORY: Laws, 2012, ch. 356, § 9, eff from and after July 1, 2012.

§79-11-719. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

HISTORY: Laws, 2012, ch. 356, § 10, eff from and after July 1, 2012.

Chapter 12. Partnerships [Repealed]

§§79-12-1 through79-12-119. Repealed.

Repealed by Laws, 2004, ch. 458, § 1207, eff from and after January 1, 2007.

§79-12-1. [Laws, 1976, ch. 407, § 1, eff from and after April 1, 1977.]

§79-12-3. [Laws, 1976, ch. 407, § 2; Laws, 1995, ch. 353, § 1; Laws, 1997, ch. 418, § 8, eff from and after July 1, 1997.]

§79-12-5. [Laws, 1976, ch. 407, § 3; Laws, 1997, ch. 418, § 9, eff from and after July 1, 1997.]

§79-12-7. [Laws, 1976, ch. 407, § 4; Laws, 2000, ch. 469, § 51, eff from and after July 1, 2000.]

§79-12-9. [Laws, 1976, ch. 407, § 5, eff from and after April 1, 1977.]

§79-12-11. [Laws, 1976, ch. 407, § 6; Laws, 1995, ch. 353 § 2, eff from and after July 1, 1995.]

§79-12-13. [Laws, 1976, ch. 407, § 7, eff from and after April 1, 1977.]

§79-12-15. [Laws, 1976, ch. 407, § 8, eff from and after April 1, 1977.]

§79-12-17. [Laws, 1976, ch. 407, § 9, eff from and after April 1, 1977.]

§79-12-19. [Laws, 1976, ch. 407, § 10, eff from and after April 1, 1977.]

§79-12-21. [Laws, 1976, ch. 407, § 11, eff from and after April 1, 1977.]

§79-12-23. [Laws, 1976, ch. 407, § 12, eff from and after April 1, 1977.]

§79-12-25. [Laws, 1976, ch. 407, § 13, eff from and after April 1, 1977.]

§79-12-27. [Laws, 1976, ch. 407, § 14, eff from and after April 1, 1977.]

§79-12-29. [Laws, 1976, ch. 407, § 15; Laws, 1995, ch. 353, § 3; Laws, 1998, ch. 376, § 1, eff from and after July 1, 1998.]

§79-12-31. [Laws, 1976, ch. 407, § 16, eff from and after April 1, 1977.]

§79-12-33. [Laws, 1976, ch. 407, § 17, eff from and after April 1, 1977.]

§79-12-35. [Laws, 1976, ch. 407, § 18; Laws, 1995, ch. 353, § 4, eff from and after July 1, 1995.]

§79-12-37. [Laws, 1976, ch. 407, § 19, eff from and after April 1, 1977.]

§79-12-39. [Laws, 1976, ch. 407, § 20, eff from and after April 1, 1977.]

§79-12-41. [Laws, 1976, ch. 407, § 21, eff from and after April 1, 1977.]

§79-12-43. [Laws, 1976, ch. 407, § 22, eff from and after April 1, 1977.]

§79-12-45. [Laws, 1976, ch. 407, § 23, eff from and after April 1, 1977.]

§79-12-47. [Laws, 1976, ch. 407, § 24, eff from and after April 1, 1977.]

§79-12-49. [Laws, 1976, ch. 407, § 25, eff and after April 1, 1977.]

§79-12-51. [Laws, 1976, ch. 407, § 26, eff from and after April 1, 1977.]

§79-12-53. [Laws, 1976, ch. 407, § 27, eff from and after April 1, 1977.]

§79-12-55. [Laws, 1976, ch. 407, § 28, eff from and after April 1, 1977.]

§79-12-57. [Laws, 1976, ch. 407, § 29, eff from and after April 1, 1977.]

§79-12-59. [Laws, 1976, ch. 407, § 30, eff from and after April 1, 1977.]

§79-12-61. [Laws, 1976, ch. 407, § 31, eff from and after April 1, 1977.]

§79-12-63. [Laws, 1976, ch. 407, § 32, eff from and after April 1, 1977.]

§79-12-65. [Laws, 1976, ch. 407, § 33, eff from and after April 1, 1977.]

§79-12-67. [Laws, 1976, ch. 407, § 34; Laws, 1995, ch. 353, § 5, eff from and after July 1, 1995.]

§79-12-69. [Laws, 1976, ch. 407, § 35; Laws, 1995, ch. 353, § 6, eff from and after July 1, 1995.]

§79-12-71. [Laws, 1976, ch. 407, § 36; Laws, 1995, ch. 353, § 7, eff from and after July 1, 1995.]

§79-12-73. [Laws, 1976, ch. 407, § 37, eff from and after April 1, 1977.]

§79-12-75. [Laws, 1976, ch. 407, § 38, eff from and after April 1, 1977.]

§79-12-77. [Laws, 1976, ch. 407, § 39, eff from and after April 1, 1977.]

§79-12-79. [Laws, 1976, ch. 407, § 40; Laws, 1995, ch. 353, § 8, eff from and after July 1, 1995.]

§79-12-81. [Laws, 1976, ch. 407, § 41, eff from and after April 1, 1977.]

§79-12-83. [Laws, 1976, ch. 407, § 42, eff from and after April 1, 1977.]

§79-12-85. [Laws, 1976, ch. 407, § 43, eff from and after April 1, 1977.]

§79-12-87. [Laws, 1995, ch. 353, § 9; Laws, 1997, ch. 418, § 10, eff from and after July 1, 1997.]

§79-12-89. [Laws, 1995, ch. 353, § 10, eff from and after July 1, 1995.]

§79-12-91. [Laws, 1995, ch. 353, § 11, eff from and after July 1, 1995.]

§79-12-93. [Laws, 1995, ch. 353, § 12, eff from and after July 1, 1995.]

§79-12-95. [Laws, 1995, ch. 353, § 13, eff from and after July 1, 1995.]

§79-12-97. [Laws, 1995, ch. 353, § 14, eff from and after July 1, 1995.]

§79-12-99. [Laws, 1995, ch. 353, § 15, eff from and after July 1, 1995.]

§79-12-101. [Laws, 1995, ch. 353, § 16, eff from and after July 1, 1995.]

§79-12-103. [Laws, 1995, ch. 353, § 17, eff from and after July 1, 1995.]

§79-12-105. [Laws, 1995, ch. 353, § 18, eff from and after July 1, 1995.]

§79-12-107. [Laws, 1995, ch. 353, § 19, eff from and after July 1, 1995.]

§79-12-109. [Laws, 1995, ch. 353, § 20; Laws, 1997, ch. 418, § 11, eff from and after July 1, 1997.]

§79-12-111. [Laws, 1995, ch. 353, § 21, eff from and after July 1, 1995.]

§79-12-113. [Laws, 1995, ch. 353, § 22, eff from and after July 1, 1995.]

§79-12-115. [Laws, 1995, ch. 353, § 23, eff from and after July 1, 1995.]

§79-12-117. [Laws, 1995, ch. 353, § 24, eff from and after July 1, 1995.]

§79-12-119. [Laws, 1995, ch. 353, § 25, eff from and after July 1, 1995.]

Editor’s Notes —

Former §§ 79-12-1 through 79-12-119 related to the Mississippi Uniform Partnership Law. For similar present provisions, see the Uniform Partnership Act, §§ 79-13-101 et seq.

Cross References —

Mississippi Limited Partnership Act, see §§ 79-14-101 et seq.

Comparable Laws from other States —

Alabama Code, §§ 10-8A-101 through 10-8A-1109.

Arkansas Code Annotated, §§ 4-46-101 through 4-46-1207.

Florida Annotated Statutes, §§ 620.81001 through 620.9902.

Georgia Code Annotated, §§ 14-8-1 through 14-8-64.

North Carolina General Statutes, §§ 59-31 through 59-73.

South Carolina Code Annotated, §§ 33-41-10 through 33-41-1330.

Tennessee Code Annotated, §§ 61-1-101 through 61-1-1208.

Texas Annotated Statutes, Article §§ 152.001 through 152.914.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 1 et seq.

Jurisdictions adopting Uniform Partnership Law, see Am. Jur. 2d Desk Book, Item No. 124.

CJS.

68 C.J.S., Partnership §§ 1 et seq.

Chapter 13. Uniform Partnership Act (1997)

Editor’s Notes —

A former Chapter 13, entitled “Limited Partnerships,” was repealed by Laws of 1987, ch. 488, § 1105, effective from and after January 1, 1988 (codified as § 79-14-1105). Former Chapter 13 contained the following undesignated headings:

“Mississippi Uniform Limited Partnership Law” [Codes, 1942, §§ 5553-01 through 5553-29; Laws, 1964, ch. 271, §§ 1 through 29], comprising former §§ 79-13-1 through 79-13-57;

“Limited Partnerships Under Prior Laws” [Codes, Hutchinson’s 1848, ch. 40, art 1; 1857, ch. 38, art. 1 et seq; 1871, §§ 1857-1877; 1880, §§ 1005-1024; 1892, §§ 2764-2781; 1906, §§ 3129-3146; Hemingway’s 1917, §§ 5467-5484; 1930, §§ 5394-5411; 1942, §§ 5553-5570; Laws, 1942, ch. 320; Laws, 1944, ch. 310, § 1; Laws, 1962, ch. 510, §§ 1 through 3], comprising former §§ 79-13-101 through 79-13-137; and

“Foreign Limited Partnerships” [Laws, 1979, ch. 420, §§ 2 through 10], comprising former §§ 79-13-201 through 79-13-217.

For present similar provisions relating to limited partnerships, see §§ 79-14-101 et seq.

Article 1. General Provisions.

§79-13-101. Definitions.

In this chapter:

  1. “Business” includes every trade, occupation, and profession.
  2. “Debtor in bankruptcy” means a person who is the subject of:
  3. “Distribution” means a transfer of money or other property from a partnership to a partner in the partner’s capacity as a partner or to the partner’s transferee.
  4. “Domestic partnership” means a partnership whose internal relations are governed by the laws of this state.
  5. “Foreign limited liability partnership” means a partnership that:
  6. “Foreign partnership” means a partnership other than a domestic partnership.
  7. “Limited liability partnership” or “domestic limited liability partnership” means a partnership that has filed a statement of qualification under Section 79-13-1001 and does not have a similar statement in effect in any other jurisdiction.
  8. “Partnership” means an association of two (2) or more persons to carry on as co-owners a business for profit formed under Section 79-13-202, predecessor law, or comparable law of another jurisdiction.
  9. “Partnership agreement” means the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement.
  10. “Partnership at will” means a partnership in which the partners have not agreed to remain partners until the expiration of a definite term or the completion of a particular undertaking.
  11. “Partnership interest” or “partner’s interest in the partnership” means all of a partner’s interests in the partnership, including the partner’s transferable interest and all management and other rights.
  12. “Person” means an individual, corporation, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
  13. “Property” means all property, real, personal, or mixed, tangible or intangible, or any interest therein.
  14. “State” means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction of the United States.
  15. “Statement” means a statement of partnership authority under Section 79-13-303, a statement of denial under Section 79-13-304, a statement of dissociation under Section 79-13-704, a statement of dissolution under Section 79-13-805, a statement of merger under Section 79-13-907, a statement of qualification under Section 79-13-1001, a statement of foreign qualification under Section 79-13-1102, or an amendment or cancellation of any of the foregoing.
  16. “Surviving partnership” means a domestic or foreign partnership into which one or more domestic or foreign partnerships are merged. A surviving partnership may preexist the merger or be created by the merger.
  17. “Transfer” includes an assignment, conveyance, lease, mortgage, deed, and encumbrance.

An order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or

A comparable order under federal, state, or foreign law governing insolvency.

Is formed under laws other than the laws of this state; and

Has the status of a limited liability partnership under those laws.

HISTORY: Laws, 2004, ch. 458, § 101; Laws, 2014, ch. 399, § 37, eff from and after Jan. 1, 2015.

Editor’s Notes —

Former § 79-13-101 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

Amendment Notes —

The 2014 amendment, effective January 1, 2015, added (4), (6), and (16) and redesignated remaining subsections accordingly; inserted “or ‘domestic limited liability partnership’ ” to present (7).

JUDICIAL DECISIONS

1. Statute of frauds.

Statute of frauds did not bar claim by purported partners because the partners’ claims did not involve a dispute over a contract for the sale of lands, but a dispute over partnership profits and assets. An otherwise enforceable verbal partnership agreement did not constitute a contract for the sale of lands under the statute of frauds simply because the purpose of the partnership included the purchase of real estate. Latham v. Johnson, — So.3d —, 2018 Miss. App. LEXIS 314 (Miss. Ct. App. June 26, 2018), cert. denied, — So.3d —, 2019 Miss. LEXIS 48 (Miss. Jan. 24, 2019).

RESEARCH REFERENCES

ALR.

Construction and Application of Revised Uniform Partnership Act. 70 A.L.R.6th 209.

Law Reviews.

Comment: When Duty Calls: Should the Duty of Majority to Minority Shareholders in Closely Held Corporations Change as a Result of the New Revised Uniform Partnership Act?, 25 Miss. C. L. Rev. 171.

§79-13-102. Knowledge and notice.

A person knows a fact if the person has actual knowledge of it.

A person has notice of a fact if the person:

  1. Knows of it;
  2. Has received a notification of it; or
  3. Has reason to know it exists from all of the facts known to the person at the time in question.

A person notifies or gives a notification to another by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person learns of it.

A person receives a notification when the notification:

Comes to the person’s attention; or

Is duly delivered at the person’s place of business or at any other place held out by the person as a place for receiving communications.

Except as otherwise provided in subsection (f), a person other than an individual knows, has notice, or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice, or receives a notification of the fact, or in any event when the fact would have been brought to the individual’s attention if the person had exercised reasonable diligence. The person exercises reasonable diligence if it maintains reasonable routines for communicating significant information to the individual conducting the transaction and there is reasonable compliance with the routines. Reasonable diligence does not require an individual acting for the person to communicate information unless the communication is part of the individual’s regular duties or the individual has reason to know of the transaction and that the transaction would be materially affected by the information.

A partner’s knowledge, notice, or receipt of a notification of a fact relating to the partnership is effective immediately as knowledge by, notice to, or receipt of a notification by the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.

HISTORY: Laws, 2004, ch. 458, § 102, eff from and after Jan. 1, 2005.

§79-13-103. Effect of partnership agreement; nonwaivable provisions.

Except as otherwise provided in subsection (b), relations among the partners and between the partners and the partnership are governed by the partnership agreement. To the extent the partnership agreement does not otherwise provide, this chapter governs relations among the partners and between the partners and the partnership.

The partnership agreement may not:

  1. Vary the rights and duties under Section 79-13-105 except to eliminate the duty to provide copies of statements to all of the partners;
  2. Unreasonably restrict the right of access to books and records under Section 79-13-403(b);
  3. Eliminate the duty of loyalty under Section 79-13-404(b) or 79-13-603(b)(3), but:
  4. Unreasonably reduce the duty of care under Section 79-13-404(c) or 79-13-603(b)(3);
  5. Eliminate the obligation of good faith and fair dealing under Section 79-13-404(d), but the partnership agreement may prescribe the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
  6. Vary the power to dissociate as a partner under Section 79-13-602(a), except to require the notice under Section 79-13-601(1) to be in writing;
  7. Vary the right of a court to expel a partner in the events specified in Section 79-13-601(5);
  8. Vary the requirement to wind up the partnership business in cases specified in Section 79-13-801(4), (5), or (6);
  9. Vary the law applicable to a limited liability partnership under Section 79-13-106(b); or
  10. Restrict rights of third parties under this chapter.

The partnership agreement may identify specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; or

All of the partners or a number or percentage specified in the partnership agreement may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;

HISTORY: Laws, 2004, ch. 458, § 103, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in (a). “This chapter” was substituted for “this act” in the second sentence.

Editor’s Notes —

Former § 79-13-103 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

JUDICIAL DECISIONS

1. Direct-benefit estoppel theory.

Denial of the law firm’s motion to compel arbitration and to stay pending completion of arbitration was inappropriate because the direct-benefit estoppel theory requires the nonsignatory claimant, the employee, to arbitrate his claims against the law firm, Miss. Code Ann. § 79-13-103. Richard F. Scruggs & SLF, Inc. v. Wyatt, 60 So.3d 758, 2011 Miss. LEXIS 173 (Miss. 2011).

§79-13-104. Supplemental principles of law.

Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

If an obligation to pay interest arises under this chapter and the rate is not specified, the rate is that specified in Section 75-17-1(1), Mississippi Code of 1972.

HISTORY: Laws, 2004, ch. 458, § 104, eff from and after Jan. 1, 2005.

§79-13-105. Execution, filing, and recording of statements.

A statement may be filed in the Office of the Secretary of State. A certified copy of a statement that is filed in an office in another state may be filed in the Office of the Secretary of State. Either filing has the effect provided in this chapter with respect to partnership property located in or transactions that occur in this state.

A certified copy of a statement that has been filed in the Office of the Secretary of State and recorded in the office for recording transfers of real property has the effect provided for recorded statements in this chapter. A recorded statement that is not a certified copy of a statement filed in the Office of the Secretary of State does not have the effect provided for recorded statements in this chapter.

A statement filed by a partnership must be executed by at least two partners. Other statements must be executed by a partner or other person authorized by this chapter. An individual who executes a statement as, or on behalf of, a partner or other person named as a partner in a statement shall personally declare under penalty of perjury that the contents of the statement are accurate.

A person authorized by this chapter to file a statement may amend or cancel the statement by filing an amendment or cancellation that names the partnership, identifies the statement, and states the substance of the amendment or cancellation.

A person who files a statement pursuant to this section shall promptly send a copy of the statement to every nonfiling partner and to any other person named as a partner in the statement. Failure to send a copy of a statement to a partner or other person does not limit the effectiveness of the statement as to a person not a partner.

The Secretary of State shall charge and collect fees in the amounts specified for the following purposes:

Filing of Statement of Qualification or Statement of Foreign Qualification – Two Hundred Fifty Dollars ($250.00).

Filing of Certificate Correcting or Amending a Statement of Qualification or Statement of Foreign Qualification – Fifty Dollars ($50.00).

Filing of Certificate of Cancellation of Statement of Qualification or Statement of Foreign Qualification – Twenty-five Dollars ($25.00).

Any other statement required or permitted to be filed by this chapter – Twenty-five Dollars ($25.00).

The Secretary of State shall have the powers reasonably necessary to perform the duties required of him under the provisions of this chapter.

HISTORY: Laws, 2004, ch. 458, § 105; Laws, 2007, ch. 391, § 1, eff from and after July 1, 2007.

Editor’s Notes —

Former § 79-13-105 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

Amendment Notes —

The 2007 amendment substituted “Statement of Qualification or Statement of Foreign Qualification” for “Certificate of Registration of Domestic or Foreign Limited Liability Partnership” throughout (f); and substituted “statement” for “document” in (f)(iv).

§79-13-106. Governing law.

Except as otherwise provided in subsection (b), the law of the jurisdiction in which a partnership has its chief executive office governs relations among the partners and between the partners and the partnership.

The law of this state governs relations among the partners and between the partners and the partnership and the liability of partners for an obligation of a limited liability partnership.

HISTORY: Laws, 2004, ch. 458, § 106, eff from and after Jan. 1, 2005.

§79-13-107. Partnership subject to amendment or repeal of chapter.

A partnership governed by this chapter is subject to any amendment to or repeal of this chapter.

HISTORY: Laws, 2004, ch. 458, § 107, eff from and after Jan. 1, 2005.

Editor’s Notes —

Former § 79-13-107 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

Article 2. Nature of Partnership.

§79-13-201. Partnership as entity.

A partnership is an entity distinct from its partners.

A limited liability partnership continues to be the same entity that existed before the filing of a statement of qualification under Section 79-13-1001.

HISTORY: Laws, 2004, ch. 458, § 201, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in (b). “Section 79-13-1001” was substituted for “Section 79-13-1201.”

Editor’s Notes —

Former § 79-13-201 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

JUDICIAL DECISIONS

1. Bankruptcy.

Where creditor sold farm supplies to partnership in which debtor was general partner, creditor was not entitled to administrative expense claim because partnership was separate legal entity and parties stipulated that farm supplies were delivered to partnership, and not to either general partner. In re Spencer, — B.R. —, 2016 Bankr. LEXIS 3867 (Bankr. N.D. Miss. Nov. 1, 2016).

§79-13-202. Formation of partnership.

Except as otherwise provided in subsection (b), the association of two or more persons to carry on as co-owners of a business for profit forms a partnership, whether or not the persons intend to form a partnership.

An association formed under a statute other than this chapter, a predecessor statute, or a comparable statute of another jurisdiction is not a partnership under this chapter.

In determining whether a partnership is formed, the following rules apply:

  1. Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of the property.
  2. The sharing of gross returns does not by itself establish a partnership, even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.
  3. A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

Of a debt by installments or otherwise;

For services as an independent contractor or of wages or other compensation to an employee;

Of rent;

Of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

Of interest or other charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral, or rights to income, proceeds, or increase in value derived from the collateral; or

For the sale of the goodwill of a business or other property by installments or otherwise.

HISTORY: Laws, 2004, ch. 458, § 202, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

In 2009, a typographical error in subsection (a) was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by inserting the word “of” following “...to carry on as co-owners...” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

JUDICIAL DECISIONS

1. Partnership not found.

A surviving spouse was entitled to a directed verdict because, although a claimant had to prove that the surviving spouse and the decedent were in a partnership, no evidence of a partnership was presented as there was no evidence that the surviving spouse and the decedent intended to run the business as partners, that the surviving spouse controlled the direction of the business, or that the surviving spouse and the decedent were sharing profits. Malouf v. Evans, — So.3d —, 2018 Miss. App. LEXIS 326 (Miss. Ct. App. July 17, 2018).

Chancellor did not abuse his discretion in finding no partnership existed between the parties, given that appellant did not prove that the parties intended to enter into a partnership agreement for a business, and thus appellant could not claim that the parties entered a partnership with the property based on its association with the business, plus appellant failed to prove that she controlled the day-to-day operations or the direction of the business, and only appellee received dividends. Carlson v. Brabham, 199 So.3d 735, 2016 Miss. App. LEXIS 32 (Miss. Ct. App.), cert. denied, 203 So.3d 597, 2016 Miss. LEXIS 395 (Miss. 2016).

§79-13-203. Partnership property.

Property acquired by a partnership is property of the partnership and not of the partners individually.

HISTORY: Laws, 2004, ch. 458, § 203, eff from and after Jan. 1, 2005.

Editor’s Notes —

Former § 79-13-203 was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. See Editor’s Note under Chapter 13 heading.

Cross References —

Partner not co-owner of partnership property, see § 79-13-501.

JUDICIAL DECISIONS

1. Conversion of property.

Chancery court erred in finding that a partner’s attorney converted the partner’s property because the evidence failed to establish that the checks or the funds at issue belonged to the partner individually where the property was either property of the partnership or represented the co-partner’s share of the liquid assets of the partnership. Newton v. Brown, 198 So.3d 1284, 2016 Miss. App. LEXIS 333 (Miss. Ct. App. 2016).

§79-13-204. When property is partnership property.

Property is partnership property if acquired in the name of:

  1. The partnership; or
  2. One or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership but without an indication of the name of the partnership.

Property is acquired in the name of the partnership by a transfer to:

The partnership in its name; or

One or more partners in their capacity as partners in the partnership, if the name of the partnership is indicated in the instrument transferring title to the property.

Property is presumed to be partnership property if purchased with partnership assets, even if not acquired in the name of the partnership or of one or more partners with an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership.

Property acquired in the name of one or more of the partners, without an indication in the instrument transferring title to the property of the person’s capacity as a partner or of the existence of a partnership and without use of partnership assets, is presumed to be separate property, even if used for partnership purposes.

HISTORY: Laws, 2004, ch. 458, § 204, eff from and after Jan. 1, 2005.

Cross References —

Transfer of partnership property, see § 79-13-302.

Partner not co-owner of partnership property, see §§ 79-13-501.

Judicial Decisions

1. Partnership property.

Evidence supported the chancellor’s determination that the property at issue was partnership property where the testimony revealed that all of these properties were treated as partnership property, that they were purchased with partnership funds, that the property taxes were paid with partnership funds, and that the rent from the properties was collected by and paid to the partnership. White v. White (In re White), 234 So.3d 1210, 2017 Miss. LEXIS 351 (Miss. 2017).

Article 3. Relations of Partners to Persons Dealing with Partnership.

§79-13-301. Partner agent of partnership.

Subject to the effect of a statement of partnership authority under Section 79-13-303:

  1. Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.
  2. An act of a partner which is not apparently for carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership only if the act was authorized by the other partners.

HISTORY: Laws, 2004, ch. 458, § 301, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in the introductory language by substituting “Section 79-13-303” for “Section 79-13-503.”

Cross References —

Effect of parnter’s act after dissolution, see § 79-13-804.

JUDICIAL DECISIONS

1. Ordinary course of partnership business.

Trial court erred by finding that an attorney’s misconduct in attempting to bribe a trial judge occurred in the ordinary course of a joint venture’s business. It was undisputed that the attempted bribery was not actually authorized by the joint venture, and there was no assertion that the bribing attorney acted with apparent authority under Miss. Code Ann. § 79-13-301(1). Barrett v. Jones, Funderburg, Sessums, Peterson & Lee, LLC, 27 So.3d 363, 2009 Miss. LEXIS 624 (Miss. 2009).

§79-13-302. Transfer of partnership property.

Partnership property may be transferred as follows:

  1. Subject to the effect of a statement of partnership authority under Section 79-13-303, partnership property held in the name of the partnership may be transferred by an instrument of transfer executed by a partner in the partnership name.
  2. Partnership property held in the name of one or more partners with an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, but without an indication of the name of the partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.
  3. Partnership property held in the name of one or more persons other than the partnership, without an indication in the instrument transferring the property to them of their capacity as partners or of the existence of a partnership, may be transferred by an instrument of transfer executed by the persons in whose name the property is held.

A partnership may recover partnership property from a transferee only if it proves that execution of the instrument of initial transfer did not bind the partnership under 79-13-301 and:

As to a subsequent transferee who gave value for property transferred under subsection (a) (1) and (2), proves that the subsequent transferee knew or had received a notification that the person who executed the instrument of initial transfer lacked authority to bind the partnership; or

As to a transferee who gave value for property transferred under subsection (a)(3), proves that the transferee knew or had received a notification that the property was partnership property and that the person who executed the instrument of initial transfer lacked authority to bind the partnership.

A partnership may not recover partnership property from a subsequent transferee if the partnership would not have been entitled to recover the property, under subsection (b), from any earlier transferee of the property.

If a person holds all of the partners’ interests in the partnership, all of the partnership property vests in that person. The person may execute a document in the name of the partnership to evidence vesting of the property in that person and may file or record the document.

HISTORY: Laws, 2004, ch. 458, § 302, eff from and after Jan. 1, 2005.

Cross References —

When property is partnership property, see §§ 79-13-203, 79-13-204.

Property of surviving entity of merger, see § 79-13-907.

§79-13-303. Statement of partnership authority.

A partnership may file a statement of partnership authority, which:

  1. Must include:
  2. May state the authority, or limitations on the authority, of some or all of the partners to enter into other transactions on behalf of the partnership and any other matter.

The name of the partnership;

The street address of its chief executive office and of one office in this state, if there is one;

The names and mailing addresses of all of the partners or of an agent appointed and maintained by the partnership for the purpose of subsection (b); and

The names of the partners authorized to execute an instrument transferring real property held in the name of the partnership; and

If a statement of partnership authority names an agent, the agent shall maintain a list of the names and mailing addresses of all of the partners and make it available to any person on request for good cause shown.

If a filed statement of partnership authority is executed pursuant to Section 79-13-105(c) and states the name of the partnership but does not contain all of the other information required by subsection (a), the statement nevertheless operates with respect to a person not a partner as provided in subsections (d) and (e).

Except as otherwise provided in subsection (g), a filed statement of partnership authority supplements the authority of a partner to enter into transactions on behalf of the partnership as follows:

Except for transfers of real property, a grant of authority contained in a filed statement of partnership authority is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a limitation on that authority is not then contained in another filed statement. A filed cancellation of a limitation on authority revives the previous grant of authority.

A grant of authority to transfer real property held in the name of the partnership contained in a certified copy of a filed statement of partnership authority recorded in the office for recording transfers of that real property is conclusive in favor of a person who gives value without knowledge to the contrary, so long as and to the extent that a certified copy of a filed statement containing a limitation on that authority is not then of record in the office for recording transfers of that real property. The recording in the office for recording transfers of that real property of a certified copy of a filed cancellation of a limitation on authority revives the previous grant of authority.

A person not a partner is deemed to know of a limitation on the authority of a partner to transfer real property held in the name of the partnership if a certified copy of the filed statement containing the limitation on authority is of record in the office for recording transfers of that real property.

Except as otherwise provided in subsections (d) and (e) and Sections 79-13-704 and 79-13-805, a person not a partner is not deemed to know of a limitation on the authority of a partner merely because the limitation is contained in a filed statement.

Unless earlier canceled, a filed statement of partnership authority is canceled by operation of law five (5) years after the date on which the statement, or the most recent amendment, was filed with the Secretary of State.

HISTORY: Laws, 2004, ch. 458, § 303, eff from and after Jan. 1, 2005.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

Transfer of partnership property, see § 79-13-302.

Statement of denial as a limitation on authority as provided in (d) and (e) of this section, see § 79-13-304.

Statement of dissolution as a limitation on authority for the purposes of § 79-13-303(e), see § 79-13-805.

§79-13-304. Statement of denial.

A partner or other person named as a partner in a filed statement of partnership authority or in a list maintained by an agent pursuant to Section 79-13-303(b) may file a statement of denial stating the name of the partnership and the fact that is being denied, which may include denial of a person’s authority or status as a partner. A statement of denial is a limitation on authority as provided in Section 79-13-303(d) and (e).

HISTORY: Laws, 2004, ch. 458, § 304, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in the first and last sentences by substituting “Section 79-13-303(b)” for “Section 79-13-503(b)” and “Section 79-13-303(d)” for “Section 79-13-503(d),” respectively.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

§79-13-305. Partnership liable for partner’s actionable conduct.

A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

If, in the course of the partnership’s business or while acting with authority of the partnership, a partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a partner, the partnership is liable for the loss.

HISTORY: Laws, 2004, ch. 458, § 305, eff from and after Jan. 1, 2005.

Cross References —

Partner’s liability, see § 79-13-306.

Actions against partnerships and partners, see § 79-13-307.

Liability of purported partner, see § 79-13-308.

JUDICIAL DECISIONS

1. Ordinary course of partnership business.

Under Miss. Code Ann. § 79-13-305, a partnership could be liable for “any penalty” incurred as a result of the wrongful act or actionable conduct by a partner in the ordinary course of partnership business; thus, the trial court possessed the discretion to sanction the partnership for a partner’s misconduct in attempting to bribe the trial judge in the underlying action, but only upon a finding that a partner’s misconduct was within the ordinary course of business of the partnership. Barrett v. Jones, Funderburg, Sessums, Peterson & Lee, LLC, 27 So.3d 363, 2009 Miss. LEXIS 624 (Miss. 2009).

§79-13-306. Partner’s liability.

Except as otherwise provided in subsections (b) and (c), all partners are liable jointly and severally for all obligations of the partnership unless otherwise agreed by the claimant or provided by law.

A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person’s admission as a partner.

An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such an obligation solely by reason of being or so acting as a partner. This subsection applies notwithstanding anything inconsistent in the partnership agreement that existed immediately before the vote required to become a limited liability partnership under Section 79-13-1001(b).

HISTORY: Laws, 2004, ch. 458, § 306, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in (c). “Section 79-13-1001(b)” was substituted for “Section 79-13-1201(b)” at the end of the last sentence.

Cross References —

Partnership’s liability, see § 79-13-305.

Actions against partnership and partners, see § 79-13-307.

Liability of purported partners, see § 79-13-308.

Partner’s liability to other partners after dissolution, see § 79-13-806.

Liability of partner of domestic partnership that is a party to a merger, see § 79-13-906.

JUDICIAL DECISIONS

1. Application.

Although all co-venturers are jointly and severally liable for joint-venture obligations pursuant to Miss. Code Ann. § 79-13-306(a), where an attorney’s misconduct in attempting to bribe a trial judge was not authorized by the joint venture, his co-venturers were not liable. Barrett v. Jones, Funderburg, Sessums, Peterson & Lee, LLC, 27 So.3d 363, 2009 Miss. LEXIS 624 (Miss. 2009).

§79-13-307. Actions by and against partnership and partners.

A partnership may sue and be sued in the name of the partnership.

An action may be brought against the partnership and, to the extent not inconsistent with Section 79-13-306, any or all of the partners in the same action or in separate actions.

A judgment against a partnership is not by itself a judgment against a partner. A judgment against a partnership may not be satisfied from a partner’s assets unless there is also a judgment against the partner.

A judgment creditor of a partner may not levy execution against the assets of the partner to satisfy a judgment based on a claim against the partnership unless the partner is personally liable for the claim under Section 79-13-306 and:

  1. A judgment based on the same claim has been obtained against the partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;
  2. The partnership is a debtor in bankruptcy;
  3. The partner has agreed that the creditor need not exhaust partnership assets;
  4. A court grants permission to the judgment creditor to levy execution against the assets of a partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers; or
  5. Liability is imposed on the partner by law or contract independent of the existence of the partnership.

This section applies to any partnership liability or obligation resulting from a representation by a partner or purported partner under Section 79-13-308.

HISTORY: Laws, 2004, ch. 458, § 307, eff from and after Jan. 1, 2005.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected typographical errors in (b), (d) and (e). “Section 79-13-306” was substituted for “Section 79-13-506” in (b) and (d), and “Section 79-13-308” was substituted for “Section 79-13-508” in (e).

Cross References —

Partnership’s liability, see § 79-13-305.

Partner’s liability see § 79-13-306.

Liability of purported partner, see § 79-13-308.

JUDICIAL DECISIONS

1. Applicability.

The trial court’s treatment of former plaintiffs’ lawsuit as one against its former co-venturers’ assets was not an abuse of discretion; the suit was an attempt by the plaintiff to obtain what it asserted to be its rightful share of joint venture profits under the joint venture agreement, and rather than suing the joint venture itself, plaintiff chose to sue the co-venturers, a litigation strategy encouraged by Miss. Code Ann. § 79-13-307(c), as well as two individuals who were not co-venturers. Barrett v. Jones, Funderburg, Sessums, Peterson & Lee, LLC, 27 So.3d 363, 2009 Miss. LEXIS 624 (Miss. 2009).

§79-13-308. Liability of purported partner.

If a person, by words or conduct, purports to be a partner, or consents to being represented by another as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to a person to whom the representation is made, if that person, relying on the representation, enters into a transaction with the actual or purported partnership. If the representation, either by the purported partner or by a person with the purported partner’s consent, is made in a public manner, the purported partner is liable to a person who relies upon the purported partnership even if the purported partner is not aware of being held out as a partner to the claimant. If partnership liability results, the purported partner is liable with respect to that liability as if the purported partner were a partner. If no partnership liability results, the purported partner is liable with respect to that liability jointly and severally with any other person consenting to the representation.

If a person is thus represented to be a partner in an existing partnership, or with one or more persons not partners, the purported partner is an agent of persons consenting to the representation to bind them to the same extent and in the same manner as if the purported partner were a partner, with respect to persons who enter into transactions in reliance upon the representation. If all of the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all of the partners of the existing partnership consent to the representation, the person acting and the partners consenting to the representation are jointly and severally liable.

A person is not liable as a partner merely because the person is named by another in a statement of partnership authority.

A person does not continue to be liable as a partner merely because of a failure to file a statement of dissociation or to amend a statement of partnership authority to indicate the partner’s dissociation from the partnership.

Except as otherwise provided in subsections (a) and (b), persons who are not partners as to each other are not liable as partners to other persons.

HISTORY: Laws, 2004, ch. 458, § 308, eff from and after Jan. 1, 2005.

Cross References —

Partnership’s liability, see § 79-13-305.

Partner’s liability, see § 79-13-306.

Actions against partners and partnerships, see § 79-13-307.

JUDICIAL DECISIONS

1. Purported partner

Evidence supported a trial court’s finding that a surviving spouse was not a purported partner of a business with the decedent–even if the surviving spouse participated in counting inventory, collecting money, and writing receipts. Malouf v. Evans, — So.3d —, 2018 Miss. App. LEXIS 326 (Miss. Ct. App. July 17, 2018).

Article 4. Relations of Partners to Each Other and to Partnership.

§79-13-401. Partner’s rights and duties.

Each partner is deemed to have an account that is:

  1. Credited with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, the partner contributes to the partnership and the partner’s share of the partnership profits; and
  2. Charged with an amount equal to the money plus the value of any other property, net of the amount of any liabilities, distributed by the partnership to the partner and the partner’s share of the partnership losses.

Each partner is entitled to an equal share of the partnership profits and is chargeable with a share of the partnership losses in proportion to the partner’s share of the profits.

A partnership shall reimburse a partner for paymentsmade and indemnify a partner for liabilities incurred by the partner in the ordinary course of the business of the partnership or for the preservation of its business or property.

A partnership shall reimburse a partner for an advance to the partnership beyond the amount of capital the partner agreed to contribute.

A payment or advance made by a partner which gives rise to a partnership obligation under subsection (c) or (d) constitutes a loan to the partnership which accrues interest from the date of the payment or advance.

Each partner has equal rights in the management and conduct of the partnership business.

A partner may use or possess partnership property only on behalf of the partnership.

A partner is not entitled to remuneration for services performed for the partnership, except for reasonable compensation for services rendered in winding up the business of the partnership.

Except as provided in Article 9 of this chapter or the Mississippi Entity Conversion and Domestication Act, a person may become a partner only with the consent of all of the partners.

A difference arising as to a matter in the ordinary course of business of a partnership may be decided by a majority of the partners.An act outside the ordinary course of business of a partnership and an amendment to the partnership agreement may be undertaken only with the consent of all of the partners.

This section does not affect the obligations of a partnership to other persons under Section 79-13-301.

HISTORY: Laws, 2004, ch. 458, § 401; Laws, 2014, ch. 399, § 38, eff from and after Jan. 1, 2015.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in (k). “Section 79-13-301” was substituted for “Section 79-13-501.”

Amendment Notes —

The 2014 amendment, effective January 1, 2015, inserted the exception at the beginning of (i).

Cross References —

When property is partnership property, see §§ 79-13-203, 79-13-204.

Partner’s rights and duties with respect to information, see § 79-13-403.

§79-13-402. Distributions in kind.

A partner has no right to receive, and may not be required to accept, a distribution in kind.

HISTORY: Laws, 2004, ch. 458, § 402, eff from and after Jan. 1, 2005.

§79-13-403. Partner’s rights and duties with respect to information.

A partnership shall keep its books and records, if any, at its chief executive office.

A partnership shall provide partners and their agents and attorneys access to its books and records. It shall provide former partners and their agents and attorneys access to books and records pertaining to the period during which they were partners. The right of access provides the opportunity to inspect and copy books and records during ordinary business hours. A partnership may impose a reasonable charge, covering the costs of labor and material, for copies of documents furnished.

Each partner and the partnership shall furnish to a partner, and to the legal representative of a deceased partner or partner under legal disability:

  1. Without demand, any information concerning the partnership’s business and affairs reasonably required for the proper exercise of the partner’s rights and duties under the partnership agreement or this chapter; and
  2. On demand, any other information concerning the partnership’s business and affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

HISTORY: Laws, 2004, ch. 458, § 403, eff from and after Jan. 1, 2005.

Cross References —

Partners rights and duties generally, see § 79-13-401.

§79-13-404. General standards of partner’s conduct.

The only fiduciary duties a partner owes to the partnership and the other partners are the duty of loyalty and the duty of care set forth in subsections (b) and (c).

A partner’s duty of loyalty to the partnership and the other partners is limited to the following:

  1. To account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property, including the appropriation of a partnership opportunity;
  2. To refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership; and
  3. To refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.

A partner’s duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

A partner shall discharge the duties to the partnership and the other partners under this chapter or under the partnership agreement and exercise any rights consistently with the obligation of good faith and fair dealing.

A partner does not violate a duty or obligation under this chapter or under the partnership agreement merely because the partner’s conduct furthers the partner’s own interest.

A partner may lend money to and transact other business with the partnership, and as to each loan or transaction the rights and obligations of the partner are the same as those of a person who is not a partner, subject to other applicable law.

This section applies to a person winding up the partnership business as the personal or legal representative of the last surviving partner as if the person were a partner.

HISTORY: Laws, 2004, ch. 458, § 404, eff from and after Jan. 1, 2005.

RESEARCH REFERENCES

Law Reviews.

Comment: When Duty Calls: Should the Duty of Majority to Minority Shareholders in Closely Held Corporations Change as a Result of the New Revised Uniform Partnership Act?, 25 Miss. C. L. Rev. 171.

§79-13-405. Actions by partnership and partners.

A partnership may maintain an action against a partner for a breach of the partnership agreement, or for the violation of a duty to the partnership, causing harm to the partnership.

A partner may maintain an action against the partnership or another partner for legal or equitable relief, with or without an accounting as to partnership business, to:

  1. Enforce the partner’s rights under the partnership agreement;
  2. Enforce the partner’s rights under this chapter, including:
  3. Enforce the rights and otherwise protect the interests of the partner, including rights and interests arising independently of the partnership relationship.

The partner’s rights under Sections 79-13-401, 79-13-403, or 79-13-404;

The partner’s right on dissociation to have the partner’s interest in the partnership purchased pursuant to Section 79-13-701 or enforce any other right under Article 6 or 7; or

The partner’s right to compel a dissolution and winding up of the partnership business under or enforce any other right under Article 8; or

The accrual of, and any time limitation on, a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.

HISTORY: Laws, 2004, ch. 458, § 405, eff from and after Jan. 1, 2005.

JUDICIAL DECISIONS

1. Applicability.

When purported partners filed an action to enforce their rights under a partnership agreement, including their right to an equal share of the partnership profits, to information concerning the partnership’s business and affairs, and to compel another partner to abide by that partner’s fiduciary duties and duties of care to the partnership and the partners, an accounting was not required. Latham v. Johnson, — So.3d —, 2018 Miss. App. LEXIS 314 (Miss. Ct. App. June 26, 2018), cert. denied, — So.3d —, 2019 Miss. LEXIS 48 (Miss. Jan. 24, 2019).

§79-13-406. Continuation of partnership beyond definite term or particular undertaking.

If a partnership for a definite term or particular undertaking is continued, without an express agreement, after the expiration of the term or completion of the undertaking, the rights and duties of the partners remain the same as they were at the expiration or completion, so far as is consistent with a partnership at will.

If the partners, or those of them who habitually acted in the business during the term or undertaking, continue the business without any settlement or liquidation of the partnership, they are presumed to have agreed that the partnership will continue.

HISTORY: Laws, 2004, ch. 458, § 406, eff from and after Jan. 1, 2005.

Article 5. Transferees and Creditors of Partner.

§79-13-501. Partner not co-owner of partnership property.

A partner is not a co-owner of partnership property and has no interest in partnership property which can be transferred, either voluntarily or involuntarily.

HISTORY: Laws, 2004, ch. 458, § 501, eff from and after Jan. 1, 2005.

JUDICIAL DECISIONS

1. Bankruptcy.

Where creditor sold farm supplies to partnership in which debtor was general partner, creditor was not entitled to administrative expense claim because partnership was separate legal entity and parties stipulated that farm supplies were delivered to partnership, and not to either general partner. In re Spencer, — B.R. —, 2016 Bankr. LEXIS 3867 (Bankr. N.D. Miss. Nov. 1, 2016).

§79-13-502. Partner’s transferable interest in partnership.

Except as provided in Article 9 of this chapter or the Mississippi Entity Conversion and Domestication Act, the only transferable interest of a partner in the partnership is the partner’s share of the profits and losses of the partnership and the partner’s right to receive distributions.The interest of a partner, whether or not transferable, is personal property.

HISTORY: Laws, 2004, ch. 458, § 502; Laws, 2014, ch. 399, § 39, eff from and after Jan. 1, 2015.

Amendment Notes —

The 2014 amendment, effective January 1, 2015, inserted the exception to the first sentence and “of a partner, whether or not transferable,” in the middle of the last sentence.

§79-13-503. Transfer of partner’s transferable interest.

A transfer, in whole or in part, of a partner’s transferable interest in the partnership:

  1. Is permissible;
  2. Does not by itself cause the partner’s dissociation or a dissolution and winding up of the partnership business; and
  3. Does not, as against the other partners or the partnership, entitle the transferee, during the continuance of the partnership, to participate in the management or conduct of the partnership business, to require access to information concerning partnership transactions, or to inspect or copy the partnership books or records.

A transferee of a partner’s transferable interest in the partnership has a right:

To receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;

To receive upon the dissolution and winding up of the partnership business, in accordance with the transfer, the net amount otherwise distributable to the transferor; and

To seek under Section 79-13-801(6) a judicial determination that it is equitable to wind up the partnership business.

In a dissolution and winding up, a transferee is entitled to an account of partnership transactions only from the date of the latest account agreed to by all of the partners.

Upon transfer, the transferor retains the rights and duties of a partner other than the interest in distributions transferred.

A partnership need not give effect to a transferee’s rights under this section until it has notice of the transfer.

A transfer of a partner’s transferable interest in the partnership in violation of a restriction on transfer contained in the partnership agreement is ineffective as to a person having notice of the restriction at the time of transfer.

HISTORY: Laws, 2004, ch. 458, § 503, eff from and after Jan. 1, 2005.

§79-13-504. Partner’s transferable interest subject to charging order.

On application by a judgment creditor of a partner or of a partner’s transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and make all other orders, directions, accounts, and inquiries the judgment debtor might have made or which the circumstances of the case may require.

A charging order constitutes a lien on the judgment debtor’s transferable interest in the partnership. The court may order a foreclosure of the interest subject to the charging order at any time. The purchaser at the foreclosure sale has the rights of a transferee.

At any time before foreclosure, an interest charged may be redeemed:

  1. By the judgment debtor;
  2. With property other than partnership property, by one or more of the other partners; or
  3. With partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged.

This chapter does not deprive a partner of a right under exemption laws with respect to the partner’s interest in the partnership.

This section provides the exclusive remedy by which a judgment creditor of a partner or partner’s transferee may satisfy a judgment out of the judgment debtor’s transferable interest in the partnership.

HISTORY: Laws, 2004, ch. 458, § 504, eff from and after Jan. 1, 2005.

§79-13-505. Enforceability of limitations on assignments of partnership interests.

Sections 75-9-406 and 75-9-408 do not apply to a partnership interest in a partnership formed under the laws of Mississippi, including the rights, powers and interests arising under a certificate of partnership or partnership agreement or under this chapter.To the extent of any conflict or inconsistency between this section and Sections 75-9-406 and 75-9-408, this section prevails.It is the express intent of this section to permit the enforcement, as a contract among the partners of a partnership, of any provision of a partnership agreement that would otherwise be ineffective under Sections 75-9-406 and 75-9-408.

HISTORY: Laws, 2010, ch. 506, § 41, eff from and after July 1, 2010.

Article 6. Partner’s Dissociation.

§79-13-601. Events causing partner’s dissociation.

A partner is dissociated from a partnership upon the occurrence of any of the following events:

  1. The partnership’s having notice of the partner’s express will to withdraw as a partner or on a later date specified by the partner;
  2. An event agreed to in the partnership agreement as causing the partner’s dissociation;
  3. The partner’s expulsion pursuant to the partnership agreement;
  4. The partner’s expulsion by the unanimous vote of the other partners if:
  5. On application by the partnership or another partner, the partner’s expulsion by judicial determination because:
  6. The partner’s:
  7. In the case of a partner who is an individual:
  8. In the case of a partner that is a trust or is acting as a partner by virtue of being a trustee of a trust, distribution of the trust’s entire transferable interest in the partnership, but not merely by reason of the substitution of a successor trustee;
  9. In the case of a partner that is an estate or is acting as a partner by virtue of being a personal representative of an estate, distribution of the estate’s entire transferable interest in the partnership, but not merely by reason of the substitution of a successor personal representative; or
  10. Termination of a partner who is not an individual, partnership, corporation, trust, or estate.

It is unlawful to carry on the partnership business with that partner;

There has been a transfer of all or substantially all of that partner’s transferable interest in the partnership, other than a transfer for security purposes, or a court order charging the partner’s interest, which has not been foreclosed;

Within ninety (90) days after the partnership notifies a corporate partner that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business; or

A partnership that is a partner has been dissolved and its business is being wound up;

The partner engaged in wrongful conduct that adversely and materially affected the partnership business;

The partner willfully or persistently committed a material breach of the partnership agreement or of a duty owed to the partnership or the other partners under Section 79-13-404; or

The partner engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with the partner;

Becoming a debtor in bankruptcy;

Executing an assignment for the benefit of creditors;

Seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or liquidator of that partner or of all or substantially all of that partner’s property; or

Failing, within ninety (90) days after the appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the partner’s property obtained without the partner’s consent or acquiescence, or failing within ninety (90) days after the expiration of a stay to have the appointment vacated;

The partner’s death;

The appointment of a guardian or general conservator for the partner; or

A judicial determination that the partner has otherwise become incapable of performing the partner’s duties under the partnership agreement;

HISTORY: Laws, 2004, ch. 458, § 601, eff from and after Jan. 1, 2005.

§79-13-602. Partner’s power to dissociate; wrongful dissociation.

A partner has the power to dissociate at any time, rightfully or wrongfully, by express will pursuant to Section 79-13-601(1).

A partner’s dissociation is wrongful only if:

  1. It is in breach of an express provision of the partnership agreement; or
  2. In the case of a partnership for a definite term or particular undertaking, before the expiration of the term or the completion of the undertaking:

The partner withdraws by express will, unless the withdrawal follows within ninety (90) days after another partner’s dissociation by death or otherwise under Section 79-13-601(6) through (10) or wrongful dissociation under this subsection;

The partner is expelled by judicial determination under Section 79-13-601(5);

The partner is dissociated by becoming a debtor in bankruptcy; or

In the case of a partner who is not an individual, trust other than a business trust, or estate, the partner is expelled or otherwise dissociated because it willfully dissolved or terminated.

A partner who wrongfully dissociates is liable to the partnership and to the other partners for damages caused by the dissociation. The liability is in addition to any other obligation of the partner to the partnership or to the other partners.

HISTORY: Laws, 2004, ch. 458, § 602, eff from and after Jan. 1, 2005.

§79-13-603. Effect of partner’s dissociation.

If a partner’s dissociation results in a dissolution and winding up of the partnership business, Article 8 applies; otherwise, Article 7 applies.

Upon a partner’s dissociation:

  1. The partner’s right to participate in the management and conduct of the partnership business terminates, except as otherwise provided in Section 79-13-803;
  2. The partner’s duty of loyalty under Section 79-13-404(b) (3) terminates; and
  3. The partner’s duty of loyalty under Section 79-13-404(b) (1) and (2) and duty of care under Section 79-13-404(c) continue only with regard to matters arising and events occurring before the partner’s dissociation, unless the partner participates in winding up the partnership’s business pursuant to Section 79-13-803.

HISTORY: Laws, 2004, ch. 458, § 603, eff from and after Jan. 1, 2005.

Article 7. Partner’s Dissociation When Business Not Wound Up.

§79-13-701. Purchase of dissociated partner’s interest.

If a partner is dissociated from a partnership without resulting in a dissolution and winding up of the partnership business under Section 79-13-801, the partnership shall cause the dissociated partner’s interest in the partnership to be purchased for a buyout price determined pursuant to subsection (b).

The buyout price of a dissociated partner’s interest is the amount that would have been distributable to the dissociating partner under Section 79-13-807(b) if, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the dissociated partner and the partnership were wound up as of that date. Interest must be paid from the date of dissociation to the date of payment.

Damages for wrongful dissociation under Section 79-13-602(b), and all other amounts owing, whether or not presently due, from the dissociated partner to the partnership, must be offset against the buyout price. Interest must be paid from the date the amount owed becomes due to the date of payment.

A partnership shall indemnify a dissociated partner whose interest is being purchased against all partnership liabilities, whether incurred before or after the dissociation, except liabilities incurred by an act of the dissociated partner under Section 79-13-702.

If no agreement for the purchase of a dissociated partner’s interest is reached within one hundred twenty (120) days after a written demand for payment, the partnership shall pay, or cause to be paid, in cash to the dissociated partner the amount the partnership estimates to be the buyout price and accrued interest, reduced by any offsets and accrued interest under subsection (c).

If a deferred payment is authorized under subsection (h), the partnership may tender a written offer to pay the amount it estimates to be the buyout price and accrued interest, reduced by any offsets under subsection (c), stating the time of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

The payment or tender required by subsection (e) or (f) must be accompanied by the following:

  1. A statement of partnership assets and liabilities as of the date of dissociation;
  2. The latest available partnership balance sheet and income statement, if any;
  3. An explanation of how the estimated amount of the payment was calculated; and
  4. Written notice that the payment is in full satisfaction of the obligation to purchase unless, within one hundred twenty (120) days after the written notice, the dissociated partner commences an action to determine the buyout price, any offsets under subsection (c), or other terms of the obligation to purchase.

A partner who wrongfully dissociates before the expiration of a definite term or the completion of a particular undertaking is not entitled to payment of any portion of the buyout price until the expiration of the term or completion of the undertaking, unless the partner establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the partnership. A deferred payment must be adequately secured and bear interest.

A dissociated partner may maintain an action against the partnership, pursuant to Section 79-13-405(b)(2) (ii), to determine the buyout price of that partner’s interest, any offsets under subsection (c), or other terms of the obligation to purchase. The action must be commenced within one hundred twenty (120) days after the partnership has tendered payment or an offer to pay or within one (1) year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the buyout price of the dissociated partner’s interest, any offset due under subsection (c), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (h), the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney’s fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against a party that the court finds acted arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership’s failure to tender payment or an offer to pay or to comply with subsection (g).

HISTORY: Laws, 2004, ch. 458, § 701, eff from and after Jan. 1, 2005.

Cross References —

Applicability of Article 7 to partner’s dissociation, see § 79-13-603.

§79-13-702. Dissociated partner’s power to bind and liability to partnership.

For one (1) year after a partner dissociates without resulting in a dissolution and winding up of the partnership business, the partnership, including a surviving partnership under Article 9, is bound by an act of the dissociated partner which would have bound the partnership under Section 79-13-301 before dissociation only if at the time of entering into the transaction the other party:

  1. Reasonably believed that the dissociated partner was then a partner;
  2. Did not have notice of the partner’s dissociation; and
  3. Is not deemed to have had knowledge under Section 79-13-303(e) or notice under Section 79-13-704(c).

A dissociated partner is liable to the partnership for any damage caused to the partnership arising from an obligation incurred by the dissociated partner after dissociation for which the partnership is liable under subsection (a).

HISTORY: Laws, 2004, ch. 458, § 702, eff from and after Jan. 1, 2005.

§79-13-703. Dissociated partner’s liability to other persons.

A partner’s dissociation does not of itself discharge the partner’s liability for a partnership obligation incurred before dissociation. A dissociated partner is not liable for a partnership obligation incurred after dissociation, except as otherwise provided in subsection (b).

A partner who dissociates without resulting in a dissolution and winding up of the partnership business is liable as a partner to the other party in a transaction entered into by the partnership, or a surviving partnership under Article 9, within one (1) year after the partner’s dissociation, only if the partner is liable for the obligation under Section 79-13-306 and at the time of entering into the transaction the other party:

  1. Reasonably believed that the dissociated partner was then a partner;
  2. Did not have notice of the partner’s dissociation; and
  3. Is not deemed to have had knowledge under Section 79-13-303(e) or notice under Section 79-13-704(c).

By agreement with the partnership creditor and the partners continuing the business, a dissociated partner may be released from liability for a partnership obligation.

A dissociated partner is released from liability for a partnership obligation if a partnership creditor, with notice of the partner’s dissociation but without the partner’s consent, agrees to a material alteration in the nature or time of payment of a partnership obligation.

HISTORY: Laws, 2004, ch. 458, § 703, eff from and after Jan. 1, 2005.

§79-13-704. Statement of dissociation.

A dissociated partner or the partnership may file a statement of dissociation stating the name of the partnership and that the partner is dissociated from the partnership.

A statement of dissociation is a limitation on the authority of a dissociated partner for the purposes of Section 79-13-303(d) and (e).

For the purposes of Sections 79-13-702(a)(3) and 79-13-703(b)(3), a person not a partner is deemed to have notice of the dissociation thirty (30) days after the statement of dissociation is filed.

HISTORY: Laws, 2004, ch. 458, § 704, eff from and after Jan. 1, 2005.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

§79-13-705. Continued use of partnership name.

Continued use of a partnership name, or a dissociated partner’s name as part thereof, by partners continuing the business does not of itself make the dissociated partner liable for an obligation of the partners or the partnership continuing the business.

HISTORY: Laws, 2004, ch. 458, § 705, eff from and after Jan. 1, 2005.

Article 8. Winding Up Partnership Business.

§79-13-801. Events causing dissolution and winding up of partnership business.

A partnership is dissolved, and its business must be wound up, only upon the occurrence of any of the following events:

  1. In a partnership at will, the partnership’s having notice from a partner, other than a partner who is dissociated under Section 79-13-601(2) through (10), of that partner’s express will to withdraw as a partner, or on a later date specified by the partner;
  2. In a partnership for a definite term or particular undertaking:
  3. An event agreed to in the partnership agreement resulting in the winding up of the partnership business;
  4. An event that makes it unlawful for all or substantially all of the business of the partnership to be continued, but a cure of illegality within ninety (90) days after notice to the partnership of the event is effective retroactively to the date of the event for purposes of this section;
  5. On application by a partner, a judicial determination that:
  6. On application by a transferee of a partner’s transferable interest, a judicial determination that it is equitable to wind up the partnership business:

Within ninety (90) days after a partner’s dissociation by death or otherwise under Section 79-13-601(6) through (10) or wrongful dissociation under Section 79-13-602(b), the express will of at least half of the remaining partners to wind up the partnership business, for which purpose a partner’s rightful dissociation pursuant to Section 79-13-602(b)(2)(i) constitutes the expression of that partner’s will to wind up the partnership business;

The express will of all of the partners to wind up the partnership business; or

The expiration of the term or the completion of the undertaking;

The economic purpose of the partnership is likely to be unreasonably frustrated;

Another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or

It is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement; or

After the expiration of the term or completion of the undertaking, if the partnership was for a definite term or particular undertaking at the time of the transfer or entry of the charging order that gave rise to the transfer; or

At any time, if the partnership was a partnership at will at the time of the transfer or entry of the charging order that gave rise to the transfer.

HISTORY: Laws, 2004, ch. 458, § 801, eff from and after Jan. 1, 2005.

Cross References —

Right of transferee of a partner’s transferable interest in the partnership to seek judicial determination under this section that it is equitable to wind up partnership business, see § 79-13-503.

§79-13-802. Partnership continues after dissolution.

Subject to subsection (b), a partnership continues after dissolution only for the purpose of winding up its business. The partnership is terminated when the winding up of its business is completed.

At any time after the dissolution of a partnership and before the winding up of its business is completed, all of the partners, including any dissociating partner other than a wrongfully dissociating partner, may waive the right to have the partnership’s business wound up and the partnership terminated. In that event:

  1. The partnership resumes carrying on its business as if dissolution had never occurred, and any liability incurred by the partnership or a partner after the dissolution and before the waiver is determined as if dissolution had never occurred; and
  2. The rights of a third party accruing under Section 79-13-804(1) or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver may not be adversely affected.

HISTORY: Laws, 2004, ch. 458, § 802, eff from and after Jan. 1, 2005.

§79-13-803. Right to wind up partnership business.

After dissolution, a partner who has not wrongfully dissociated may participate in winding up the partnership’s business, but on application of any partner, partner’s legal representative, or transferee, the chancery court of the county in which the partnership’s chief executive office is located, for good cause shown, may order judicial supervision of the winding up.

The legal representative of the last surviving partner may wind up a partnership’s business.

A person winding up a partnership’s business may preserve the partnership business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the partnership’s business, dispose of and transfer the partnership’s property, discharge the partnership’s liabilities, distribute the assets of the partnership pursuant to Section 79-13-807, settle disputes by mediation or arbitration, and perform other necessary acts.

HISTORY: Laws, 2004, ch. 458, § 803, eff from and after Jan. 1, 2005.

Cross References —

Applicability of Article 8 to partner’s dissociation, see § 79-13-603.

§79-13-804. Partner’s power to bind partnership after dissolution.

Subject to Section 79-13-805, a partnership is bound by a partner’s act after dissolution that:

  1. Is appropriate for winding up the partnership business; or
  2. Would have bound the partnership under Section 79-13-301 before dissolution, if the other party to the transaction did not have notice of the dissolution.

HISTORY: Laws, 2004, ch. 458, § 804, eff from and after Jan. 1, 2005.

§79-13-805. Statement of dissolution.

After dissolution, a partner who has not wrongfully dissociated may file a statement of dissolution stating the name of the partnership and that the partnership has dissolved and is winding up its business.

A statement of dissolution cancels a filed statement of partnership authority for the purposes of Section 79-13-303(d) and is a limitation on authority for the purposes of Section 79-13-303(e).

For the purposes of Sections 79-13-301 and 79-13-804, a person not a partner is deemed to have notice of the dissolution and the limitation on the partners’ authority as a result of the statement of dissolution thirty (30) days after it is filed.

After filing and, if appropriate, recording a statement of dissolution, a dissolved partnership may file and, if appropriate, record a statement of partnership authority which will operate with respect to a person not a partner as provided in Section 79-13-303(d) and (e) in any transaction, whether or not the transaction is appropriate for winding up the partnership business.

HISTORY: Laws, 2004, ch. 458, § 805, eff from and after Jan. 1, 2005.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

§79-13-806. Partner’s liability to other partners after dissolution.

Except as otherwise provided in subsection (b) and Section 79-13-306, after dissolution a partner is liable to the other partners for the partner’s share of any partnership liability incurred under Section 79-13-804.

A partner who, with knowledge of the dissolution, incurs a partnership liability under Section 79-13-804(2) by an act that is not appropriate for winding up the partnership business is liable to the partnership for any damage caused to the partnership arising from the liability.

HISTORY: Laws, 2004, ch. 458, § 806, eff from and after Jan. 1, 2005.

§79-13-807. Settlement of accounts and contributions among partners.

In winding up a partnership’s business, the assets of the partnership, including the contributions of the partners required by this section, must be applied to discharge its obligations to creditors, including, to the extent permitted by law, partners who are creditors. Any surplus must be applied to pay in cash the net amount distributable to partners in accordance with their right to distributions under subsection (b).

Each partner is entitled to a settlement of all partnership accounts upon winding up the partnership business. In settling accounts among the partners, profits and losses that result from the liquidation of the partnership assets must be credited and charged to the partners’ accounts. The partnership shall make a distribution to a partner in an amount equal to any excess of the credits over the charges in the partner’s account. A partner shall contribute to the partnership an amount equal to any excess of the charges over the credits in the partner’s account but excluding from the calculation charges attributable to an obligation for which the partner is not personally liable under Section 79-13-306.

If a partner fails to contribute the full amount required under subsection (b), all of the other partners shall contribute, in the proportions in which those partners share partnership losses, the additional amount necessary to satisfy the partnership obligations for which they are personally liable under Section 79-13-306. A partner or partner’s legal representative may recover from the other partners any contributions the partner makes to the extent the amount contributed exceeds that partner’s share of the partnership obligations for which the partner is personally liable under Section 79-13-306.

After the settlement of accounts, each partner shall contribute, in the proportion in which the partner shares partnership losses, the amount necessary to satisfy partnership obligations that were not known at the time of the settlement and for which the partner is personally liable under Section 79-13-306.

The estate of a deceased partner is liable for the partner’s obligation to contribute to the partnership.

An assignee for the benefit of creditors of a partnership or a partner, or a person appointed by a court to represent creditors of a partnership or a partner, may enforce a partner’s obligation to contribute to the partnership.

HISTORY: Laws, 2004, ch. 458, § 807, eff from and after Jan. 1, 2005.

JUDICIAL DECISIONS

1. Conversion of property.

Chancery court erred in finding that a partner’s attorney converted the partner’s property because the evidence failed to establish that the checks or the funds at issue belonged to the partner individually where the property was either property of the partnership or represented the co-partner’s share of the liquid assets of the partnership. Newton v. Brown, 198 So.3d 1284, 2016 Miss. App. LEXIS 333 (Miss. Ct. App. 2016).

Article 9. Conversions and Mergers.

§79-13-901. Definitions.

In this article:

  1. “Domestic partnership” means a partnership the internal affairs of which are governed by this chapter.
  2. “Entity” means any association or legal entity organized to conduct business, including, without limitation, for profit and nonprofit corporations, limited partnerships, partnerships, limited liability partnerships, limited liability companies, joint ventures, joint stock companies, and business trusts.
  3. “General partner” means a partner in a partnership and a general partner in a limited partnership.
  4. “Limited partner” means a limited partner in a limited partnership.
  5. “Limited partnership” means a limited partnership created under the Mississippi Limited Partnership Act (Section 79-14-101 et seq.), predecessor law, or comparable law of another jurisdiction.
  6. “Partner” includes both a general partner and a limited partner.

HISTORY: Laws, 2004, ch. 458, § 901, eff from and after Jan. 1, 2005.

§79-13-902. Repealed.

Repealed by Laws, 2014, ch. 399, § 48, effective January 1, 2015.

[Laws, 2004, ch. 458, § 902, eff from and after Jan. 1, 2005]

Editor’s Notes —

Former § 79-13-902 provided for conversion of a partnership to a limited partnership.

Cross References —

Mississippi Limited Partnership Act, see §§ 79-14-101 et seq.

§79-13-903. Repealed.

Repealed by Laws, 2014, ch. 399, § 49, effective January 1, 2015.

[Laws, 2004, ch. 458, § 903, eff from and after Jan. 1, 2005]

Editor’s Notes —

Former § 79-13-903 was reserved for future enactment.

§79-13-904. Repealed.

Repealed by Laws, 2014, ch. 399, § 50, effective January 1, 2015.

[Laws, 2004, ch. 458, § 903, eff from and after Jan. 1, 2005]

Editor’s Notes —

Former § 79-13-904 provided for the effect of a conversion.

Cross References —

Mississippi Limited Partnership Act, see §§ 79-14-101 et seq.

§79-13-905. Merger.

Unless otherwise provided in the partnership agreement, pursuant to a plan of merger approved as provided in subsection (d), one or more domestic partnerships may be merged with a domestic or foreign entity.

A domestic or foreign entity may be a party to the merger, or may be created by the terms of the plan of merger, only if:

  1. The merger is permitted by the laws under which the entity is organized or by which it is governed; and
  2. In effecting the merger, the entity complies with such laws and with its organizational documents.
  3. If the surviving entity is a partnership or a limited partnership, the status of each partner;
  4. The terms and conditions of the merger;
  5. The manner and basis of converting the interests of each party to the merger into shares or other securities, interests, obligations, or rights to acquire shares or other securities of the surviving entity, or into money or other property, or any combination of the foregoing;
  6. The organizational documents of any entity to be created by the merger, or if a new entity is not to be created by the merger, any amendments to the survivor’s organizational documents;
  7. The street address of the surviving entity’s chief executive office; and
  8. Any other provisions required by the laws under which any party to the merger is organized or by which it is governed, or by the organizational documents of any such party.

The plan of merger must set forth:

The name of each entity that is a party to the merger;

The name of the entity that will be the survivor of the merger;

The plan of merger must be approved:

In the case of a domestic partnership that is a party to the merger, by all of the partners, or a number or percentage specified for merger in the partnership agreement; and

In the case of a domestic limited liability partnership that is a party to a merger where the surviving entity is a partnership other than a limited liability partnership, by all of the partners, notwithstanding a provision to the contrary in the partnership agreement.

After a plan of merger is approved and before the merger takes effect, the plan may be amended or abandoned as provided in the plan.

The merger takes effect on the later of:

The approval of the plan of merger by all parties to the merger, as provided in subsection (d);

The filing of all documents required by law to be filed as a condition to the effectiveness of the merger; or

Any effective date specified in the plan of merger.

HISTORY: Laws, 2004, ch. 458, § 905, eff from and after Jan. 1, 2005.

§79-13-906. Effect of merger.

When a merger takes effect:

  1. The separate existence of every domestic partnership that is a party to the merger, other than the surviving entity, ceases;
  2. All property owned by each of the merged domestic partnerships vests in the surviving entity;
  3. All obligations of every domestic partnership that is a party to the merger become the obligations of the surviving entity; and
  4. An action or proceeding pending against a domestic partnership that is a party to the merger may be continued as if the merger had not occurred, or the surviving entity may be substituted as a party to the action or proceeding.

The Secretary of State of this state is the agent for service of process in an action or proceeding against a surviving foreign entity to enforce an obligation of a domestic partnership that is a party to a merger. The surviving foreign entity shall promptly notify the Secretary of State of the mailing address of its chief executive office and of any change of address. Upon receipt of process, the Secretary of State shall mail a copy of the process to the surviving foreign entity.

A partner of a domestic partnership which is a party to a merger remains liable for all obligations incurred by such domestic partnership before the merger and for which the partner was personally liable before the merger.

Without affecting any liability a partner may have in accordance with the provisions of subsection (c) of this section, a partner of a domestic partnership which is the survivor of a merger:

Shall not become personally liable as a result of the merger for obligations of the surviving partnership incurred before the merger by a party to the merger of which that partner was not a general partner; and

Except as otherwise provided in Section 79-13-306, shall become personally liable for all obligations of the surviving partnership incurred after the merger takes effect.

In the case of a partner of a domestic partnership which is a party to a merger who does not become a partner, shareholder, member or other equity owner of the surviving entity:

The surviving entity shall cause the partner’s interest in the partnership to be purchased under Section 79-13-701; and

If the surviving entity is a domestic partnership, the surviving partnership is bound under Section 79-13-702 by an act of the terminated partner, and the terminated partner is liable under Section 79-13-703 for transactions entered into by the surviving partnership after the merger takes effect.

HISTORY: Laws, 2004, ch. 458, § 906, eff from and after Jan. 1, 2005.

§79-13-907. Statement of merger.

After a merger, the surviving domestic or foreign entity may file a statement that one or more domestic partnerships have merged into the surviving entity.

A statement of merger must contain:

  1. The name of each entity that is a party to the merger;
  2. The name and domicile of the entity that will be the survivor of the merger;
  3. The street address of the surviving entity’s chief executive office and of an office in this state, if any; and
  4. The type of entity of the surviving entity is (e.g., partnership, limited partnership, for profit corporation, etc.).

Except as otherwise provided in subsection (d), for the purposes of Section 79-13-302, property of the surviving entity which before the merger was held in the name of another party to the merger is property held in the name of the surviving entity upon filing a statement of merger.

For the purposes of Section 79-13-302, real property of the surviving entity which before the merger was held in the name of another party to the merger is property held in the name of the surviving entity upon recording a certified copy of the statement of merger in the office for recording transfers of that real property.

A filed and, if appropriate, recorded statement of merger, executed and declared to be accurate pursuant to Section 79-13-105(c), stating the name of a partnership that is a party to the merger in whose name property was held before the merger and the name of the surviving entity, but not containing all of the other information required by subsection (b), operates with respect to the partnerships named to the extent provided in subsections (c) and (d).

HISTORY: Laws, 2004, ch. 458, § 907, eff from and after Jan. 1, 2005.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

§79-13-908. Nonexclusive.

This article is not exclusive.Partnerships may be converted or merged in any other manner provided or permitted by law.

HISTORY: Laws, 2004, ch. 458, § 908; Laws, 2014, ch. 399, § 40, eff from and after Jan. 1, 2015.

Amendment Notes —

The 2014 amendment, effective January 1, 2015, inserted “or permitted” in the last sentence.

Article 10. Limited Liability Partnership.

§79-13-1001. Statement of qualification.

A partnership may become a limited liability partnership pursuant to this section.

The terms and conditions on which a partnership becomes a limited liability partnership must be approved by the vote necessary to amend the partnership agreement except, in the case of a partnership agreement that expressly considers obligations to contribute to the partnership, the vote necessary to amend those provisions.

After the approval required by subsection (b), a partnership may become a limited liability partnership by filing a statement of qualification. The statement must contain:

  1. The name of the partnership;
  2. The street address of the partnership’s chief executive office and, if different, the street address of an office in this state, if any;
  3. If the partnership does not have an office in this state, the information required by Section 79-35-5(a);
  4. A statement that the partnership elects to be a limited liability partnership; and
  5. A deferred effective date, if any.

[Reserved]

The status of a partnership as a limited liability partnership is effective on the later of the filing of the statement or a date specified in the statement. The status remains effective, regardless of changes in the partnership, until it is canceled pursuant to Section 79-13-105(d).

The status of a partnership as a limited liability partnership and the liability of its partners is not affected by errors or later changes in the information required to be contained in the statement of qualification under subsection (c).

The filing of a statement of qualification establishes that a partnership has satisfied all conditions precedent to the qualification of the partnership as a limited liability partnership.

An amendment or cancellation of a statement of qualification is effective when it is filed or on a deferred effective date specified in the amendment or cancellation.

HISTORY: Laws, 2004, ch. 458, § 1001; Laws, 2012, ch. 382, § 76, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “the information required by Section 79-35-5(a)” for “the street address of an office in this state, if any” in (c)(3); and deleted (d), which read: “The agent of a limited liability partnership for service of process must be an individual who is a resident of this state or other person authorized to do business in this state” and reserved the subsection designator.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

Foreign limited liability partnerships, see §§ 79-13-1101 through 79-13-1105.

§79-13-1002. Name.

The name of a limited liability partnership must end with “Registered Limited Liability Partnership”, “Limited Liability Partnership”, “R.L.L.P.,” “L.L.P.,” “RLLP” or “LLP.”

HISTORY: Laws, 2004, ch. 458, § 1002, eff from and after Jan. 1, 2005.

§79-13-1003. Administrative dissolution of statement of qualification; grounds.

The Secretary of State may commence a proceeding under Section 79-13-1004 to administratively dissolve a statement of qualification if:

  1. The limited liability partnership does not pay within sixty (60) days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
  2. [Reserved]
  3. The limited liability partnership is without a registered agent in this state for sixty (60) days or more;
  4. The limited liability partnership does not notify the Secretary of State within sixty (60) days that its registered agent has been changed or that its registered agent has resigned; or
  5. A misrepresentation has been made of any material matter in any application, report, affidavit, or other record submitted by the limited liability partnership pursuant to this chapter.

HISTORY: Laws, 2012, ch. 382, § 77, eff from and after Jan. 1, 2013.

§79-13-1004. Administrative dissolution of statement of qualification; procedure.

If the Secretary of State determines that one or more grounds exist under Section 79-13-1003 for the administrative dissolution of a statement of qualification, the Secretary of State shall serve the limited liability partnership with written notice of his determination, except that such determination may be served by first-class mail.

If the limited liability partnership does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after service of the notice, the Secretary of State shall administratively dissolve the statement of qualification by signing a certification of the dissolution that recites the ground for dissolution and its effective date. The Secretary of State shall file the original of the certificate and serve the limited liability partnership with a copy of the certificate, except that such certificate may be served by first-class mail.

The administrative dissolution of a statement of qualification affects only the partnership’s status as a limited liability partnership and is not an event of dissolution of the partnership.

A limited liability partnership administratively dissolved continues its existence but may carry on only business necessary to wind up and liquidate its business and affairs under Section 79-13-803.

The administrative dissolution of the statement of qualification of a limited partnership does not terminate the authority of its agent for service of process.

HISTORY: Laws, 2012, ch. 382, § 78, eff from and after Jan. 1, 2013.

§79-13-1005. Administrative dissolution of statement of qualification; reinstatement.

A limited liability partnership whose statement of qualification has been administratively dissolved under Section 79-13-1004 may apply to the Secretary of State for reinstatement at any time after the effective date of dissolution. The application must:

  1. Recite the name of the limited liability partnership and the effective date of its administrative dissolution;
  2. State that the ground or grounds for dissolution either did not exist or have been eliminated;
  3. State that the limited liability partnership’s name satisfies the requirements of Section 79-13-1002; and
  4. Contain a certificate from the Mississippi Department of Revenue reciting that all taxes owed by the limited liability partnership have been paid.

If the Secretary of State determines that the application contains the information required by subsection (a) of this section and that the information is correct, the Secretary of State shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites this determination and the effective date of reinstatement, file the original of the certificate and serve the limited liability partnership with a copy of the certificate.

When the reinstatement is effective:

The reinstatement relates back to and takes effect as of the effective date of the administrative dissolution;

Any liability incurred by a member after the administrative dissolution and before the reinstatement shall be determined as if the administrative dissolution had never occurred; and

The limited liability partnership may resume its business as if the administrative dissolution had never occurred.

HISTORY: Laws, 2012, ch. 382, § 79; Laws, 2015, ch. 453, § 2, eff from and after July 1, 2015.

Amendment Notes —

The 2015 amendment substituted “Section 79-13-1004” for “Section 79-14-1004” in (a).

§79-13-1006. Appeal from denial of reinstatement.

If the Secretary of State denies a limited liability partnership’s application for reinstatement following administrative dissolution, the Secretary of State shall serve the limited liability partnership with a record that explains the reason or reasons for denial.

The limited liability partnership may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court of the county where the limited partnership is domiciled within thirty (30) days after service of the notice of denial is perfected. The limited liability partnership appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State’s certificate of dissolution, the limited liability partnership’s application for reinstatement, and the Secretary of State’s notice of denial.

The court may summarily order the Secretary of State to reinstate the dissolved limited liability partnership or may take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2012, ch. 382, § 80, eff from and after Jan. 1, 2013.

Article 11. Foreign Limited Liability Partnership.

§79-13-1101. Law governing foreign limited liability partnership.

The law under which a foreign limited liability partnership is formed governs relations among the partners and between the partners and the partnership and the liability of partners for obligations of the partnership.

A foreign limited liability partnership may not be denied a statement of foreign qualification by reason of any difference between the law under which the partnership was formed and the law of this state.

A statement of foreign qualification does not authorize a foreign limited liability partnership to engage in any business or exercise any power that a partnership may not engage in or exercise in this state as a limited liability partnership.

HISTORY: Laws, 2004, ch. 458, § 1101, eff from and after Jan. 1, 2005.

§79-13-1102. Statement of foreign qualification.

Before transacting business in this state, a foreign limited liability partnership must file a statement of foreign qualification. The statement must contain:

  1. The name of the foreign limited liability partnership which satisfies the requirements of the state or other jurisdiction under whose law it is formed and ends with “Registered Limited Liability Partnership,” “Limited Liability Partnership,” “R.L.L.P.,” “L.L.P.,” “RLLP” or “LLP”;
  2. The street address of the partnership’s chief executive office;
  3. The information required by Section 79-35-5(a); and
  4. A deferred effective date, if any.

[Reserved]

The status of a partnership as a foreign limited liability partnership is effective on the later of the filing of the statement of foreign qualification or a date specified in the statement. The status remains effective, regardless of changes in the partnership, until it is canceled pursuant to Section 79-13-105(d).

An amendment or cancellation of a statement of foreign qualification is effective when it is filed or on a deferred effective date specified in the amendment or cancellation.

HISTORY: Laws, 2004, ch. 458, § 1102; Laws, 2012, ch. 382, § 81, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “and, if different, the street address of an office of the partnership in this state, if any” from the end of (a)(2); rewrote (a)(3), which formerly read: “If there is no office of the partnership in this state, the name and street address of the partnership’s agent for service of process”; and deleted (b), which read: “The agent of a foreign limited liability company for service of process must be an individual who is a resident of this state or other person authorized to do business in this state” and reserved the subsection designator.

Cross References —

Execution, filing and recording of statements, see § 79-13-105.

Filing fees, see § 79-13-105.

§79-13-1103. Effect of failure to qualify.

A foreign limited liability partnership transacting business in this state may not maintain an action or proceeding in this state unless it has in effect a statement of foreign qualification.

The failure of a foreign limited liability partnership to have in effect a statement of foreign qualification does not impair the validity of a contract or act of the foreign limited liability partnership or preclude it from defending an action or proceeding in this state.

A limitation on personal liability of a partner is not waived solely by transacting business in this state without a statement of foreign qualification.

If a foreign limited liability partnership transacts business in this state without a statement of foreign qualification, the Secretary of State is its agent for service of process with respect to a right of action arising out of the transaction of business in this state.

HISTORY: Laws, 2004, ch. 458, § 1103, eff from and after Jan. 1, 2005.

§79-13-1104. Activities not constituting transacting business.

Activities of a foreign limited liability partnership which do not constitute transacting business for the purpose of this article include:

  1. Maintaining, defending, or settling an action or proceeding;
  2. Holding meetings of its partners or carrying on any other activity concerning its internal affairs;
  3. Maintaining bank accounts;
  4. Maintaining offices or agencies for the transfer, exchange, and registration of the partnership’s own securities or maintaining trustees or depositories with respect to those securities;
  5. Selling through independent contractors;
  6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
  7. Creating or acquiring indebtedness, with or without a mortgage, or other security interest in property;
  8. Collecting debts or foreclosing mortgages or other security interests in property securing the debts, and holding, protecting, and maintaining property so acquired;
  9. Conducting an isolated transaction that is completed within thirty (30) days and is not one in the course of similar transactions; and
  10. Transacting business in interstate commerce.

For purposes of this article, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (a), constitutes transacting business in this state.

This section does not apply in determining the contacts or activities that may subject a foreign limited liability partnership to service of process, taxation, or regulation under any other law of this state.

HISTORY: Laws, 2004, ch. 458, § 1104, eff from and after Jan. 1, 2005.

§79-13-1105. Action by attorney general.

The Attorney General may maintain an action to restrain a foreign limited liability partnership from transacting business in this state in violation of this article.

HISTORY: Laws, 2004, ch. 458, § 1105, eff from and after Jan. 1, 2005.

§79-13-1106. Administrative revocation of statement of foreign qualification; grounds.

The Secretary of State may commence a proceeding under Section 79-13-1107 to revoke the statement of foreign qualification of a foreign limited liability partnership authorized to transact business in this state if:

  1. [Reserved]
  2. The foreign limited liability partnership does not pay within sixty (60) days after they are due any fees, taxes, or penalties imposed by this chapter or other law;
  3. The foreign limited partnership is without a registered agent in this state for sixty (60) days or more;
  4. The foreign limited liability partnership does not notify the Secretary of State within sixty (60) days that its registered agent has been changed or that its registered agent has resigned;
  5. The Secretary of State receives a duly authenticated certificate from the Secretary of State or other public official having custody of corporate records in the state or country under whose law the foreign limited liability partnership is organized stating that it has been dissolved or disappeared as the result of a merger; or
  6. A misrepresentation has been made of any material matter in any application, report, affidavit, or other record submitted by the foreign limited liability partnership pursuant to this chapter.

The Secretary of State may not revoke a statement of foreign qualification of a foreign limited liability partnership unless the Secretary of State sends the foreign limited liability partnership notice of the revocation at least sixty (60) days before its effective date, by a record addressed to its registered agent, or to the foreign limited liability partnership if the foreign limited liability partnership fails to appoint and maintain a proper agent in this state. The notice must specify the cause for the revocation of the registration. The authority of the foreign limited liability partnership to transact business in this state ceases on the effective date of the revocation unless the foreign limited liability partnership cures the failure before that date.

HISTORY: Laws, 2012, ch. 382, § 82; Laws, 2015, ch. 453, § 3, eff from and after July 1, 2015.

Amendment Notes —

The 2015 amendment substituted “Section 79-13-1107” for “Section 79-14-1107” in the introductory paragraph of (a); substituted “foreign limited liability partnership” for “limited partnership” in (a)(4); and inserted “foreign” preceding “limited liability partnership” in (a)(6) and in the second, third, fourth and fifth time it appears in (b).

§79-13-1107. Administrative revocation of statement of foreign qualification; procedure.

If the Secretary of State determines that one or more grounds exist under Section 79-13-1106 for revocation of a statement of foreign qualification, he shall serve the foreign limited liability partnership with written notice of his determination, except that such determination may be served by first-class mail.

If the foreign limited liability partnership does not correct each ground for revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after service of the notice is perfected, the Secretary of State may revoke the foreign limited liability partnership’s statement of foreign qualification by signing a certificate of revocation that recites the ground or grounds for revocation and its effective date. The Secretary of State shall file the original of the certificate and serve a copy on the foreign limited liability partnership, except that such certificate may be served by first-class mail.

The authority of a foreign limited liability partnership to transact business in this state ceases on the date shown on the certificate revoking its registration.

The Secretary of State’s revocation of a foreign limited liability partnership’s registration appoints the Secretary of State the foreign limited liability partnership’s agent for service of process in any proceeding based on a cause of action which arose during the time the foreign limited liability partnership was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign limited liability partnership. Upon receipt of process, the Secretary of State shall mail a copy of the process to the foreign limited liability partnership at its principal office shown in its most recent communication received from the foreign limited liability partnership stating the current mailing address of its principal office, or, if none are on file, in its application for a registration.

Revocation of a foreign limited liability partnership’s statement of foreign qualification does not terminate the authority of the registered agent of the foreign limited liability partnership.

HISTORY: Laws, 2012, ch. 382, § 83; Laws, 2015, ch. 453, § 4, eff from and after July 1, 2015.

Amendment Notes —

The 2015 amendment substituted “Section 79-13-1106” for “Section 79-14-1106” in (a); and inserted “foreign” preceding “limited liability partnership” in (e).

§79-13-1108. Administrative revocation of statement of foreign qualification; reinstatement.

A foreign limited liability partnership whose statement of foreign qualification is administratively revoked under Section 79-13-1107 may apply to the Secretary of State for reinstatementat any time after the effective date of such revocation. The application must:

  1. Recite the name of the limited liability partnership and the effective date of the administrative revocation;
  2. State that the ground or grounds for revocation either did not exist or have been eliminated;
  3. State that the limited liability partnership’s name satisfies the requirements of Section 79-13-1002; and
  4. Contain a certificate from the Mississippi Department of Revenue reciting that the limited liability partnership has properly filed all reports and paid all taxes and penalties required by revenue laws of this state.

If the Secretary of State determines that the application contains the information required by subsection (a) of this section and that the information is correct, he shall reinstate the registration, prepare a certificate that recites his determination and the effective date of reinstatement, file the original of the certificate, and serve a copy on the limited liability partnership.

When the reinstatement is effective:

The reinstatement relates back to and takes effect as of the effective date of the administrative revocation;

Any liability incurred by a member after the administrative revocation and before the reinstatement shall be determined as if the administrative revocation had never occurred; and

The limited liability partnership may resume its business as if the administrative revocation had never occurred.

HISTORY: Laws, 2012, ch. 382, § 84, eff from and after Jan. 1, 2013.

§79-13-1109. Appeal from denial of reinstatement.

If the Secretary of State denies a foreign limited liability partnership’s application for reinstatement of the statement of foreign qualification following administrative revocation, he shall serve the limited liability partnership with a written communication that explains the reason or reasons for denial.

The limited liability partnership may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court of the county where the limited liability partnership is domiciled within thirty (30) days after service of the communication of denial is perfected. The limited liability partnership appeals by petitioning the court to set aside the revocation and attaching to the petition copies of the Secretary of State’s communication of denial.

The court may summarily order the Secretary of State to reinstate the registration of the limited liability partnership or may take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2012, ch. 382, § 85, eff from and after Jan. 1, 2013.

Article 12. Miscellaneous Provisions.

§79-13-1201. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

HISTORY: Laws, 2004, ch. 458, § 1201, eff from and after Jan. 1, 2005.

Comparable Laws from other States —

Alabama Code, §§ 10-8A-101 through 10-8A-1109.

Arkansas Code Annotated, §§ 4-46-101 through 4-46-1207.

Florida Annotated Statutes, §§ 620.81001 through 620.9902.

Georgia Code Annotated, §§ 14-8-1 through 14-8-64.

North Carolina General Statutes, §§ 59-31 through 59-73.

South Carolina Code Annotated, §§ 33-41-10 through 33-41-1330.

Tennessee Code Annotated, §§ 61-1-101 through 61-1-1208.

Texas Annotated Statutes, Article §§ 152.001 through 152.914.

§79-13-1202. Short title.

This chapter may be cited as the Uniform Partnership Act (1997).

HISTORY: Laws, 2004, ch. 458, § 1202, eff from and after Jan. 1, 2005.

§79-13-1203. Severability clause.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

HISTORY: Laws, 2004, ch. 458, § 1203, eff from and after Jan. 1, 2005.

§79-13-1204. Reserved.

Reserved.

HISTORY: Laws, 2004, ch. 458, § 1204, eff from and after Jan. 1, 2005.

§79-13-1205. Applicability.

Before January 1, 2007, this chapter governs only a partnership formed:

  1. After January 1, 2005, except a partnership that is continuing the business of a dissolved partnership under the Mississippi Uniform Partnership Law in effect on December 31, 2004; and
  2. Before January 1, 2005, that elects, as provided by subsection (c), to be governed by this chapter.

On and after January 1, 2007, this chapter governs all partnerships.

Before January 1, 2007, a partnership voluntarily may elect, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be governed by this chapter. The provisions of this chapter relating to the liability of the partnership’s partners to third parties apply to limit those partners’ liability to a third party who had done business with the partnership within one (1) year before the partnership’s election to be governed by this chapter only if the third party knows or has received a notification of the partnership’s election to be governed by this chapter.

HISTORY: Laws, 2004, ch. 458, § 1205, eff from and after Jan. 1, 2005.

Editor’s Notes —

Former §§ 79-12-1 through 79-12-119, which were repealed by Laws of 2004, ch. 458, § 1207, effective January 1, 2007, related to the Mississippi Uniform Partnership Law referred to in this section.

§79-13-1206. Savings clause.

This chapter does not affect an action or proceeding commenced or right accrued before this chapter takes effect.

HISTORY: Laws, 2004, ch. 458, § 1208, eff from and after Jan. 1, 2005.

Chapter 14. Mississippi Uniform Limited Partnership Act

Editor's Notes —

Provisions relating to limited partnerships were previously codified in former Chapter 13, entitled “Limited Partnerships,” which was repealed by Laws of 1987, ch. 488, § 1105 (codified as § 79-14-1105), effective from and after January 1, 1988. Former Chapter 13 contained the following undesignated headings:

“Mississippi Uniform Limited Partnership Law” [Codes, 1942, §§ 5553-01 through 5553-29; Laws, 1964, ch. 271, §§ 1 through 29], comprising former §§ 79-13-1 through 79-13-57;

“Limited Partnerships Under Prior Laws” [Codes, Hutchinson's 1848, ch. 40, art 1; 1857, ch. 38, art. 1 et seq; 1871, §§ 1857-1877; 1880, §§ 1005-1024; 1892, §§ 2764-2781; 1906, §§ 3129-3146; Hemingway's 1917, §§ 5467-5484; 1930, §§ 5394-5411; 1942, §§ 5553-5570; Laws, 1942, ch. 320; Laws, 1944, ch. 310, § 1; Laws, 1962, ch. 510, §§ 1 through 3], comprising former §§ 79-13-101 through 79-13-137; and

“Foreign Limited Partnerships” [Laws, 1979, ch. 420, §§ 2 through 10], comprising former §§ 79-13-201 through 79-13-217.

The Mississippi Limited Partnership Act [Laws, 1987, ch. 488, §§ 101 through 1107] comprising former §§ 79-14-101 through 79-14-1107, was repealed by Section 6 of Chapter 453, Laws of 2015, effective July 1, 2015, and replaced by the Mississippi Uniform Limited Partnership Act, codified as §§ 79-14-101 through 79-14-1301 by Section 1 of Chapter 453, Laws of 2015, effective from and after July 1, 2015.

Article 1. General Provisions.

§79-14-101. Short title.

This chapter may be cited as the Mississippi Uniform Limited Partnership Act.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-101 [Laws, 1987, ch. 488, § 101; Laws, 1997, ch. 418, § 12; Laws, 2000, ch. 469, § 40; Laws, 2014, ch. 399, § 41, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided definitions of terms used in the chapter. For present similar provisions, see § 79-14-102.

Cross References —

For the text of the Mississippi Uniform Partnership Law see §§ 79-13-101 et seq.

Further definition of “certificate of limited partnership”, see § 79-14-1106.

Comparable Laws from other States —

Alabama Code, §§ 10A-9-1.02 through 10A-9-12.08.

Arkansas Code Annotated, §§ 4-47-101 through 4-47-1302.

Florida Annotated Statutes, §§ 620.1101 through 620.2205.

Georgia Code Annotated, §§ 14-9-100 through 14-9-1204.

North Carolina General Statutes, §§ 59-101 through 59-1107.

South Carolina Code Annotated, §§ 33-42-10 through 33-42-2140.

Tennessee Code Annotated, §§ 61-2-101 through 61-2-1208.

Texas Annotated Statutes, §§ 153.001 through 153.555.

Alabama: Code of Ala. § 10-9B-101 et seq.

Alaska: Alaska Stat. § 32.11.010 et seq.

Arizona: A.R.S. § 29-301 et seq.

Arkansas: A.C.A. § 4-47-101 et seq.

California: Cal Corp. Code § 15900 et seq.

Colorado: C.R.S. 7-62-101 et seq.

Connecticut: Conn. Gen. Stat. § 34-9 et seq.

Delaware: 6 Del. C. § 17-101 et seq.

District of Columbia: D.C. Code § 33-201.01 et seq.

Florida: Fla. Stat. § 620.1101 et seq.

Georgia: O.C.G.A. § 14-9-100 et seq.

Hawaii: HRS § 425E-101 et seq.

Idaho: Idaho Code § 53-2-101 et seq.

Illinois: 805 ILCS 210/100 et seq.

Indiana: Burns Ind. Code Ann. § 23-16-1-1.

Iowa: Iowa Code § 488.101 et seq.

Kansas: K.S.A. § 56-1a01 et seq.

Kentucky: KRS § 362.2-102 et seq.

Maine: 31 M.R.S. § 1301 et seq.

Maryland: Md. Corporations and Associations Code Ann. § 10-101 et seq.

Massachusetts: ALM GL ch. 109, § 1 et seq.

Michigan: MCLS § 449.1101 et seq.

Minnesota: Minn. Stat. §§ 321.0101 et seq. and 322A.01 et seq.

Missouri: § 359.011 R.S.Mo. et seq.

Montana: Mont. Code Anno., § 35-12-501 et seq.

Nebraska: R.R.S. Neb. § 67-233 et seq.

Nevada: NRS § 87A.005 et seq.

New Hampshire: RSA 304-B:1 et seq.

New Jersey: N.J. Stat. § 42:2A-1 et seq.

New Mexico: N.M. Stat. Ann. § 54-2A-101 et seq.

New York: NY CLS Partn. § 90.

North Carolina: N.C. Gen. Stat. § 59-101 et seq.

North Dakota: N.D. Cent. Code, § 45-10.2-01 et seq.

Ohio: ORC Ann. § 1782.01 et seq.

Oklahoma: 54 Okl. St. § 1-906 et seq.

Oregon: ORS § 70.005 et seq.

Pennsylvania: 15 Pa. C. S. § 8501 et seq.

Rhode Island: R.I. Gen. Laws § 7-13-1 et seq.

South Carolina: S.C. Code Ann. § 33-42-10 et seq.

South Dakota: S.D. Codified Laws § 48-7-101 et seq.

Tennessee: Tenn. Code Ann. § 61-2-101 et seq.

Texas: Tex. Rev. Civ. Stat. art. 6132a-1.

Utah: Utah Code Ann. § 48-2a-101 et seq.

Vermont: 11 V.S.A. § 3401 et seq.

Virgin Islands: 26 V.I.C. § 321 et seq.

Virginia: Va. Code Ann. § 50-73.1 et seq.

Washington: Rev. Code Wash. § 25.10.010 et seq.

West Virginia: W. Va. Code § 47-9-1 et seq.

Wisconsin: Wis. Stat. § 179.01 et seq.

Wyoming: Wyo. Stat. § 17-14-201 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-13-3.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-13-3.

11. In general.

Nonresident limited partners of a nonresident limited partnership doing business in the state could not be made subject to jurisdiction of the state’s courts in an action against the partnership where they had done none of the acts specified by the long arm statute (§ 13-3-57) as prerequisites to jurisdiction, and had paid their indebtedness to the partnership in full, thus, under the statute governing circumstances in which limited partners are proper parties to a suit against the partnership (§§ 79-13-3, 79-13-51[repealed]), not being subject to being made parties. Ga-Pak Lumber Co. v. Nalley, 337 So. 2d 1270, 1976 Miss. LEXIS 1615 (Miss. 1976).

§79-14-102. Definitions.

In this chapter:

  1. “Certificate of limited partnership” means the certificate required by Section 79-14-201. The term includes the certificate as amended or restated.
  2. “Contribution”, except in the phrase “right of contribution,” means property or a benefit described in Section 79-14-501 which is provided by a person to a limited partnership to become a partner or in the person’s capacity as a partner.
  3. “Debtor in bankruptcy” means a person that is the subject of:
  4. “Distribution” means a transfer of money or other property from a limited partnership to a person on account of a transferable interest or in the person’s capacity as a partner. The term:
  5. “Foreign limited liability limited partnership” means a foreign limited partnership whose general partners have limited liability for the debts, obligations, or other liabilities of the foreign partnership under a provision similar to Section 79-14-404(c).
  6. “Foreign limited partnership” means an unincorporated entity formed under the law of a jurisdiction other than this state which would be a limited partnership if formed under the law of this state. The term includes a foreign limited liability limited partnership.
  7. “General partner” means a person that:
  8. “Jurisdiction,” used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.
  9. “Jurisdiction of formation” means the jurisdiction whose law governs the internal affairs of an entity.
  10. “Limited liability limited partnership,” except in the phrase “foreign limited liability limited partnership” and in Article 11, means a limited partnership whose certificate of limited partnership states that the partnership is a limited liability limited partnership.
  11. “Limited partner” means a person that:
  12. “Limited partnership,” except in the phrase “foreign limited partnership” and in Article 11, means an entity formed under this chapter or which becomes subject to this chapter under Article 11 or Section 79-14-112. The term includes a limited liability limited partnership.
  13. “Partner” means a limited partner or general partner.
  14. “Partnership agreement” means the agreement, whether or not referred to as a partnership agreement and whether oral, implied, in a record, or in any combination thereof, of all the partners of a limited partnership concerning the matters described in Section 79-14-105(a). The term includes the agreement as amended or restated.
  15. “Person” means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, agricultural association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
  16. “Principal office” means the principal executive office of a limited partnership or foreign limited partnership, whether or not the office is located in this state.
  17. “Property” means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein.
  18. “Record,” used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
  19. “Registered agent” means an agent of a limited partnership or foreign limited partnership which is authorized to receive service of any process, notice, or demand required or permitted by law to be served on the partnership.
  20. “Registered foreign limited partnership” means a foreign limited partnership that is registered to do business in this state pursuant to a statement of registration filed by the Secretary of State.
  21. “Required information” means the information that a limited partnership is required to maintain under Section 79-14-108.
  22. “Sign” means, with present intent to authenticate or adopt a record:
  23. “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
  24. “Transfer” includes:
  25. “Transferable interest” means the right, as initially owned by a person in the person’s capacity as a partner, to receive distributions from a limited partnership, whether or not the person remains a partner or continues to own any part of the right. The term applies to any fraction of the interest, by whomever owned.
  26. “Transferee” means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner. The term includes a person that owns a transferable interest under Section 79-14-602(a)(3) or 79-14-605(a)(4).

An order for relief under Title 11 of the United States Code or a comparable order under a successor statute of general application; or

A comparable order under federal, state, or foreign law governing insolvency.

Includes:

A redemption or other purchase by a limited partnership of a transferable interest; and

A transfer to a partner in return for the partner’s relinquishment of any right to participate as a partner in the management or conduct of the partnership’s activities and affairs or to have access to records or other information concerning the partnership’s activities and affairs; and

Does not include amounts constituting reasonable compensation for present or past service or payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program.

Has become a general partner under Section 79-14-401 or was a general partner in a partnership when the partnership became subject to this chapter under Section 79-14-112; and

Has not dissociated as a general partner under Section 79-14-603.

Has become a limited partner under Section 79-14-301 or was a limited partner in a limited partnership when the partnership became subject to this chapter under Section 79-14-112; and

Has not dissociated under Section 79-14-601.

To execute or adopt a tangible symbol; or

To attach to or logically associate with the record an electronic symbol, sound, or process.

An assignment;

A conveyance;

A sale;

A lease;

An encumbrance, including a mortgage or security interest;

A gift; and

A transfer by operation of law.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-102 [Laws, 1987, ch. 488, § 102; Laws, 1990, ch. 385, § 1, effective from and after passage (approved March 13, 1990); Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided certain requirements regarding the name of a limited partnership. For present similar provisions, see § 79-14-114.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

Provision that limited partner who permits his name to be used in name of limited partnership may in some circumstances be liable to creditors of limited partnership, see § 79-14-303.

Names under which foreign limited partnerships may register prior to transacting business in this state, see § 79-14-904.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership § 789.

CJS.

68 C.J.S., Partnership § 562.

§79-14-103. Knowledge; notice.

A person knows a fact if the person:

  1. Has actual knowledge of it; or
  2. Is deemed to know it under law other than this chapter.

A person has notice of a fact if the person:

Has reason to know the fact from all the facts known to the person at the time in question; or

Is deemed to have notice of the fact under subsection (c) or (d).

A certificate of limited partnership on file in the office of the Secretary of State is notice that the partnership is a limited partnership and the persons designated in the certificate as general partners are general partners. Except as otherwise provided in subsection (d), the certificate is not notice of any other fact.

A person not a partner is deemed to have notice of:

Another person’s dissociation as a general partner, ninety (90) days after an amendment to the certificate of limited partnership which states that the other person has dissociated becomes effective, or ninety (90) days after a statement of dissociation pertaining to the other person becomes effective, whichever occurs first;

A limited partnership’s:

Dissolution, ninety (90) days after the statement of dissolution becomes effective;

Participation in a conversion or domestication under the Mississippi Entity Conversion and Domestication Act, ninety (90) days after the effective date of statement of conversion or domestication.

Participation in a merger under Article 11, ninety (90) days after the effective date of the articles of merger.

Subject to Section 79-14-210(f), a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not those steps cause the other person to know the fact.

A general partner’s knowledge or notice of a fact relating to the limited partnership is effective immediately as knowledge of or notice to the partnership, except in the case of a fraud on the partnership committed by or with the consent of the general partner. A limited partner’s knowledge or notice of a fact relating to the partnership is not effective as knowledge of or notice to the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-103 [Laws, 1987, ch. 488, § 103; Laws, 2014, ch. 468, § 3, effective from and after July 1, 2014; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the reservation of a legal name that complied with former § 79-14-102. For present similar provisions, see § 79-14-115.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Filing fees, see § 79-14-1104.

Mississippi Entity Conversion and Domestication Act, see § 79-37-101 et seq.

§79-14-104. Governing law.

The law of this state governs:

  1. The internal affairs of a limited partnership; and
  2. The liability of a partner as partner for a debt, obligation, or other liability of a limited partnership.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-104 [Laws, 1987, ch. 488, § 104; Laws, 2012, ch. 382, § 86, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] required a limited partnership to have and maintain an office in the State of Mississippi.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote the section.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Requirement that certificate of limited partnership set forth address of office and of registered agent, see § 79-14-201.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act (January 1, 1988), see § 79-14-1106.

§79-14-105. Partnership agreement; scope, function, and limitations.

Except as otherwise provided in subsections (c) and (d), the partnership agreement governs:

  1. Relations among the partners as partners and between the partners and the limited partnership;
  2. The activities and affairs of the partnership and the conduct of those activities and affairs; and
  3. The means and conditions for amending the partnership agreement.
  4. Vary the provisions of Section 79-14-204;
  5. Vary the right of a general partner under Section 79-14-406(b)(2) to vote on or consent to an amendment to the certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership;
  6. Alter or eliminate the duty of loyalty or the duty of care except as otherwise provided in subsection (d);
  7. Eliminate the contractual obligation of good faith and fair dealing under Sections 79-14-305(a) and 79-14-409(d), but the partnership agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured;
  8. Relieve or exonerate a person from liability for conduct involving bad faith, willful or intentional misconduct, or knowing violation of law;
  9. Vary the information required under Section 79-14-108 or unreasonably restrict the duties and rights under Section 79-14-304 or 79-14-407, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under those sections and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;
  10. Vary the grounds for expulsion stated in Section 79-14-603(5)(B);
  11. Vary the power of a person to dissociate as a general partner under Section 79-14-604(a), except to require that the notice under Section 79-14-603(1) be in a record;
  12. Vary the causes of dissolution specified in Section 79-14-801(a)(6);
  13. Vary the requirement to wind up the partnership’s activities and affairs as specified in Section 79-14-802(a), (b)(1), and (d);
  14. Unreasonably restrict the right of a partner to maintain an action under Article 9;
  15. Vary the provisions of Section 79-14-905, but the partnership agreement may provide that the partnership may not have a special litigation committee;
  16. Vary the right of a partner to approve a conversion or domestication under the Mississippi Entity Conversion and Domestication Act;
  17. Vary the required contents of a plan of merger under Article 11 or plan of conversion or plan of domestication under the Mississippi Entity Conversion and Domestication Act; or
  18. Except as otherwise provided in Sections 79-14-106 and 79-14-107(b), restrict the rights under this chapter of a person other than a partner.

To the extent the partnership agreement does not provide for a matter described in subsection (a), this chapter governs the matter.

A partnership agreement may not:

Vary the law applicable under Section 79-14-104;

Vary a limited partnership’s capacity under Section 79-14-111 to sue and be sued in its own name;

Vary any requirement, procedure, or other provision of this chapter pertaining to:

Registered agents; or

The Secretary of State, including provisions pertaining to records authorized or required to be delivered to the Secretary of State for filing under this chapter;

Subject to subsection (c)(8), without limiting other terms that may be included in a partnership agreement, the following rules apply:

The partnership agreement may:

Specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts; and

Alter the prohibition in Section 79-14-504(a)(2) so that the prohibition requires only that the partnership’s total assets not be less than the sum of its total liabilities.

If not manifestly unreasonable, the partnership agreement may:

Alter or eliminate the aspects of the duty of loyalty stated in Section 79-14-409(b);

Identify specific types or categories of activities that do not violate the duty of loyalty;

Alter the duty of care, but may not authorize conduct involving bad faith, willful or intentional misconduct, or knowing violation of law; and

Alter or eliminate any other fiduciary duty.

The court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under subsection (c)(7) or (d)(2). The court:

Shall make its determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time; and

May invalidate the term only if, in light of the purposes, activities, and affairs of the limited partnership, it is readily apparent that:

The objective of the term is unreasonable; or

The term is an unreasonable means to achieve its objective.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-105 [Laws, 1987, ch. 488, § 105; Laws, 2014, ch. 399, § 42, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the records a limited partnership was required to keep at its office. For present similar provisions, see § 79-14-108.

Cross References —

Liability for false statement in certificate, see § 79-14-207.

Limited partner’s right to inspect and copy the partnership records required under this section, see § 79-14-305.

Obligation of partner to contribute cash equal to that portion of value, as stated in records kept under this section, of stated contribution of property or services not made, see § 79-14-502.

Allocation of profits and losses on basis of value, as stated in records kept under this section, of contributions made by each partner, see § 79-14-503.

Distribution of cash or other assets on basis of value, as stated in records kept under this section, of contributions made by each partner, see § 79-14-504.

Extent to which partner receives return of his contribution, as determined by reference to records kept under this section, see § 79-14-608.

Mississippi Entity Conversion and Domestication Act, see § 79-37-101 et seq.

JUDICIAL DECISIONS

1.-2. [Reserved for future use.]

3. Required filing with Secretary of State.

1.-2. [Reserved for future use.]

3. Required filing with Secretary of State.

Deceased general partner did not validly assign a general partnership interest to a conservator because a schedule listing the conservator as a general partner was not filed with the Secretary of State, as the limited partnership agreement, Miss. Code Ann. § 79-14-105(c)(3)(B), and former Miss. Code Ann. § 79-14-202(c)(1) [now § 79-14-202(d)(1)] required. Smith v. Maggie Mae, L.P., 225 So.3d 1243, 2016 Miss. App. LEXIS 267 (Miss. Ct. App. 2016), cert. denied, 216 So.3d 1149, 2017 Miss. LEXIS 213 (Miss. 2017).

§79-14-106. Partnership agreement; effect on limited partnership and person becoming partner; preformation agreement.

A limited partnership is bound by and may enforce the partnership agreement, whether or not the partnership has itself manifested assent to the agreement.

A person that becomes a partner is deemed to assent to the partnership agreement.

Two (2) or more persons intending to become the initial partners of a limited partnership may make an agreement providing that upon the formation of the partnership the agreement will become the partnership agreement.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-106 [Laws, 1987, ch. 488, § 106, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided that a limited partnership could carry on any business that a partnership without limited partners could carry on.

Cross References —

State policy regarding issuance of governing licenses to limited partnerships, see § 75-76-219.

Eligibility requirements for limited partnerships to receive state gaming license, see § 75-76-221.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 774, 781.

CJS.

68 C.J.S., Partnership § 576.

§79-14-107. Partnership agreement; effect on third parties and relationship to records effective on behalf of limited partnership.

A partnership agreement may specify that its amendment requires the approval of a person that is not a party to the agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition.

The obligations of a limited partnership and its partners to a person in the person’s capacity as a transferee or person dissociated as a partner are governed by the partnership agreement. Subject only to a court order issued under Section 79-14-703(b)(2) to effectuate a charging order, an amendment to the partnership agreement made after a person becomes a transferee or is dissociated as a partner:

  1. Is effective with regard to any debt, obligation, or other liability of the partnership or its partners to the person in the person’s capacity as a transferee or person dissociated as a partner; and
  2. Is not effective to the extent the amendment imposes a new debt, obligation, or other liability on the transferee or person dissociated as a partner.

If a record delivered by a limited partnership to the Secretary of State for filing becomes effective and contains a provision that would be ineffective under Section 79-14-105(c) or (d)(2) if contained in the partnership agreement, the provision is ineffective in the record.

Subject to subsection (c), if a record delivered by a limited partnership to the Secretary of State for filing becomes effective and conflicts with a provision of the partnership agreement:

The agreement prevails as to partners, persons dissociated as partners, and transferees; and

The record prevails as to other persons to the extent they reasonably rely on the record.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-107 [Laws, 1987, ch. 488, § 107, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to business transactions of a partner with the partnership.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership § 228.

§79-14-108. Required information.

A limited partnership shall maintain at its principal office the following information:

  1. A current list showing the full name and last-known street and mailing addresses of each partner, separately identifying the general partners, in alphabetical order, and the limited partners, in alphabetical order;
  2. A copy of the initial certificate of limited partnership and all amendments to and restatements of the certificate, together with signed copies of any powers of attorney under which any certificate, amendment, or restatement has been signed;
  3. A copy of any filed articles of merger, conversion, or domestication;
  4. A copy of the partnership’s federal, state, and local income tax returns and reports, if any, for the three (3) most recent years;
  5. A copy of any partnership agreement made in a record and any amendment made in a record to any partnership agreement;
  6. A copy of any financial statement of the partnership for the three (3) most recent years;
  7. Reserved;
  8. A copy of any record made by the partnership during the past three (3) years of any consent given by or vote taken of any partner pursuant to this chapter or the partnership agreement;
  9. A copy of any statement of conversion or domestication filed under the Mississippi Entity Conversion and Domestication Act; and
  10. Unless contained in a partnership agreement made in a record, a record stating:

A description and statement of the agreed value of contributions other than money made and agreed to be made by each partner;

The times at which, or events on the happening of which, any additional contributions agreed to be made by each partner are to be made;

For any person that is both a general partner and a limited partner, a specification of what transferable interest the person owns in each capacity; and

Any events upon the happening of which the partnership is to be dissolved and its activities and affairs wound up.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-108 [Laws, 1987, ch. 488, § 108, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to indemnification. For present similar provisions relating to indemnification, see § 79-14-408.

§79-14-109. Dual capacity.

A person may be both a general partner and a limited partner. A person that is both a general and limited partner has the rights, powers, duties, and obligations provided by this chapter and the partnership agreement in each of those capacities. When the person acts as a general partner, the person is subject to the obligations, duties, and restrictions under this chapter and the partnership agreement for general partners. When the person acts as a limited partner, the person is subject to the obligations, duties, and restrictions under this chapter and the partnership agreement for limited partners.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-110. Nature, purpose, and duration of limited partnership.

A limited partnership is an entity distinct from its partners. A limited partnership is the same entity regardless of whether its certificate states that the limited partnership is a limited liability limited partnership.

A limited partnership may have any lawful purpose, regardless of whether for profit.

A limited partnership has perpetual duration, unless otherwise specified in the partnership agreement.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-111. Powers.

A limited partnership has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities and affairs.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-112. Application to existing relationships.

Before January 1, 2017, this chapter governs only:

  1. A limited partnership formed on or after July 1, 2015; and
  2. Except as otherwise provided in subsections (c) and (d), a limited partnership formed before July 1, 2015, which elects, in the manner provided in its partnership agreement or by law for amending the partnership agreement, to be subject to this chapter.
  3. Sections 79-14-601 and 79-14-602 do not apply and a limited partner has the same right and power to dissociate from the limited partnership, with the same consequences, as existed immediately before July 1, 2015.
  4. Section 79-14-603(4) does not apply.
  5. Section 79-14-603(5) does not apply and a court has the same power to expel a general partner as the court had immediately before July 1, 2015.
  6. Section 79-14-801(a)(3) does not apply and the connection between a person’s dissociation as a general partner and the dissolution of the limited partnership is the same as existed immediately before July 1, 2015.

Except as otherwise provided in subsections (c) and (d), on and after January 1, 2017, this chapter governs all limited partnerships.

With respect to a limited partnership formed before July 1, 2015, the following rules apply except as the partners otherwise elect in the manner provided in the partnership agreement or by law for amending the partnership agreement:

Section 79-14-110(c) does not apply and the limited partnership has whatever duration it had under the law applicable immediately before July 1, 2015.

The limited partnership is not required to amend its certificate of limited partnership to comply with Section 79-14-201(b)(5).

With respect to a limited partnership that elects pursuant to subsection (a)(2) to be subject to this chapter, after the election takes effect the provisions of this chapter relating to the liability of the limited partnership’s general partners to third parties apply:

Before January 1, 2017, to:

A third party that had not done business with the limited partnership in the year before the election took effect; and

A third party that had done business with the limited partnership in the year before the election took effect only if the third party knows or has been notified of the election; and

On and after January 1, 2017, to all third parties, but those provisions remain inapplicable to any obligation incurred while those provisions were inapplicable under paragraph (1)(B).

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-113. Supplemental principles of law.

Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-114. Permittee names.

The name of a limited partnership may contain the name of any partner.

The name of a limited partnership that is not a limited liability limited partnership must contain the words “limited partnership” or the abbreviation “LP” or “L.P.” and may not contain the phrase “limited liability limited partnership” or the abbreviation “LLLP” or “L.L.L.P.”.

The name of a limited liability limited partnership must contain the phrase “limited liability limited partnership” or the abbreviation “LLLP” or “L.L.L.P.” and must not contain the abbreviation “LP” or “L.P.”.

Except as otherwise provided in subsection (g), the name of a limited partnership, and the name under which a foreign limited partnership may register to do business in this state, must be distinguishable on the records of the Secretary of State from any:

  1. Name of an existing person whose formation required the filing of a record by the Secretary of State and which is not at the time administratively dissolved;
  2. Name of a limited liability partnership whose statement of qualification is in effect;
  3. Name under which a person is registered to do business in this state by the filing of a record by the Secretary of State;
  4. Name reserved under Section 79-14-115 or other law of this state providing for the reservation of a name by the filing of a record by the Secretary of State; and
  5. Name registered under the Fictitious Business Name Registration Act.

If a person consents in a record to the use of its name and submits an undertaking in a form satisfactory to the Secretary of State to change its name to a name that is distinguishable on the records of the Secretary of State from any name in any category of names in subsection (d), the name of the consenting person may be used by the person to which the consent was given.

Except as otherwise provided in subsection (g), in determining whether a name is the same as or not distinguishable on the records of the Secretary of State from the name of another person, words, phrases, or abbreviations indicating the type of person, such as “corporation,” “corp.,” “incorporated,” “Inc.,” “professional corporation,” “PC,” “P.C.,” “professional association,” “PA,” “P.A.,” “Limited,” “Ltd.,” “limited partnership,” “LP,” “L.P.,” “limited liability partnership,” “LLP” “L.L.P.,” “registered limited liability partnership,” “RLLP,” “R.L.L.P.,” “limited liability limited partnership,” “LLLP,” “L.L.L.P.,” “registered limited liability limited partnership,” “RLLLP,” “R.L.L.L.P.,” “limited liability company,” “LLC,” “L.L.C.,” “limited cooperative association,” “limited cooperative,” “LCA,” or “L.C.A.” may not be taken into account.

A person may consent in a record to the use of a name that is not distinguishable on the records of the Secretary of State from its name except for the addition of a word, phrase, or abbreviation indicating the type of person as provided in subsection (f). In such a case, the person need not change its name pursuant to subsection (e).

The name of a limited partnership may not contain the words “bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” or any combination thereof, or any words of similar import.

A limited partnership or foreign limited partnership may use a name that is not distinguishable from a name described in subsection (d)(1) through (5) if:

The partnership delivers to the Secretary of State a certified copy of a final judgment of a court of competent jurisdiction establishing the right of the partnership to use the name in this state; or

The other limited partnership or person consents to the use in writing and submits an undertaking in a form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying limited partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-115. Reservation of name.

A person may reserve the exclusive use of a legal name that complies with Section 79-14-114 by delivering an application to the Secretary of State for filing. The application must state the name and addresses of the applicant and the name to be reserved. If the Secretary of State finds that the name is available, the Secretary of State shall reserve the name for the applicant’s exclusive use for one hundred eighty (180) days. The one-hundred-eighty-day period may be renewed once by the applicant by filing a renewal application within thirty (30) days before the expiration of the initial one-hundred-eighty-day period.

The owner of a reserved name may transfer the reservation to another person by delivering to the Secretary of State a signed notice in a record of the transfer which states the name and address of the person to which the reservation is being transferred.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-116. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-117. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-118. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-119. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-120. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-121. Service of process, notice, or demand.

Notice or demand required or permitted by law on a limited partnership or foreign limited partnership authorized to transact business in this state is governed by Section 79-35-13. Service of process is governed by the Mississippi Rules of Civil Procedure.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-122. Delivery of record.

Except as otherwise provided in this chapter, permissible means of delivery of a record include delivery by hand, mail, conventional commercial practice, and electronic transmission.

Delivery to the Secretary of State is effective only when a record is received by the Secretary of State.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 2. Formation; Certificate of Limited Partnership and Other Filings.

§79-14-201. Formation of limited partnership; certificate of limited partnership.

To form a limited partnership, a person must deliver a certificate of limited partnership to the Secretary of State for filing.

A certificate of limited partnership must state:

  1. The name of the limited partnership, which must comply with Section 79-14-114;
  2. The information required by Section 79-35-5;
  3. The street and mailing addresses of the limited partnership’s principal office;
  4. The street and mailing addresses of each general partner; and
  5. Whether the limited partnership is a limited liability limited partnership.

A certificate of limited partnership may contain statements as to matters other than those required by subsection (b), but may not vary or otherwise affect the provisions specified in Section 79-14-105(c) and (d) in a manner inconsistent with that section.

A limited partnership is formed when:

The certificate of limited partnership becomes effective:

At least two (2) persons have become partners;

At least one (1) person has become a general partner; and

At least one (1) person has become a limited partner.

Subject to subsection (b) of this section, if any provision of a partnership agreement is inconsistent with the filed certificate of limited partnership, or with a filed statement of dissociation, termination, or change, or with filed articles of merger, or with a statement of conversion or domestication filed under the Mississippi Entity Conversion and Domestication Act:

The partnership agreement shall prevail as to partners and transferees; and

The filed document prevails as to persons, other than partners and transferees, that reasonably rely on the filed record to their detriment.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-201 [Laws, 1987, ch. 488, § 201; Laws, 1997, ch. 418, § 13; Laws, 2012, ch. 382, § 87; Laws, 2014, ch. 399, § 43, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the certificate of limited partnership. Present similar provisions are found in current § 79-14-201, above.

Cross References —

Incorporation of provisions of this section into definition of “certificate of limited partnership” for purposes of this chapter, see § 79-14-101.

Filing fees, see § 79-14-1104.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

RESEARCH REFERENCES

CJS.

68 C.J.S., Partnership § 567.

§79-14-202. Amendment or restatement of certificate of limited partnership.

A certificate of limited partnership may be amended or restated at any time.

To amend its certificate of limited partnership, a limited partnership must deliver to the Secretary of State for filing an amendment stating:

  1. The name of the limited partnership;
  2. The date of filing of its initial certificate; and
  3. The amendment.

To restate its certificate of limited partnership, a limited partnership must deliver to the Secretary of State for filing a restatement, designated as such in its heading.

A limited partnership shall promptly deliver to the Secretary of State for filing an amendment to a certificate of limited partnership to reflect:

The admission of a new general partner;

The dissociation of a person as a general partner; or

The appointment of a person to wind up the limited partnership’s activities and affairs under Section 79-14-802(c) or (d).

If a general partner knows that any information in a filed certificate of limited partnership was inaccurate when the certificate was filed or has become inaccurate due to changed circumstances, the general partner shall promptly:

Cause the certificate to be amended; or

If appropriate, deliver to the Secretary of State for filing a statement of change under Section 79-35-8 or a statement of correction under Section 79-14-209.

A certificate of limited partnership may also be amended by filing articles of merger under Article 11 or a statement of conversion, or domestication under the Mississippi Entity Conversion and Domestication Act.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-202 [Laws, 1987, ch. 488, § 202; Laws, 1997, ch. 418, § 14; Laws, 2012, ch. 382, § 88; Laws, 2014, ch. 399, § 44, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the amendment of a certificate of limited partnership. Present similar provisions are found in current § 79-14-202, above.

Cross References —

Execution of certificate, see § 79-14-204.

Filing of “amended and restated” and “restated” certificates of limited partnership, see § 79-14-210.

Mississippi Entity Conversion and Domestication Act, see § 79-37-101 et seq.

Liability, as general partner, of person who has ceased to be general partner, until amended certificate of limited partnership is filed pursuant to this section, see § 79-14-402.

Filing fees, see § 79-14-1104.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 797, 798 et seq.

CJS.

68 C.J.S., Partnership §§ 574, 595.

JUDICIAL DECISIONS

1.-2. [Reserved for future use.]

3. Required filing with Secretary of State.

1.-2. [Reserved for future use.]

3. Required filing with Secretary of State.

Deceased general partner did not validly assign a general partnership interest to a conservator because a schedule listing the conservator as a general partner was not filed with the Secretary of State, as the limited partnership agreement, Miss. Code Ann. § 79-14-105(c)(3)(B), and former Miss. Code Ann. § 79-14-202(c)(1) [now § 79-14-202(d)(1)] required. Smith v. Maggie Mae, L.P., 225 So.3d 1243, 2016 Miss. App. LEXIS 267 (Miss. Ct. App. 2016), cert. denied, 216 So.3d 1149, 2017 Miss. LEXIS 213 (Miss. 2017).

§79-14-203. Signing of records to be delivered for filing to Secretary of State.

A record delivered to the Secretary of State for filing pursuant to this chapter must be signed as follows:

  1. An initial certificate of limited partnership must be signed by all general partners listed in the certificate.
  2. An amendment to the certificate of limited partnership adding or deleting a statement that the limited partnership is a limited liability limited partnership must be signed by all general partners listed in the certificate.
  3. An amendment to the certificate of limited partnership designating as general partner a person admitted under Section 79-14-801(a)(3)(B) following the dissociation of a limited partnership’s last general partner must be signed by that person.
  4. An amendment to the certificate of limited partnership required by Section 79-14-802(c) following the appointment of a person to wind up the dissolved limited partnership’s activities and affairs must be signed by that person.
  5. Any other amendment to the certificate of limited partnership must be signed by:
  6. A restated certificate of limited partnership must be signed by at least one (1) general partner listed in the certificate, and, to the extent the restated certificate effects a change under any other paragraph of this subsection, the certificate must be signed in a manner that satisfies that paragraph.
  7. A statement of dissolution must be signed by all general partners listed in the certificate of limited partnership or, if the limited partnership lists no general partners, by the person appointed pursuant to Section 79-14-802(c) or (d) to wind up the dissolved limited partnership’s activities and affairs.
  8. Any other record delivered by a limited partnership to the Secretary of State for filing must be signed by at least one (1) general partner listed in the certificate of limited partnership.
  9. A statement by a person pursuant to Section 79-14-605(a)(3) stating that the person has dissociated as a general partner must be signed by that person.
  10. A statement of negation by a person pursuant to Section 79-14-306 must be signed by that person.
  11. Any other record delivered on behalf of a person to the Secretary of State for filing must be signed by that person.

At least one (1) general partner listed in the certificate;

Each other person designated in the amendment as a new general partner; and

Each person that the amendment indicates has dissociated as a general partner, unless:

The person is deceased or a guardian or general conservator has been appointed for the person and the amendment so states; or

The person has previously delivered to the Secretary of State for filing a statement of dissociation.

Any record delivered for filing under this chapter may be signed by an agent. Whenever this chapter requires a particular individual to sign a record and the individual is deceased or incompetent, the record may be signed by a legal representative of the individual.

A person that signs a record as an agent or legal representative thereby affirms as a fact that the person is authorized to sign the record.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-203 [Laws, 1987, ch. 488, § 203; Laws, 1997, ch. 418, § 15, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the dissolution and cancellation of a limited partnership. For present provisions relating to dissolution of a limited partnership, see §§ 79-14-801 through 79-14-813.

Cross References —

Execution of certificate, see § 79-14-204.

Attachments to certificate of cancellation following merger or consolidation, where surviving or resulting entity is foreign limited partnership, see § 79-14-211.

Authority of persons winding up limited partnership’s affairs until filing of certificate of cancellation as provided in this section, see § 79-14-803.

Filing fees, see § 79-14-1104.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

§79-14-204. Signing and filing pursuant to judicial order.

If a person required by this chapter to sign a record or deliver a record to the Secretary of State for filing under this chapter does not do so, any other person that is aggrieved may petition the Chancery Court of the First Judicial District of Hinds County, Mississippi to order:

  1. The person to sign the record;
  2. The person to deliver the record to the Secretary of State for filing; or
  3. The Secretary of State to file the record unsigned.

If a petitioner under subsection (a) is not the limited partnership or foreign limited partnership to which the record pertains, the petitioner shall make the partnership or foreign partnership a party to the action.

A record filed under subsection (a)(3) is effective without being signed.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-204 [Laws, 1987, ch. 488, § 204; Laws, 1994, ch. 417, § 6; Laws, 1995, ch. 362, § 3; Laws, 1997, ch. 418, § 16; Laws, 2014, ch. 399, § 45, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the execution of a certificate of limited partnership. For present similar provisions, see § 79-14-203.

Cross References —

Judicial relief in event that person required by this section to execute certificate fails or refuses to do so, see § 79-14-205.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

§79-14-205. Liability for inaccurate information in filed record.

If a record delivered to the Secretary of State for filing under this chapter and filed by the Secretary of State contains inaccurate information, a person that suffers loss by reliance on the information may recover damages for the loss from:

  1. A person that signed the record, or caused another to sign it on the person’s behalf, and knew the information to be inaccurate at the time the record was signed; and
  2. A general partner if:

The record was delivered for filing on behalf of the partnership; and

The general partner knew or had notice of the inaccuracy for a reasonably sufficient time before the information was relied upon so that, before the reliance, the general partner reasonably could have:

Effected an amendment under Section 79-14-202;

Filed a petition under Section 79-14-204; or

Delivered to the Secretary of State for filing a statement of change under Section 79-35-8 or a statement of correction under Section 79-14-209.

An individual who signs a record authorized or required to be filed under this chapter affirms under penalty of perjury that the information stated in the record is accurate.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-205 [Laws, 1987, ch. 488, § 205, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to amendment, dissolution or cancellation by judicial act. For present similar provisions, see § 79-14-204.

Cross References —

Liability of general partner for failure to timely file petition for amendment, dissolution, or cancellation, see § 79-14-207.

RESEARCH REFERENCES

CJS.

68 C.J.S., Partnership § 575.

§79-14-206. Filing requirements.

To be filed by the Secretary of State pursuant to this chapter, a record must be received by the Secretary of State, must comply with this chapter, and satisfy the following:

  1. The filing of the record must be required or permitted by this chapter.
  2. The record must be physically delivered in written form unless and to the extent the Secretary of State permits electronic delivery of records.
  3. The words in the record must be in English, and numbers must be in Arabic or Roman numerals, but the name of an entity need not be in English if written in English letters or Arabic or Roman numerals.
  4. The record must be signed by a person authorized or required under this chapter to sign the record.
  5. The record must state the name and capacity, if any, of each individual who signed it, either on behalf of the individual or the person authorized or required to sign the record, but need not contain a seal, attestation, acknowledgment, or verification.

If law other than this chapter prohibits the disclosure by the Secretary of State of information contained in a record delivered to the Secretary of State for filing, the Secretary of State shall file the record if the record otherwise complies with this chapter but may redact the information.

When a record is delivered to the Secretary of State for filing, any fee required under this chapter and any fee, tax, interest, or penalty required to be paid under this chapter or law other than this chapter must be paid in a manner permitted by the Secretary of State or by that law.

The Secretary of State may require that a record delivered in written form be accompanied by an identical or conformed copy.

The Secretary of State may provide forms for filings required or permitted to be made by this chapter, but, except as otherwise provided in subsection (f), their use is not required.

The Secretary of State may require that a cover sheet for a filing be on a form prescribed by the Secretary of State.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-206 [Laws, 1987, ch. 488, § 206; Laws, 1990, ch. 385, § 2; Laws, 1995, ch. 362, § 4; Laws, 1997, ch. 418, § 17, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the filing of a certificate of limited partnership and certificates of amendment, dissolution or cancellation with the Secretary of State. For present similar provisions, see § 79-14-210.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Delivery of copies of certificates to limited partners after filing pursuant to this section, see § 79-14-209.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

RESEARCH REFERENCES

CJS.

68 C.J.S., Partnership § 573.

§79-14-207. Effective date and time.

Except as otherwise provided in Section 79-14-208 and subject to Section 79-14-209(d), a record filed under this chapter is effective:

  1. On the date and at the time of its filing by the Secretary of State, as provided in Section 79-14-210(b);
  2. On the date of filing and at the time specified in the record as its effective time, if later than the time under paragraph (1);
  3. At a specified delayed effective date and time, which may not be more than ninety (90) days after the date of filing; or
  4. If a delayed effective date is specified, but no time is specified, at 12:01 a.m. on the date specified, which may not be more than ninety (90) days after the date of filing.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-207 [Laws, 1987, ch. 488, § 207; Laws, 1997, ch. 418, § 18; Laws, 2012, ch. 382, § 89, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to liability for false statements in a certificate of limited partnership or certificate of amendment, dissolution or cancellation. For present similar provisions, see § 79-14-205.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (a)(2), added “or to file a statement of change of agent pursuant to Section 79-35-8” at the end and made a related change.

Cross References —

Assignor’s liability to partnership under this section, where assignee of partnership interest has become limited partner, see § 79-14-704.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership § 834.

§79-14-208. Withdrawal of filed record before effectiveness.

Except as otherwise provided in Article 11, or the Mississippi Entity Conversion and Domestication Act, a record delivered to the Secretary of State for filing may be withdrawn before it takes effect by delivering to the Secretary of State for filing a statement of withdrawal.

A statement of withdrawal must:

  1. Be signed by each person that signed the record being withdrawn, except as otherwise agreed by those persons;
  2. Identify the record to be withdrawn; and
  3. If signed by fewer than all the persons that signed the record being withdrawn, state that the record is withdrawn in accordance with the agreement of all the persons that signed the record.

On filing by the Secretary of State of a statement of withdrawal, the action or transaction evidenced by the original record does not take effect.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-208 [Laws, 1987, ch. 488, § 208, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided that a certificate of limited partnership on file with the office of the Secretary of State was notice that the partnership was a limited partnership and that a person designated in the certificate as general partner was a general partner. For present similar provisions, see § 79-14-103.

Cross References —

Mississippi Entity Conversion and Domestication Act, see § 79-37-101 et seq.

§79-14-209. Correcting filed record.

A person on whose behalf a filed record was delivered to the Secretary of State for filing may correct the record if:

  1. The record at the time of filing was inaccurate;
  2. The record was defectively signed; or
  3. The electronic transmission of the record to the Secretary of State was defective.
  4. Must specify the inaccuracy or defect to be corrected; and
  5. Must correct the inaccuracy or defect.

To correct a filed record, a person on whose behalf the record was delivered to the Secretary of State must deliver to the Secretary of State for filing a statement of correction.

A statement of correction:

May not state a delayed effective date;

Must be signed by the person correcting the filed record;

Must identify the filed record to be corrected;

A statement of correction is effective as of the effective date of the filed record that it corrects except for purposes of Section 79-14-103(d) and as to persons relying on the uncorrected filed record and adversely affected by the correction. For those purposes and as to those persons, the statement of correction is effective when filed.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-209 [Laws, 1987, ch. 488, § 209; Laws, 1997, ch. 418, § 19, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the delivery of certificates of limited partnership to limited partners.

§79-14-210. Duty of Secretary of State to file; review of refusal to file; delivery of record by Secretary of State.

The Secretary of State shall file a record delivered to the Secretary of State for filing which satisfies this chapter. The duty of the Secretary of State under this section is ministerial.

When the Secretary of State files a record, the Secretary of State shall record it as filed on the date and at the time of its delivery. After filing a record, the Secretary of State shall deliver to the person that submitted the record a copy of the record with an acknowledgment of the date and time of filing.

If the Secretary of State refuses to file a record, the Secretary of State shall, not later than fifteen (15) business days after the record is delivered:

  1. Return the record or notify the person that submitted the record of the refusal; and
  2. Provide a brief explanation in a record of the reason for the refusal.
  3. To the principal office of the person; or
  4. To another address the person provides to the Secretary of State for delivery.

If the Secretary of State refuses to file a record, the person that submitted the record may petition the Chancery Court of the First Judicial District of Hinds County, Mississippi, to compel filing of the record. The record and the explanation of the Secretary of State of the refusal to file must be attached to the petition. The court may decide the matter in a summary proceeding.

The filing of or refusal to file a record does not:

Affect the validity or invalidity of record in whole or in part; or

Create a presumption that the information contained in the record is correct or incorrect.

Except as otherwise provided by Section 79-35-13 or by law other than this chapter, the Secretary of State may deliver any record to a person by delivering it:

In person to the person that submitted it;

To the address of the person’s registered agent;

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-210 [Laws, 1987, ch. 488, § 210; Laws, 1997, ch. 418, § 20, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to restated certificates of limited partnership.

Cross References —

Execution of certificate, see § 79-14-204.

Filing fees, see § 79-14-1104.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

§79-14-211. Certificate of good standing or registration.

On request of any person, the Secretary of State shall issue a certificate of good standing for a limited partnership or a certificate of registration for a registered foreign limited partnership.

A certificate under subsection (a) must state:

  1. The limited partnership’s name or the registered foreign limited partnership’s name used in this state;
  2. In the case of a limited partnership:
  3. In the case of a registered foreign limited partnership, that it is registered to do business in this state;
  4. That all fees, taxes, interest, and penalties owed to this state by the limited partnership or the foreign partnership and collected through the Secretary of State have been paid, if:
  5. Other facts reflected in the records of the Secretary of State pertaining to the limited partnership or foreign limited partnership which the person requesting the certificate reasonably requests.

That a certificate of limited partnership has been filed and has taken effect;

The date the certificate became effective;

The period of the partnership’s duration if the records of the Secretary of State reflect that its period of duration is less than perpetual; and

That:

No statement of dissolution or statement of administrative dissolution has been filed;

The records of the Secretary of State do not otherwise reflect that the partnership has been dissolved or terminated; and

A proceeding is not pending under Section 79-14-811;

Payment is reflected in the records of the Secretary of State; and

Nonpayment affects the good standing or registration of the partnership or foreign partnership; and

Subject to any qualification stated in the certificate, a certificate issued by the Secretary of State under subsection (a) may be relied on as conclusive evidence of the facts stated in the certificate.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-211 [Laws, 1987, ch. 488, § 211; Laws, 2000, ch. 469, § 41, effective from and after July 1, 2000; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the merger and consolidation of a limited partnership. For present similar provisions relating to mergers, see §§ 79-14-1101 through 79-14-1113.

Amendment Notes —

The 2000 amendment rewrote the section.

Cross References —

Requirement that certificate of cancellation be filed upon completion of winding up of affairs or upon merger or consolidation, see § 79-14-203.

Article 3. Limited Partners.

§79-14-301. Becoming limited partner.

Upon formation of a limited partnership, a person becomes a limited partner as agreed among the persons that are to be the initial partners.

After formation, a person becomes a limited partner:

  1. As provided in the partnership agreement;
  2. As the result of a transaction effective under Article 11;
  3. With the affirmative vote or consent of all the partners; or
  4. As provided in Section 79-14-801(a)(4) or (a)(5).

A person may become a limited partner without:

Acquiring a transferable interest; or

Making or being obligated to make a contribution to the limited partnership.

HISTORY: Laws, 2015, ch. 453, § 1, effective July 1, 2015.

Editor’s Notes —

A former § 79-14-301 [Laws, 1987, ch. 488, § 301, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to admission of limited partners.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 901, 903.

CJS.

68 C.J.S., Partnership § 589.

§79-14-302. No agency power of limited partner as limited partner.

A limited partner is not an agent of a limited partnership solely by reason of being a limited partner.

A person’s status as a limited partner does not prevent or restrict law other than this chapter from imposing liability on a limited partnership because of the person’s conduct.

HISTORY: Laws, 2015, ch. 453, § 1, eff from July 1, 2015.

Editor’s Notes —

A former § 79-14-302 [Laws, 1987, ch. 488, § 302, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to classes or groups of limited partners.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 841-843.

§79-14-303. No liability as limited partner for limited partnership obligations.

A debt, obligation, or other liability of a limited partnership is not the debt, obligation, or other liability of a limited partner. A limited partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the partnership solely by reason of being or acting as a limited partner, even if the limited partner participates in the management and control of the limited partnership. This subsection applies regardless of the dissolution of the partnership.

The failure of a limited partnership to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a limited partner for a debt, obligation, or other liability of the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-303 [Laws, 1987, ch. 488, § 303, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the liability of limited partners to third parties.

Cross References —

Provision that, subject to this section, voting rights may be granted to all or certain identified limited partners or to specified classes or groups, see § 79-14-302.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 866, 874, 878, 879.

19 Am. Jur. Pl & Pr Forms (Rev), Partnership, Form 349.

CJS.

68 C.J.S., Partnership §§ 591 et seq.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-13-121.

11. In general.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-13-121.

11. In general.

Special partner held not to become liable as a general partner because, on general partner becoming sick, he looked over the business, examined the firm’s books, and stated that he expected to close out the business to pay creditors. E. C. Cropper & Co. v. Illinois Sewing Mach. Co., 100 Miss. 127, 54 So. 849, 1911 Miss. LEXIS 3 (Miss. 1911).

§79-14-304. Rights to information of limited partner and person dissociated as limited partner.

On ten (10) days’ demand, made in a record received by the limited partnership, a limited partner may inspect and copy required information during regular business hours in the limited partnership’s principal office. The limited partner need not have any particular purpose for seeking the information.

During regular business hours and at a reasonable location specified by the limited partnership, a limited partner may inspect and copy information regarding the activities, affairs, financial condition, and other circumstances of the limited partnership as is just and reasonable if:

  1. The limited partner seeks the information for a purpose reasonably related to the partner’s interest as a limited partner;
  2. The limited partner makes a demand in a record received by the limited partnership, describing with reasonable particularity the information sought and the purpose for seeking the information; and
  3. The information sought is directly connected to the limited partner’s purpose.

Not later than ten (10) days after receiving a demand pursuant to subsection (b), the limited partnership shall inform in a record the limited partner that made the demand of:

What information the partnership will provide in response to the demand and when and where the partnership will provide the information; and

The partnership’s reasons for declining, if the partnership declines to provide any demanded information.

Whenever this chapter or a partnership agreement provides for a limited partner to vote on or give or withhold consent to a matter, before the vote is cast or consent is given or withheld, the limited partnership shall, without demand, provide the limited partner with all information that is known to the partnership and is material to the limited partner’s decision.

Subject to subsection (j), on ten (10) days’ demand made in a record received by a limited partnership, a person dissociated as a limited partner may have access to information to which the person was entitled while a limited partner if:

The information pertains to the period during which the person was a limited partner;

The person seeks the information in good faith; and

The person satisfies the requirements imposed on a limited partner by subsection (b).

A limited partnership shall respond to a demand made pursuant to subsection (e) in the manner provided in subsection (c).

A limited partnership may charge a person that makes a demand under this section reasonable costs of copying, limited to the costs of labor and material.

A limited partner or person dissociated as a limited partner may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the partnership agreement or under subsection (j) applies both to the agent or legal representative and to the limited partner or person dissociated as a limited partner.

Subject to Section 79-14-704, the rights under this section do not extend to a person as transferee.

In addition to any restriction or condition stated in its partnership agreement, a limited partnership, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-304 [Laws, 1987, ch. 488, § 304, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to persons who make contributions to business enterprises and erroneously believe in good faith that they are limited partners. For present similar provisions, see § 79-14-306.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 884, 885.

CJS.

68 C.J.S., Partnership § 597.

§79-14-305. Limited duties of limited partners.

A limited partner shall discharge any duties to the partnership and the other partners under the partnership agreement and exercise any rights under this chapter or the partnership agreement consistently with the contractual obligation of good faith and fair dealing.

Except as otherwise provided in subsection (a), a limited partner does not have any duty to the limited partnership or to any other partner solely by reason of acting as a limited partner.

If a limited partner enters into a transaction with a limited partnership, the limited partner’s rights and obligations arising from the transaction are the same as those of a person that is not a partner.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-305 [Laws, 1987, ch. 488, § 305, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to rights to information of limited partners. For present similar provisions, see § 79-14-304.

RESEARCH REFERENCES

ALR.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

JUDICIAL DECISIONS

1. Accounting.

Statute providing that limited partner was to have right to accounting on same basis as general partner, “whenever circumstances render it just and reasonable,” did not create absolute right to accounting. Wholey v. Cal-Maine Foods, 700 So. 2d 291, 1997 Miss. LEXIS 300 (Miss. 1997).

§79-14-306. Person erroneously believing self to be limited partner.

Except as otherwise provided in subsection (b), a person that makes an investment in a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise is not liable for the enterprise’s obligations by reason of making the investment, receiving distributions from the enterprise, or exercising any rights of or appropriate to a limited partner, if, on ascertaining the mistake, the person:

  1. Causes an appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the Secretary of State for filing; or
  2. Withdraws from future participation as an owner in the enterprise by signing and delivering to the Secretary of State for filing a statement of negation under this section.

A person that makes an investment described in subsection (a) is liable to the same extent as a general partner to any third party that enters into a transaction with the enterprise, believing in good faith that the person is a general partner, before the Secretary of State files a statement of negation, certificate of limited partnership, amendment, or statement of correction to show that the person is not a general partner.

If a person makes a diligent effort in good faith to comply with subsection (a)(1) and is unable to cause the appropriate certificate of limited partnership, amendment, or statement of correction to be signed and delivered to the Secretary of State for filing, the person has the right to withdraw from the enterprise pursuant to subsection (a)(2) even if the withdrawal would otherwise breach an agreement with others that are or have agreed to become co-owners of the enterprise.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 4. General Partners.

§79-14-401. Becoming general partner.

Upon formation of a limited partnership, a person becomes a general partner as agreed among the persons that are to be the initial partners.

After formation of a limited partnership, a person becomes a general partner:

  1. As provided in the partnership agreement;
  2. As the result of a transaction effective under Article 11;
  3. With the affirmative vote or consent of all the partners; or
  4. Under Section 79-14-801(a)(3)(B) following the dissociation of a limited partnership’s last general partner.

A person may become a general partner without:

Acquiring a transferable interest; or

Making or being obligated to make a contribution to the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-401 [Laws, 1987, ch. 488, § 401, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the admission of additional general partners. Present similar provisions are found in current § 79-14-401, above.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 817, 818.

CJS.

68 C.J.S., Partnership § 589.

§79-14-402. General partner agent of limited partnership.

Each general partner is an agent of the limited partnership for the purposes of its activities and affairs. An act of a general partner, including the signing of a record in the partnership’s name, for apparently carrying on in the ordinary course the partnership’s activities and affairs or activities and affairs of the kind carried on by the partnership binds the partnership, unless the general partner did not have authority to act for the partnership in the particular matter and the person with which the general partner was dealing knew or had notice that the general partner lacked authority.

An act of a general partner which is not apparently for carrying on in the ordinary course the limited partnership’s activities and affairs or activities and affairs of the kind carried on by the partnership binds the partnership only if the act was actually authorized by all the other partners.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-402 [Laws, 1987, ch. 488, § 402, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to events upon the occurrence of which a person ceases to be a general partner of a limited partnership. For present similar provisions relating to dissociation as a general partner, see § 79-14-603.

Cross References —

Incorporation of provisions of this section into definition of “event of withdrawal of a general partner” for purposes of this chapter, see § 79-14-101.

Provision that no person shall be liable, except as provided in this section, where an amendment to a certificate of limited partnership or other document is filed within 30 days of event necessitating it, see §§ 79-14-202 and 79-14-207.

Effects of withdrawal of general partner, see § 79-14-602.

Assignor’s liability to partnership under this section, where assignee of partnership interest has become limited partner, see § 79-14-704.

§79-14-403. Limited partnership liable for general partner’s actionable conduct.

A limited partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a general partner acting in the ordinary course of activities and affairs of the partnership or with the actual or apparent authority of the partnership.

If, in the course of a limited partnership’s activities and affairs or while acting with actual or apparent authority of the partnership, a general partner receives or causes the partnership to receive money or property of a person not a partner, and the money or property is misapplied by a general partner, the partnership is liable for the loss.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-403 [Laws, 1987, ch. 488, § 403, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the general powers and liabilities of general partners. For present similar provisions, see §§ 79-14-404, 79-14-405 and 79-14-406.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 841 et seq.

CJS.

68 C.J.S., Partnership §§ 583, 584.

JUDICIAL DECISIONS

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-3-117.

11. Validity of partnership.

I. Under Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-3-117.

11. Validity of partnership.

Where a husband and wife created a limited partnership valid under this section [Code 1942, § 5560] for the conduct of their business and each reported income as their share of profits as set forth in a written agreement, this partnership was valid for income tax purposes despite the fact that wife exercised no management or control and that the parties did not equally draw cash for personal use. Marcus v. Commissioner, 201 F.2d 850, 1953 U.S. App. LEXIS 4213 (5th Cir. Miss. 1953).

§79-14-404. General partner’s liability.

Except as otherwise provided in subsections (b) and (c), all general partners are liable jointly and severally for all debts, obligations, and other liabilities of the limited partnership unless otherwise agreed by the claimant or provided by law.

A person that becomes a general partner is not personally liable for a debt, obligation, or other liability of the limited partnership incurred before the person became a general partner.

A debt, obligation, or other liability of a limited partnership incurred while the partnership is a limited liability limited partnership is solely the debt, obligation, or other liability of the limited liability limited partnership. A general partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the limited liability limited partnership solely by reason of being or acting as a general partner. This subsection applies:

  1. Despite anything inconsistent in the partnership agreement that existed immediately before the vote or consent required to become a limited liability limited partnership under Section 79-14-406(b)(2); and
  2. Regardless of the dissolution of the partnership.

The failure of a limited liability limited partnership to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a general partner for a debt, obligation, or other liability of the partnership.

An amendment of a certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership does not affect the limitation in this section on the liability of a general partner for a debt, obligation, or other liability of the limited partnership incurred before the amendment became effective.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-404 [Laws, 1987, ch. 488, § 404, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to contributions by a general partner. For present similar provisions relating to contributions and distributions, see §§ 79-14-501 through 79-14-505.

Cross References —

Powers of general partner, see § 79-14-403.

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred, see § 79-14-809.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 841 et seq.

CJS.

68 C.J.S., Partnership § 588.

§79-14-405. Actions by and against partnership and partners.

To the extent not inconsistent with Section 79-14-404, a general partner may be joined in an action against the limited partnership or named in a separate action.

A judgment against a limited partnership is not by itself a judgment against a general partner. A judgment against a partnership may not be satisfied from a general partner’s assets unless there is also a judgment against the general partner.

A judgment creditor of a general partner may not levy execution against the assets of the general partner to satisfy a judgment based on a claim against the limited partnership, unless the partner is personally liable for the claim under Section 79-14-404 and:

  1. A judgment based on the same claim has been obtained against the limited partnership and a writ of execution on the judgment has been returned unsatisfied in whole or in part;
  2. The partnership is a debtor in bankruptcy;
  3. The general partner has agreed that the creditor need not exhaust partnership assets;
  4. A court grants permission to the judgment creditor to levy execution against the assets of a general partner based on a finding that partnership assets subject to execution are clearly insufficient to satisfy the judgment, that exhaustion of assets is excessively burdensome, or that the grant of permission is an appropriate exercise of the court’s equitable powers; or
  5. Liability is imposed on the general partner by law or contract independent of the existence of the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-405 [Laws, 1987, ch. 488, § 405, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to classes and groups of general partners.

§79-14-406. Management rights of general partner.

Each general partner has equal rights in the management and conduct of the limited partnership’s activities and affairs. Except as otherwise provided in this chapter, any matter relating to the activities and affairs of the partnership is decided exclusively by the general partner or, if there is more than one general partner, by a majority of the general partners.

The affirmative vote or consent of all the partners is required to:

  1. Amend the partnership agreement;
  2. Amend the certificate of limited partnership to add or delete a statement that the limited partnership is a limited liability limited partnership; and
  3. Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited partnership’s property, with or without the good will, other than in the usual and regular course of the limited partnership’s activities and affairs.

A limited partnership shall reimburse a general partner for an advance to the partnership beyond the amount of capital the general partner agreed to contribute.

A payment or advance made by a general partner which gives rise to an obligation of the limited partnership under subsection (c) or Section 79-14-408(a) constitutes a loan to the limited partnership which accrues interest from the date of the payment or advance.

A general partner is not entitled to remuneration for services performed for the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-407. Rights to information of general partner and person dissociated as general partner.

A general partner may inspect and copy required information during regular business hours in the limited partnership’s principal office, without having any particular purpose for seeking the information.

On reasonable notice, a general partner may inspect and copy during regular business hours, at a reasonable location specified by the limited partnership, any record maintained by the partnership regarding the partnership’s activities, affairs, financial condition, and other circumstances, to the extent the information is material to the general partner’s rights and duties under the partnership agreement or this chapter.

A limited partnership shall furnish to each general partner:

  1. Without demand, any information concerning the partnership’s activities, affairs, financial condition, and other circumstances which the partnership knows and is material to the proper exercise of the general partner’s rights and duties under the partnership agreement or this chapter, except to the extent the partnership can establish that it reasonably believes the general partner already knows the information; and
  2. On demand, any other information concerning the partnership’s activities, affairs, financial condition, and other circumstances, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.
  3. The person satisfies the requirements imposed on a limited partner by Section 79-14-304(b).

The duty to furnish information under subsection (c) also applies to each general partner to the extent the general partner knows any of the information described in subsection (b).

Subject to subsection (j), on ten (10) days’ demand made in a record received by a limited partnership, a person dissociated as a general partner may have access to the information and records described in subsections (a) and (b) at the locations specified in those subsections if:

The information or record pertains to the period during which the person was a general partner;

The person seeks the information or record in good faith; and

A limited partnership shall respond to a demand made pursuant to subsection (e) in the manner provided in Section 79-14-304(c).

A limited partnership may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material.

A general partner or person dissociated as a general partner may exercise the rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the partnership agreement or under subsection (j) applies both to the agent or legal representative and to the general partner or person dissociated as a general partner.

The rights under this section do not extend to a person as transferee, but if:

A general partner dies, Section 79-14-704 applies; and

An individual dissociates as a general partner under Section 79-14-603(6)(B) or (C), the legal representative of the individual may exercise the rights under subsection (c) of a person dissociated as a general partner.

In addition to any restriction or condition stated in its partnership agreement, a limited partnership, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction under this subsection, the partnership has the burden of proving reasonableness.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-408. Reimbursement; indemnification; advancement; and insurance.

A limited partnership shall reimburse a general partner for any payment made by the general partner in the course of the general partner’s activities on behalf of the partnership, if the general partner complied with Sections 79-14-406, 79-14-409, and 79-14-504 in making the payment.

A limited partnership shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person’s former or present capacity as a general partner, if the claim, demand, debt, obligation, or other liability does not arise from the person’s breach of Section 79-14-406, 79-14-409, or 79-14-504.

In the ordinary course of its activities and affairs, a limited partnership may advance reasonable expenses, including attorney’s fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person’s former or present capacity as a general partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under subsection (b).

A limited partnership may purchase and maintain insurance on behalf of a general partner against liability asserted against or incurred by the general partner in that capacity or arising from that status even if, under Section 79-14-105(c) (8), the partnership agreement could not eliminate or limit the person’s liability to the partnership for the conduct giving rise to the liability.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-409. Standards of conduct for general partners.

A general partner owes to the limited partnership and, subject to Section 79-14-901, the other partners the duties of loyalty and care stated in subsections (b) and (c).

The fiduciary duty of loyalty of a general partner includes the duties:

  1. To account to the limited partnership and hold as trustee for it any property, profit, or benefit derived by the general partner:
  2. To refrain from dealing with the partnership in the conduct or winding up of the partnership’s activities and affairs as or on behalf of a person having an interest adverse to the partnership; and
  3. To refrain from competing with the partnership in the conduct or winding up of the partnership’s activities and affairs.

In the conduct or winding up of the partnership’s activities and affairs;

From a use by the general partner of the partnership’s property; or

From the appropriation of a partnership opportunity;

The duty of care of a general partner in the conduct or winding up of the limited partnership’s activities and affairs is to refrain from engaging in grossly negligent or reckless conduct, willful or intentional misconduct, or knowing violation of law.

A general partner shall discharge the duties and obligations under this chapter or under the partnership agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.

A general partner does not violate a duty or obligation under this chapter or under the partnership agreement solely because the general partner’s conduct furthers the general partner’s own interest.

All the partners of a limited partnership may authorize or ratify, after full disclosure of all material facts, a specific act or transaction by a general partner that otherwise would violate the duty of loyalty.

It is a defense to a claim under subsection (b)(2) and any comparable claim in equity or at common law that the transaction was fair to the limited partnership.

If, as permitted by subsection (f) or the partnership agreement, a general partner enters into a transaction with the limited partnership which otherwise would be prohibited by subsection (b)(2), the general partner’s rights and obligations arising from the transaction are the same as those of a person that is not a general partner.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 5. Contributions and Distributions.

§79-14-501. Form of contribution.

A contribution may consist of property transferred to, services performed for, or another benefit provided to the limited partnership or an agreement to transfer property to, perform services for, or provide another benefit to the partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-501 [Laws, 1987, ch. 488, § 501, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the forms of contributions of partners. Present similar provisions are found in current § 79-14-501, above.

Cross References —

Liability of assignees and assignors of partnership interests with respect to making and returning contributions, inter alia, see § 79-14-704.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 868 et seq.

CJS.

68 C.J.S., Partnership § 568.

§79-14-502. Liability for contribution.

A person’s obligation to make a contribution to a limited partnership is not excused by the person’s death, disability, termination, or other inability to perform personally.

If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited partnership to contribute money equal to the value, as stated in the required information, of the part of the contribution which has not been made.

The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all the partners. If a creditor of a limited partnership extends credit or otherwise acts in reliance on an obligation described in subsection (a) without knowledge or notice of a compromise under this subsection, the creditor may enforce the obligation.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-502 [Laws, 1987, ch. 488, § 502, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to liability for contributions. Present similar provisions are found in current § 79-14-502, above.

Cross References —

Liability of assignees and assignors of partnership interests with respect to making and returning contributions, inter alia, see § 79-14-704.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

JUDICIAL DECISIONS

1. In general.

Miss. Code Ann. § 79-29-502(1) and Miss. Code Ann. § 79-14-502(a) are similar and both statutes deal with the statute of frauds. However, that was not the issue on appeal, where a minority member never promised to contribute to the limited liability company (LLC) in writing or otherwise; the subject of the dispute, a capital call, was not an obligation but a choice, and the minority member’s financial interest was properly reduced as a result of the other members’ capital contributions in a valid call for the raising of additional equity. KBL Props., LLC v. Bellin, 900 So. 2d 1160, 2005 Miss. LEXIS 211 (Miss. 2005).

§79-14-503. Sharing of and right to distributions before dissolution.

Any distribution made by a limited partnership before its dissolution and winding up must be shared among the partners on the basis of the value, as stated in the required information when the limited partnership decides to make the distribution, of the contributions the limited partnership has received from each partner, except to the extent necessary to comply with a transfer effective under Section 79-14-702 or charging order in effect under Section 79-14-703.

A person has a right to a distribution before the dissolution and winding up of a limited partnership only if the partnership decides to make an interim distribution. A person’s dissociation does not entitle the person to a distribution.

A person does not have a right to demand or receive a distribution from a limited partnership in any form other than money. Except as otherwise provided in Section 79-14-810(f), a partnership may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person’s share of distributions.

If a partner or transferee becomes entitled to receive a distribution, the partner or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited partnership with respect to the distribution. However, the partnership’s obligation to make a distribution is subject to offset for any amount owed to the partnership by the partner or a person dissociated as a partner on whose account the distribution is made.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-503 [Laws, 1987, ch. 488, § 503, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the sharing of profits and losses.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 836 et seq.

§79-14-504. Limitations on distributions.

A limited partnership may not make a distribution, including a distribution under Section 79-14-810, if after the distribution:

  1. The partnership would not be able to pay its debts as they become due in the ordinary course of the partnership’s activities and affairs; or
  2. The partnership’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the partnership were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of partners and transferees whose preferential rights are superior to the rights of persons receiving the distribution.
  3. In all other cases, as of the date:

A limited partnership may base a determination that a distribution is not prohibited under subsection (a) on:

Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or

A fair valuation or other method that is reasonable under the circumstances.

Except as otherwise provided in subsection (e), the effect of a distribution under subsection (a) is measured:

In the case of a distribution as defined in Section 79-14-102(4)(A), as of the earlier of:

The date money or other property is transferred or debt is incurred by the limited partnership; or

The date the person entitled to the distribution ceases to own the interest or right being acquired by the partnership in return for the distribution;

In the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and

The distribution is authorized, if the payment occurs not later than one hundred twenty (120) days after that date; or

The payment is made, if the payment occurs more than one hundred twenty (120) days after the distribution is authorized.

A limited partnership’s indebtedness to a partner or transferee incurred by reason of a distribution made in accordance with this section is at parity with the partnership’s indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.

A limited partnership’s indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.

In measuring the effect of a distribution under Section 79-14-810, the liabilities of a dissolved limited partnership do not include any claim that has been disposed of under Section 79-14-806, 79-14-807, or 79-14-808.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-504 [Laws, 1987, ch. 488, § 504, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the sharing of distributions. For present similar provisions, see § 79-14-503.

§79-14-505. Liability for improper distributions.

If a general partner consents to a distribution made in violation of Section 79-14-504 and in consenting to the distribution fails to comply with Section 79-14-409, the general partner is personally liable to the limited partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section 79-14-504.

A person that receives a distribution knowing that the distribution violated Section 79-14-504 is personally liable to the limited partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section 79-14-504.

A general partner against which an action is commenced because the general partner is liable under subsection (a) may:

  1. Implead any other person that is liable under subsection (a) and seek to enforce a right of contribution from the person; and
  2. Implead any person that received a distribution in violation of subsection (b) and seek to enforce a right of contribution from the person in the amount the person received in violation of subsection (b).

An action under this section is barred unless commenced not later than two (2) years after the distribution.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 6. Dissociation.

§79-14-601. Dissociation as limited partner.

A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership.

A person is dissociated as a limited partner when:

  1. The limited partnership knows or has notice of the person’s express will to withdraw as a limited partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date;
  2. An event stated in the partnership agreement as causing the person’s dissociation as a limited partner occurs;
  3. The person is expelled as a limited partner pursuant to the partnership agreement;
  4. The person is expelled as a limited partner by the affirmative vote or consent of all the other partners if:
  5. On application by the limited partnership or a partner in a direct action under Section 79-14-901, the person is expelled as a limited partner by judicial order because the person:
  6. In the case of an individual, the individual dies;
  7. In the case of a person that is a testamentary or inter vivos trust or is acting as a limited partner by virtue of being a trustee of such a trust, the trust’s entire transferable interest in the limited partnership is distributed;
  8. In the case of a person that is an estate or is acting as a limited partner by virtue of being a personal representative of an estate, the estate’s entire transferable interest in the limited partnership is distributed;
  9. In the case of a person that is not an individual, the existence of the person terminates;
  10. The limited partnership participates in a merger under Article 11 and:
  11. The limited partnership participates in a conversion under the Mississippi Entity Conversion and Domestication Act;
  12. The limited partnership participates in a domestication under the Mississippi Entity Conversion and Domestication Act and, as a result of the domestication, the person ceases to be a limited partner; or
  13. The limited partnership dissolves and completes winding up.

It is unlawful to carry on the limited partnership’s activities and affairs with the person as a limited partner;

There has been a transfer of all the person’s transferable interest in the partnership, other than:

A transfer for security purposes; or

A charging order in effect under Section 79-14-703 which has not been foreclosed;

The person is an entity and:

The partnership notifies the person that it will be expelled as a limited partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person’s charter or the equivalent has been revoked, or the person’s right to conduct business has been suspended by the person’s jurisdiction of formation; and

Not later than ninety (90) days after the notification, the statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, the person has not been reinstated, or the person’s charter or the equivalent or right to conduct business has not been reinstated; or

The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up;

Has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership’s activities and affairs;

Has committed willfully or persistently, or is committing willfully and persistently, a material breach of the partnership agreement or the contractual obligation of good faith and fair dealing under Section 79-14-305(a); or

Has engaged or is engaging in conduct relating to the partnership’s activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a limited partner;

The partnership is not the surviving entity; or

Otherwise as a result of the merger, the person ceases to be a limited partner;

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-601 [Laws, 1987, ch. 488, § 601, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to interim distributions. For present provisions relating to distributions, see §§ 79-14-503 through 79-14-505.

Cross References —

Liability of assignees and assignors of partnership interests with respect to making and returning contributions, inter alia, see § 79-14-704.

Satisfaction, upon winding up of limited partnership, of liabilities to for distributions to partners under this section or § 79-14-604, see § 79-14-804.

Mississippi Entity Conversion and Domestication Act, see § 79-37-101 et seq.

§79-14-602. Effect of dissociation as limited partner.

If a person is dissociated as a limited partner:

  1. Subject to Section 79-14-704, the person does not have further rights as a limited partner;
  2. The person’s contractual obligation of good faith and fair dealing as a limited partner under Section 79-14-305(a) ends with regard to matters arising and events occurring after the person’s dissociation; and
  3. Subject to Section 79-14-704 and Article 11, any transferable interest owned by the person in the person’s capacity as a limited partner immediately before dissociation is owned by the person solely as a transferee.

A person’s dissociation as a limited partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a limited partner.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-602 [Laws, 1987, ch. 488, § 602; Laws, 1990, ch. 385, § 3, effective from and after passage (approved March 13, 1990); Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the withdrawal of a general partner. For present similar provisions, see § 79-14-603.

Cross References —

Provision that person ceases to be general partner upon withdrawing from limited partnership under subsection (a) of this section, see § 79-14-402.

§79-14-603. Dissociation as general partner.

A person is dissociated as a general partner when:

  1. The limited partnership knows or has notice of the person’s express will to withdraw as a general partner, but, if the person has specified a withdrawal date later than the date the partnership knew or had notice, on that later date;
  2. An event stated in the partnership agreement as causing the person’s dissociation as a general partner occurs;
  3. The person is expelled as a general partner pursuant to the partnership agreement;
  4. The person is expelled as a general partner by the affirmative vote or consent of all the other partners if:
  5. On application by the limited partnership or a partner in a direct action under Section 79-14-901, the person is expelled as a general partner by judicial order because the person:
  6. In the case of an individual:
  7. The person:
  8. In the case of a person that is a testamentary or inter vivos trust or is acting as a general partner by virtue of being a trustee of such a trust, the trust’s entire transferable interest in the limited partnership is distributed;
  9. In the case of a person that is an estate or is acting as a general partner by virtue of being a personal representative of an estate, the estate’s entire transferable interest in the limited partnership is distributed;
  10. In the case of a person that is not an individual, the existence of the person terminates;
  11. The limited partnership participates in a merger under Article 11 and:
  12. The limited partnership participates in a conversion under the Mississippi Entity Conversion and Domestication Act;
  13. The limited partnership participates in a domestication under the Mississippi Entity Conversion and Domestication Act and, as a result of the domestication, the person ceases to be a general partner; or
  14. The limited partnership dissolves and completes winding up.

It is unlawful to carry on the limited partnership’s activities and affairs with the person as a general partner;

There has been a transfer of all the person’s transferable interest in the partnership, other than:

A transfer for security purposes; or

A charging order in effect under Section 79-14-703 which has not been foreclosed;

The person is an entity and:

The partnership notifies the person that it will be expelled as a general partner because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person’s charter or the equivalent has been revoked, or the person’s right to conduct business has been suspended by the person’s jurisdiction of formation; and

Not later than ninety (90) days after the notification, the statement of dissolution or the equivalent has not been withdrawn, rescinded, or revoked, the person has not been reinstated, or the person’s charter or the equivalent or right to conduct business has not been reinstated; or

The person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up;

Has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the partnership’s activities and affairs;

Has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or a duty or obligation under Section 79-14-409; or

Has engaged or is engaging in conduct relating to the partnership’s activities and affairs which makes it not reasonably practicable to carry on the activities and affairs of the limited partnership with the person as a general partner;

The individual dies;

A guardian or general conservator for the individual is appointed; or

A court orders that the individual has otherwise become incapable of performing the individual’s duties as a general partner under this chapter or the partnership agreement;

Becomes a debtor in bankruptcy;

Executes an assignment for the benefit of creditors; or

Seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all the person’s property;

The partnership is not the surviving entity; or

Otherwise as a result of the merger, the person ceases to be a general partner;

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-603 [Laws, 1987, ch. 488, § 603; Laws, 1998, ch. 376, § 12, effective from and after July 1, 1998; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the withdrawal of a limited partner. For present similar provisions, see § 79-14-601.

§79-14-604. Power to dissociate as general partner; wrongful dissociation.

A person has the power to dissociate as a general partner at any time, rightfully or wrongfully, by withdrawing as a general partner by express will under Section 79-14-603(1).

A person’s dissociation as a general partner is wrongful only if the dissociation:

  1. Is in breach of an express provision of the partnership agreement; or
  2. Occurs before the completion of the winding up of the limited partnership, and:

The person withdraws as a general partner by express will;

The person is expelled as a general partner by judicial order under Section 79-14-603(5);

The person is dissociated as a general partner under Section 79-14-603(7); or

In the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a general partner because it willfully dissolved or terminated.

A person that wrongfully dissociates as a general partner is liable to the limited partnership and, subject to Section 79-14-901, to the other partners for damages caused by the dissociation. The liability is in addition to any debt, obligation, or other liability of the general partner to the partnership or the other partners.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-604 [Laws, 1987, ch. 488, § 604; Laws, 1998, ch. 376, § 3, effective from and after July 1, 1998; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to distribution upon withdrawal. For present provisions relating to distributions, see §§ 79-14-503 through 79-14-505.

Cross References —

Satisfaction, upon winding up of limited partnership, of liabilities to for distributions to partners under this section or § 79-14-601, see § 79-14-804.

§79-14-605. Effect of dissociation as general partner.

If a person is dissociated as a general partner:

  1. The person’s right to participate as a general partner in the management and conduct of the limited partnership’s activities and affairs terminates;
  2. The person’s duties and obligations as a general partner under Section 79-14-409 end with regard to matters arising and events occurring after the person’s dissociation;
  3. The person may sign and deliver to the Secretary of State for filing a statement of dissociation pertaining to the person and, at the request of the limited partnership, shall sign an amendment to the certificate of limited partnership which states that the person has dissociated as a general partner; and
  4. Subject to Section 79-14-704 and Article 11, any transferable interest owned by the person in the person’s capacity as a general partner immediately before dissociation is owned by the person solely as a transferee.

A person’s dissociation as a general partner does not of itself discharge the person from any debt, obligation, or other liability to the limited partnership or the other partners which the person incurred while a general partner.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-605 [Laws, 1987, ch. 488, § 605, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to distributions in kind. For present similar provisions, see § 79-14-503.

§79-14-606. Power to bind and liability of person dissociated as general partner.

After a person is dissociated as a general partner and before the limited partnership is merged out of existence under Article 11, converted or domesticated under the Mississippi Entity Conversion and Domestication Act, or dissolved, the partnership is bound by an act of the person only if:

  1. The act would have bound the partnership under Section 79-14-402 before the dissociation; and
  2. At the time the other party enters into the transaction:

Less than two (2) years has passed since the dissociation; and

The other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner.

If a limited partnership is bound under subsection (a), the person dissociated as a general partner which caused the partnership to be bound is liable:

To the partnership for any damage caused to the partnership arising from the obligation incurred under subsection (a); and

If a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the liability.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-606 [Laws, 1987, ch. 488, § 606, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the right to receive a distribution. For present similar provisions, see § 79-14-503.

§79-14-607. Liability of person dissociated as general partner to other persons.

A person’s dissociation as a general partner does not of itself discharge the person’s liability as a general partner for a debt, obligation, or other liability of the limited partnership incurred before dissociation. Except as otherwise provided in subsections (b) and (c), the person is not liable for a partnership obligation incurred after dissociation.

A person whose dissociation as a general partner results in a dissolution and winding up of the limited partnership’s activities and affairs is liable on an obligation incurred by the partnership under Section 79-14-805 to the same extent as a general partner under Section 79-14-404.

A person that is dissociated as a general partner without the dissociation resulting in a dissolution and winding up of the limited partnership’s activities and affairs is liable on a transaction entered into by the partnership after the dissociation only if:

  1. A general partner would be liable on the transaction; and
  2. At the time the other party enters into the transaction:

Less than two (2) years has passed since the dissociation; and

The other party does not have knowledge or notice of the dissociation and reasonably believes that the person is a general partner.

By agreement with a creditor of a limited partnership and the partnership, a person dissociated as a general partner may be released from liability for a debt, obligation, or other liability of the partnership.

A person dissociated as a general partner is released from liability for a debt, obligation, or other liability of the limited partnership if the partnership’s creditor, with knowledge or notice of the person’s dissociation as a general partner but without the person’s consent, agrees to a material alteration in the nature or time of payment of the debt, obligation, or other liability.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-607 [Laws, 1987, ch. 488, § 607, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to limitations on distributions. For present similar provisions, see § 79-14-504.

Cross References —

Partner’s entitlement to remedies available to creditor of limited partnership, when he becomes entitled to distribution, subject to this section and § 79-14-804, see § 79-14-606.

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred, see § 79-14-809.

§79-14-608. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-608 [Laws, 1987, ch. 488, § 608, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to liability upon return of a partner’s contribution.

Article 7. Transferable Interests and Rights of Transferees and Creditors.

§79-14-701. Nature of transferable interest.

A transferable interest is personal property.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-701 [Laws, 1987, ch. 488, § 701; Laws, 2014, ch. 399, § 46, effective from and after January 1, 2015; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the nature of a partnership interest. Present similar provisions are found in current § 79-14-701, above.

§79-14-702. Transfer of transferable interest.

A transfer, in whole or in part, of a transferable interest:

  1. Is permissible;
  2. Does not by itself cause a partner’s dissociation or a dissolution and winding up of the limited partnership’s activities and affairs; and
  3. Subject to Section 79-14-704, does not entitle the transferee to:

Participate in the management or conduct of the partnership’s activities and affairs; or

Except as otherwise provided in subsection (c), have access to required information, records, or other information concerning the partnership’s activities and affairs.

A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

In a dissolution and winding up of a limited partnership, a transferee is entitled to an account of the partnership’s transactions only from the date of dissolution.

A transferable interest may be evidenced by a certificate of the interest issued by a limited partnership in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.

A limited partnership need not give effect to a transferee’s rights under this section until the partnership knows or has notice of the transfer.

A transfer of a transferable interest in violation of a restriction on transfer contained in the partnership agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer.

Except as otherwise provided in Sections 79-14-601(b)(4)(B) and 79-14-603(4)(B), if a general or limited partner transfers a transferable interest, the transferor retains the rights of a general or limited partner other than the transferable interest transferred and retains all the duties and obligations of a general or limited partner.

If a general or limited partner transfers a transferable interest to a person that becomes a general or limited partner with respect to the transferred interest, the transferee is liable for the transferor’s obligations under Sections 79-14-502 and 79-14-505 known to the transferee when the transferee becomes a partner.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-702 [Laws, 1987, ch. 488, § 702, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to assignments of partnership interests. Present provisions relating to the transfer of a transferable interest are found in current § 79-14-702, above.

Cross References —

Provision that person ceases to be general partner when he ceases to be member of limited partnership pursuant to this section, see § 79-14-402.

Sale, assignment or other disposition or other dispositon of any interest in limited partnership that holds state gaming license, see § 75-76-223.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 819, 820 et seq.

§79-14-703. Charging order.

On application by a judgment creditor of a partner or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor’s transferable interest and requires the limited partnership to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.

To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a), the court may:

  1. Appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and
  2. Make all other orders necessary to give effect to the charging order.

Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. The purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a partner, and is subject to Section 79-14-702.

At any time before foreclosure under subsection (c), the partner or transferee whose transferable interest is subject to a charging order under subsection (a) may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

At any time before foreclosure under subsection (c), a limited partnership or one or more partners whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

This chapter does not deprive any partner or transferee of the benefit of any exemption law applicable to the transferable interest of the partner or transferee.

This section provides the exclusive remedy by which a person seeking, in the capacity of a judgment creditor, to enforce a judgment against a partner or transferee may satisfy the judgment from the judgment debtor’s transferable interest.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-703 [Laws, 1987, ch. 488, § 703, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the rights of a creditor of a partner. For present provisions relating to actions by and against partnerships and partners, see § 79-14-405.

RESEARCH REFERENCES

CJS.

68 C.J.S., Partnership § 601.

JUDICIAL DECISIONS

I. Current Law.

1.-10. [Reserved for future use.]

II. Under Former §79-13-37.

11. In general.

I. Current Law.

1.-10. [Reserved for future use.]

II. Under Former § 79-13-37.

11. In general.

The trial court properly revoked its order directing the sale of a debtor’s 47 percent interest in partnerships, where individuals received a 99.7 percent interest in the partnerships before a writ of fieri facias was served on the debtor, which transfer of ownership effectively cut off a creditor bank’s ability to reach the 47 percent interest in the partnership previously owned by the debtor. Grenada Bank v. Willey, 694 F.2d 85, 1982 U.S. App. LEXIS 23152 (5th Cir. Miss. 1982).

§79-14-704. Power to legal representative of deceased partner.

If a partner dies, the deceased partner’s legal representative may exercise:

  1. The rights of a transferee provided in Section 79-14-702(c); and
  2. For the purposes of settling the estate, the rights of a current limited partner under Section 79-14-304.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-704 [Laws, 1987, ch. 488, § 704, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the right of an assignee to become a limited partner.

Cross References —

Admission of assignee of partnership interest as additional limited partner, see § 79-14-301.

Applicability of this section to limited partnerships formed prior to the effective date of the Mississippi Limited Partnership Act, see § 79-14-1106.

§79-14-705. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

§79-14-705 [Laws, 1987, ch. 488, § 705, effective from and after January 1, 1988]

Editor’s Notes —

Former § 79-14-705 related to the power of the estate of a deceased or incompetent partner. For present similar provisions, see § 79-14-704.

§79-14-706. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

§79-14-706 [Laws, 2010, ch. 506, § 42, effective from and after July 1, 2010]

Editor’s Notes —

Former § 79-14-706 related to the enforceability of limitations on assignments of limited partnership interests.

Article 8. Dissolution and Winding Up.

§79-14-801. Events causing dissolution.

A limited partnership is dissolved, and its activities and affairs must be wound up, upon the occurrence of any of the following:

  1. An event or circumstance that the partnership agreement states causes dissolution;
  2. The affirmative vote or consent of all general partners and of limited partners owning a majority of the rights to receive distributions as limited partners at the time the vote or consent is to be effective;
  3. After the dissociation of a person as a general partner:
  4. The passage of ninety (90) consecutive days after the dissociation of the partnership’s last limited partner, unless before the end of the period the partnership admits at least one (1) limited partner;
  5. The passage of ninety (90) consecutive days during which the partnership has only one (1) partner, unless before the end of the period:
  6. On application by a partner, the entry by the chancery court for the county in which the office of the limited partnership is located of an order dissolving the partnership on the grounds that:
  7. The signing and filing of a statement of administrative dissolution by the Secretary of State under Section 79-14-811.

If the partnership has at least one (1) remaining general partner, the affirmative vote or consent to dissolve the partnership not later than ninety (90) days after the dissociation by partners owning a majority of the rights to receive distributions as partners at the time the vote or consent is to be effective; or

If the partnership does not have a remaining general partner, the passage of ninety (90) days after the dissociation, unless before the end of the period:

Consent to continue the activities and affairs of the partnership and admit at least one (1) general partner is given by limited partners owning a majority of the rights to receive distributions as limited partners at the time the consent is to be effective; and

At least one (1) person is admitted as a general partner in accordance with the consent;

The partnership admits at least one (1) person as a partner;

If the previously sole remaining partner is only a general partner, the partnership admits the person as a limited partner; and

If the previously sole remaining partner is only a limited partner, the partnership admits a person as a general partner;

The conduct of all or substantially all the partnership’s activities and affairs is unlawful; or

It is not reasonably practicable to carry on the partnership’s activities and affairs in conformity with the certificate of limited partnership and partnership agreement; or

If an event occurs that imposes a deadline on a limited partnership under subsection (a) and before the partnership has met the requirements of the deadline, another event occurs that imposes a different deadline on the partnership under subsection (a):

The occurrence of the second event does not affect the deadline caused by the first event; and

The partnership’s meeting of the requirements of the first deadline does not extend the second deadline.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-801 [Laws, 1987, ch. 488, § 801, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to nonjudicial dissolution. Present similar provisions are found in current § 79-14-801, above.

Cross References —

Requirement that amendment to certificate of limited partnership be filed to reflect continuation of business under this section after event of withdrawal of general partner, see § 79-14-202.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 910 et seq.

CJS.

68 C.J.S., Partnership §§ 610-612.

§79-14-802. Winding up.

A dissolved limited partnership shall wind up its activities and affairs and, except as otherwise provided in Section 79-14-803, the partnership continues after dissolution only for the purpose of winding up.

In winding up its activities and affairs, the limited partnership:

  1. Shall discharge the partnership’s debts, obligations, and other liabilities, settle and close the partnership’s activities and affairs, and marshal and distribute the assets of the partnership;
  2. Shall file a statement of dissolution of the limited partnership with the Secretary of State; and
  3. May:

Preserve the partnership activities, affairs, and property as a going concern for a reasonable time;

Prosecute and defend actions and proceedings, whether civil, criminal, or administrative;

Transfer the partnership’s property;

Settle disputes by mediation or arbitration; and

Perform other acts necessary or appropriate to the winding up.

If a dissolved limited partnership does not have a general partner, a person to wind up the dissolved partnership’s activities and affairs may be appointed by the affirmative vote or consent of limited partners owning a majority of the rights to receive distributions as limited partners at the time the vote or consent is to be effective. A person appointed under this subsection:

Has the powers of a general partner under Section 79-14-804 but is not liable for the debts, obligations, and other liabilities of the partnership solely by reason of having or exercising those powers or otherwise acting to wind up the dissolved partnership’s activities and affairs; and

Shall deliver promptly to the Secretary of State for filing an amendment to the partnership’s certificate of limited partnership stating:

That the partnership does not have a general partner;

The name and street and mailing addresses of the person; and

That the person has been appointed pursuant to this subsection to wind up the partnership.

On the application of a partner, the chancery court may order judicial supervision of the winding up of a dissolved limited partnership, including the appointment of a person to wind up the partnership’s activities and affairs, if:

The partnership does not have a general partner and within a reasonable time following the dissolution no person has been appointed pursuant to subsection (c); or

The applicant establishes other good cause.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-802 [Laws, 1987, ch. 488, § 802, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to judicial dissolution. For present similar provisions, see § 79-14-801.

Cross References —

Chancery courts generally, see §§ 9-5-1 et seq.

Provision that limited partnership is dissolved and its affairs must be wound up upon entry of decree of judicial dissolution under this section, see § 79-14-801.

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

RESEARCH REFERENCES

ALR.

Inability of partnership to operate at profit as justification for court-ordered dissolution. 20 A.L.R.4th 122.

Am. Jur.

19 Am. Jur. Pl & Pr Forms (Rev), Partnership, Form 342.

CJS.

68 C.J.S., Partnership § 613.

§79-14-803. Rescinding dissolution.

A limited partnership may rescind its dissolution, unless the chancery court has entered an order under Section 79-14-801(a) (6) dissolving the partnership or the Secretary of State has dissolved the partnership under Section 79-14-811.

Rescinding dissolution under this section requires:

  1. The affirmative vote or consent of each partner; and
  2. If the limited partnership has delivered to the Secretary of State for filing an amendment to the certificate of limited partnership stating that the partnership is dissolved and:
  3. The rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission may not be adversely affected.

The amendment has not become effective, delivery to the Secretary of State for filing of a statement of withdrawal under Section 79-14-208 applicable to the amendment; or

The amendment has become effective, delivery to the Secretary of State for filing of an amendment to the certificate of limited partnership within one hundred twenty (120) days of the effective date of the dissolution stating that dissolution has been rescinded under this section.

If a limited partnership rescinds its dissolution:

The partnership resumes carrying on its activities and affairs as if dissolution had never occurred;

Subject to paragraph (3), any liability incurred by the partnership after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-803 [Laws, 1987, ch. 488, § 803, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the winding up of a limited partnership. For present similar provisions, see § 79-14-802.

Cross References —

Chancery courts generally, see §§ 9-5-1 et seq.

Requirement that certificates of dissolution and cancellation be signed by general or limited partners conducting winding up of affairs under this section, see § 79-14-204.

Provision that limited partner who winds up limited partnership does not thereby participate in control of business for purposes of provisions as to liability to third parties, see § 79-14-303.

Distribution of assets, see § 79-14-804.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership § 913.

CJS.

68 C.J.S., Partnership §§ 610-612.

§79-14-804. Power to bind partnership after dissolution.

A limited partnership is bound by a general partner’s act after dissolution which:

  1. Is appropriate for winding up the partnership’s activities and affairs; or
  2. Would have bound the partnership under Section 79-14-402 before dissolution if, at the time the other party enters into the transaction, the other party does not know or have notice of the dissolution.

A person dissociated as a general partner binds a limited partnership through an act occurring after dissolution if:

At the time the other party enters into the transaction:

Less than two (2) years has passed since the dissociation; and

The other party does not know or have notice of the dissociation and reasonably believes that the person is a general partner; and

The act:

Is appropriate for winding up the partnership’s activities and affairs; or

Would have bound the partnership under Section 79-14-402 before dissolution and at the time the other party enters into the transaction the other party does not know or have notice of the dissolution.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-804 [Laws, 1987, ch. 488, § 804, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the distribution of a dissolved limited partnership’s assets. For present similar provisions, see § 79-14-810.

Cross References —

Partner’s entitlement to remedies available to creditor of limited partnership, when he becomes entitled to distribution, subject to this section and § 79-14-607, see § 79-14-606.

§79-14-805. Liability after dissolution of general partner and person dissociated as general partner.

If a general partner having knowledge of the dissolution causes a limited partnership to incur an obligation under Section 79-14-804(a) by an act that is not appropriate for winding up the partnership’s activities and affairs, the general partner is liable:

  1. To the partnership for any damage caused to the partnership arising from the obligation; and
  2. If another general partner or a person dissociated as a general partner is liable for the obligation, to that other general partner or person for any damage caused to that other general partner or person arising from the liability.

If a person dissociated as a general partner causes a limited partnership to incur an obligation under Section 79-14-804(b), the person is liable:

To the partnership for any damage caused to the partnership arising from the obligation; and

If a general partner or another person dissociated as a general partner is liable for the obligation, to the general partner or other person for any damage caused to the general partner or other person arising from the obligation.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-806. Known claims against dissolved limited partnership.

Except as otherwise provided in subsection (d), a dissolved limited partnership may give notice of a known claim under subsection (b), which has the effect provided in subsection (c).

A dissolved limited partnership may in a record notify its known claimants of the dissolution. The notice must:

  1. Specify the information required to be included in a claim;
  2. State that a claim must be in writing and provide a mailing address to which the claim is to be sent;
  3. State the deadline for receipt of a claim, which may not be less than one hundred twenty (120) days after the date the notice is received by the claimant;
  4. State that the claim will be barred if not received by the deadline; and
  5. Unless the partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section 79-14-404.

A claim against a dissolved limited partnership is barred if the requirements of subsection (b) are met and:

The claim is not received by the specified deadline; or

If the claim is timely received but rejected by the partnership:

The partnership causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the partnership to enforce the claim not later than ninety (90) days after the claimant receives the notice; and

The claimant does not commence the required action not later than ninety (90) days after the claimant receives the notice.

This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Cross References —

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred, see § 79-14-809.

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

§79-14-807. Other claims against dissolved limited partnership.

A dissolved limited partnership may publish notice of its dissolution and request persons having claims against the partnership to present them in accordance with the notice.

A notice under subsection (a) must:

  1. Be published at least once in a newspaper of general circulation in the county in this state in which the dissolved limited partnership’s principal office is located or, if the principal office is not located in this state, in Hinds County, Mississippi;
  2. Describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent;
  3. State that a claim against the partnership is barred unless an action to enforce the claim is commenced not later than three (3) years after publication of the notice; and
  4. Unless the partnership has been throughout its existence a limited liability limited partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any general partner or person dissociated as a general partner which is based on Section 79-14-404.

If a dissolved limited partnership publishes a notice in accordance with subsection (b), the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the partnership not later than three (3) years after the publication date of the notice:

A claimant that did not receive notice in a record under Section 79-14-806;

A claimant whose claim was timely sent to the partnership but not acted on; and

A claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution.

A claim not barred under this section or Section 79-14-806 may be enforced:

Against the dissolved limited partnership, to the extent of its undistributed assets;

Except as otherwise provided in Section 79-14-808, if assets of the partnership have been distributed after dissolution, against a partner or transferee to the extent of that person’s proportionate share of the claim or of the partnership’s assets distributed to the partner or transferee after dissolution, whichever is less, but a person’s total liability for all claims under this paragraph may not exceed the total amount of assets distributed to the person after dissolution; and

Against any person liable on the claim under Sections 79-14-404 and 79-14-607.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Cross References —

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred, see § 79-14-809.

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

§79-14-808. Court proceedings.

A dissolved limited partnership that has published a notice under Section 79-14-807 may file an application with the chancery court in the county where the limited partnership’s principal office is located or, if the principal office is not located in this state, in the Chancery Court of the First Judicial District of Hinds County, Mississippi, for a determination of the amount and form of security to be provided for payment of claims that are contingent, have not been made known to the limited partnership, or are based on an event occurring after the date of dissolution but which, based on the facts known to the limited partnership, are reasonably expected to arise after the date of dissolution. Security is not required for any claim that is or is reasonably anticipated to be barred under Section 79-14-807.

Not later than ten (10) days after the filing of an application under subsection (a), the dissolved limited partnership shall give notice of the proceeding to each claimant holding a contingent claim known to the partnership.

In a proceeding brought under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited partnership.

A dissolved limited partnership that provides security in the amount and form ordered by the court under subsection (a) satisfies the dissolved limited partnership’s obligations with respect to claims that are contingent, have not been made known to the partnership, or are based on an event occurring after the date of dissolution, and such claims may not be enforced against a partner or transferee on account of assets received in liquidation.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Cross References —

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred, see § 79-14-809.

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

§79-14-809. Liability of general partner and person dissociated as general partner when claim against limited partnership barred.

If a claim against a dissolved limited partnership is barred under Section 79-14-806, 79-14-807, or 79-14-808, any corresponding claim under Section 79-14-404 or 79-14-607 is also barred.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-809 [ Laws, 2012, ch. 382, § 90, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided the grounds for an administrative dissolution. For present similar provisions, see § 79-14-811.

§79-14-810. Disposition of assets in winding up; when contributions required.

In winding up its activities and affairs, a limited partnership shall apply its assets, including the contributions required by this section, to discharge the partnership’s obligations to creditors, including partners that are creditors.

After a limited partnership complies with subsection (a), any surplus must be distributed in the following order, subject to any charging order in effect under Section 79-14-703:

  1. To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and
  2. Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the partnership.
  3. If a person does not make the additional contribution required by paragraph (2), further additional contributions are determined and due in the same manner as provided in that paragraph.

If a limited partnership’s assets are insufficient to satisfy all of its obligations under subsection (a), with respect to each unsatisfied obligation incurred when the partnership was not a limited liability limited partnership, the following rules apply:

Each person that was a general partner when the obligation was incurred and that has not been released from the obligation under Section 79-14-607 shall contribute to the partnership for the purpose of enabling the partnership to satisfy the obligation. The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those persons when the obligation was incurred.

If a person does not contribute the full amount required under paragraph (1) with respect to an unsatisfied obligation of the partnership, the other persons required to contribute by paragraph (1) on account of the obligation shall contribute the additional amount necessary to discharge the obligation. The additional contribution due from each of those other persons is in proportion to the right to receive distributions in the capacity of a general partner in effect for each of those other persons when the obligation was incurred.

A person that makes an additional contribution under subsection (c)(2) or (3) may recover from any person whose failure to contribute under subsection (c)(1) or (2) necessitated the additional contribution. A person may not recover under this subsection more than the amount additionally contributed. A person’s liability under this subsection may not exceed the amount the person failed to contribute.

If a limited partnership does not have sufficient surplus to comply with subsection (b)(1), any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.

All distributions made under subsections (b) and (c) must be paid in money.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-810 [ Laws, 2012, ch. 382, § 91, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the procedure for an administrative dissolution. For present similar provisions, see § 79-14-811.

Cross References —

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

§79-14-811. Administrative dissolution.

The Secretary of State may commence a proceeding under subsection (b) to dissolve a limited partnership administratively if the partnership does not:

  1. Pay any fee, tax, or penalty due to the Secretary of State under this chapter or other law within sixty (60) days after it is due; or
  2. Have a registered agent in this state for sixty (60) consecutive days.

If the Secretary of State determines that one or more grounds exist for administratively dissolving a limited partnership, the Secretary of State shall serve the partnership with notice in a record of the Secretary of State’s determination.

If a limited partnership, not later than sixty (60) days after service of the notice under subsection (b), does not cure or demonstrate to the satisfaction of the Secretary of State the nonexistence of each ground determined by the Secretary of State, the Secretary of State shall administratively dissolve the partnership by signing a statement of administrative dissolution that recites the grounds for dissolution and the effective date of dissolution. The Secretary of State shall file the statement and serve a copy on the partnership pursuant to Section 79-35-13, except that the statement of administrative dissolution may be served by first-class mail.

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under Sections 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under Section 79-14-812.

The administrative dissolution of a limited partnership does not terminate the authority of its registered agent.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-811 [ Laws, 2012, ch. 382, § 92, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to reinstatement of a limited partnership after an administrative dissolution. For present similar provisions, see § 79-14-812.

§79-14-812. Reinstatement.

A limited partnership that is administratively dissolved under Section 79-14-811 may apply to the Secretary of State for reinstatement not later than two (2) years after the effective date of dissolution. The application must state:

  1. The name of the partnership at the time of its administrative dissolution and, if needed, a different name that satisfies Section 79-14-114;
  2. The address of the principal office of the partnership and the name and street and mailing addresses of its registered agent;
  3. The effective date of the partnership’s administrative dissolution; and
  4. That the grounds for dissolution did not exist or have been cured.

To be reinstated, a limited partnership must pay all fees, taxes, interest, and penalties that were due to the Mississippi Department of Revenue at the time of the partnership’s administrative dissolution and all fees, taxes, interest, and penalties that would have been due to the Mississippi Department of Revenue while the partnership was administratively dissolved.

If the Secretary of State determines that an application under subsection (a) contains the required information, is satisfied that the information is correct, and determines that all payments required to be made to the Mississippi Department of Revenue by subsection (b) have been made, the Secretary of State shall:

Cancel the statement of administrative dissolution and prepare a statement of reinstatement that states the Secretary of State’s determination and the effective date of reinstatement; and

File the statement of reinstatement and serve a copy on the limited partnership.

When reinstatement under this section is effective, the following rules apply:

The reinstatement relates back to and takes effect as of the effective date of the administrative dissolution.

The limited partnership resumes carrying on its activities and affairs as if the administrative dissolution had not occurred.

The rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are not affected.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-812 [ Laws, 2012, ch. 382, § 93, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided for an appeal from denial of reinstatement. For present similar provisions, see § 79-14-813.

Cross References —

A limited partnership that is administratively dissolved continues in existence as an entity but may not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets under §§ 79-14-802, 79-14-806, 79-14-807, 79-14-808, and 79-14-810, or to apply for reinstatement under § 79-14-812, see § 79-14-811.

§79-14-813. Judicial review of denial of reinstatement.

If the Secretary of State denies a limited partnership’s application for reinstatement following administrative dissolution, the Secretary of State shall serve the partnership with a notice in a record that explains the reason or reasons for the denial.

A limited partnership may seek judicial review of denial of reinstatement in the Chancery Court of the First Judicial District of Hinds County, Mississippi, not later than thirty (30) days after service of the notice of denial.

The court may summarily order the Secretary of State to reinstate the limited partnership or may take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 9. Actions By Partners.

§79-14-901. Direct action by partner.

Subject to subsection (b), a partner may maintain a direct action against another partner or the limited partnership, with or without an accounting as to the partnership’s activities and affairs, to enforce the partner’s rights and otherwise protect the partner’s interests, including rights and interests under the partnership agreement or this chapter or arising independently of the partnership relationship.

A partner maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.

A right to an accounting on a dissolution and winding up does not revive a claim barred by law.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-901 [Laws, 1987, ch. 488, § 901, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the law governing foreign limited partnerships. For present similar provisions, see § 79-14-1001.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnership §§ 914, 915.

§79-14-902. Derivative action.

A partner may maintain a derivative action to enforce a right of a limited partnership if:

  1. The partner first makes a demand on the general partners, requesting that they cause the partnership to bring an action to enforce the right, and the general partners do not bring the action within a reasonable time; or
  2. A demand under paragraph (1) would be futile.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-902 [Laws, 1987, ch. 488, § 902; Laws, 1990, ch. 385, § 4; Laws, 1995, ch. 362, § 5; Laws, 1997, ch. 418, § 21; Laws, 2012, ch. 382, § 94, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] required foreign limited partnerships to register with the Secretary of State before doing business in Mississippi. For present similar provisions, see § 79-14-1002.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (3), which formerly read: “The name and street and mailing address of any registered agent for service of process on the foreign limited partnership whom the foreign limited partnership elects to appoint; the registered agent must be an individual resident of this state, a domestic corporation or a foreign corporation having a place of business in and authorized to do business in this state”; and deleted former (4), which provided the Secretary of State would be appointed registered agent of a foreign limited partnership for service of process under certain circumstances, and reserved the paragraph designator.

Cross References —

Filing fees, see § 79-14-1104.

§79-14-903. Proper plaintiff.

A derivative action to enforce a right of a limited partnership may be maintained only by a person that is a partner at the time the action is commenced and:

  1. Was a partner when the conduct giving rise to the action occurred; or
  2. Whose status as a partner devolved on the person by operation of law or pursuant to the terms of the partnership agreement from a person that was a partner at the time of the conduct.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-903 [Laws, 1987, ch. 488, § 903; Laws, 1990, ch. 385, § 5; Laws, 1995, ch. 362, § 6; Laws, 1997, ch. 418, § 22, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the issuance of a foreign limited partnership registration. For present similar provisions, see § 79-14-210.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

§79-14-904. Pleading.

In a derivative action, the complaint must state with particularity:

  1. The date and content of plaintiff’s demand and the response to the demand by the general partner; or
  2. Why demand should be excused as futile.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-904 [Laws, 1987, ch. 488, § 904, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the name under which a foreign limited partnership could register. For present similar provisions, see § 79-14-114.

Cross References —

Name requirements applicable to limited partnerships generally, see § 79-14-102.

§79-14-905. Special litigation committee.

If a limited partnership is named as or made a party in a derivative proceeding, the partnership may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the partnership. If the partnership appoints a special litigation committee, on motion by the committee made in the name of the partnership, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from:

  1. Enforcing a person’s right to information under Section 79-14-304 or 79-14-407; or
  2. Granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.
  3. Be settled on terms approved by the committee; or
  4. Be dismissed.

A special litigation committee must be composed of one or more disinterested and independent individuals, who may be partners.

A special litigation committee may be appointed:

By a majority of the general partners not named as parties in the proceeding; or

If all general partners are named as parties in the proceeding, by a majority of the general partners named as defendants.

After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited partnership that the proceeding:

Continue under the control of the plaintiff;

Continue under the control of the committee;

After making a determination under subsection (d), a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) and allow the action to continue under the control of the plaintiff.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-905 [Laws, 1987, ch. 488, § 905; Laws, 1995, ch. 362, § 7; Laws, 1997, ch. 418, § 23, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to changes and amendments to the registration statement. For present similar provisions, see § 79-14-1004.

§79-14-906. Proceeds and expenses.

Except as otherwise provided in subsection (b):

  1. Any proceeds or other benefits of a derivative action, whether by judgment, compromise, or settlement, belong to the limited partnership and not to the plaintiff; and
  2. If the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the partnership.

If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney’s fees and costs, from the recovery of the limited partnership.

A derivative action on behalf of a limited partnership may not be voluntarily dismissed or settled without the court’s approval.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-906 [Laws, 1987, ch. 488, § 906; Laws, 1995, ch. 362, § 8; Laws, 1997, ch. 418, § 24, effective from and after July 1, 1997; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the cancellation of a foreign limited partnership’s registration.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Filing fees, see § 79-14-1104.

§79-14-907. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-907 [Laws, 1987, ch. 488, § 907, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the transaction of business without registration. For present similar provisions, see § 79-14-1002.

§79-14-908. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-908 [Laws, 1987, ch. 488, § 908, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to actions by the Attorney General. For present similar provisions, see § 79-14-1012.

§79-14-909. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-909 [ Laws, 1995, ch. 362, § 9, effective from and after July 1, 1995; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided that a document filed under former Chapter 14 that contained a copy of a signature was acceptable for filing.

§79-14-910. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-910 [ Laws, 2012, ch. 382, § 95, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided the grounds for an administrative revocation of a foreign limited partnership’s registration. For present similar provisions, see § 79-14-1010.

§79-14-911. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-911 [ Laws, 2012, ch. 382, § 96, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided the procedure for the administrative revocation of a foreign limited partnership’s registration. For present similar provisions, see § 79-14-1010.

§79-14-912. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-912 [ Laws, 2012, ch. 382, § 97, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the reinstatement of a revoked foreign limited partnership registration.

§79-14-913. Repealed.

Repealed by Laws of 2015, ch. 453, § 6, effective July 1, 2015.

Editor’s Notes —

Former § 79-14-913 [ Laws, 2012, ch. 382, § 98, effective from and after January 1, 2013; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to appeals from denials of reinstatement.

Article 10. Foreign Limited Partnerships.

§79-14-1001. Governing law.

The law of the jurisdiction of formation of a foreign limited partnership governs:

  1. The internal affairs of the partnership;
  2. The liability of a partner as partner for a debt, obligation, or other liability of the partnership; and
  3. The liability of a series of the partnership.

A foreign limited partnership is not precluded from registering to do business in this state because of any difference between the law of its jurisdiction of formation and the law of this state.

Registration of a foreign limited partnership to do business in this state does not authorize the foreign partnership to engage in any activities and affairs or exercise any power that a limited partnership may not engage in or exercise in this state.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1001 [Laws, 1987, ch. 488, § 1001, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the right of action of a limited partner against a general partner. For present similar provisions, see § 79-14-902.

RESEARCH REFERENCES

ALR.

Right of limited partner to maintain derivative action on behalf of partnership. 26 A.L.R.4th 264.

§79-14-1002. Registration to do business in this state.

A foreign limited partnership may not do business in this state until it registers with the Secretary of State under this article.

A foreign limited partnership doing business in this state may not maintain an action or proceeding in this state unless it is registered to do business in this state.

The failure of a foreign limited partnership to register to do business in this state does not impair the validity of a contract or act of the partnership or preclude it from defending an action or proceeding in this state.

A limitation on the liability of a general partner or limited partner of a foreign limited partnership is not waived solely because the partnership does business in this state without registering to do business in this state.

Section 79-14-1001(a) and (b) applies even if the foreign limited partnership fails to register under this article.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1002 [Laws, 1987, ch. 488, § 1002, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the proper plaintiff in a derivative action. For present similar provisions, see § 79-14-903.

§79-14-1003. Foreign registration statement.

To register to do business in this state, a foreign limited partnership must deliver a foreign registration statement to the Secretary of State for filing. The statement must state:

  1. The name of the partnership and, if the name does not comply with Section 79-14-114, an alternate name adopted pursuant to Section 79-14-1006(a);
  2. That the partnership is a foreign limited partnership;
  3. The partnership’s jurisdiction of formation;
  4. The street and mailing addresses of the partnership’s principal office and, if the law of the partnership’s jurisdiction of formation requires the partnership to maintain an office in that jurisdiction, the street and mailing addresses of the required office; and
  5. The information required by Section 79-35-5(a).

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1003 [Laws, 1987, ch. 488, § 1003, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to derivative action pleadings. For present similar provisions, see § 79-14-904.

§79-14-1004. Amendment of foreign registration statement.

A registered foreign limited partnership shall deliver to the Secretary of State for filing an amendment to its foreign registration statement if there is a change in:

  1. The name of the partnership;
  2. The partnership’s jurisdiction of formation;
  3. An address required by Section 79-14-1003(4); or
  4. The information required by Section 79-35-5(a).

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1004 [Laws, 1987, ch. 488, § 1004, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to awarding of reasonable expenses to plaintiffs in a successful derivative action. For present similar provisions, see § 79-14-906.

RESEARCH REFERENCES

ALR.

Attorneys’ fees: cost of services provided by paralegals or the like as compensable element of award in state court. 73 A.L.R.4th 938.

§79-14-1005. Activities not constituting doing business.

Activities of a foreign limited partnership which do not constitute doing business in this state under this article include:

  1. Maintaining, defending, mediating, arbitrating, or settling an action or proceeding;
  2. Carrying on any activity concerning its internal affairs, including holding meetings of its partners;
  3. Maintaining accounts in financial institutions;
  4. Maintaining offices or agencies for the transfer, exchange, and registration of securities of the partnership or maintaining trustees or depositories with respect to those securities;
  5. Selling through independent contractors;
  6. Soliciting or obtaining orders by any means if the orders require acceptance outside this state before they become contracts;
  7. Creating or acquiring indebtedness, mortgages, or security interests in property;
  8. Securing or collecting debts or enforcing mortgages or security interests in property securing the debts and holding, protecting, or maintaining property;
  9. Conducting an isolated transaction that is not in the course of similar transactions;
  10. Owning, without more, property; and
  11. Doing business in interstate commerce.

A person does not do business in this state solely by being a partner of a foreign limited partnership that does business in this state.

This section does not apply in determining the contacts or activities that may subject a foreign limited partnership to service of process, taxation, or regulation under law of this state other than this chapter.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1006. Noncomplying name of foreign limited partnership.

A foreign limited partnership whose name does not comply with Section 79-14-114 may not register to do business in this state until it adopts, for the purpose of doing business in this state, an alternate name that complies with Section 79-14-114. A partnership that registers under an alternate name under this subsection need not comply with the Fictitious Business Name Registration Act. After registering to do business in this state with an alternate name, a partnership shall do business in this state under:

  1. The alternate name;
  2. The partnership’s name, with the addition of its jurisdiction of formation; or
  3. A name the partnership is authorized to use under the Fictitious Business Name Registration Act.

If a registered foreign limited partnership changes its name to one that does not comply with Section 79-14-114, it may not do business in this state until it complies with subsection (a) by amending its registration to adopt an alternate name that complies with Section 79-14-114.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Cross References —

Fictitious Business Name Registration Act, see § 75-93-1 et seq.

§79-14-1007. Withdrawal deemed on conversion to domestic filing entity or domestic limited liability partnership.

A registered foreign limited partnership that converts to a domestic limited liability partnership or to a domestic entity whose formation requires delivery of a record to the Secretary of State for filing is deemed to have withdrawn its registration on the effective date of the conversion.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1008. Withdrawal on dissolution or conversion to nonfiling entity other than limited liability partnership.

A registered foreign limited partnership that has dissolved and completed winding up or has converted to a domestic or foreign entity whose formation does not require the public filing of a record, other than a limited liability partnership, shall deliver a statement of withdrawal to the Secretary of State for filing. In the case of a partnership that has completed winding up, the statement must state:

  1. Its name and jurisdiction of formation;
  2. That the partnership surrenders its registration to do business in this state.

After a withdrawal under this section is effective, service of process in any action or proceeding based on a cause of action arising during the time the foreign limited partnership was registered to do business in this state may be made pursuant to Section 79-35-13.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1009. Transfer of registration.

When a registered foreign limited partnership has merged into a foreign entity that is not registered to do business in this state or has converted to a foreign entity required to register with the Secretary of State to do business in this state, the foreign entity shall deliver to the Secretary of State for filing an application for transfer of registration. The application must state:

  1. The name of the registered foreign limited partnership before the merger;
  2. That before the merger the registration pertained to a foreign limited partnership;
  3. The name of the applicant foreign entity into which the foreign limited partnership has merged or to which it has been converted and, if the name does not comply with Section 79-14-114, an alternate name adopted pursuant to Section 79-14-1006(a);
  4. The type of entity of the applicant foreign entity and its jurisdiction of formation;
  5. The street and mailing addresses of the principal office of the applicant foreign entity and, if the law of the entity’s jurisdiction of formation requires the entity to maintain an office in that jurisdiction, the street and mailing addresses of that office; and
  6. The name and street and mailing addresses of the applicant foreign entity’s registered agent in this state.

When an application for transfer of registration takes effect, the registration of the foreign limited partnership to do business in this state is transferred without interruption to the foreign entity into which the partnership has merged or to which it has been converted.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1010. Termination of registration.

The Secretary of State may terminate the registration of a registered foreign limited partnership in the manner provided in subsections (b) and (c) if the partnership does not:

  1. Pay, not later than sixty (60) days after the due date, any fee, tax, interest, or penalty required to be paid to the Secretary of State under this chapter or law other than this chapter;
  2. Have a registered agent as required by the Mississippi Registered Agents Act; or
  3. Deliver to the Secretary of State for filing a statement of a change under Section 79-35-8 not later than thirty (30) days after a change has occurred in the name or address of the registered agent.

The Secretary of State may terminate the registration of a registered foreign limited partnership by:

Filing a notice of termination or noting the termination in the records of the Secretary of State; and

Delivering a copy of the notice or the information in the notation to the partnership’s registered agent or, if the partnership does not have a registered agent, to the partnership’s principal office.

The notice must state or the information in the notation must include:

The effective date of the termination, which must be at least sixty (60) days after the date the Secretary of State delivers the copy; and

The grounds for termination under subsection (a).

The authority of the registered foreign limited partnership to do business in this state ceases on the effective date of the notice of termination or notation under subsection (b), unless before that date the partnership cures each ground for termination stated in the notice or notation. If the partnership cures each ground, the Secretary of State shall file a record so stating.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1011. Withdrawal of registration of registered foreign limited partnership.

A registered foreign limited partnership may withdraw its registration by delivering a statement of withdrawal to the Secretary of State for filing. The statement of withdrawal must state:

  1. The name of the partnership and its jurisdiction of formation;
  2. That the partnership is not doing business in this state and that it withdraws its registration to do business in this state;
  3. That the partnership revokes the authority of its registered agent to accept service on its behalf in this state; and
  4. An address to which service of process may be made under subsection (b).

After the withdrawal of the registration of a foreign limited partnership, service of process in any action or proceeding based on a cause of action arising during the time the partnership was registered to do business in this state may be made pursuant to Section 79-35-13.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1012. Action by Attorney General.

The Attorney General may maintain an action to enjoin a foreign limited partnership from doing business in this state in violation of this article.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 11. Merger.

§79-14-1101. Definitions.

In this article:

  1. “Constituent limited partnership” means a constituent organization that is a limited partnership.
  2. “Constituent organization” means an organization that is party to a merger.
  3. “General partner” means a general partner of a limited partnership.
  4. “Governing statute” of an organization means the statute that governs the organization’s internal affairs.
  5. “Organization” means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership; limited liability company; business trust; corporation; or any other person having a governing statute. The term includes domestic and foreign organizations whether or not organized for profit.
  6. “Organizational documents” means:
  7. “Personal liability” means personal liability for a debt, liability, or other obligation of an organization which is imposed on a person that co-owns, has an interest in, or is a member of the organization:
  8. “Surviving organization” means an organization into which one or more other organizations are merged. A surviving organization may preexist the merger or be created by the merger.

For a domestic or foreign general partnership, its partnership agreement;

For a limited partnership or foreign limited partnership, its certificate of limited partnership and partnership agreement;

For a domestic or foreign limited liability company, its articles of organization and operating agreement, or comparable records as provided in its governing statute;

For a business trust, its agreement of trust and declaration of trust;

For a domestic or foreign corporation for profit, its articles of incorporation, bylaws, and other agreements among its shareholders which are authorized by its governing statute, or comparable records as provided in its governing statute; and

For any other organization, the basic records that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it.

By the organization’s governing statute solely by reason of the person co-owning, having an interest in, or being a member of the organization; or

By the organization’s organizational documents under a provision of the organization’s governing statute authorizing those documents to make one or more specified persons liable for all or specified debts, liabilities, and other obligations of the organization solely by reason of the person or persons co-owning, having an interest in, or being a member of the organization.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1101 [Laws, 1987, ch. 488, § 1101, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the construction and application of former Chapter 14. For present similar provisions, see § 79-14-1201.

§79-14-1102. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1102 [Laws, 1987, ch. 488, § 1102, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided the short title for former Chapter 14. For present similar provisions, see § 79-14-101.

§79-14-1103. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1103 [Laws, 1987, ch. 488, § 1103, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] was a severability clause. For present similar provisions, see § 79-14-1204.

§79-14-1104. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1104 [Laws, 1987, ch. 488, § 1104; Laws, 2012, ch. 382, § 99; Laws, 2014, ch. 468, § 7, effective from and after July 1, 2014; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] was a list of fees the Secretary of State was authorized to charge and collect. For present similar provisions, see § 79-14-1301.

Cross References —

Secretary of State generally, see §§ 7-3-1 et seq.

Fees for change of address or resignation of agency appointment by registered agent of limited partnership, see § 79-14-104.

Filing of certificates relative to limited partnerships upon receipt of fees required under this section, see § 79-14-206.

Requirement that all fees be paid before issuance of certificate of registration to foreign limited partnership, see § 79-14-903.

Requirement that foreign limited partnership pay fee when filing certificate correcting its application for registration, see § 79-14-905.

§79-14-1105. [Reserved].

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1105 [Laws, 1987, ch. 488, § 1105, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] repealed former Chapter 13, which governed limited partnerships, limited partnerships under prior laws and foreign limited partnerships.

§79-14-1106. Merger.

A limited partnership may merge with one or more other constituent organizations pursuant to this section and Sections 79-14-1107 through 79-14-1109 and a plan of merger, if:

  1. The governing statute of each of the other organizations authorizes the merger;
  2. The merger is not prohibited by the law of a jurisdiction that enacted any of those governing statutes; and
  3. Each of the other organizations complies with its governing statute in effecting the merger.
  4. If the surviving organization is to be created by the merger, the surviving organization’s organizational documents; and
  5. If the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization’s organizational documents.

A plan of merger must be in a record and must include:

The name and form of each constituent organization;

The name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect;

The terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration;

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1106 [Laws, 1987, ch. 488, § 1106; Laws, 1988, ch. 396, effective from and after passage (approved April 20, 1988); Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] related to the status of partnerships formed prior to January 1, 1988, transitional rules and a savings clause. For present similar provisions, see §§ 79-14-112 and 79-14-1203.

§79-14-1107. Action on plan of merger by constituent limited partnership.

Subject to Section 79-14-1110, a plan of merger must be consented to by all the partners of a constituent limited partnership.

Subject to Section 79-14-1110 and any contractual rights, after a merger is approved, and at any time before a filing is made under Section 79-14-1108, a constituent limited partnership may amend the plan or abandon the planned merger:

  1. As provided in the plan; and
  2. Except as prohibited by the plan, with the same consent as was required to approve the plan.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Editor’s Notes —

A former § 79-14-1107 [Laws, 1987, ch. 488, § 1107, effective from and after January 1, 1988; Repealed by Laws, 2015, ch. 453, § 6, effective from and after July 1, 2015.] provided that cases not provided for in former Chapter 14 were governed by the Mississippi Uniform Partnership Act ( § 79-13-101 et seq.).

Cross References —

Mississippi Uniform Partnership Act, see §§ 79-13-101 et seq.

§79-14-1108. Filings required for merger; effective date.

After each constituent organization has approved a merger, articles of merger must be signed on behalf of:

  1. Each preexisting constituent limited partnership, by each general partner listed in the certificate of limited partnership; and
  2. Each other preexisting constituent organization, by an authorized representative.
  3. The date the merger is effective under the governing statute of the surviving organization;
  4. If the surviving organization is to be created by the merger:
  5. If the surviving organization preexists the merger, any amendments provided for in the plan of merger for the organizational document that created the organization;
  6. A statement as to each constituent organization that the merger was approved as required by the organization’s governing statute;
  7. If the surviving organization is a foreign organization not authorized to transact business in this state, the street and mailing addresses of an office which the Secretary of State may use for the purposes of Section 79-14-1109(b); and
  8. Any additional information required by the governing statute of any constituent organization.

The articles of merger must include:

The name and form of each constituent organization and the jurisdiction of its governing statute;

The name and form of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created by the merger, a statement to that effect;

If it will be a limited partnership, the limited partnership’s certificate of limited partnership; or

If it will be an organization other than a limited partnership, the organizational document that creates the organization;

Each constituent limited partnership shall deliver the articles of merger for filing in the Office of the Secretary of State.

A merger becomes effective under this article:

If the surviving organization is a limited partnership, upon the later of:

Compliance with subsection (c); or

Subject to Section 79-14-206(c), as specified in the articles of merger; or

If the surviving organization is not a limited partnership, as provided by the governing statute of the surviving organization.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1109. Effect of merger.

When a merger becomes effective:

  1. The surviving organization continues or comes into existence;
  2. Each constituent organization that merges into the surviving organization ceases to exist as a separate entity;
  3. All property owned by each constituent organization that ceases to exist vests in the surviving organization;
  4. All debts, liabilities, and other obligations of each constituent organization that ceases to exist continue as obligations of the surviving organization;
  5. An action or proceeding pending by or against any constituent organization that ceases to exist may be continued as if the merger had not occurred;
  6. Except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist vest in the surviving organization;
  7. Except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;
  8. Except as otherwise agreed, if a constituent limited partnership ceases to exist, the merger does not dissolve the limited partnership for the purposes of Article 8;
  9. If the surviving organization is created by the merger:
  10. If the surviving organization preexists the merger, any amendments provided for in the articles of merger for the organizational document that created the organization become effective.

If it is a limited partnership, the certificate of limited partnership becomes effective; or

If it is an organization other than a limited partnership, the organizational document that creates the organization becomes effective; and

A surviving organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any obligation owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the obligation. A surviving organization that is a foreign organization and not authorized to transact business in this state appoints the Secretary of State as its agent for service of process for the purposes of enforcing an obligation under this subsection. Service on the Secretary of State under this subsection is made in the same manner and with the same consequences as in the Mississippi Registered Agents Act.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Cross References —

Mississippi Registered Agents Act, see § 79-35-1 et seq.

§79-14-1110. Restrictions on approval of mergers and on relinquishing LLLP status.

If a partner of a constituent limited partnership will have personal liability with respect to a surviving organization, approval and amendment of a plan of merger are ineffective without the consent of the partner, unless:

  1. The limited partnership’s partnership agreement provides for the approval of the merger with the consent of fewer than all the partners; and
  2. The partner has consented to the provision of the partnership agreement.

An amendment to a certificate of limited partnership which deletes a statement that the limited partnership is a limited liability limited partnership is ineffective without the consent of each general partner unless:

The limited partnership’s partnership agreement provides for the amendment with the consent of less than all the general partners; and

Each general partner that does not consent to the amendment has consented to the provision of the partnership agreement.

A partner does not give the consent required by subsection (a) or (b) merely by consenting to a provision of the partnership agreement which permits the partnership agreement to be amended with the consent of fewer than all the partners.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1111. Liability of general partner after merger.

A merger under this article does not discharge any liability under Sections 79-14-404 and 79-14-607 of a person that was a general partner in or dissociated as a general partner from a constituent limited partnership, but:

  1. The provisions of this chapter pertaining to the collection or discharge of the liability continue to apply to the liability;
  2. For the purposes of applying those provisions, the converted or surviving organization is deemed to be the constituent limited partnership; and
  3. If a person is required to pay any amount under this subsection:

The person has a right of contribution from each other person that was liable as a general partner under Section 79-14-404 when the obligation was incurred and has not been released from the obligation under Section 79-14-607; and

The contribution due from each of those persons is in proportion to the right to receive distributions in the capacity of general partner in effect for each of those persons when the obligation was incurred.

In addition to any other liability provided by law:

A person that immediately before a merger became effective was a general partner in a constituent limited partnership that was not a limited liability limited partnership is personally liable for each obligation of the converted or surviving organization arising from a transaction with a third party after the merger becomes effective, if, at the time the third party enters into the transaction, the third party:

Does not have notice of the merger; and

Reasonably believes that:

The surviving business is the constituent limited partnership;

The constituent limited partnership is not a limited liability limited partnership; and

The person is a general partner in the constituent limited partnership; and

A person that was dissociated as a general partner from a constituent limited partnership before the merger became effective is personally liable for each obligation of the surviving organization arising from a transaction with a third party after the merger becomes effective, if:

Immediately before the merger became effective, the converted surviving limited partnership was not a limited liability limited partnership; and

At the time the third party enters into the transaction, less than two (2) years have passed since the person dissociated as a general partner and the third party:

Does not have notice of the dissociation;

Does not have notice of the merger; and

Reasonably believes that the surviving organization is the constituent limited partnership, the constituent limited partnership is not a limited liability limited partnership, and the person is a general partner in the constituent limited partnership.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1112. Power of general partners and persons dissociated as general partners to bind organization after merger.

An act of a person that immediately before a merger became effective was a general partner in a constituent limited partnership binds the surviving organization after the merger becomes effective, if:

  1. Before the merger became effective, the act would have bound the constituent limited partnership under Section 79-14-402; and
  2. At the time the third party enters into the transaction, the third party:

Does not have notice of the merger; and

Reasonably believes that the surviving business is the constituent limited partnership and that the person is a general partner in the constituent limited partnership.

An act of a person that before a merger became effective was dissociated as a general partner from a constituent limited partnership binds the converted or surviving organization after the merger becomes effective, if:

Before the merger became effective, the act would have bound the constituent limited partnership under Section 79-14-402 if the person had been a general partner; and

At the time the third party enters into the transaction, less than two (2) years have passed since the person dissociated as a general partner and the third party:

Does not have notice of the dissociation;

Does not have notice of the merger; and

Reasonably believes that the surviving organization is the constituent limited partnership and that the person is a general partner in the constituent limited partnership.

If a person having knowledge of the merger causes a surviving organization to incur an obligation under subsection (a) or (b), the person is liable:

To the converted or surviving organization for any damage caused to the organization arising from the obligation; and

If another person is liable for the obligation, to that other person for any damage caused to that other person arising from the liability.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1113. Article not exclusive.

This article does not preclude an entity from being converted or merged under other law.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 12. Miscellaneous Provisions.

§79-14-1201. Uniformity of application and construction.

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1202. Relation to electronic signatures in Global and National Commerce Act.

This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 USC Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 USC Section 7003(b).

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1203. Savings clause.

This chapter does not affect an action commenced, proceeding brought, or right accrued before July 1, 2015.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

§79-14-1204. Severability clause.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Article 13. Fees.

§79-14-1301. Fees.

Pursuant to this chapter, the Secretary of State shall charge and collect a fee for:

  1. Reservation, Cancellation or Transfer of PartnershipName. . . . . $25.00
  2. Filing of Certificate of Limited Partnership. . . . .50.00
  3. Filing of Amendment to Certificate of LimitedPartnership. . . . .50.00
  4. Filing of Statement of Dissolution. . . . .25.00
  5. [Reserved]
  6. Filing of Restated Certificate of Limited Partnershipor Amended and Restated Certificate of LimitedPartnership. . . . .25.00
  7. Filing of Statement of Withdrawal. . . . .25.00
  8. Filing of Application for Registration of Foreign LimitedPartnership. . . . .250.00
  9. Filing of Certificate Correcting Application orRegistration of Foreign Limited Partnership. . . . .50.00
  10. Filing of withdrawal of Registration of ForeignLimited Partnership. . . . .25.00
  11. Certificate of Administrative Dissolution. . . . .No fee
  12. Filing of Application for Reinstatement FollowingAdministrative Dissolution. . . . .50.00
  13. Certificate of Revocation of Registration to TransactBusiness. . . . .No fee
  14. Filing of Application for Reinstatement FollowingAdministrative Revocation. . . . .100.00
  15. Any other document required or permitted to befiled by Section 79-14-101 et seq. . . . .25.00

HISTORY: Laws, 2015, ch. 453, § 1, eff from and after July 1, 2015.

Chapter 15. Investment Trusts

General Provisions

§79-15-1. Short title.

This chapter may be cited as “The Mississippi Investment Trust Law.”

HISTORY: Codes, 1942, § 5570-01; Laws, 1962, ch. 238, § 1, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Small business investment companies, see §§ 79-7-1 et seq.

Foreign investment trusts, see §§ 79-15-101 et seq.

§79-15-3. Definitions.

  1. An “investment trust” is an express trust created by a written declaration of trust whereby three (3) or more trustees agree to hold and manage in trust property conveyed or to be conveyed to them as trustees for the benefit of such persons as may be or become holders of transferable certificates evidencing the beneficial interest in the trust estate. An investment trust organized in conformity with and by specific reference to this chapter is declared to be neither a general nor a limited partnership, even though the declaration of trust may contain provisions not expressly or by implication contained in this chapter, and even though one (1) or more of the trustees may be or become the holder of a certificate of beneficial interest in the investment trust of which he is trustee.
  2. A “foreign investment trust” is an investment trust for profit organized under laws other than the laws of this state for a purpose or purposes for which an investment trust may be organized under this chapter.

HISTORY: Codes, 1942, § 5570-02; Laws, 1962, ch. 238, § 2; Laws, 1978, ch. 463, § 1, eff from and after July 1, 1978.

Cross References —

Provision for income tax deduction with respect to dividends distributed during the taxable year by an investment trust defined in this section, see § 27-7-17.

Limited partnerships, see §§ 79-14-101 et seq.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 1 et seq.

CJS.

12 C.J.S., Business Trusts § 1, 3.

§79-15-5. Organization.

  1. An investment trust may be established by a declaration of trust, duly executed by three or more trustees, for any lawful purpose including, but not limited to, acquiring, managing, improving, leasing, dealing in, selling, or otherwise alienating, mortgaging, or otherwise encumbering, real and personal property of all kinds, and descriptions, including, dealing in, purchasing, holding, selling and exchanging stocks, bonds, mortgages, deeds of trust and other securities of all kinds and descriptions; receiving the income, dividends, rents, profits and returns therefrom, and investing same or distributing same to the beneficial owners of the trust in accordance with the terms of the declaration of trust.
  2. At all times during the existence of the investment trust, at least one of the trustees shall be a natural person and a resident of the State of Mississippi. The other trustees need not be natural persons or residents of this state unless the declaration of trust or bylaws so require. The declaration of trust or bylaws may provide other or additional qualifications for the trustees consistent with this chapter.

HISTORY: Codes, 1942, § 5570-03; Laws, 1962, ch. 238, § 3, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 11 et seq.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:15, 51:23 et seq.

15B Am. Jur. Legal Forms 2d, Real Estate Investment Trusts and Syndications §§ 218:12 et seq. (declaration of trust).

CJS.

12 C.J.S., Business Trusts §§ 9-14.

§79-15-7. What declaration shall contain.

The declaration of trust of an investment trust shall contain:

The name under which the trust shall conduct its business, which name shall include the words “investment trust” but shall not include the words “trust company.”

An express statement that the trust is formed pursuant to this chapter, as now or hereafter amended, and that all provisions of the declaration of trust are subject to and intended to be construed in conformity with the provisions of this chapter, as now or hereafter amended.

The post-office address of the principal office and place of business of the trust.

The full name and post-office address of the initial trustees of the trust.

The aggregate number of shares of beneficial interest which the trust shall have authority to issue, the unit value in dollars to be received by the trust for the issuance of each of such shares, and a statement that each share shall be equal in all respects to every other share.

The manner of calling and conducting meetings of the holders of certificates of beneficial interest, and the mode or voting by proxy, provided that a meeting of the holders of certificates of beneficial interest shall be held at least annually.

A requirement that the trustees shall keep accurate and complete books of account and shall keep minutes of the proceedings of the trustees and shall keep a record of the holders of certificates of beneficial interest, giving the names and addresses of all such holders and the number of shares held by each, which books and records shall be available for inspection by any holders of a certificate of beneficial interest, at the principal place of business during normal business hours, upon reasonable notice. Provided, that nothing in this chapter shall impair the power of any court of competent jurisdiction upon a proper showing to compel the production, for examination of the books and the records of account, minutes, and record of holders of certificates of beneficial interest, by any person who for cause shown is entitled to conduct such examination.

The declaration of trust may contain any other terms and provisions deemed necessary or desirable for the purposes of the investment trust and consistent with this chapter.

HISTORY: Codes, 1942, § 5570-04; Laws, 1962, ch. 238, § 4, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 12, 13.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:15, 51:23 et seq.

15B Am. Jur. Legal Forms 2d, Real Estate Investment Trusts and Syndications §§ 218:12 et seq. (declaration of trust).

CJS.

12 C.J.S., Business Trusts § 14.

§79-15-9. Powers and liabilities of trustees.

  1. The trustees shall hold the legal title to all property at any time belonging to the investment trust, and shall have complete control over the management, operation, disposition, investment and reinvestment of such property and complete control of the management of the business affairs of the investment trust. The trustees may, if so provided in the declaration of trust, elect one of their number as chairman and elect such other officers as may be provided in the declaration of trust. The trustees may designate one or more of their number to act for and on behalf of the trustees in the execution of deeds, notes and other written instruments.
  2. The trustees shall have such powers as to the investment and management of the trust estate as may be set out in the declaration of trust, without regard to the type of investments to which trustees generally are restricted by the provisions of Section 91-13-1, Mississippi Code of 1972, as now or hereafter amended, or by any other statute or rule of law or equity. Unless the declaration of trust shall so provide, it shall not be necessary for an investment trust or the trustees thereof to file an accounting with any court, except upon liquidation of the trust. Provided, however, that nothing in this chapter shall impair the power of any court of competent jurisdiction, upon a proper showing of cause, to compel an accounting by the trustees of an investment trust of all funds held by them in such capacity.
  3. Liability to third persons for any act, omission, or obligation of an investment trust or of a trustee of an investment trust, when acting in such capacity, shall extend to the whole of the trust estate or to so much thereof as may be necessary to discharge such liability, but no trustee shall be personally or individually liable to third persons for any such act, omission, or obligation, unless such trustee with respect to such act, omission, or obligation engaged in intentional fraud or other unlawful conduct prohibited by statute.

HISTORY: Codes, 1942, § 5570-05; Laws, 1962, ch. 238, § 5, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 41 et seq.

5 Am. Jur. Pl & Pr Forms (Rev), Business Trusts, Forms 1, 4.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:51 et seq., 51:91-51:93, 51:103 et seq., 51:123 et seq., 51:143 et seq.

CJS.

12 C.J.S., Business Trusts §§ 27 et seq.

§79-15-11. Certificates of beneficial interest.

  1. The beneficial ownership of an investment trust shall be evidenced by certificates issued by the trustees in units of value to be provided by the trust instrument. No investment trust shall issue certificates of beneficial interest except for money, labor done, or services rendered or property actually received for the use and lawful purposes of the investment trust. Any investment trust may purchase any property authorized by its declaration of trust, or necessary for the use and lawful purposes of such investment trust, and may issue certificates of beneficial interest to the amount of the value thereof in payment therefor. Any certificate of beneficial interest issued in compliance with this section shall be fully paid, and the holder thereof shall not be liable to any further call or for any further payment. No assessment shall be made against the interest of any holder of such fully paid certificates. In the absence of fraud in the transaction, the judgment of the trustees as to the value of labor done or services performed or property purchased shall be conclusive. For the purpose of determining whether certificates of beneficial interest of any investment trust are fully paid and not liable to any further call, no deduction shall be made in computing the amount of consideration received by such investment trust for such certificates of beneficial interest, for such reasonable compensation or discount in the sale, underwriting, or purchase of such certificates by underwriters or dealers or others performing similar services as may be paid or allowed by the investment trust; and for such purpose the judgment of the trustees as the value of such services shall be conclusive in the absence of fraud in the transaction.
  2. The certificates of beneficial interest issued pursuant to this section shall be transferable in the same manner as stock certificates of a business corporation are transferable, and the issuance and transfer of such certificates of beneficial interest shall be governed by the statutes applicable to the issuance and transfer of stock of business corporations to the extent that such statutes are not inconsistent with the provisions and purposes of this chapter.

HISTORY: Codes, 1942, § 5570-06; Laws, 1962, ch. 238, § 6, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Regulation of transfer of investment securities under the Uniform Commercial Code, see § 75-8-101 et seq.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 20 et seq.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:164 et seq., 51:174, 51:175.

CJS.

12 C.J.S., Business Trusts §§ 16-20.

§79-15-13. Liability of holders of certificates of beneficial interest.

No holder of a fully paid certificate of beneficial interest in an investment trust shall be personally or individually liable in any manner whatever for any debts, acts, omissions, or obligations incurred by the trustees or by the investment trust. It is expressly declared to be the intention of this chapter that the holders of fully paid certificates of beneficial interest issued by an investment trust organized pursuant to this chapter shall not be considered to be partners, either general or limited, in the business of the trust, and the limited liability provided by this section shall not be altered by reason of the fact that the declaration of trust may contain a provision for the election of successor trustees by the holders of certificates of beneficial interest.

HISTORY: Codes, 1942, § 5570-07; Laws, 1962, ch. 238, § 7, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Limited partnerships, see §§ 79-14-101 et seq.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 31 et seq.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:183 et seq., 51:194, 51:195.

CJS.

12 C.J.S., Business Trusts §§ 22 et seq.

§79-15-15. The election and removal of trustees.

The declaration of trust shall provide for the annual election of successor trustees by the holders of certificates of beneficial interest, and shall further provide for the election of successor trustees by the holder of beneficial interest in the event of the death, resignation or removal of a trustee. The election of successor trustees shall not be deemed an amendment to the declaration of trust within the meaning of this chapter.

HISTORY: Codes, 1942, § 5570-08; Laws, 1962, ch. 238, § 8, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts §§ 41-46.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:51, 51:78, 51:191.

CJS.

12 C.J.S., Business Trusts §§ 27, 29.

§79-15-17. Amendment of declaration of trust.

  1. The declaration of trust shall provide that it can be amended only by the affirmative vote of the holders of at least two thirds (2/3) of the amount of the then outstanding certificates of beneficial interest. If the declaration of trust shall provide that an amendment to the declaration of trust shall require an affirmative vote of holders of a greater percentage in the amount of then outstanding certificates of beneficial interest than provided by this section, then the declaration of trust shall control. The foregoing provisions shall not be applicable to an amendment made to a declaration of trust at any time prior to the issuance of certificates of beneficial interest; at any time prior to the issuance of certificates and beneficial interest, the declaration of trust may be amended by affirmative vote of a majority of the trustees.
  2. No amendment to the declaration of trust shall be effective to alter or expand the liability of the trustees or the liability of the holders of fully paid certificates of beneficial interest, contrary to the liability provided in this chapter.

HISTORY: Codes, 1942, § 5570-09; Laws, 1962, ch. 238, § 9, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

RESEARCH REFERENCES

ALR.

Power of court to authorize modification of trust instrument because of changes in tax law. 57 A.L.R.3d 1044.

Am. Jur.

13 Am. Jur. 2d, Business Trusts § 15.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:73, 51:74.

§79-15-19. Recording.

The declaration of trust shall be signed and acknowledged by the initial trustees and recorded in the office of the clerk of the chancery court in the county in which the principal place of business of the investment trust is located, and also with the Secretary of State of Mississippi, and such officers are authorized to charge a fee for such recording, as in the manner and in the amount provided for the recording of articles of incorporation of business corporations. Amendments to declarations of trust shall be recorded in the manner above set out for the original.

HISTORY: Codes, 1942, § 5570-10; Laws, 1962, ch. 238, § 10, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Secretary of State, see §§ 7-3-1 et seq.

Duty of chancery court clerk to keep records, see § 9-5-137.

Recording of instruments by chancery court clerk, see § 89-5-25.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts § 14.

CJS.

12 C.J.S., Business Trusts §§ 30, 42.

§79-15-21. Duration of investment trust; rule against perpetuities and restraint of alienation are not violated.

  1. An investment trust shall not be deemed invalid as violating the rule against perpetuities or any law or statute against suspension of the powers of alienation. Such trust may continue for an indefinite period or for such time as may be necessary for the accomplishment of the purposes for which it was created; provided, however, that the declaration of trust shall contain a provision that such trust may be terminated at any time by the affirmative vote of holders of at least two thirds (2/3) of the amount of certificates of beneficial interest then outstanding, in the manner hereafter provided.
  2. At any meeting called for the purpose, notice of the purpose being contained in the call, the holders of at least two thirds (2/3) of the amount of certificates of beneficial interest then outstanding may by their affirmative vote dissolve the investment trust; the trustees shall thereupon file with the secretary of state an attested certified copy of the minutes of the meeting at which such vote was taken, together with a statement of the names and addresses of all trustees duly verified. The secretary of state, upon receipt of the above, shall record same and execute a certificate to the effect that such minutes and statement have been filed and that it appears therefrom that the investment trust has complied with this section. Such certificate shall be filed for record by the investment trust in the office of the clerk of the chancery court of the county wherein the original declaration of trust was recorded, and thereupon such investment trust shall be dissolved and shall cease to carry on business except for the purpose of adjusting and winding up its affairs. It shall then proceed to adjust and wind up its business, be empowered to carry out its contracts, collect its accounts receivable, and liquidate its assets and apply the same in discharge of its obligations and, after paying such obligations, the holder of each certificate of beneficial interest, according to the amount paid in thereon, shall be entitled to his portion of the balance of the assets. Said investment trust shall continue in existence for the purpose of discharging its debts and obligations, collect and distribute its assets, and doing all other acts required in order to wind up its business, and may sue and be sued for the purpose of enforcing such debts and obligations until its affairs are fully adjusted and wound up for three (3) years.
  3. If the holders of certificates of beneficial interest of an investment trust shall vote to dissolve, any holder of a certificate of beneficial interest of such trust may, within six (6) months from the date that the certificate of dissolution is filed with the chancery clerk as herein provided, demand an accounting by the trustees of all assets held by them in such capacity; and the chancery court of the county wherein the original declaration of trust was recorded shall have jurisdiction to compel such accounting upon petition by any holder of a certificate of beneficial interest in the investment trust.

HISTORY: Codes, 1942, § 5570-11; Laws, 1962, ch. 238, § 11, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Secretary of state, see §§ 7-3-1 et seq.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts § 19.

5 Am. Jur. Pl & Pr Forms (Rev), Business Trusts, Form 1.

4 Am. Jur. Legal Forms 2d, Business Trusts §§ 51:204-51:208.

CJS.

12 C.J.S., Business Trusts § 15.

§79-15-23. How investment trust sued.

  1. An investment trust may sue or be sued as a separate and distinct entity, under the name set forth in the declaration of trust, and it shall not be necessary to join the trustees individually or the holders of certificates of beneficial interest as parties plaintiff or defendant. An investment trust may be sued, at law or in equity, for debts and other obligations incurred by the trustees in the performance of their duties under the declaration of trust, and for damages to third persons resulting from the negligence of such trustees in the performance of their duties under the declaration of trust, and its property shall be subject to attachment and execution, all in like manner as if it were a corporation.
  2. The trustees shall severally be agents for service of process upon an investment trust. An investment trust organized pursuant to this chapter shall be deemed to be domiciled in the State of Mississippi and in the county of its principal office and place of business within that state, without regard to the residence of the trustees.

HISTORY: Codes, 1942, § 5570-12; Laws, 1962, ch. 238, § 12, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Cross References —

Attachments generally, see §§ 11-33-1 et seq.

Service of process on trustees, see § 13-3-41.

Levy of execution generally, see §§ 13-3-111 et seq.

RESEARCH REFERENCES

Am. Jur.

5 Am. Jur. Pl & Pr Forms (Rev), Business Trusts, Forms 2, 4, 5.

CJS.

12 C.J.S., Business Trusts §§ 50, 52-61, 64.

§79-15-25. How investment trust taxed.

The income of an investment trust shall be taxed as if the investment trust were a business corporation with the exception of the dividend deduction allowed an investment trust under Section 27-7-17. An investment trust shall be deemed a domestic corporation for purposes of the corporation franchise tax imposed by Sections 27-13-1 through 27-13-61, Mississippi Code of 1972.

HISTORY: Codes, 1942, § 5570-13; Laws, 1962, ch. 238, § 13; Laws, 1985, ch. 411, § 2; Laws, 1987, ch. 356, § 2, eff from and after January 1, 1988.

Cross References —

Income tax, see §§ 27-7-1 et seq.

Corporation franchise tax, see §§ 27-13-1 et seq.

§79-15-27. Effect of chapter on prior rights, duties, penalties and proceedings.

This chapter shall not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before May 15, 1962.

HISTORY: Codes, 1942, § 5570-14; Laws, 1962, ch. 238, § 14, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

§79-15-29. Applicability of other laws; repeals.

The provisions of the Investment Securities chapter and other appropriate provisions of the Mississippi Uniform Commercial Code, and the provisions of the Mississippi Blue Sky Laws, Sections 75-71-1 through 75-71-57, Mississippi Code of 1972, and the regulations and rules adopted thereunder, and the provisions of the Fiduciary Transfer Law, Sections 91-11-1 through 91-11-21, Mississippi Code of 1972, shall be applicable to investment trusts organized pursuant to this chapter. All other laws applicable to business corporations organized for profit shall be applicable to investment trusts organized pursuant to this chapter, to the extent that such laws are not inconsistent with the provisions and purposes of this chapter. All laws or parts of laws in conflict with the provisions of this chapter are hereby repealed to the extent of such conflict only.

HISTORY: Codes, 1942, § 5570-15; Laws, 1962, ch. 238, § 15, eff immediately upon its passage and approval by the Governor (approved May 15, 1962).

Editor’s Notes —

Sections 75-71-1 through 75-71-57 referred to in this section were repealed by Laws of 1981, ch. 521, § 418, eff from and after July 1, 1981. For current provisions, see §§ 75-71-101 et seq.

Cross References —

Investment securities under Uniform Commercial Code, see §§ 75-8-101 et seq.

RESEARCH REFERENCES

ALR.

What gives rise to right of rescission under state blue sky laws. 52 A.L.R.5th 491.

Foreign Investment Trusts

§79-15-101. Certificate of authority; necessity of; what constitutes not transacting business.

No foreign investment trust shall have the right to transact business in this state until it shall have procured a certificate of authority so to do from the secretary of state. No foreign investment trust shall be entitled to procure a certificate of authority under Sections 79-15-101 through 79-15-139 to transact in this state any business which an investment trust organized under the Mississippi Investment Trust Law is not permitted to transact. A foreign investment trust shall not be denied a certificate of authority by reason of the fact that the laws of the state or country under which such foreign investment trust is organized governing its organization and internal affairs differ from the laws of this state, and nothing contained in Sections 79-15-101 through 79-15-139 shall be construed to authorize this state to regulate the organization or the internal affairs of such foreign investment trust.

Without excluding other activities which may not constitute transacting business in this state, a foreign investment trust shall not be considered to be transacting business in this state, for the purposes of Sections 79-15-101 through 79-15-139, by reason of carrying on in this state any one (1) or more of the following activities:

Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes.

Maintaining bank accounts.

Maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities.

Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this state before becoming binding contracts.

Transacting any business in interstate commerce.

Conducting an isolated transaction completed within a period of thirty (30) days and not in the course of a number of repeated transactions of like nature.

Investing in or acquiring, in transactions outside of Mississippi, royalties and other non-operating mineral interests, and the execution of division orders, contracts of sale and other instruments incidental to the ownership of such non-operating mineral interests.

HISTORY: Laws, 1978, ch. 463, § 2, eff from and after July 1, 1978.

Cross References —

Domestic investment trusts, see §§ 79-15-1 et seq.

Filing fees, see § 79-15-135.

RESEARCH REFERENCES

Am. Jur.

13 Am. Jur. 2d, Business Trusts § 75.

CJS.

12 C.J.S., Business Trusts §§ 11, 51, 52, 56.

§79-15-103. Rights and responsibilities similar to domestic trusts.

A foreign investment trust which shall have received a certificate of authority under Sections 79-15-101 through 79-15-139 shall, until a certificate of revocation or of withdrawal shall have been issued as provided in Sections 79-15-123 through 79-15-129, enjoy the same, but no greater, rights and privileges as a domestic investment trust organized for the purposes set forth in the application pursuant to which such certificate of authority is issued; and, except as in Sections 79-15-101 through 79-15-139 otherwise provided, shall be subject to the same duties, restrictions, penalties and liabilities now or hereafter imposed upon a domestic investment trust of like character.

HISTORY: Laws, 1978, ch. 463, § 3, eff from and after July 1, 1978.

Cross References —

Domestic investment trusts, see §§ 79-15-1 et seq.

§79-15-105. Name of foreign investment trust.

No certificate of authority shall be issued to a foreign investment trust unless the name of such foreign investment trust:

shall contain the words “investment trust”, or such foreign investment trust shall, for use in this state, add at the end of its name the words “investment trust”.

shall not contain any word or phrase which indicates or implies that it is organized for any purpose other than one or more of the purposes contained in its declaration of trust.

shall not be the same as, or deceptively similar to, the name of any domestic investment trust existing under the laws of this state or any foreign investment trust authorized to transact business in this state.

HISTORY: Laws, 1978, ch. 463, § 4, eff from and after July 1, 1978.

Cross References —

Domestic investment trusts, see §§ 79-15-1 et seq.

§79-15-107. Prohibited change of name; penalties.

Whenever a foreign investment trust which is authorized to transact business in this state shall change its name to one under which a certificate of authority would not be granted to it on application therefor, the certificate of authority of such foreign investment trust shall be suspended and it shall not thereafter transact any business in this state until it has changed its name to a name which is available to it under the laws of this state.

HISTORY: Laws, 1978, ch. 463, § 5, eff from and after July 1, 1978.

§79-15-109. Certificate of authority; application.

A foreign investment trust, in order to procure a certificate of authority to transact business in this state, shall make application therefor to the Secretary of State, which application shall set forth:

The name of the foreign investment trust and the state or country under the laws of which it is organized.

If the name of the foreign investment trust does not contain the words “investment trust,” then the name containing the words “investment trust” which it elects to use in this state.

The date of declaration of trust and the period of duration of the trust.

The address of the principal office of the foreign investment trust in the state or country under the laws of which it is organized.

The information required by Section 79-35-5(a).

The purpose or purposes of the foreign investment trust which it proposes to pursue in the transaction of business in this state.

The names and respective addresses of the trustees of the foreign investment trust.

A statement of the aggregate number of shares of beneficial interest which the foreign investment trust has authority to issue and the unit value in dollars to be received by the trust for the issuance of each of such shares.

A statement of the aggregate number of issued shares of beneficial interest.

Such additional information as may be necessary or appropriate in order to enable the Secretary of State to determine whether such corporation is entitled to a certificate of authority to transact business in this state and to determine and assess the fees payable as in Section 79-15-135 prescribed.

Such application shall be made on forms prescribed and furnished by the Secretary of State and shall be executed in duplicate by at least three (3) of the trustees and verified.

HISTORY: Laws, 1978, ch. 463, § 6; Laws, 2012, ch. 382, § 100, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (e), which read “the address of the proposed registered office of the foreign investment trust in this state, and the name of its proposed registered agent in this state at such address.”

§79-15-111. Certificate of authority; issuance.

Duplicate originals of the application of the foreign investment trust for a certificate of authority shall be delivered to the secretary of state, together with a copy of its declaration of trust and all amendments thereto, duly authenticated by the proper officer where its declaration of trust and amendments thereto were recorded under the laws of the state or country where it is organized.

If the secretary of state finds that such application conforms to law, he shall, when all fees have been paid as in Section 79-15-135 prescribed:

endorse on each of such documents the word “FILED”, and the month, day and year of the filing thereof.

file in his office one (1) of such duplicate originals of the application and the copy of the declaration of trust and amendments thereto.

issue a certificate of authority to transact business in this state to which he shall affix the other duplicate original application.

The certificate of authority, together with the duplicate original of the application affixed thereto by the secretary of state, shall be returned to the foreign investment trust or its representative.

HISTORY: Laws, 1978, ch. 463, § 7, eff from and after July 1, 1978.

§79-15-113. Certificate of authority; right to transact business upon issuance; right of state to revoke or suspend.

Upon the issuance of a certificate of authority by the secretary of state, the foreign investment trust shall be authorized to transact business in this state for those purposes set forth in its application, subject, however, to the right of this state to suspend or to revoke such authority as provided in Section 79-15-129.

HISTORY: Laws, 1978, ch. 463, § 8, eff from and after July 1, 1978.

§79-15-115. Repealed.

Repealed by Laws, 2012, ch. 382, § 137, effective January 1, 2013.

§79-15-115. [Laws, 1978, ch. 463, § 9, eff from and after July 1, 1978.]

Editor’s Notes —

Former § 79-15-115 pertained to requirement to maintain registered office and registered agent in state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-15-117. Repealed.

Repealed by Laws, 2012, ch. 382, § 138, effective January 1, 2013.

§79-15-117. [Laws, 1978, ch. 463, § 10, eff from and after July 1, 1978.]

Editor’s Notes —

Former § 79-15-117 pertained to change of registered office and registered agent and resignation of registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-15-119. Repealed.

Repealed by Laws, 2012, ch. 382, § 139, effective January 1, 2013.

§79-15-119. [Laws, 1978, ch. 463, § 11, eff from and after July 1, 1978.]

Editor’s Notes —

Former § 79-15-119 pertained to service of process. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-15-121. Declaration of trust; filing of amendment.

Whenever the declaration of trust of a foreign investment trust authorized to transact business in this state is amended, such foreign investment trust shall, within sixty (60) days after such amendment becomes effective, file in the office of the secretary of state a copy of such amendment duly authenticated by the proper officer where its declaration of trust and amendments thereto were recorded under the laws of the state or country where it is organized. The filing thereof shall not of itself enlarge or alter the purpose or purposes which such foreign investment trust is authorized to pursue in the transaction of business in this state, nor authorize such foreign investment trust to transact business in this state under any other name than the name set forth in its certificate of authority.

HISTORY: Laws, 1978, ch. 463, § 12, eff from and after July 1, 1978.

Joint Legislative Committee Note —

In 2009, a typographical error in the first sentence was corrected at the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation by substituting “business in this state is amended” for “business in this state are amended.” The corrections were ratified by the Joint Committee at its July 22, 2010, meeting.

Cross References —

Filing fees, see § 79-15-135.

RESEARCH REFERENCES

Am. Jur.

4 Am. Jur. Legal Forms 2d, Business Trusts § 51:15.

§79-15-123. Certificate of authority; amendments.

A foreign investment trust authorized to transact business in this state shall procure an amended certificate of authority in the event it changes its name, or desires to pursue in this state other or additional purposes than those set forth in its prior application for a certificate of authority, by making application therefor to the secretary of state.

The requirements in respect to the form and contents of such application, the manner of its execution, the filing of duplicate originals thereof with the secretary of state, the issuance of an amended certificate of authority and the effect thereof, shall be the same as in the case of an original application for a certificate of authority.

HISTORY: Laws, 1978, ch. 463, § 13, eff from and after July 1, 1978.

Cross References —

Filing fees, see § 79-15-135.

§79-15-125. Certificate of withdrawal; application and filing.

A foreign investment trust authorized to transact business in this state may withdraw from this state upon procuring from the secretary of state a certificate of withdrawal. In order to procure such certificate of withdrawal, such foreign investment trust shall deliver to the secretary of state an application for withdrawal, which shall set forth:

The name of the foreign investment trust and the state or country under the laws of which it is organized.

That the foreign investment trust is not transacting business in this state.

That the foreign investment trust surrenders its authority to transact business in this state.

That the foreign investment trust revokes the authority of its registered agent in this state to accept service of process and consents that service of process in any action, suit or proceeding based upon any cause of action arising in this state during the time the foreign investment trust was authorized to transact business in this state may thereafter be made on such foreign investment trust by service thereof on the secretary of state.

A post-office address to which the secretary of state may mail a copy of any process against the foreign investment trust that may be served on him.

Such additional information as may be necessary or appropriate in order to enable the secretary of state to determine and assess any unpaid fees payable by such foreign investment trust as in Sections 79-15-101 through 79-15-139 prescribed, and a certificate of the state tax commission that the foreign investment trust owes no sales taxes.

The application for withdrawal shall be made on forms prescribed and furnished by the secretary of state and shall be executed by the trust by at least three (3) of its trustees and verified by them, or if the foreign investment trust is in the hands of a receiver or trustee, shall be executed on behalf of the foreign investment trust by such receiver or trustee and verified by him.

HISTORY: Laws, 1978, ch. 463, § 14, eff from and after July 1, 1978.

Editor’s Notes —

Section 27-3-4 provides that the terms “ ‘Mississippi State Tax Commission,’ ‘State Tax Commission,’ “Tax Commission’ and ‘commission’ appearing in the laws of this state in connection with the performance of the duties and functions by the Mississippi State Tax Commission, the State Tax Commission or Tax Commission shall mean the Department of Revenue.”

Cross References —

Filing fees, see § 79-15-135.

§79-15-127. Certificate of withdrawal; issuance.

Duplicate originals of such application for withdrawal shall be delivered to the secretary of state. If the secretary of state finds that such application conforms to the provisions of Section 79-15-125, he shall, when all fees and sales taxes have been paid as by law prescribed:

Endorse on each of such duplicate originals the word “Filed,” and the month, day and year of the filing thereof.

File one (1) of such duplicate originals in his office.

Issue a certificate of withdrawal to which he shall affix the other duplicate original.

The certificate of withdrawal, together with the duplicate original of the application for withdrawal affixed thereto by the secretary of state, shall be returned to the foreign investment trust or its representative. Upon the issuance of such certificate of withdrawal, the authority of the foreign investment trust to transact business in this state shall cease.

HISTORY: Laws, 1978, ch. 463, § 15, eff from and after July 1, 1978.

Cross References —

Filing fees, see § 79-15-135.

§79-15-129. Certificate of authority; revocation; causes.

The certificate of authority of a foreign investment trust to transact business in this state may be revoked by the Secretary of State upon the conditions prescribed in this section when:

The foreign investment trust has failed to pay any fees prescribed by Sections 79-15-101 through 79-15-139 when they have become due and payable;

The foreign investment trust has failed to appoint and maintain a registered agent in this state as required by Section 79-15-115;

The foreign investment trust has failed, after change of its registered agent, to file in the Office of the Secretary of State a statement of such change as required by Section 79-35-8;

The foreign investment trust has failed to file in the Office of the Secretary of State any amendment to its declaration of trust within the time prescribed by Section 79-15-121; or

A misrepresentation has been made of any material matter in any application, report, affidavit, or other document submitted by such foreign investment trust pursuant to Sections 79-15-101 through 79-15-139.

No certificate of authority of a foreign investment trust shall be revoked by the Secretary of State unless (1) he shall have given the foreign investment trust not less than sixty (60) days’ notice thereof by mail as provided by Section 79-35-13, and (2) the foreign investment trust shall fail prior to revocation to pay such fees, or file the required statement of change of registered agent, or file such articles of amendment or correct such misrepresentation.

HISTORY: Laws, 1978, ch. 463, § 16; Laws, 2012, ch. 382, § 101, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-8” for “79-15-117; or” at the end of (c); and, in the last paragraph, substituted ‘by mail as provided by Section 79-35-13,‘ for ‘addressed to its registered office in this state‘ in (1), and deleted “or registered office” following “registered agent” in (2).

Cross References —

Filing fees, see § 79-15-135.

§79-15-131. Certificate of authority; revocation; procedure.

Upon revoking any such certificate of authority, the Secretary of State shall:

Issue a certificate of revocation in duplicate.

File one (1) of such certificates in his office.

Mail to such foreign investment trust as provided in Section 79-35-13 a notice of such revocation accompanied by one (1) of such certificates.

Upon issuance of such certificate of revocation, the authority of the foreign investment trust to transact business in this state shall cease.

HISTORY: Laws, 1978, ch. 463, § 17; Laws, 2012, ch. 382, § 102, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment. effective January 1, 2013, inserted “as provided in Section 79-35-13” in (c).

§79-15-133. Certificate of authority; failure to obtain; ability to sue and be sued.

No foreign investment trust transacting business in this state without a certificate of authority shall be permitted to maintain any action, suit or proceeding in any court of this state. Nor shall any action, suit or proceeding be maintained in any court of this state by any successor or assignee of such foreign investment trust on any right, claim or demand arising out of the transaction of business by such foreign investment trust in this state.

The failure of a foreign investment trust to obtain a certificate of authority to transact business in this state shall not impair the validity of any contract or act of such foreign investment trust, and shall not prevent such foreign investment trust from defending any action, suit or proceeding in any court of this state.

A foreign investment trust which transacts business in this state without a certificate of authority shall be liable to this state, for the years or parts thereof during which it transacted business in this state without a certificate of authority, in an amount equal to all fees which would have been imposed by Section 79-15-135 upon such foreign investment trust had it duly applied for and received a certificate of authority to transact business in this state as required by Sections 79-15-101 et seq. and thereafter filed all reports required by said sections, plus all penalties imposed by said sections for failure to pay such fees. The attorney general shall bring proceedings to recover all amounts due this state under the provisions of this section.

HISTORY: Laws, 1978, ch. 463, § 18, eff from and after July 1, 1978.

RESEARCH REFERENCES

CJS.

12 C.J.S., Business Trusts §§ 11, 51, 52, 56.

§79-15-135. Fees.

The Secretary of State shall charge and collect from foreign investment trust for:

The fees required by Section 79-35-3.

Filing an application of a foreign investment trust for a certificate of authority to transact business in this state and issuing a certificate of authority, One Hundred Dollars ($100.00).

Filing an application of a foreign investment trust for an amended certificate of authority to transact business in this state and issuing an amended certificate of authority, Twenty Dollars ($20.00).

Filing a copy of an amendment to the articles of incorporation of a foreign investment trust holding a certificate of authority to transact business in this state, Twenty Dollars ($20.00).

Filing an application for withdrawal of a foreign investment trust and issuing a certificate of withdrawal, Five Dollars ($5.00).

Filing any other statement or report of a foreign investment trust, Five Dollars ($5.00).

For furnishing a certified copy of any document, instrument, or paper relating to a foreign investment trust, Sixty Cents (60¢) per page and Two Dollars ($2.00) for the certificate and affixing the seal thereto, with a minimum charge of Three Dollars ($3.00).

At the time of any service of process on him as resident agent of a foreign investment trust, Five Dollars ($5.00), which amount may be recovered as taxable cost by the party to the suit or action causing such service to be made if such party prevails in the suit or action.

HISTORY: Laws, 1978, ch. 463, §§ 19, 20; Laws, 2012, ch. 382, § 103, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (a), which formerly read: “Filing a statement of change of address of registered office or change of registered agent, or both, five dollars ($ 5.00).”

§79-15-137. Disbursement of collected funds.

All fees and charges to be collected by the secretary of state under the provisions of Sections 79-15-101 through 79-15-139 including the assessment and collection thereof of all penalties shall be paid into the general funds of the state treasury, less ten percent (10%) as received thereof to be retained and used by the secretary of state as necessary expense to administer the provisions of said sections as the secretary of state deems necessary.

HISTORY: Laws, 1978, ch. 463, § 21, eff from and after July 1, 1978.

§79-15-139. Law applicable to foreign investment trusts previously transacting business in state.

Foreign investment trusts which are transacting business in this state at the time Sections 79-15-101 through 79-15-139 take effect, for a purpose or purposes for which a foreign investment trust might secure such authority under Sections 79-15-101 through 79-15-139, shall, subject to the limitations set forth in their respective certificates of authority, charters or articles of incorporation, be entitled to all the rights and privileges applicable to foreign investment trusts procuring certificates of authority to transact business in this state under Sections 79-15-101 through 79-15-139, and from the time said sections take effect such foreign investment trust shall be subject to all the limitations, restrictions, liabilities and duties prescribed herein for foreign investment trusts procuring certificates of authority to transact business in this state under Sections 79-15-101 through 79-15-139.

Within one (1) year from July 1, 1978, said foreign investment trust transacting business within this state at the time said sections take effect shall secure a certificate of authority or be subject to the penalties, restrictions and limitations otherwise herein provided.

HISTORY: Laws, 1978, ch. 463, § 22, eff from and after July 1, 1978.

Chapter 16. Mississippi Registration of Foreign Business Trusts Act

§79-16-1. Short title.

This chapter shall be known and may be cited as the “Mississippi Registration of Foreign Business Trusts Act.”

HISTORY: Laws, 1998, ch. 428, § 1, eff from and after July 1, 1998.

§79-16-3. Reservation of power to amend or repeal.

The Mississippi Legislature has the power to amend or repeal all or part of this chapter at any time and all foreign business trusts subject to this chapter are governed by the amendment or repeal.

HISTORY: Laws, 1998, ch. 428, § 2, eff from and after July 1, 1998.

§79-16-5. Certificate of authority; necessity of; what constitutes not transacting business.

  1. No foreign business trust shall have the right to transact business in this state until it shall have procured a certificate of authority from the Secretary of State. No foreign business trust shall be entitled to procure a certificate of authority under this chapter to transact in this state any business which a foreign business trust is not permitted to transact in the state or country in which it was created.
  2. The following activities, among others, do not constitute transacting business within the meaning of subsection (1):
    1. Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes;
    2. Maintaining bank accounts;
    3. Maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities;
    4. Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this state before becoming binding contracts;
    5. Transacting any business in interstate commerce;
    6. Holding meetings of the board of trustees or holders of beneficial interest or carrying on other activities concerning internal affairs;
    7. Selling through independent contractors;
    8. Creating or procuring indebtedness, mortgages and security interests in real and personal property;
    9. Conducting an isolated transaction that is completed within a period of thirty (30) days and not in the course of a number of repeated transactions of a like nature.
    10. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts; or
    11. Owning without more, real or personal property.
  3. The list of activities in subsection (2) is not exhaustive.

HISTORY: Laws, 1998, ch. 428, § 3, eff from and after July 1, 1998.

§79-16-7. Name of foreign business trust.

  1. The name of each foreign business trust as set forth in its certificate of trust must be such as to distinguish it upon the records of the Office of the Secretary of State from the name of any corporation, limited partnership, limited liability company, investment trust or limited liability partnership reserved, registered, formed or organized under the laws of the State of Mississippi or qualified to do business or registered as a foreign corporation, foreign limited partnership, foreign limited liability company, foreign investment trust or foreign limited liability partnership in the State of Mississippi; provided, however, that a foreign business trust may register under any name which is not such as to distinguish it upon the records of the Office of the Secretary of State from the name of any domestic or foreign corporation, limited partnership, limited liability company, investment trust or limited liability partnership reserved, registered, formed or organized under the laws of the State of Mississippi with the written consent of the other corporation, limited partnership, limited liability company, investment trust or limited liability partnership which written consent shall be filed with the Secretary of State.
  2. The name of each foreign business trust as set forth in its certificate of trust may contain the name of a beneficial owner, a trustee or any other person.
  3. The name of each foreign business trust as set forth in its certificate of trust may contain the following words: “company,” “association,” “club,” “foundation,” “fund,” “institute,” “society,” “union,” “syndicate,” “limited,” or “trust” or abbreviations of like import.
  4. The exclusive right to the use of a name may be reserved by a foreign business trust in accordance with the Mississippi Business Corporation Act.

HISTORY: Laws, 1998, ch. 428, § 4, eff from and after July 1, 1998.

Cross References —

Mississippi Business Corporation Act, see §§ 79-4-1.01 et seq.

§79-16-9. Prohibited change of name; penalties.

Whenever a foreign business trust which is authorized to transact business in this state shall change its name to one under which a certificate of authority would not be granted to it on application therefor, the certificate of authority of such foreign business trust shall be suspended and it shall not thereafter transact any business in this state until it has changed its name to a name which is available to it under the laws of this state and obtains a certificate of correction or amendment.

HISTORY: Laws, 1998, ch. 428, § 5, eff from and after July 1, 1998.

§79-16-11. Application for certificate of authority.

  1. A foreign business trust, in order to procure a certificate of authority to transact business in this state, shall make application therefor to the Secretary of State, which application shall set forth:
    1. The name of the foreign business trust and the state or country under the laws of which it is organized;
    2. The date of declaration of trust and the period of duration of the trust;
    3. The address of the principal office of the foreign business trust in the state or country under the laws of which it is organized;
    4. The information required by Section 79-35-5(a);
    5. The purpose or purposes of the foreign business trust which it proposes to pursue in the transaction of business in this state;
    6. The names and respective addresses of the trustees of the foreign business trust; and
    7. A statement of the aggregate number of shares of beneficial interest which the foreign business trust has authority to issue and the unit value in dollars to be received by the trust for the issuance of each of such shares.
  2. Such application shall be made on forms prescribed and furnished by the Secretary of State and shall be executed by at least one (1) of the trustees.
  3. A business trust shall deliver with the completed application a certificate of existence, or a document of similar import, duly authenticated by the Secretary of State or other official having custody of trust records in the state or country under whose law it is created.

HISTORY: Laws, 1998, ch. 428, § 6; Laws, 2012, ch. 382, § 104, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (1)(d), which formerly read: “The address of the registered office of the foreign business trust in this state and the name of its registered agent in this state at such address.”

Cross References —

Filing fees, see § 79-15-135.

§79-16-13. Issuance of certificate of authority.

If the Secretary of State finds that the application for certificate of authority meets the requirements of this chapter and requisite fees as provided in Section 79-16-33, Mississippi Code of 1972, have been paid, he shall:

Endorse on the original the word “filed” and the month, day and year of the filing thereof;

File in his office the original of the application; and

Issue a certificate of authority to transact business in this state to which he shall affix a copy of the application.

The certificate of authority, together with a copy of the application affixed thereto by the Secretary of State, shall be returned to the business trust or its representative.

HISTORY: Laws, 1998, ch. 428, § 7, eff from and after July 1, 1998.

§79-16-15. Changes and amendments.

If any statement in the application for certificate of authority of a foreign business trust was false when made or any arrangements or other facts described have changed, making the application inaccurate in any respect, the foreign business trust shall promptly file in the Office of the Secretary of State a certificate, signed by a trustee, correcting such statement, together with a fee as set forth in Section 79-16-33, Mississippi Code of 1972.

HISTORY: Laws, 1998, ch. 428, § 8, eff from and after July 1, 1998.

§79-16-17. Repealed.

Repealed by Laws, 2012, ch. 382, § 140, effective January 1, 2013.

§79-16-17. [Laws, 1998, ch. 428, § 9, eff from and after July 1, 1998.]

Editor’s Notes —

Former § 79-16-17 required that a foreign business trust maintain a registered office and registered agent in the state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-16-19. Repealed.

Repealed by Laws, 2012, ch. 382, § 141, effective January 1, 2013.

§79-16-19. [Laws, 1998, ch. 428, § 10, eff from and after July 1, 1998.]

Editor’s Notes —

Former § 79-16-19 pertained to a change or resignation of registered office or registered agent by a foreign business trust. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-16-21. Repealed.

Repealed by Laws, 2012, ch. 382, § 142, effective January 1, 2013.

§79-16-21. [Laws, 1998, ch. 428, § 11, eff from and after July 1, 1998.]

Editor’s Notes —

Former § 79-16-21 pertained to service of process on a foreign business trust. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-16-23. Certificate of withdrawal; application and filing.

  1. A foreign business trust authorized to transact business in this state may withdraw from this state upon procuring from the Secretary of State a certificate of withdrawal. In order to procure such certificate of withdrawal, such foreign business trust shall deliver to the Secretary of State an application for withdrawal, which shall set forth:
    1. The name of the foreign business and the state or country under the laws of which it is organized;
    2. That the foreign business trust is not transacting business in this state;
    3. That the foreign business trust surrenders its authority to transact business in this state;
    4. That the foreign business trust revokes the authority of its registered agent in this state to accept service of process and consents that service of process in any action, suit or proceeding based on a cause of action arising in this state during the time the foreign business trust was authorized to transact business in this state may thereafter be made on such foreign business trust by service thereof on the Secretary of State;
    5. A post office address to which the Secretary of State may mail a copy of any process against the foreign business trust that may be served on him;
    6. A commitment to notify the Secretary of State in the future of any change in its mailing address; and
    7. Such additional information as may be necessary or appropriate in order to enable the Secretary of State to determine and assess any unpaid fees payable by such foreign business trust, and a certificate of the State Tax Commission that the foreign business trust owes no taxes.
  2. The application for withdrawal shall be made on forms prescribed and furnished by the Secretary of State and shall be executed by the trust by at least one (1) of its trustees, or if the foreign business trust is in the hands of a receiver or trustee, shall be executed on behalf of the foreign business trust by such receiver or trustee.

HISTORY: Laws, 1998, ch. 428, § 12, eff from and after July 1, 1998.

Editor’s Notes —

Section 27-3-4 provides that the terms “ ‘Mississippi State Tax Commission,’ ‘State Tax Commission,’ “Tax Commission’ and ‘commission’ appearing in the laws of this state in connection with the performance of the duties and functions by the Mississippi State Tax Commission, the State Tax Commission or Tax Commission shall mean the Department of Revenue.”

Cross References —

Filing fees, see § 79-16-33.

§79-16-25. Certificate of withdrawal; issuance.

  1. Application for withdrawal shall be delivered to the Secretary of State. If the Secretary of State finds that such application meets the requirements of this chapter, when all fees and taxes have been paid as by law prescribed, he shall:
    1. Endorse on such application the word “filed,” and the month, day and year of the filing thereof;
    2. File the application in his office; and
    3. Issue a certificate of withdrawal.
  2. The certificate of withdrawal, together with a copy of the application for withdrawal affixed thereto by the Secretary of State, shall be returned to the foreign business trust or its representative. Upon the issuance of such certificate of withdrawal, the authority of the foreign business trust to transact business in this state shall cease.

HISTORY: Laws, 1998, ch. 428, § 13, eff from and after July 1, 1998.

Cross References —

Filing fees, see § 79-16-33.

§79-16-27. Certificate of authority; revocation; causes.

  1. The certificate of authority of a foreign business trust to transact business in this state may be revoked by the Secretary of State upon the condition prescribed in this section when:
    1. The foreign business trust has failed to pay any fees prescribed by law when they become due and payable;
    2. The foreign business trust has failed to appoint and maintain a registered agent in this state;
    3. The foreign business trust has failed, after change of its registered office or registered agent, to file in the Office of Secretary of State an appropriate filing as required by the Mississippi Registered Agents Act, Chapter 35, Title 79, Mississippi Code of 1972; or
    4. A misrepresentation has been made of any material matter in an application, report, affidavit or other document submitted by such foreign business trust pursuant to law.
  2. No certificate of authority of a foreign business trust shall be revoked by the Secretary of State unless:
    1. He shall have given the foreign business trust not less than sixty (60) days’ notice thereof by mail addressed to its registered office in this state; and
    2. The foreign business trust shall fail prior to revocation to pay such fees, any taxes owed or file the required appropriate filing as required by the Mississippi Registered Agents Act, Chapter 35, Title 39, Mississippi Code of 1972, to report a change of registered agent or address of registered agent, or file such amendment or correct such misrepresentation.

HISTORY: Laws, 1998, ch. 428, § 14; Laws, 2012, ch. 382, § 105, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “an appropriate filing as required by the Mississippi Registered Agents Act, Chapter 35, title 79, Mississippi Code of 1972” for “a statement of such change as required by law”at the end of (1)(c); and, in (2)(b), substituted “required appropriate filing as required by the Mississippi Registered Agents Act, Chapter 35, Title 39, Mississippi Code of 1972, to report a change” for “required statement of change” and “or address of registered agent” for “or registered office”.

Cross References —

Filing fees, see § 79-16-33.

§79-16-29. Certificate of authority; revocation procedure.

  1. Upon revoking such certificate of authority, the Secretary of State shall:
    1. Issue a certificate of revocation;
    2. File one (1) of such certificates in his office; and
    3. Mail to such foreign business trust to its registered agent as provided in Section 79-35-13 a notice of such revocation accompanied by one (1) of such certificates.
  2. Upon issuance of such certificate of revocation, the authority of the foreign business trust to transact business in this state shall cease.

HISTORY: Laws, 1998, ch. 428, § 15; Laws, 2012, ch. 382, § 106, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “agent as provided in Section 79-35-13” for “office in this state” in (1)(c).

§79-16-31. Consequences of transacting business without authority.

  1. A foreign business trust transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.
  2. The successor to a foreign business trust that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state until the foreign business trust or its successor obtains a certificate of authority.
  3. A court may stay a proceeding commenced by a foreign business trust, its successor or assignee until it determines whether the foreign business trust or its successor requires a certificate of authority. If it so determines, the court may further stay a proceeding until the foreign business trust or its successor obtains a certificate.
  4. A foreign business trust is liable for a civil penalty of Ten Dollars ($10.00) for each day, but not to exceed a total of One Thousand Dollars ($1,000.00) for each year it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection.
  5. Notwithstanding subsections (1) and (2), the failure of a foreign business trust to obtain a certificate of authority does not impair the validity of its acts or prevent it from defending any proceeding in this state.

HISTORY: Laws, 1998, ch. 428, § 16, eff from and after July 1, 1998.

§79-16-33. Fees.

The Secretary of State shall charge and collect from foreign business trust for:

  1. Filings required by the Mississippi Registered Agents Act, the fees required by Section 79-35-3;
  2. Filing an application of a foreign business trust for a certificate of authority to transact business in this state and issuing a certificate of authority, Two Hundred Fifty Dollars ($250.00);
  3. Filing a certificate of correction or amendment of a foreign business trust authorized to transact business in this state, Fifty Dollars ($50.00);
  4. Filing an application for withdrawal of a foreign business trust and issuing a certificate of withdrawal, Twenty-five Dollars ($25.00);
  5. Filing any other statement or report of a foreign business trust, Twenty-five Dollars ($25.00);
  6. For furnishing a certified copy of any document, instrument or paper relating to a foreign business trust, One Dollar ($1.00) per page and Ten Dollars ($10.00) for the certificate and affixing the seal thereto; and
  7. At the time of any service of process on him as resident agent of a foreign business trust, Twenty-five Dollars ($25.00), which amount may be recovered as taxable cost by the party to the suit or action causing such service to be made if such party prevails in the suit or action.

HISTORY: Laws, 1998, ch. 428, § 17; Laws, 2012, ch. 382, § 107, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (1), which formerly read: “Filing a statement of change of address of registered office or change of registered agent, or both, Twenty-five Dollars ($ 25.00).”

Cross References —

Mississippi Registered Agents Act see §§ 79-35-1 et seq.

§79-16-35. Laws applicable to foreign business trust previously transacting business in this state.

  1. Foreign business trusts which are transacting business in this state at the time this law takes effect, for a purpose or purposes for which a foreign business trust might secure such authority under said law, shall, subject to the limitations set forth in their respective certificates of authority, be entitled to all the rights and privileges applicable to foreign business trusts procuring certificates of authority to transact business, and such foreign business trusts shall be subject to all the limitations, restrictions, liabilities and duties prescribed herein for foreign business trusts procuring certificates of authority to transact business in this state.
  2. Within one (1) year from July 1, 1998, all foreign business trust transacting business within the state at the time said chapter takes effect shall secure a certificate of authority or be subject to the penalties, restrictions and limitations otherwise herein provided.

HISTORY: Laws, 1998, ch. 428, § 18, eff from and after July 1, 1998.

Chapter 17. Agricultural Associations; Conversion to Corporate Form

§79-17-1. Agriculture classified as primary industry.

Agriculture is the primary industry in the State of Mississippi, and it is in the interest of said state and its inhabitants that agriculture be classified in the manner and for the purposes herein set forth.

HISTORY: Codes, 1930, § 4080; 1942, § 4475; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Agricultural exemptions from sales tax, see § 27-65-103.

State regulation of agriculture, horticulture and animals, see §§ 69-1-1 et seq.

Regulation of markets and marketing, see §§ 69-7-101 et seq.

Agricultural cooperative marketing associations, see §§ 79-19-1 et seq.

Cooperative aquatic products marketing associations, see §§ 79-21-1 et seq.

Agricultural credit corporations, see §§ 81-15-1 et seq.

RESEARCH REFERENCES

ALR.

Liability of member or former member of marketing or purchasing cooperative for its debts or losses. 96 A.L.R.3d 1243.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 1 et seq.

CJS.

3 C.J.S., Agriculture § 151.

§79-17-3. A supplementary law.

This chapter is supplementary of and not amendatory or in alteration of any other laws for the accomplishment of any of the purposes herein set forth, and shall apply only to organizations created and operating hereunder.

HISTORY: Codes, 1930, § 4081; 1942, § 4476; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

§79-17-5. How may be cited.

This chapter shall be known as the “Agricultural Association Law,” and may be cited as such and may be abbreviated as “A.A.L.”

HISTORY: Codes, 1930, § 4082; 1942, § 4477; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

§79-17-7. Purposes.

The purposes of this chapter are to promote the general welfare of agriculture; to enable producers of agricultural products whether in the State of Mississippi or not to co-operate in the productions, processing, packing, distribution, financing and marketing of agricultural products, and the elimination of speculation and waste therein; to enable such producers to organize incorporated associations with or without capital stock and not for profit but for service to their members by the organization and operation of such corporations by a simplified and inexpensive procedure for the promotion and accomplishment of such co-operation and the general welfare of agriculture.

HISTORY: Codes, 1930, § 4083; 1942, § 4478; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Regulation of markets and marketing, see §§ 69-7-101 et seq.

Effect of antitrust laws on agricultural organizations, see § 75-21-5.

Farm warehouses, see §§ 75-43-1 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 4.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:8-71:11.

CJS.

3 C.J.S., Agriculture § 151.

18 C.J.S., Corporations § 65.

§79-17-9. Name of associations incorporated hereunder.

Any such incorporated association shall have a distinctive name, the concluding part of which shall be “A.A.L.” in parentheses; and no organization not created under this chapter, whether incorporated or unincorporated, shall use or have as a part of its name or title the letters “A.A.L.” When any federation shall be organized under this chapter, and shall have adopted as a part of its name any distinctive words which are indicative of its field of service, such as the words “farm bureau,” no person, firm, corporation or association shall be entitled to use such words as a part of its name unless it be a member of such federation; and if any member thereof shall cease to be a member, it shall thereupon be required to change its name so as to eliminate the use of such words therein.

HISTORY: Codes, 1930, § 4084; 1942, § 4479; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Unlawful use of the words “farm bureau” see § 79-17-11.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 5.

CJS.

7 C.J.S., Associations § 73.

§79-17-11. Unlawful use of the words “farm bureau.”

  1. The use of the words “farm bureau” by any person, firm, partnership, association, corporation, or other business enterprise doing business in the State of Mississippi, except by the Mississippi Farm Bureau Federation or its subsidiaries or affiliate associations, shall be unlawful.
  2. The use of the words “farm bureau,” either preceded by or followed by the name of any state, county, or town or by any word designating a product, service, activity, or enterprise in the State of Mississippi shall be unlawful; provided, however, this shall not limit nor affect the right of the Mississippi Farm Bureau Federation, or any of its affiliate associations, in the free use of such words.
  3. The Mississippi Farm Bureau Federation may authorize its affiliate or associate organizations, services, or activities to use the words “farm bureau” by resolution duly adopted and spread upon the minutes of its board of directors, a certified copy of which shall be filed with the secretary of state before such words shall be used by any other than the Mississippi Farm Bureau Federation.
  4. Any person, firm, partnership, association, or corporation violating any of the provisions of this section shall be guilty of a misdemeanor and, upon conviction, fined not less than One Hundred Dollars ($100.00) or imprisoned in the county jail not exceeding six (6) months, or both.

HISTORY: Codes, 1942, § 4479-01; Laws, 1946, ch. 213, §§ 1-4.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

§79-17-13. How associations may be formed.

Three (3) or more producers of agricultural products in the State of Mississippi who may desire that they, their associates, and successors shall come under this chapter and enjoy its benefits may enter into articles of association and incorporation, which shall set forth the name of the organization, the period of its existence (which shall be for not more than ninety-nine (99) years), its domicile, and that it is to be organized and operated under this chapter. Such articles shall be in duplicate and signed and acknowledged by all those named therein and filed with the Secretary of State of Mississippi. Upon the receipt of Twenty-five Dollars ($25.00) as a recording fee, the Secretary of State shall file both of said copies, endorsing thereon over his official signature the filing and the date thereof. Thereupon and by such filing and indorsement, said association described in the said articles shall be and become a complete and valid corporation without capital stock and without individual liability on the part of the organizers, their associates and successors, who may become members of such incorporated association, or on the part of the directors and officers of such organization, notwithstanding indebtedness be incurred by said corporation and it be without capital stock. Such articles when so filed shall be the charter of such corporation. Upon the filing and endorsement of the articles as aforesaid, the Secretary of State shall return one (1) of said copies of said articles to said corporation, which shall have the same recorded in the record of charters in the office of the clerk of the chancery court of the county in which the principal office or place of business of such corporation is located, and the Secretary of State shall retain the other copy of said articles for his files and record it and said endorsements thereon in the records of charters in his office. Such articles may be amended by the same procedure except that the proposed amendment shall be signed by two (2) executive officers, only after authority given by the vote of a majority of the members present at any membership meeting duly called and held; provided, however, that notice of such meeting and a statement of the substance of the proposed amendment to the articles of association and incorporation shall be mailed or delivered by hand to all members of the incorporated association at least fifteen (15) days prior to the date of such meeting. The recording fee for an amendment to such articles shall be Twenty Dollars ($20.00).

HISTORY: Codes, 1930, § 4085; 1942, § 4480; Laws, 1928, ch. 295; Laws, 1930, ch. 109; Laws, 1958, ch. 204; Laws, 1964, ch. 256; Laws, 2004, ch. 422, § 1, eff from and after July 1, 2004.

Amendment Notes —

The 2004 amendment substituted “Three (3) or more producers” for “Ten (10) or more producers” at the beginning of the section.

Cross References —

Secretary of State, see §§ 7-3-1 et seq.

Duty of chancery court clerk to keep records, see § 9-5-137.

Recording of instruments by chancery court clerk, see § 89-5-25.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13-15.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:6 et seq. 71:40 et seq.

CJS.

3 C.J.S., Agriculture § 152.

7 C.J.S., Associations §§ 7, 12, 14-16.

18 C.J.S., Corporations §§ 43, 65.

§79-17-15. Organization, officers, bylaws.

A majority of the organizing members named in the articles, at a time and place agreed upon in writing by all of the said organizers or when and where all are present or upon call of a majority of such organizers and upon five (5) days’ notice thereof in writing giving the time, place and purposes of the meeting by United States mail or delivery by hand to all of the others of said organizing members, may make permanent organization of such corporation and adopt bylaws for the same and elect the members of the board of directors and such officers as under the bylaws may be elected by the members. The bylaws so adopted may be amended by the vote of a majority of the members present at any membership meeting duly called and held; provided, however, notice of such meeting and a statement of the substance of the proposed bylaw amendment shall be mailed or delivered by hand to all members of the incorporated association at least fifteen (15) days prior to the date of such meeting.

HISTORY: Codes, 1930, § 4086; 1942, § 4481; Laws, 1928, ch. 295; Laws, 1930, ch. 109; Laws, 1964, ch. 257, eff from and after passage (approved March 11, 1964).

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13-15.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:16 et seq., 71:45 et seq., 71:91.

CJS.

7 C.J.S., Associations § 7.

§79-17-17. Board of directors to control affairs.

The affairs of such incorporated association shall be conducted, controlled and managed by a board of directors of such number and with such terms of office as may be provided by the bylaws.

HISTORY: Codes, 1930, § 4087; 1942, § 4482; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 16, 17.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:45 et seq., 71:54 et seq., 71:87 et seq.

CJS.

7 C.J.S., Associations §§ 21-26.

§79-17-19. Voting by mail, dues and fees.

The bylaws may provide among other things for voting of the members by mail and for membership fees and dues, and shall provide how membership in the incorporated association may be acquired and lost.

HISTORY: Codes, 1930, § 4088; 1942, § 4483; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 14, 18.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:28 et seq.

CJS.

7 C.J.S., Associations §§ 62, 64, 66.

§79-17-21. Membership nontransferable.

All memberships shall be personal to the member and equal in right, and shall not be transferable, assignable, vendible, inheritable, devisable, or seizable; and each member shall have one (1) vote only.

HISTORY: Codes, 1930, § 4089; 1942, § 4484; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 18, 21.

5B Am. Jur. Legal Forms 2d, Cooperative Associations § 71:118.

§79-17-23. Associations with capital stock, etc.

Such incorporated association may be organized with capital stock at the option of the organizers; and it shall in that event be organized by the same method and for the same recording fee as in the case of those associations organized without capital stock, except that the articles of association shall set forth also that the association is organized with capital stock, and the amount of capital stock authorized, with particulars as to the class or classes thereof, and the par value of shares. There shall be no individual liability on the part of the shareholders, members, officers, or directors.

Such association may begin business whenever as many as ten (10) members shall have paid for one (1) or more shares of stock each. The articles of association may provide for preferred stock as well as common stock; but all shares shall have a definite par value, and all shares of the same class shall have the same par value. No stock shall be issued until it shall be paid for in cash or in property or services fairly equal in value to its par value.

Common stock and preferred stock enjoying voting rights shall be issued only to, and held by, producers of agricultural products who make use of the services and facilities of the association, or agricultural associations, organizations, federations or corporations organized under this chapter, or whose purposes and operations are in harmony with the purposes of this chapter. But the articles of association may limit the ownership of common stock and preferred stock enjoying voting rights to such producers of agricultural products. Dividends upon the capital stock, common or preferred, shall not be declared or paid in excess of eight percent (8%) per annum. Each share of stock shall entitle the holder thereof to one (1) vote in the management of the association; provided, however, if authorized by the articles of incorporation and association, classes of preferred stock may be issued without voting rights. Shares of nonvoting preferred stock may be issued to any party, whether or not such party is a producer eligible to own common stock or preferred stock which enjoys voting rights. Shares of common stock or of preferred stock which enjoys voting rights shall not be transferable except to producers of agricultural products or organizations to whom they could be issued, and no person shall acquire them by operation of law. If any shareholder of common stock or of preferred stock enjoying voting rights shall cease to be eligible to hold such shares, or shall die, or shall be dissolved, and if such shares be not promptly transferred to some producer or organization eligible to hold the same, the association shall take up such shares at par value or, at the option of the association, at appraised value, such value to be conclusively fixed by the board of directors of the association, and the association may pay therefor in cash or by certificate of indebtedness to be thereafter paid from the income of the association.

All shareholders shall be members of the association, but there may also be members who are not shareholders. Such additional members shall have no vote in the management of the association; but they shall be entitled to all other benefits of the association equally with members who are shareholders, as if it were organized without capital stock, except that they shall have no right to stock dividends.

If any shareholder shall attempt to transfer his shares, except as permitted, such shares may, at the option of the association, be taken up as in case of the death of a shareholder.

Upon the dissolution of the association, any assets remaining after the payment of debts and the retiring of outstanding stock at par value shall be distributed in the manner provided in the bylaws of the incorporated association.

HISTORY: Codes, 1930, § 4090; 1942, § 4485; Laws, 1930, ch. 109; Laws, 1964, ch. 258, eff from and after passage (approved March 11, 1964).

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 21.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:10, 71:68, 71:94, 71:95.

CJS.

18 C.J.S., Corporations § 43.

JUDICIAL DECISIONS

1. In general.

2. Rights of shareholder.

1. In general.

An incorporated agricultural association has absolute duty of taking up and paying, at its par value only, the stock of a shareholder who has ceased to be a producer of agricultural products and who is unable to transfer such stock to some other producer, although the association may pay for such stock by issuing its certificate of indebtedness payable out of future earnings or income. Avon Gin Co. v. Bond, 198 Miss. 197, 22 So. 2d 362, 1945 Miss. LEXIS 184 (Miss. 1945).

2. Rights of shareholder.

Rights of shareholder in a corporate agricultural association are controlled by the law under which the association is organized which must be read into his contract of purchase of the stock, and, upon becoming a member of the association, he is charged with notice of the law pertaining thereto. Avon Gin Co. v. Bond, 198 Miss. 197, 22 So. 2d 362, 1945 Miss. LEXIS 184 (Miss. 1945).

Shareholder of capital stock in an incorporated agricultural association, upon becoming ineligible to hold stock by reason of fact that he is no longer a producer of agricultural products and who is unable to sell or transfer his stock to another eligible producer or organization, is entitled to be paid by the association only the par value of his stock, which may be paid by association’s certificate of indebtedness payable out of future earnings, and not the amount representing the proportion that his shares bear to the present assets of the association, even though such amount may be greater than the par value of the shares, and such does not deprive the shareholder of property without due process of law in violation of the constitution. Avon Gin Co. v. Bond, 198 Miss. 197, 22 So. 2d 362, 1945 Miss. LEXIS 184 (Miss. 1945).

§79-17-25. Powers of association.

Such incorporated association shall have the power to contract and be contracted with, borrow and lend money, issue notes, bonds and other obligations, and secure the payment of the same by mortgage or otherwise, contract for, own, sell, convey, pledge, mortgage, buy and otherwise have, use, and dispose of property of all kinds not prohibited by law; to promote and carry out the purposes of this chapter, to grow and market the agricultural products of its members, cooperatively in pools and otherwise, and collect for the same, to purchase such products from its members; to advance money upon such products to its members, to act as agent for its members, to process, condition, pack, store, and otherwise safeguard, care for, and make ready for market the agricultural products of its members, to purchase for the distribution to its members, and purchase for and sell to its members, seed, plants, fertilizer, machinery, necessary fuel, implements, livestock, feed, chemicals, foodstuff, materials, supplies, packages, containers, wrapping, labels, tags, and any other products, wares, merchandise, and any and all other commodities necessary or useful in the production, processing, packing, storage, distributing and marketing of agricultural products, and beautifying and making more attractive and comfortable home and farm properties; and in the growing, distributing, transporting and marketing of agricultural products, electric light poles, cross arms, fruit trees, ornamental shrubs and plants, and any and all material, commodities or supplies necessary or useful in the growing, transporting, distributing, marketing, and processing farm products, and in extending, encouraging, and cooperating with the Tennessee Valley Association in the promotion of agricultural pursuits, and in locating, aiding and encouraging manufacturing enterprises, and the improving of agricultural communities and conditions of the state; to erect, buy, own, rent, operate, manage or control all plants, properties, machinery, supplies, materials, commodities and installations necessary or useful in processing, conditioning, packing, manufacturing, storing, shipping, distributing, transporting, marketing and producing such products, and in aiding and encouraging the locating, promoting and supplying of manufacturing enterprises, and for the beautifying and making more comfortable and attractive home and farm properties, and in assisting, extending, and cooperating with the Tennessee Valley Authority in the distribution and sale of electrical supplies of all kinds and character.

Any provision of any law which otherwise would be in conflict with this chapter, or with the powers herein conferred, shall not be construed as applying to the associations herein provided for; and all laws heretofore or hereafter enacted in conflict with any of the provisions hereof shall be construed as not applying to associations of this character, if to construe otherwise would tend to limit, restrict, prohibit, or penalize the associations herein authorized to be organized. Provided, that such interpretation and construction shall be strictly limited to bona fide cooperative associations, and that nothing herein contained is intended nor shall be construed so as to permit any person, firm and/or corporation to engage in any business for the personal profit and gain of said person, firm and/or corporation and not as a strictly cooperative association, and escape liability for taxes or other legal exactions by assuming or claiming the form or guise of a cooperative association.

Any association heretofore or hereafter organized under the provisions of Chapters 17, 19, and 21 of Title 79, Mississippi Code of 1972, is hereby authorized and empowered to organize and operate such branch associations as it may deem necessary or useful in carrying out the purposes of this chapter. Such branch associations shall be located at such places as the directors may deem proper, and shall be under the supervision, control and management of the officers and directors of the parent association; and members of such branch associations may or may not be shareholders, but all members of branch associations shall be entitled to the same benefits and privileges as are permitted and enjoyed by members of the parent association.

In addition to the foregoing, the articles of incorporation of any association incorporated hereunder may contain any provision consistent with law with respect to management, regulation, government, financing, indebtedness, membership, the establishment of voting districts and the election of delegates for representative purposes, the issuance, retirement, and transfer of its stock, if formed with capital stock, or any provisions relative to the way or manner in which it shall operate or with respect to its members, officers or directors and any other provisions relative to its affairs.

The powers herein granted shall be possessed by an association or federation organized hereunder fully and completely, whether specified in the articles of association or not, unless expressly eliminated by the articles of association.

Such incorporated association may render the services mentioned in this section to producers of agricultural products who are not members thereof as well as to members, provided that no such incorporated association shall deal in the agricultural products of nonmembers to an amount greater in value than such as are handled by it for members, and that no such incorporated association shall purchase supplies and equipment for nonmembers in an amount greater in value than such as are purchased for members.

Whenever such incorporated association shall market the products of, purchase supplies or equipment for, or render other services to nonmembers, such nonmember patrons shall be treated on the same basis as members in that the same charges and deductions shall be made against them as against members for like services, and that they shall be entitled to receive patronage dividends and distributions equally with members on account of like services rendered by such association to them during the period of time for which such patronage dividends or distributions are made, but as to nonmembers such patronage dividends and distributions may be paid as a credit toward the purchase of stock or the payment of a membership fee, at the option of such association.

HISTORY: Codes, 1930, § 4091; 1942, § 4486; Laws, 1928, ch. 295; Laws, 1930, ch. 109; Laws, 1934, ch. 289; Laws, 1964, ch. 259, eff from and after passage (approved March 26, 1964).

Cross References —

Regulation of markets and marketing, see §§ 69-7-101 et seq.

Electric power associations, see §§ 77-5-201 et seq.

RESEARCH REFERENCES

ALR.

Validity and construction of provision for liquidated damages in contract with co-operative marketing association. 12 A.L.R.2d 130.

Co-operative associations: rights in equity credits or patronage dividends. 50 A.L.R.3d 435.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 26-28.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:54 et seq., 71:76 et seq., 71:102 et seq..

CJS.

3 C.J.S., Agriculture §§ 153-155.

7 C.J.S., Associations §§ 71, 72 et seq.

§79-17-27. Charges for expenses and creating reserve.

Such incorporated association may make charges to its members and deductions from the proceeds of their products for services rendered to them for the purpose of paying the expenses of operation and the maintenance and development of such association, and for the creation and maintenance of reserves for the purpose of paying expenses, retiring obligations, acquiring, maintaining and operating property necessary or useful in carrying out the purposes of this chapter and for caring for contingencies, and such reserves may be used or distributed as may be deemed proper by the board of directors under the bylaws; and such corporation may make patronage dividends or distributions to its members and may do any and all things not unlawful in carrying out the purposes of this chapter, and shall have and enjoy all the rights, privileges and immunities of other corporations not inconsistent with this chapter.

HISTORY: Codes, 1930, § 4092; 1942, § 4487; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

RESEARCH REFERENCES

ALR.

Construction and effect of co-operative farm or dairy products agreement with respect to association’s charges and deductions for gathering, grading, processing, shipping and marketing the products. 90 A.L.R.2d 1142.

Co-operative associations: rights in equity credits or patronage dividends. 50 A.L.R.3d 435.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 20, 35, 39.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:59, 71:61.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Form 3.

CJS.

7 C.J.S., Associations §§ 61, 62, 64.

§79-17-29. Certain suits authorized.

Such incorporated association may sue and be sued; and may collect, sue for and realize on claims for the purchase money of products sold by it for its members and/or nonmembers, and on claims for freight overcharges on, and for loss and damage to, shipments made by it for its members and/or nonmembers, for the use and benefit of such persons.

HISTORY: Codes, 1930, § 4093; 1942, § 4488; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 42 et seq.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Forms 3, 11, 12, 21.

CJS.

7 C.J.S., Associations §§ 88 et seq.

JUDICIAL DECISIONS

1. In general.

A patron of a co-operative may not set off equity credits to him on its books against a debt presently due. Clarke County Cooperative v. Read, 243 Miss. 879, 139 So. 2d 639, 1962 Miss. LEXIS 414 (Miss. 1962).

§79-17-31. Associations may federate.

Such associations incorporated hereunder may, in carrying out their purposes, become members of and enjoy the facilities and co-operation of any federation whose members are agricultural societies, organizations or associations, whose purposes and operations are in any way promotive of and not inconsistent with the purposes of this chapter.

HISTORY: Codes, 1930, § 4094; 1942, § 4489; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

§79-17-33. How federation managed.

Five (5) or more associations or corporations organized under this chapter, or whose purposes and operations are in any way promotive of, and not inconsistent with, the purposes of this chapter, whether incorporated hereunder or not, may organize and incorporate a federation of such incorporated associations as members thereof. Such incorporated federation shall be managed by a board of directors to be composed of representatives of such constituent member associations. The articles of association and incorporation for such federation shall contain the names of the constituent member associations, and the signatures and acknowledgments thereto shall be by an executive officer of each of the constituent associations; and the other procedure and details of incorporation shall be the same as herein provided for the incorporation of the constituent incorporated associations. The organization meeting and adoption of bylaws shall be by representatives chosen by the respective constituent members for that purpose, one (1) for each member. In the organization and management of such federation each constituent member shall be entitled to one (1) vote only, and if any constituent member has more than one (1) representative as members of the board of directors of said federation, such representatives as directors shall jointly have one (1) vote only, it being intended that such a federation may be incorporated hereunder as aforesaid for the purposes and with all the rights and powers herein given to associations of producers of agricultural products hereunder. After such federation has been organized and incorporated as provided herein, agricultural societies, organizations, associations or corporations, whose purposes and operations are in any way promotive of, and not inconsistent with, the purposes of this chapter, whether incorporated under this chapter or not, may become members of such federation, and are accepted by the federation; and any such federation may limit its membership to associations incorporated under this chapter.

Such federation may be organized with capital stock at the option of the organizing associations, and in that event the provisions of this chapter applying to capital stock organization of incorporated associations shall apply also to such federation, but in addition the common stock thereof shall be owned only by member associations. And the management shall be vested in a board of directors of such number as the bylaws may provide, elected by the shareholders. Such federation may begin business as soon as the organizing associations have paid for at least one (1) share of stock each.

The representatives of the member associations in the case of non-stock federations, and the directors of capital stock federations, need not be producers of agricultural products, shareholders or members of the constituent members.

HISTORY: Codes, 1930, § 4095; 1942, § 4490; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Producers of agricultural products defined, see § 79-17-35.

Agricultural products defined, see § 79-17-39.

§79-17-35. “Producers” defined.

Producers of agricultural products herein mentioned shall include individual persons, partnerships, associations and corporations who produce such products either directly or as landlords, tenants or share-croppers.

HISTORY: Codes, 1930, § 4096; 1942, § 4491; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Agricultural products defined, see § 79-17-39.

§79-17-37. Powers of federation.

Any such federation incorporated hereunder for the purpose of carrying out the purposes of this chapter and the rendition of services to its constituent members and their members shall have all the rights, powers, privileges and immunities herein given its constituent members as an incorporated association hereunder. The members of the constituent members of such federation shall be treated as members of the federation to the extent that services rendered to them by the federation shall be considered to be rendered to its own members.

Each incorporated association or federation organized hereunder shall be exempt from the payment of income and franchise taxes, and shall be exempt from the payment of sales taxes on all agricultural products and products of the farm, grove, or garden grown in Mississippi. All exemptions applying to agricultural products grown in Mississippi in the possession or under the control of the producer shall apply similarly and completely to such products when delivered by the producer to such association or federation, and while in its possession or under its control or owner of it.

All shares of stock in any federation or association organized under this chapter shall be exempt from ad valorem taxation. Dividends or other net earnings paid to the holders of such stock, or to members of such federation or association, however, shall not be exempt from income taxation in the hands of such shareholder or member.

HISTORY: Codes, 1930, § 4097; 1942, § 4492; Laws, 1930, ch. 109; Laws, 1936, ch. 328; Laws, 1940, ch. 126; Laws, 1944, ch. 136; Laws, 1954, ch. 151, § 1, eff May 1, 1954.

Cross References —

Producers of agricultural products defined, see § 79-17-35.

Agricultural products defined, see § 79-17-39.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 26-28.

CJS.

3 C.J.S., Agriculture §§ 153-155.

7 C.J.S., Associations §§ 71, 72 et seq.

§79-17-39. “Agricultural products” defined.

Agricultural products as herein defined shall include the products of field, pasture, meadow and garden, and fruits, melons, berries, nuts and vegetables, live stock, poultry and poultry products, dairy products and all other things commonly known as agricultural products.

HISTORY: Codes, 1930, § 4098; 1942, § 4493; Laws, 1928, ch. 295; Laws, 1930, ch. 109.

Cross References —

Definition of agricultural products under Cooperative Marketing Law, see § 79-19-3.

§79-17-41. Repealed.

Repealed by Laws of 2013, Ch. 419, § 6, effective from and after July 1, 2013.

§79-17-41. [Codes, 1942, § 4535.5; Laws, 1950, ch. 311, §§ 1-4; Laws, 1964, ch. 264, eff from and after passage (approved April 15, 1964).]

Editor’s Notes —

Former § 79-17-41 provided for changing the corporate form of a cooperative association.

Chapter 19. Agricultural Cooperative Marketing Associations

§79-19-1. Declaration of policy.

It is the purpose of this chapter to promote, foster and encourage the intelligent and orderly marketing of agricultural products through cooperation and to eliminate speculation and waste; and to make the distribution of agricultural products as direct as can be efficiently done between producer and consumer; and to stabilize the marketing of agricultural products; and to promote, foster and encourage the live stock and poultry industry.

HISTORY: Codes, 1930, § 4099; 1942, § 4494; Laws, 1922, ch. 179; Laws, 1930, ch. 10.

Cross References —

Regulation of markets and marketing, see §§ 69-7-101 et seq.

Effect of antitrust laws on agricultural organizations, see § 75-21-5.

Definition of cooperative association under Milk Processor’s Regulation Act of 1988, see § 75-31-503.

Agricultural cooperative associations, see §§ 79-17-1 et seq.

Authority of any association organized under provisions of this Chapter and Chapters 17 and 21 to organize and operate branch associations, see § 79-17-25.

Applicability of general cooperative marketing associations law to cooperative aquatic products marketing associations, see § 79-21-19.

Applicability of this chapter to associations organized under the provisions of §§ 79-21-67, see § 79-21-67.

RESEARCH REFERENCES

Am. Jur.

3 Am. Jur. 2d, Agriculture § 51.

18 Am. Jur. 2d, Cooperative Associations §§ 1 et seq.

CJS.

3 C.J.S., Agriculture §§ 164.

§79-19-3. Definitions; nature of associations; short title.

As used in this chapter:

The term “agricultural product” shall include horticultural, viticultural, forestry, dairy, live stock, poultry, bee and any other farm products;

The term “member” shall include actual members of associations without capital stock and holders of common stock in associations organized with capital stock;

The term “association” means any association organized under this chapter; and

The term “person” shall include individuals, firms, partnerships, corporations and associations.

Associations organized hereunder shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their members as producers.

This chapter shall be referred to as the “Cooperative Marketing Law and Cooperative Live Stock and Poultry Raising Law.”

HISTORY: Codes, 1930, § 4100; 1942, § 4495; Laws, 1922, ch. 179; Laws, 1930, ch. 10.

Cross References —

Definition of cooperative association under Milk Processor’s Regulation Act of 1988, see § 75-31-503.

Definition of agricultural products under Agricultural Association Law, see § 79-17-39.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 1.

CJS.

3 C.J.S., Agriculture §§ 164, 165.

7 C.J.S., Associations §§ 1-5.

§79-19-5. Who may organize.

Twenty (20) or more persons, a majority of whom are residents of this state, engaged in the production of agricultural products may form a nonprofit, cooperative association, with or without capital stock, under the provisions of this chapter; provided, however, that for the formation of cooperative associations for growing, breeding, selling, and handling live stock or poultry, five (5) or more persons may form a cooperative association.

HISTORY: Codes, 1930, § 4101; 1942, § 4496; Laws, 1922, ch. 179; Laws, 1930, ch. 10.

Cross References —

Agricultural products defined, see § 79-19-3.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13-15.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:6, 71:7.

CJS.

3 C.J.S., Agriculture § 165.

7 C.J.S., Associations § 7.

§79-19-7. Purposes.

An association may be organized to engage in any activity in connection with the growing, breeding, handling, shipping, or utilization, or moving or marketing of the byproducts thereof of live stock and poultry of every description, and with the marketing or selling of agricultural products of it members, or with the harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilization thereof, or the manufacturing or marketing of the byproducts thereof; or in connection with the manufacturing, selling, or supplying to its members of machinery, equipment, or supplies; or in the financing of the above enumerated activities; or in any one or more of the activities specified herein.

HISTORY: Codes, 1930, § 4102; 1942, § 4497; Laws, 1922, ch. 179; Laws, 1930, ch. 10.

RESEARCH REFERENCES

ALR.

Validity and construction of provision for liquidated damages in contract with cooperative marketing association. 12 A.L.R.2d 130.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 4.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:12-71:14.

CJS.

7 C.J.S., Associations §§ 1-5.

§79-19-9. Powers.

Each association incorporated hereunder shall have the following powers:

To engage in any activity in connection with the growing, breeding, marketing, selling, or buying, or utilization of live stock and poultry of every description and the byproducts thereof, or with the marketing, selling, harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, or utilization of any agricultural product produced or delivered to it by its members; or the manufacturing or marketing of the byproducts thereof; or in connection with the purchase, hiring, or use by its members of supplies, machinery, or equipment; or in the financing of any such activities; or in any one or more of the activities specified in this section. The association may also buy, sell and deal in agricultural products of nonmembers to an amount not greater in value than such as are handled by it for its members.

To borrow money and to make advances to members.

To act as the agent or representative of any member or members in any of the above mentioned activities.

To purchase or otherwise acquire, and to hold, own, and exercise all rights of ownership in, and to sell, transfer, or pledge, or guarantee the payment of dividends or interest on, or the retirement or redemption of shares of the capital stock or bonds of any corporation or association engaged in any related activity, or in the warehousing or handling or marketing of any of the products handled by the association.

To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the bylaws.

To buy, hold, and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association, or incidental thereto.

To do each and every thing necessary, suitable, or proper for the accomplishment of any one (1) of the purposes, or the attainment of any one or more of the objects herein enumerated, or conducive to or expedient for the interest or benefit of the association; and to contract accordingly; and in addition to exercise and possess all powers, rights, and privileges necessary or incidental to the purposes for which the association is organized, or to the activities in which it is engaged; and to do any such thing anywhere.

To sue and be sued, and prosecute and be prosecuted to judgment and suit before any court; to contract and be contracted with.

HISTORY: Codes, 1930, § 4103; 1942, § 4498; Laws, 1922, ch. 179; Laws, 1930, ch. 10; Laws, 2014, ch. 507, § 1, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment substituted the present last sentence in (a) for the former last sentence, which read: “No association shall handle the agricultural products of any nonmember, except as necessary and incidental to the handling of the products of members, and in any such case the value of products of nonmembers so handled shall not exceed the value of the products handled by the association for its members”; and inserted “(1)” following “accomplishment of any one” in (g).

Cross References —

For another section derived from same 1942 code section, see § 79-19-11.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 26-28.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:54 et seq., 71:76 et seq.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Form 3.

CJS.

7 C.J.S., Associations §§ 71, 72 et seq.

§79-19-11. Members.

  1. Under the terms and conditions prescribed in its bylaws, an association may admit as members, or issue common stock or certificate of membership, only to persons engaged in the production of the agricultural products to be handled by or through the association, including the lessees and tenants of land used for the production of such products and any lessors and landlords who receive as rent part of the crops raised in the leased premises. Certificate of membership and common stock shall not be transferable, and no person shall acquire the same by operation of law or otherwise, except as provided herein.
  2. If a member of a nonstock association be other than a natural person, such member may be represented by any individual, associate, officer, manager, or member thereof, duly authorized in writing.
  3. One (1) association organized hereunder may become a member or stockholder of any other association or associations organized hereunder or whose purposes and operations are in harmony with the purposes of this chapter.
  4. The first meeting of persons at interest, unless otherwise provided for, may be called by notice published in some convenient newspaper at least five (5) days before the time appointed for the meeting, which notice shall be signed by one or more persons named in the articles of association; and the meeting when assembled may proceed to organize the association.

HISTORY: Codes, 1930, §§ 4103, 4104; 1942, §§ 4498, 4499; Laws, 1922, ch. 179; Laws, 1930, ch. 10; Laws, 1964, ch. 260, eff from and after passage (approved March 11, 1964).

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 14, 18 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:28 et seq., 91, 93 et seq, 118.

2 Am. Jur. Proof of Facts 147, Associations and Clubs.

CJS.

7 C.J.S., Associations §§ 38-40, 42 et seq.

JUDICIAL DECISIONS

1. In general.

2. Actions.

3. Estoppel.

1. In general.

Releasing certain members of the cooperative association, from operation of marketing agreement, is a breach of contract releasing other members from adhering thereto. Staple Cotton Co-op. Ass'n v. Borodofsky, 143 Miss. 558, 108 So. 802, 1926 Miss. LEXIS 293 (Miss. 1926).

2. Actions.

Bill by cotton grower against cooperative cotton association and an insurance company on a policy secured by the association as trustee and sales agent for itself and grower members, of whom plaintiff was one, held a bill for accounting with discovery as an incident thereto, and so not multifarious, though praying for alternative relief and alleging alternative liability. Johnson v. Staple Cotton Co-op. Ass'n, 142 Miss. 312, 107 So. 2, 1926 Miss. LEXIS 53 (Miss. 1926).

3. Estoppel.

Member is not estopped to assert right to cancel contract because he delivered cotton prior to bringing cross-bill for cancellation, where a cross-bill was filed immediately upon learning of breach of the contract by the association. Staple Cotton Co-op. Ass'n v. Borodofsky, 143 Miss. 558, 108 So. 802, 1926 Miss. LEXIS 293 (Miss. 1926).

§79-19-13. Articles of association.

Each association formed under this chapter must prepare and file articles of association, setting forth:

The name of the association.

The purposes for which it is formed.

The place where its principal business will be transacted.

The term for which it is to exist, if other than perpetual.

The number of directors thereof, which must not be less than five (5) and may be any number in excess thereof, and the term of office of such directors.

If organized without capital stock, whether the property rights and interest of each member shall be equal or unequal; and if unequal, the articles shall set forth the general rule or rules applicable to all members by which property right and interests, respectively, of each member may and shall be determined and fixed; and provision for the admission of new members who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules. This paragraph of the articles of association shall not be altered, amended, or repealed except by the written consent of the vote of three-fourths (3/4) of the members.

If organized with capital stock, the amount of such stock and the number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided the articles of association must contain a statement of the number of shares of stock to which preference is granted and the number of shares of stock to which no preference is granted and the nature and definite extent of the preference and privileges granted to each.

The articles must be subscribed by the incorporators and acknowledged by one (1) of them before an officer authorized by the laws of this state to take and certify acknowledgments, and shall be filed and recorded in the Office of the Secretary of State.

HISTORY: Codes, 1930, § 4105; 1942, § 4500; Laws, 1922, ch. 179; Laws, 1962, ch. 227; Laws, 2014, ch. 507, § 2, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment substituted “if other than perpetual” for “not exceeding ninety-nine (99) years” in (d) and inserted “(1)” following “acknowledged by one” in the undesignated paragraph in (g).

Cross References —

Secretary of state, see §§ 7-3-1 et seq.

Filing fees, see § 79-19-55.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:8 et seq.

CJS.

7 C.J.S., Associations § 12, 14-16.

§79-19-15. Amendments to articles of association.

  1. Any amendment to the articles of association must first be approved by a vote of not less than two-thirds (2/3) of all the members of the board of directors and then adopted by a vote representing a majority of all the members of the association.
  2. However, if a majority of the members are not present at a meeting of the members of the association to a proposed amendment that has been submitted, then those present shall recess the meeting to a time and place certain, but not sooner than three (3) weeks from the time of recess. Prior to the reconvening of the recessed meeting, notices shall be published each week for three (3) consecutive weeks in a newspaper of general circulation in the place where the principal office of the association is located. These notices shall state the time, place, and purpose of the recessed meeting. When the meeting reconvenes, the members present shall constitute a quorum, and may take action on the proposed amendment by a majority vote of those present, even if members present are fewer than a majority of the total membership of the association.
  3. Amendments to the articles of association when so adopted shall be certified to by the president and secretary of the association and shall be filed with the Secretary of State. Such certification and filing shall be conclusive evidence of the validity of such amendment.

HISTORY: Codes, 1930, § 4106; 1942, § 4501; Laws, 1922, ch. 179; Laws, 1964, ch. 261; Laws, 2014, ch. 507, § 3, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment added (2) and redesignated the former undesignated paragraph as present (1) and (3); in (1) deleted the second sentence regarding the submission of proposed amendment to the members for a vote and inserted “and then adopted . . . of the association” at the end.

Cross References —

Filing fees, see § 79-19-55.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 14.

CJS.

7 C.J.S., Associations § 12, 14-16.

§79-19-17. Bylaws.

Each association incorporated hereunder must, within thirty (30) days after its incorporation, adopt for its government and management a code of bylaws, not inconsistent with the powers granted herein. A majority vote of the members or stockholders, or their written assent, is necessary to adopt such bylaws. The bylaws so adopted may be amended by the vote of a majority of the members present at any membership meeting duly called and held; provided, however, notice of such meeting and a statement of the substance of the proposed bylaw amendment shall be mailed or delivered by hand to all members of the association at least fifteen (15) days prior to the date of such meeting. Each association under its bylaws may also provide for any or all of the following matters:

The time, place and manner of calling and conducting its meetings.

The number of stockholders or members constituting a quorum.

The right of members or stockholders to vote by proxy or by mail, or both, and the conditions, manner, form and effect of such votes.

The number of directors constituting a quorum.

The qualifications, and duties and term of office of directors and officers, time of their election and the mode and manner of giving notice thereof.

Penalties for violations of the bylaws.

The amount of entrance, organization and membership fees, if any; the manner and method of collection of the same, and the purposes for which they may be used.

The amount which each member or stockholder shall be required to pay annually or from time to time, if at all, to carry on the business of the association; the charge, if any, to be paid by each member or stockholder for service rendered by the association to him; and the marketing contract between the association and its members or stockholders which every member or stockholder shall be required to sign.

The qualification of members or stockholders of the association and the conditions precedent to membership or ownership of common stock; the method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock; the manner of assignment and transfer of the interest of members, and of the shares of common stock; the conditions upon which, and time when membership of any member shall cease. The automatic suspension of the rights of a member when he ceases to be eligible to membership in the association, and mode, manner and effect of the expulsion of a member; manner of determining the value of a member’s interest and provision for its purchase by the association upon the death or withdrawal of a member or stockholder, or upon the expulsion of a member or forfeiture of his membership, or, at the option of the association, by conclusive appraisal by the board of directors. In case of the withdrawal or expulsion of a member, the board of directors shall equitably and conclusively appraise his property interests in the association and shall fix the amount thereof in money, and the association may pay therefor in cash or by certificate of indebtedness to be thereafter paid from the income of the association.

HISTORY: Codes, 1930, § 4107; 1942, § 4502; Laws, 1922, ch. 179; Laws, 1964, ch. 262, eff from and after passage (approved March 11, 1964).

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:20 et seq.

CJS.

7 C.J.S., Associations §§ 12, 14-16.

§79-19-19. General and special meetings, how called.

In its bylaws each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time, and ten percent (10%) of the members or stockholders may file a petition stating the specific business to be brought before the association and demand a special meeting at any time. Such meeting must thereupon be called by the directors. Notice of all meetings, together with a statement of the purposes thereof, shall be mailed to each member at least ten (10) days prior to the meeting; provided, however, that the bylaws may require instead that such notice may be given by publication in a newspaper of general circulation, published at the principal place of business of the association.

HISTORY: Codes, 1930, § 4108; 1942, § 4503; Laws, 1922, ch. 179.

RESEARCH REFERENCES

CJS.

7 C.J.S., Associations §§ 17-20.

§79-19-21. Directors; election.

The affairs of the association shall be managed by a board of not less than five (5) directors, elected by the members or stockholders from their own number and shall have all rights and powers as provided for under the general corporation laws of this state, and such other powers as may be necessary to the proper execution of provisions of this chapter. The bylaws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts. In such case the bylaws shall specify the number of directors to be elected by each district, the manner and method of reapportioning the directors and of redistricting the territory covered by the association. The bylaws may provide that primary elections should be held in each district to elect the directors apportioned to such districts and the result of all such primary elections must be ratified by the next regular meeting of the association or may be considered final as to the association.

The bylaws may provide that one or more directors may be appointed by the president of Mississippi State University of Agriculture and Applied Science or such other public official, commission, association or board as may be indicated by such bylaws. Such directors shall represent primarily the interest of the general public in such associations. The director or directors so appointed need not be members or stockholders of the association, but shall have the same powers and rights as other directors. Such directors shall not number more than one-fifth (1/5) of the entire number of directors.

The directors of an association may provide a fair remuneration for the time actually spent by its officers, directors and employees in its service. No director, during the term of his office, shall be a party to a contract for profit with the association, differing in any way from the business relations accorded regular members or holders of common stock of the association.

The bylaws may provide for an executive committee and may allot to such committee all the functions and powers of the board of directors, subject to the general direction and control of the board.

When a vacancy on the board of directors occurs, other than by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy unless the bylaws provide for an election of directors by districts. In such a case the board of directors shall immediately call a special election to be voted in by the members or stockholders in that district to fill the vacancy.

HISTORY: Codes, 1930, § 4109; 1942, § 4504; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 16, 17.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:45 et seq.

CJS.

7 C.J.S., Associations §§ 21, 22 et seq.

JUDICIAL DECISIONS

1. In general.

There was no contract by a director “differing in any way from the business relations accorded regular members” where an association director negotiated directly with a buyer a type of contract permissible for any member and where the association, which acted only as a marketing agent, received its usual fee for its marketing services. Campbell v. Staple Cotton Cooperative Asso., 334 So. 2d 378, 1976 Miss. LEXIS 1926 (Miss. 1976), cert. denied, 429 U.S. 1074, 97 S. Ct. 813, 50 L. Ed. 2d 792, 1977 U.S. LEXIS 529 (U.S. 1977).

§79-19-23. Election of officers.

The directors shall elect from their number a chairman or board president. The directors also shall elect a chief operating officer of the association, one or more vice presidents, a secretary and treasurer, none of whom need be directors or members of the association.The board may combine the two (2) latter offices and designate the combined office as secretary-treasurer.The treasurer may be a bank or any depository, and as such shall not be considered as an officer but as a function of the board of directors.In such case the secretary shall perform the usual accounting duties of the treasurer, excepting that the funds shall be deposited only as authorized by the board of directors.

HISTORY: Codes, 1930, § 4110; 1942, § 4505; Laws, 1922, ch. 179; Laws, 2014, ch. 507, § 4, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment inserted “chairman or board” following “from their number a”, “The directors also shall elect a chief operating officer of the association” preceding “one or more vice presidents”, and “The board” preceding “may combine the two (2)”; deleted “and” preceding “one or more vice presidents”, “They shall also elect” preceding “a secretary and treasurer”, “not” preceding “be directors or members”, and “and they” preceding “may combine the two (2)”; and substituted “none of whom” for “who” in the former first and second sentences.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 16, 17.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:45 et seq.

CJS.

7 C.J.S., Associations §§ 21, 22 et seq.

§79-19-25. Stock, membership certificates, when issued; voting; liability; limitations on transfer and ownership.

When a member of an association established without capital stock has paid his membership fee, if required, in full he shall receive a certificate of membership.

No association shall issue stock to a member until it has been fully paid for.

Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee.

No stockholder of a cooperative association shall own more than one-twentieth (1/20) of the common stock of the association or more than one-twentieth (1/20) of the preferred stock of the association enjoying voting rights, but any one (1) stockholder may own one-twentieth (1/20) of each class; and an association, in its bylaws, may limit the amount of common stock or of preferred stock enjoying voting rights which one (1) member may own to any amount less than one-twentieth (1/20) of such stock.

Each share of stock shall entitle the holder thereof to one (1) vote in the management of the association; provided, however, if authorized by the articles of association, classes of preferred stock may be issued without voting rights.

Preferred stock may be redeemable or retirable by the association on such terms and conditions as may be provided for by the articles of association and printed on the face of the certificate.

The bylaws shall prohibit the transfer of the common stock or of preferred stock enjoying voting rights to persons not engaged in the production of the agricultural products handled by the association, and such restrictions must be printed upon every certificate of stock subject thereto.

The association may at any time, except when the debts of the association exceed fifty percent (50%) of the assets thereof, buy in or purchase its stock at book value thereof as conclusively determined by the board of directors and pay for it in cash within one (1) year thereafter.

HISTORY: Codes, 1930, § 4111; 1942, § 4506; Laws, 1922, ch. 179; Laws, 1964, ch. 263; Laws, 2014, ch. 507, § 5, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment inserted “if required” following “has paid his membership fee” in the first undesignated paragraph and made minor punctuation changes.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 14, 18 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:28 et seq., 71:66 et seq., 71:93-71:95, 71:118.

2 Am. Jur. Proof of Facts 147, Associations and Clubs.

CJS.

7 C.J.S., Associations §§ 38-40, 42 et seq.

§79-19-27. Removal of officer or director.

Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by ten percent (10%) of the members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association and, by a vote of a majority of the members, the association may remove the officer or director and fill the vacancy. The director or officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the meeting to be heard in person or by counsel and to present witnesses; and the person or persons bringing charges against him shall have the same opportunity. But such officer or director may be suspended by a vote of two thirds (2/3) of the directors, pending the hearing of such charges.

In case the bylaws provide for election of directors by districts with primary elections in each district, then the petition for removal of a director must be signed by twenty percent (20%) of the members residing in the district from which he was elected. The board of directors must call a special meeting of the members residing in that district to consider the removal of the director. By a vote of the majority of the members of that district, the director in question shall be removed from office.

HISTORY: Codes, 1930, § 4112; 1942, § 4507; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:49, 71:50.

CJS.

7 C.J.S., Associations §§ 24, 25.

§79-19-29. Referendum may be had in certain cases.

Upon demand of one third (1/3) of the entire board of directors, any matter that has been approved or passed by the board must be referred to the entire membership or the stockholders for decision at the next special or regular meeting; provided, however, that a special meeting shall be called for the purpose.

HISTORY: Codes, 1930, § 4113; 1942, § 4508; Laws, 1922, ch. 179.

§79-19-31. Marketing contract.

The association and its members may make and execute marketing contracts, requiring the members to sell, for any period of time, not over ten (10) years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association, or any facilities to be created by the association. If they contract a sale to the association, it shall be conclusively held that title to the products passes absolutely and unreservedly, except for recorded liens, to the association upon delivery, or when put in a merchantable condition, or at any other specified time if expressly and definitely agreed in the said contract. The contract may provide that the association may sell or resell the products delivered by its members, with or without taking title thereto; and pay over to its members the resale price, after deducting all necessary selling, overhead, and other costs, deductions as defined in said contract, and expenses, including interest on preferred stock, not exceeding eight percent (8%) per annum, and reserves for retiring the stock, if any; and other proper reserves; and interest not exceeding eight percent (8%) per annum upon common stock.

HISTORY: Codes, 1930, § 4114; 1942, § 4509; Laws, 1922, ch. 179.

Cross References —

Agricultural products deferred, see § 79-19-3.

RESEARCH REFERENCES

ALR.

Validity and construction of provision for liquidated damages in contract with cooperative marketing association. 12 A.L.R.2d 130.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 29 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:102 et seq..

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Form 21.

§79-19-33. Remedies for breach of contract or bylaws.

  1. The bylaws or the marketing contract of any association existing hereunder may fix, as liquidated damages, specific sums to be paid by the member or stockholder to the association upon the breach or threatened breach by him of any provision of the marketing contract regarding the sale or delivery or withholding of products; and may further provide that the member will pay all costs, premiums for bonds, expenses, and fees in case any action is brought upon the contract by the association; and any such provisions shall be valid and enforceable in the courts of law or equity of this state, and such clauses providing for liquidated damages shall be enforceable as such and shall not be regarded as penalties.
  2. In the event of any breach or threatened breach of such marketing contract by a member or other person, the association shall be entitled to an injunction to prevent the breach or further breach of the contract, and to a decree of specific performance thereof. Pending the adjudication of such an action and upon filing a verified complaint showing the breach or threatened breach, and upon filing a bond in the sum of One Hundred Dollars ($100.00), the association shall be entitled to an injunction against the member or other person; provided, however, that the chancellor in his discretion may increase such bond to Five Hundred Dollars ($500.00), after a hearing on five (5) days’ notice to the parties, if justice demands such increase in the amount of said bond.
  3. In any action, legal or equitable, upon any marketing contract of any member with any association existing hereunder, it shall be conclusively presumed that the products produced by any person, firm, or corporation during the period of time covered by such marketing contract, on the land of such member, however and by whomsoever produced, are the products of such member and, as such, are subject to the said marketing contract if the said products have been grown or acquired under any contract between such member and such other person, firm, or corporation, entered into after the execution of the said marketing contract; and in such actions, the foregoing remedies for nondelivery or breach shall lie and be enforceable against such person, firms, or corporations.

HISTORY: Codes, 1930, § 4115; 1942, § 4510; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 42 et seq.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Forms 11, 12, 21, 31-33.

CJS.

7 C.J.S., Associations § 103-105.

JUDICIAL DECISIONS

1. In general.

An injunction was properly granted to an association to prevent the breach of a marketing contract, by which a farmer had agreed to sell all his cotton at a set price, and the association was entitled to specific performance of the contract, where the farmer’s contention that the contract was voided by an association director’s use of his position to secure a more favorable contract with the association than regular members could obtain, in violation of § 79-19-21, was without merit, the director having negotiated with his buyer a floating price type of contract available to all members and having paid the association its usual marketing fee, and where the execution of such floating price contracts by the director and by other growers did not thereby release them from their agreements with the association and did not thereby release the farmer from his contract. Campbell v. Staple Cotton Cooperative Asso., 334 So. 2d 378, 1976 Miss. LEXIS 1926 (Miss. 1976), cert. denied, 429 U.S. 1074, 97 S. Ct. 813, 50 L. Ed. 2d 792, 1977 U.S. LEXIS 529 (U.S. 1977).

§79-19-35. Purchasing business of other associations, persons, firms or corporations; payment; stock issued.

Whenever an association organized or existing hereunder with preferred capital stock shall purchase the stock or any property, or any interest in any property, of any person, firm, or corporation, or association, it may discharge the obligations so incurred, wholly or in part, by exchanging for the acquired interest shares of its preferred capital stock to an amount which at par value would equal a fair market value of the stock or interest so purchased, as determined by the board of directors. In that case the transfer to the association of the stock or interest purchased shall be equivalent to payment in cash for the shares of stock issued.

HISTORY: Codes, 1930, § 4116; 1942, § 4511; Laws, 1922, ch. 179.

JUDICIAL DECISIONS

1. In general.

Where co-operative association in bringing suit against a member filed a bond for $100, and there was no motion to increase the bond, the association’s liability was limited to $100, and it was error for the trial court on dissolving injunction to allow attorney’s fees of Staple Cotton Co-op. Ass'n v. Borodofsky, 143 Miss. 585, 108 So. 807, 1926 Miss. LEXIS 294 (Miss. 1926).

§79-19-37. Conflicting laws not to apply.

Any provisions of law which otherwise would be in conflict with this chapter shall not be construed as applying to the associations herein provided for, nor shall any such provisions be deemed to be repealed by this chapter.

Any exemptions under any and all existing laws applying to agricultural products in the possession or under the control of the individual producer shall apply similarly and completely to such products delivered by its farmer members, in the possession or under the control of the association.

HISTORY: Codes, 1930, § 4117; 1942, § 4512; Laws, 1922, ch. 179.

§79-19-39. Limitation of the use of term “cooperative.”

No person, firm, corporation, or association hereafter organized or doing business in this state shall be entitled to use the word “cooperative” as part of its corporate or other business name or title for producers’ cooperative marketing activities, unless it has complied with the provisions of this chapter.

HISTORY: Codes, 1930, § 4118; 1942, § 4513; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 5 et seq.

§79-19-41. Interest in other corporations or associations.

An association may organize, form, operate, own, control, have an interest in, own stock of, or be a member of any corporation or association, with or without capital stock, engaged in preserving, drying, processing, canning, packing, storing, handling, shipping, utilizing, manufacturing, marketing, or selling of the agricultural products handled by the association, or the byproducts thereof. If such corporations are warehousing corporations, they may issue legal warehouse receipts to the association, against the commodities delivered by it, or to any other person; and such legal warehouse receipts shall be considered as adequate collateral to the extent of the usual and current value of the commodity represented thereby. In case such warehouse is licensed or licensed and bonded under the laws of this state or the United States, its warehouse receipts delivered to the association on commodities of the association or its members, or delivered by the association or its members, shall not be challenged or discriminated against because of ownership or control, wholly or in part, by the association.

HISTORY: Codes, 1930, § 4119; 1942, § 4514; Laws, 1922, ch. 179.

§79-19-43. Contracts and agreements with other associations.

Any association may, upon resolution adopted by its board of directors, enter into all necessary and proper contracts and agreements and make all necessary and proper stipulations, agreements, and contracts and arrangements with any other corporation, association or associations, formed in this or in any other state, for the cooperative or more economical carrying on of its business, or any part or parts thereof. Any two or more associations may, by agreement between them, unite in employing and using or may separately employ and use the same personnel, methods, means, and agencies for carrying on and conducting their respective businesses.

HISTORY: Codes, 1930, § 4120; 1942, § 4515; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 29 et seq.

5A Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:261 et seq.

§79-19-45. Association heretofore organized may adopt the provisions of this chapter.

Any corporation or association organized under previously existing statutes, or any foreign corporation or association heretofore authorized by the laws of this state to do business in this state, or any foreign corporation or association organized under the laws of another state, may by a majority vote of its directors or members be brought under this chapter. It shall make out in duplicate a statement signed and sworn to by a majority of its directors, to the effect that the corporation or association has by a majority vote of its directors decided to accept the benefits and be bound by the provisions of this chapter. Articles of association shall be filed as required herein except that they shall be signed by a majority of the members of the board of directors. The filing fee shall be the same as for filing an amendment to articles of association.

HISTORY: Codes, 1930, § 4121; 1942, § 4516; Laws, 1922, ch. 179.

§79-19-47. How associations organized in another state may carry on business in this state.

Any cooperative marketing association, organized under appropriate laws of any other state for the purposes and with the restrictions and limitations substantially the same as those set forth herein, may operate and do business in this state with all the rights, powers, and privileges granted to any cooperative marketing association incorporated under this chapter, upon compliance with any or either of the laws of this state regarding the qualification of foreign corporations, to carry on business within this state.

HISTORY: Codes, 1930, § 4122; 1942, § 4517; Laws, 1922, ch. 179.

RESEARCH REFERENCES

Am. Jur.

4 Am. Jur. Proof of Facts 483, Doing Business.

§79-19-49. Misdemeanor; breach of marketing contract of cooperative association; spreading false reports about the finances or management thereof.

Any person or persons or any corporation whose officers or employees knowingly induce or attempt to induce any member or stockholder of an association organized hereunder to breach his marketing contract with the association, or who knowingly spreads false reports about the finances or management thereof, shall be guilty of a misdemeanor and subject to a fine of not less than One Hundred Dollars ($100.00), and not more than One Thousand Dollars ($1,000.00), for such offense; and shall be liable to the association aggrieved in a civil suit in the penal sum of One Thousand Dollars ($1,000.00) for each such offense.

HISTORY: Codes, 1930, § 4123; 1942, § 4518; Laws, 1922, ch. 179.

Cross References —

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 46.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Forms 31-33.

§79-19-51. Associations not in restraint of trade.

No association organized hereunder shall be deemed to be in violation of the anti-trust statutes of this state or a combination in restraint of trade or an illegal monopoly, nor in an attempt to lessen competition or fix prices arbitrarily; nor shall the marketing contracts or agreements between the association and its members or any agreements authorized in this chapter be considered illegal or in restraint of trade, or in violation of said anti-trust statutes of said state.

HISTORY: Codes, 1930, § 4124; 1942, § 4519; Laws, 1922, ch. 179.

Cross References —

Effect of antitrust laws on agricultural organizations, see § 75-21-5.

§79-19-53. Exemptions.

Each association organized hereunder shall be exempt from the payment of ad valorem taxes on agricultural products and products of farm, grove or garden produced by its members within the State of Mississippi.

HISTORY: Codes, 1930, § 4125; 1942, § 4520; Laws, 1922, ch. 179; Laws, 1936, ch. 328; Laws, 1954, ch. 151, § 2, eff May 1, 1954.

Cross References —

Privilege tax exemptions, see §§ 27-15-225, 27-17-485.

Ad valorem tax exemptions, see §§ 27-31-1 et seq.

RESEARCH REFERENCES

ALR.

Income and excess profits tax of cooperative association and its patrons or members. 8 A.L.R.2d 925.

§79-19-55. Filing fees.

For filing articles of association and amendments to the articles, an association organized under this chapter shall pay to the Secretary of State Fifty Dollars ($50.00).

HISTORY: Codes, 1930, § 4126; 1942, § 4521; Laws, 1922, ch. 179; Laws, 1958, ch. 346, § 2, eff July 1, 1958; Laws, 2014, ch. 507, § 6, eff from and after July 1, 2014.

Amendment Notes —

The 2014 amendment inserted “and amendments to the articles” following “For filing articles of association”, substituted “under this chapter” for “hereunder Twenty Dollars ($20.00); and for filing an amendment to the articles, Ten Dollars ($10.00)”, and added “Fifty Dollars ($50.00)” to the end of the sentence.

§79-19-57. Cooperative marketing associations may maintain replevin.

All cooperative marketing associations organized or doing business under the laws of the State of Mississippi may obtain the possession of personal property to the immediate possession of which they may be entitled, by the action of replevin, and the giving of this means of enforcement of rights shall not be in lieu, or in repeal, of any other rights or remedies now given to cooperative marketing associations under the laws of the State of Mississippi.

HISTORY: Codes, 1930, § 4127; 1942, § 4522; Laws, 1924, ch. 275.

Cross References —

Action of replevin, see §§ 11-37-101 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 42 et seq.

JUDICIAL DECISIONS

1. In general.

Replevin does not lie in favor of cotenant; cooperative marketing law held not to change this rule. Staple Cotton Co-op. Ass'n v. Hemphill, 142 Miss. 298, 107 So. 24, 1926 Miss. LEXIS 57 (Miss. 1926).

§79-19-59. Liquidated damages may be recovered.

If such cooperative marketing association recover judgment as plaintiff in replevin and the property sued for be agricultural products and the plaintiff’s right to the possession thereof as against the defendant be by virtue of a marketing agreement with a member of such association and the defendant has bonded the property within two (2) days after its seizure in replevin, the plaintiff shall, in addition to the judgment now provided by law, recover as an element of damages, of the defendant and the sureties on his bond, for the wrongful taking and detention or the wrongful detention of the property, a sum equal to such damages as the plaintiff could have recovered of such member of the association as liquidated damages under the marketing agreement, for the breach thereof by wrongful detention or disposal of said property by the member.

HISTORY: Codes, 1930, § 4128; 1942, § 4523; Laws, 1934, ch. 275.

RESEARCH REFERENCES

ALR.

Validity and construction of provision for liquidated damages in contract with cooperative marketing association. 12 A.L.R.2d 130.

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 45.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Forms 11, 31-33.

§79-19-61. Loan limited to 50 percent of capital and surplus.

The total liability to any association organized or doing business under the terms of this chapter by a person, company, corporation, or firm for money loaned shall not exceed fifty percent (50%) of the aggregate paid in capital and surplus of said association. The discount of bills of exchange drawn in good faith, against actual existing values of loans made on time secured by warehouse receipts or bills of lading, or actually existing values, shall not be restricted to, or considered as coming within, such limitation of fifty percent (50%).

HISTORY: Codes, 1930, § 4129; 1942, § 4524; Laws, 1924, ch. 186.

§79-19-63. Stock in bank for cooperatives.

All cooperative agricultural associations of any kind or character whatsoever, heretofore or hereafter organized under the laws of the State of Mississippi, are hereby authorized and empowered to purchase, or otherwise acquire, and to hold stock in the New Orleans Bank for Cooperatives and in the Central Bank for Cooperatives in accordance with the provisions of the Farm Credit Act of 1933 as heretofore amended and as it may hereafter be amended by the Congress of the United States.

All corporations, heretofore or hereafter organized under the laws of the State of Mississippi, which are eligible to borrow from production credit associations are hereby authorized and empowered to purchase, or otherwise acquire, and to hold stock in production credit associations in accordance with the provisions of the Farm Credit Act of 1933 as heretofore amended and as it may hereafter be amended by the Congress of the United States.

HISTORY: Codes, 1942, § 4525; Laws, 1934, ch. 276.

Federal Aspects—

Farm Credit Act of 1933, see 12 USCS §§ 1131 et seq.

§79-19-65. Applicability of general nonprofit corporation laws to associations organized under this chapter.

The general nonprofit corporation laws and all powers and rights under those laws apply to the associations organized under this chapter, except where such provisions are in conflict or inconsistent with the express provisions of this chapter.

HISTORY: Laws, 2014, ch. 507, § 7, eff from and after July 1, 2014.

Chapter 21. Aquatic Products Marketing Association

General provisions

§79-21-1. Title.

This chapter shall be known and cited as the “Co-operative Aquatic Products Marketing Law.”

HISTORY: Codes, 1942, § 4535-01; Laws, 1968, ch. 270, § 1, eff from and after passage (approved August 6, 1968).

Cross References —

Agricultural cooperative associations, see §§ 79-17-1 et seq.

Authority of any association organized under provisions of this chapter and Chapter 17 and 19 to organize and operate branch associations, see § 79-17-25.

Cooperative marketing associations generally, see §§ 79-19-1 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 1 et seq.

§79-21-3. Declaration of policy.

In order to promote, foster and encourage the intelligent and orderly marketing of aquatic products through co-operation and to eliminate speculation and waste; and to make the distribution of aquatic products as direct as can be efficiently done between producer and consumer; and to stabilize the marketing of aquatic products; and to promote, foster and encourage the aquatic products industry in this state, this chapter is passed.

HISTORY: Codes, 1942, § 4535-02; Laws, 1968, ch. 270, § 2, eff from and after passage (approved August 6, 1968).

Cross References —

Regulation of domestic fish farming, see §§ 69-7-501 et seq.

§79-21-5. Definitions.

As used in this chapter:

The term “member” shall include actual members of associations without capital stock and holders of common stock in associations organized with capital stock.

The term “person” shall include individuals, firms, partnerships, corporations and associations.

The term “association” means any association organized under the terms of this chapter.

The term “aquatic product” shall include all commercial products of aquatic life normally found in, or associated with, the fresh waters of the State of Mississippi, or the United States. It shall specifically include, but is not limited to, domesticated fish, fish of all species, and their byproducts, normally found in fresh water.

The term “commercial fishing” shall include all persons engaged totally or part-time in the business of catching or otherwise taking aquatic products from the fresh waters of the State of Mississippi, or the United States, for commercial purposes.

The term “domestic fish farming” shall include all persons engaged in the growing, managing, harvesting and/or marketing of domesticated fish as a cultivated crop in privately owned waters.

The term “domesticated fish” shall be understood to mean any fish that are spawned and grown, managed, harvested and marketed on an annual, semiannual, biennial, or short-term basis in privately owned waters.

The term “producer” shall mean any person engaged totally, or part-time, in the business of commercial fishing or domestic fish farming for the commercial purpose of providing aquatic products to consumers.

HISTORY: Codes, 1942, § 4535-03; Laws, 1968, ch. 270, § 3, eff from and after passage (approved August 6, 1968).

Cross References —

Regulation of domestic fish farming, see §§ 69-7-501 et seq.

Co-operative marketing associations in connection with aquatic product found in salt waters, see §§ 79-21-51 et seq.

Salt water aquatic product, as used in §§ 79-21-51 through 79-21-67, defined, see § 79-21-53.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 1.

CJS.

7 C.J.S., Associations §§ 1-5.

§79-21-7. A supplementary law.

This chapter shall not be construed to permit the catching or sale of any fish or other aquatic product which is otherwise prohibited by law from being caught or sold, but shall be supplementary thereto. This chapter is supplementary of and not amendatory or in alteration of any other laws for the accomplishment of any of the purposes herein set forth, and shall apply only to organizations created and operating hereunder. However, associations organized hereunder shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their members as producers.

HISTORY: Codes, 1942, § 4535-04; Laws, 1968, ch. 270, § 4, eff from and after passage (approved August 6, 1968).

Cross References —

Nonprofit nonshare corporations generally, see §§ 79-11-101 et seq.

§79-21-9. Who may organize.

Ten (10) or more persons who are residents of the State of Mississippi and engaged in the business of commercial fishing or domestic fish farming may form a nonprofit, cooperative association, with or without capital stock, under the provisions of this chapter.

HISTORY: Codes, 1942, § 4535-05; Laws, 1968, ch. 270, § 5, eff from and after passage (approved August 6, 1968).

Cross References —

Organization of cooperative marketing associations, generally, see § 79-19-5.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:6, 71:7.

CJS.

7 C.J.S., Associations § 7.

§79-21-11. Purposes.

An association may be organized to engage in any activity in connection with the catching, growing, breeding, handling, shipping, or utilization, or moving or marketing of the byproducts thereof of aquatic products of every description, and with the marketing or selling of aquatic products of its members, or with the catching, harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilization thereof, or the manufacturing or marketing of the byproducts thereof; or in connection with the manufacturing, selling, or supplying to its members of machinery, equipment, or supplies; or in the financing of the above-enumerated activities; or in any one or more of the activities specified herein.

HISTORY: Codes, 1942, § 4535-06; Laws, 1968, ch. 270, § 6, eff from and after passage (approved August 6, 1968).

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 4.

§79-21-13. Powers.

Each and every association organized hereunder shall have the following powers:

To engage in any activity in connection with the catching, growing, breeding, handling, shipping, or utilization, or moving or marketing of the byproducts thereof of aquatic products of every description, and with the marketing or selling of aquatic products of its members, or with the catching, harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilization of any aquatic product produced or delivered to it by its members; or the manufacturing or marketing of the byproducts thereof; or in connection with the purchase, hiring, or use by its members of supplies, machinery, or equipment; or in the financing of any such activities; or in any one or more of the activities specified in this section. No association shall handle the aquatic products of any nonmember except as necessary and incidental to the handling of the aquatic products of members, and in any such case the value of aquatic products of nonmembers so handled shall not exceed the value of the aquatic products handled by the association for its members.

To borrow money and to make advances to members.

To act as the agent or representative of any member or members in any of the above-mentioned activities.

To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the bylaws. However, if the association shall decide to invest any of said funds in bonds, then, in such event, at least fifty percent (50%) of such bond investment must be in bonds issued by the State of Mississippi or one or more of its counties, districts, municipalities, or subdivisions.

To purchase or otherwise acquire, and to hold, own, and exercise all rights of ownership in, and to sell, transfer, or pledge, or guarantee the payment of dividends or interest on, or the retirement or redemption of shares of the capital stock or bonds of any corporation or association engaged in any related activity, or in the warehousing or handling or marketing of any of the aquatic products handled by the association.

To buy, hold, and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association, or incidental thereto.

Obtain possession of personal property to the immediate possession of which they may be entitled by the action of replevin.

To sue and be sued, and to prosecute and be prosecuted to judgment and suit before any court; and to contract and be contracted with in all matters.

To do each and everything necessary, suitable, or proper for the accomplishment of any one (1) of the purposes or the attainment of any one or more of the objects herein enumerated, or conducive to or expedient for the interest or benefit of the association or its members; and in addition to exercise and possess all powers, rights, and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and to do any such thing anywhere.

HISTORY: Codes, 1942, § 4535-07; Laws, 1968, ch. 270, § 7, eff from and after passage (approved August 6, 1968).

Cross References —

Powers of cooperative marketing associations generally, see § 79-19-9.

Fresh water aquatic product, as used in this chapter, defined, see § 79-21-5.

Salt water aquatic product, as used in §§ 79-21-51 through 79-21-67, defined, see § 79-21-53.

Another section derived from same 1942 code section, see § 79-21-15.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 26 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:54 et seq., 71:76 et seq., 71:102 et seq.

CJS.

7 C.J.S., Associations §§ 71, 72 et seq.

§79-21-15. Members.

  1. Under the terms and conditions prescribed in its bylaws, an association may admit as members, or issue common stock or certificate of membership, only to persons engaged in commercial fishing or domestic fish farming who catch, take, grow, or otherwise obtain aquatic products to be handled by or through the association. Certificate of membership and common stock shall not be transferable, and no person shall acquire the same by operation of law or otherwise, except as provided herein.
  2. If a member of a nonstock association be other than a natural person, such member may be represented by any individual, associate, officer, manager, or member thereof, duly authorized in writing.
  3. All members engaged in commercial fishing shall be required to have receipts evidencing that they have paid in full all licensing requirements of the State of Mississippi with regard to their fishing operation, including licenses and fees required with regard to their equipment. A failure to pay for such licenses or fees, when required by statute, shall result in the automatic suspension of such member from the association until such licenses or fees are paid in full.
  4. No member of any association organized under the terms of this chapter shall have more than one (1) vote, regardless of the amount of stock or membership capital he may own therein.
  5. Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee.
  6. The first meeting of persons at interest, unless otherwise provided for, may be called by notice published in some convenient newspaper at least five (5) days before the time appointed for the meeting, which notice shall be signed by one or more persons named in the articles of association; and the meeting when assembled may proceed to organize the association.

HISTORY: Codes, 1942, §§ 4535-07, 4535-08; Laws, 1968, ch. 270, §§ 7, 8, eff from and after passage (approved August 6, 1968).

Cross References —

Commercial fishing licenses, see § 49-7-9.

Members of cooperative marketing associations generally, see § 79-19-11.

Fresh water aquatic product, as used in this chapter, defined, see § 79-21-5.

Another section derived from same 1942 code section, see § 79-21-13.

Salt water aquatic product, as used in §§ 79-21-51 through 79-21-67, defined, see § 79-21-53.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 18 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:28 et seq., 71:93.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Form 3.

2 Am. Jur. Proof of Facts 147, Associations and Clubs.

CJS.

7 C.J.S., Associations §§ 38-40, 42 et seq.

§79-21-17. Articles of association.

Each association formed under this chapter must prepare and file articles of association setting forth:

The name of the association.

The purposes for which it is formed.

The place where its principal business will be transacted.

The term for which it is to exist, not exceeding ninety-nine (99) years.

The number of directors thereof, which must not be less than five (5) and may be any number in excess thereof, and the term of office of such directors.

If organized without capital stock, whether the property rights and interest of each member shall be equal or unequal; and if unequal, the articles shall set forth the general rule or rules applicable to all members by which property rights and interests, respectively, of each member may and shall be determined and fixed; and provision for the admission of new members who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules. This paragraph of the articles of association shall not be altered, amended, or repealed except by the written consent of the vote of three-fourths (3/4) of the members.

If organized with capital stock, the amount of such stock and the number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided the articles of association must contain a statement of the number of shares of stock to which no preference is granted and the nature and definite extent of the preference and privileges granted to each.

The articles must be subscribed by the incorporators and acknowledged by one (1) of them before an officer authorized by the laws of this state to take and certify acknowledgments; and shall be filed and recorded in the office of the secretary of state.

HISTORY: Codes, 1942, § 4535-09; Laws, 1968, ch. 270, § 9, eff from and after passage (approved August 6, 1968).

Cross References —

Articles of association of cooperative marketing associations, generally, see §§ 79-19-13, 79-19-15.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations, §§ 71:8 et seq., 71:28 et seq., 71:45 et seq., 71:66 et seq., 71:94, 71:95.

CJS.

7 C.J.S., Associations §§ 12, 14-16.

§79-21-19. General cooperative marketing association laws apply.

The general co-operative marketing association laws of this state shall apply to all associations organized pursuant to this chapter. Subject to the foregoing provisions of this chapter, all associations organized pursuant to this chapter shall enjoy all of the rights and privileges of such general co-operative marketing association laws, and shall also be subject to their requirements, liabilities and penalties. To such extent the provisions of Chapter 19, Title 79, Mississippi Code of 1972, shall be construed to include associations organized under the provisions of this chapter. However, associations organized under the provisions of this chapter shall be limited to the marketing and distribution of aquatic products and their byproducts, as provided herein; and the general co-operative marketing association laws of this state shall not be construed so as to authorize associations organized under the provisions of this chapter to market or distribute to consumers products other than aquatic products and their byproducts, as provided herein.

HISTORY: Codes, 1942, § 4535-10; Laws, 1968, ch. 270, § 10, eff from and after passage (approved August 6, 1968).

Cross References —

Agricultural cooperative Marketing Associations, see §§ 79-19-1 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 12.

§79-21-21. Repealed.

Repealed by Laws of 1990, ch. 345, § 1, eff from and after passage (approved March 12, 1990).

[Codes, 1942, § 4535-11; Laws, 1968, ch. 270, § 11]

Editor’s Notes —

Former § 79-21-21 was entitled: Counties where applicable.

Statewide Fresh and Salt Water Co-Operatives

§79-21-51. Declaration of policy.

In order to promote, foster and encourage the intelligent and orderly marketing of aquatic products through cooperation and to eliminate speculation and waste; to make the distribution of aquatic products as direct as can be efficiently done between producer and consumer; to stabilize the marketing of aquatic products; and to promote, foster and encourage the aquatic products industry in this state, Sections 79-21-51 through 79-21-67 are passed.

HISTORY: Laws, 1974, ch. 438, § 1, eff from and after passage (approved March 26, 1974).

Cross References —

Regulation of domestic fish farming, see §§ 69-7-501 et seq.

Aquatic product as used in this chapter, defined, see § 79-21-5.

Aquatic product, as used in §§ 79-21-51 through 79-21-67, defined, see § 79-21-53.

§79-21-53. Definitions.

As used in Sections 79-21-51 through 79-21-67, Mississippi Code of 1972:

The term “member” shall include actual members of associations without capital stock and holders of common stock in associations organized with capital stock.

The term “person” shall include individuals, firms, partnerships, corporations and associations.

The term “association” means any association organized under the terms of Sections 79-21-51 through 79-21-67, Mississippi Code of 1972.

The term “aquatic product” shall include all commercial products of aquatic life normally found in, or associated with, the salt waters of the State of Mississippi or the United States. It shall specifically include, but is not limited to, shellfish, domesticated fish, fish of all species, and their by-products, normally found in salt water.

The term “commercial fishing” shall include all persons engaged totally or part-time in the business of catching freezing, marketing, processing, transporting, wholesaling or otherwise involved in the utilization of aquatic products from the salt waters of the State of Mississippi or the United States for commercial purposes.

The term “domestic fish farming” shall include all persons engaged in the growing, managing, harvesting and/or marketing of domesticated fish or shellfish as a cultivated crop in privately owned or leased waters or submerged lands.

The term “domesticated fish” means any fish or shellfish that are spawned and grown, managed, harvested and marketed on an annual, semiannual, biennial, or short-term basis in privately owned or leased waters or submerged lands.

The term “producer” means any person engaged totally, or part-time, in the business of commercial fishing or domestic fish farming for the commercial purpose of providing aquatic products to consumers.

HISTORY: Laws, 1974, ch. 438, § 2; Laws, 1990, ch. 427, § 1, eff from and after passage (approved March 15, 1990).

Cross References —

Regulation of domestic fish farming, see §§ 69-7-501 et seq.

Co-operative marketing associations in connection with aquatic products found in fresh waters, see §§ 79-21-3 et seq.

Fresh water aquatic product, as used in this chapter, defined, see § 79-21-5.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 1.

CJS.

7 C.J.S., Associations §§ 1-5.

§79-21-55. Construction of Sections79-21-51 through79-21-67.

Sections 79-21-51 through 79-21-67 shall not be construed to permit the catching or sale of any fish or other aquatic product which is otherwise prohibited by law from being caught or sold, but shall be supplementary thereto. These sections are supplementary of and not amendatory or in alteration of any other laws for the accomplishment of any of the purposes herein set forth, and shall apply only to organizations created and operating hereunder. However, associations organized hereunder shall be deemed nonprofit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their members as producers.

HISTORY: Laws, 1974, ch. 438, § 3, eff from and after passage (approved March 26, 1974).

Cross References —

Nonprofit nonshare corporations generally, see §§ 79-11-101 et seq.

§79-21-57. Who may organize.

Ten (10) or more persons who are residents of the State of Mississippi and engaged in the business of commercial fishing or domestic fish farming may form a nonprofit, cooperative association, with or without capital stock, under the provisions of Sections 79-21-51 through 79-21-67.

HISTORY: Laws, 1974, ch. 438, § 4, eff from and after passage (approved March 26,1974).

Cross References —

Organization of cooperative marketing associations generally, see § 79-19-5.

Fresh water commercial and domestic fish farming, as used in this chapter, defined, see § 79-21-5.

Salt water commercial and domestic fish farming, as used in §§ 79-21-51 through 79-21-67, defined, see § 79-21-53.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:6, 71:7.

CJS.

7 C.J.S., Associations § 7.

§79-21-59. Purposes.

An association may be organized to engage in any activity in connection with the catching, growing, breeding, handling, shipping, or utilization, or moving or marketing of the byproducts thereof of aquatic products of every description, and with the marketing or selling of aquatic products of its members, or with the catching, harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilization thereof, or the manufacturing or marketing of the byproducts thereof; or in connection with the manufacturing, selling, or supplying to its members of machinery, equipment, or supplies; or in the financing of the above-enumerated activities; or in any one or more of the activities specified herein.

HISTORY: Laws, 1974, ch. 438, § 5, eff from and after passage (approved March 26, 1974).

Cross References —

Fresh water aquatic product defined, see § 79-21-5.

Salt water aquatic product defined, see § 79-21-53.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 4.

§79-21-61. Powers.

Each and every association organized hereunder shall have the following powers:

To engage in any activity in connection with the catching, growing, breeding, handling, shipping, or utilization, or moving or marketing of the byproducts thereof of aquatic products of every description, and with the marketing or selling of aquatic products of its members, or with the catching, harvesting, preserving, drying, processing, manufacturing, canning, packing, grading, storing, handling, shipping, or utilization of any aquatic product produced or delivered to it by its members; or the manufacturing or marketing of the byproducts thereof; or in connection with the purchase, hiring, or use by its members of supplies, machinery or equipment; or in the financing of any such activities; or in any one or more of the activities specified in this section. No association shall handle the aquatic products of any nonmember except as necessary and incidental to the handling of the aquatic products of members, and in any such case the value of aquatic products of nonmembers so handled shall not exceed the value of the aquatic products handled by the association for its members.

To borrow money and to make advances to members.

To act as the agent or representative of any member or members in any of the above-mentioned activities.

To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the bylaws. However, if the association shall decide to invest any of said funds in bonds, then, in such event, at least fifty percent (50%) of such bond investment must be in bonds issued by the State of Mississippi or one or more of its counties, districts, municipalities or subdivisions.

To purchase or otherwise acquire, and to hold, own and exercise all rights of ownership in and to sell, transfer or pledge or guarantee the payment of dividends or interest on, or the retirement or redemption of shares of the capital stock or bonds of any corporation or association engaged in any related activity, or in the warehousing or handling or marketing of any of the aquatic products handled by the association.

To buy, hold and exercise all privileges of ownership over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association or incidental thereto.

Obtain possession of personal property to the immediate possession of which they may be entitled by the action of replevin.

To sue and be sued, and to prosecute and be prosecuted to judgment and suit before any court; and to contract and be contracted with in all matters.

To do each and everything necessary, suitable or proper for the accomplishment of any one (1) of the purposes or the attainment of any one or more of the objects herein enumerated or conducive to or expedient for the interest or benefit of the association or its members; and in addition to exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and to do any such thing anywhere.

HISTORY: Laws, 1974, ch. 438, § 6, eff from and after passage (approved March 26, 1974).

Cross References —

Powers of cooperative marketing associations generally, see § 79-19-9.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 26-28.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:54 et seq., 71:76 et seq., 71:99 et seq.

CJS.

7 C.J.S., Associations §§ 71, 72 et seq.

§79-21-63. Members.

  1. Under the terms and conditions prescribed in its bylaws, an association may admit as members, or issue common stock or certificate of membership, only to persons engaged in commercial fishing or domestic fish farming who catch, take, grow or otherwise obtain aquatic products to be handled by or through the association. Certificate of membership and common stock shall not be transferable and no person shall acquire the same by operation of law or otherwise, except as provided herein.
  2. If a member of a nonstock association be other than a natural person, such member may be represented by an individual, associate, officer, manager or member thereof, duly authorized in writing.
  3. All members engaged in commercial fishing shall be required to have receipts evidencing that they have paid in full all licensing requirements of the State of Mississippi with regard to their fishing operation, including licenses and fees required with regard to their equipment. A failure to pay for such licenses or fees, when required by statute, shall result in the automatic suspension of such member from the association until such licenses or fees are paid in full.
  4. No member of any association organized under the terms of Sections 79-21-51 through 79-21-67 shall have more than one (1) vote, regardless of the amount of stock or membership capital he may own therein.
  5. Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee.
  6. The first meeting of persons at interest, unless otherwise provided for, may be called by notice published in some convenient newspaper at least five (5) days before the time appointed for the meeting, which notice shall be signed by one or more persons named in the articles of association; and the meeting when assembled may proceed to organize the association.

HISTORY: Laws, 1974, ch. 438, § 7, eff from and after passage (approved March 26, 1974).

Cross References —

Commercial fishing licenses, see § 49-7-9.

Members of cooperative marketing associations generally, see § 79-19-11.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 18 et seq.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:28 et seq., 71:93.

7 Am. Jur. Pl & Pr Forms (Rev), Cooperative Associations, Form 3.

2 Am. Jur. Proof of Facts 147, Associations and Clubs.

CJS.

7 C.J.S., Associations §§ 38-40, 42 et seq.

§79-21-65. Articles of association.

Each association formed under Sections 79-21-51 through 79-21-67 must prepare and file articles of association setting forth:

The name of the association.

The purposes for which it is formed.

The place where its principal business will be transacted.

The term for which it is to exist, not exceeding ninety-nine (99) years.

The number of directors thereof, which must not be less than five (5) and may be any number in excess thereof, and the term of office of such directors.

If organized without capital stock, whether the property rights and interest of each member shall be equal or unequal; and if unequal, the articles shall set forth the general rule or rules applicable to all members by which property rights and interests, respectively, of each member may and shall be determined and fixed; and provision for the admission of new members who shall be entitled to share in the property of the association with the old members in accordance with such general rule or rules. This paragraph of the articles of association shall not be altered, amended or repealed except by the written consent of the vote of three-fourths (3/4) of the members.

If organized with capital stock, the amount of such stock and the number of shares into which it is divided and the par value thereof. The capital stock may be divided into preferred and common stock. If so divided, the articles of association must contain a statement of the number of shares of stock to which no preference is granted and the nature and definite extent of the preference and privileges granted to each.

The articles must be subscribed by the incorporators and acknowledged by one (1) of them before an officer authorized by the laws of this state to take and certify acknowledgements; and shall be filed and recorded in the office of the secretary of state.

HISTORY: Laws, 1974, ch. 438, § 8, eff from and after passage (approved March 26, 1974).

Cross References —

Articles of association of cooperative marketing associations generally, see §§ 79-19-13, 79-19-15.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations §§ 13-15.

5B Am. Jur. Legal Forms 2d, Cooperative Associations §§ 71:8 et seq., 71:28 et seq., 71:45-71:51, 71:66 et seq., 71:94, 71:95.

CJS.

7 C.J.S., Associations §§ 12, 14-16.

§79-21-67. General cooperative marketing association laws apply.

The general cooperative marketing association laws of this state shall apply to all associations organized pursuant to Section 79-21-51 through 79-21-67. Subject to the foregoing provisions of Sections 79-21-51 through 79-21-67, all associations organized pursuant to these sections shall enjoy all of the rights and privileges of such general cooperative marketing association laws, and shall also be subject to their requirements, liabilities and penalties. To such extent the provisions of Chapter 19, Title 79, shall be construed to include associations organized under the provisions of Sections 79-21-51 through 79-21-67. However, associations organized under the provisions of Sections 79-21-51 through 79-21-67 shall be limited to the marketing and distribution of aquatic products and their byproducts, as provided herein; and the general cooperative marketing association laws of this state shall not be construed so as to authorize associations organized under the provisions of Sections 79-21-51 through 79-21-67 to market or distribute to consumers products other than aquatic products and their byproducts, as provided herein.

HISTORY: Laws, 1974, ch. 438, § 9, eff from and after passage (approved March 26, 1974).

Cross References —

Agricultural cooperative marketing associations, see §§ 79-19-1 et seq.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Cooperative Associations § 12.

Chapter 22. Mississippi Aquaculture Act of 1988

§79-22-1. Short title.

This chapter shall be known and may be cited as the Mississippi Aquaculture Act of 1988.

HISTORY: Laws, 1988, ch. 481, § 1, eff from and after July 1, 1988.

Cross References —

Administration of chapter, see § 69-1-203.

Domestic fish farming, see §§ 69-7-501 et seq.

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-3. Legislative purpose.

The Legislature recognizes that aquaculture is the fastest growing segment of the United States agriculture industry and declares that it is the intent of this legislation to effectively encourage and support United States citizens in expanded and new growth of aquaculture in this state while conserving and enhancing aquatic resources and providing mechanisms for increasing aquaculture production which will lead to the creation of new industries, job opportunities, income for aquaculturists, tax revenues and other benefits to this state.

HISTORY: Laws, 1988, ch. 481, § 2; Laws, 1993, ch. 457, § 1, eff from and after July 1, 1993.

Cross References —

Domestic fish farming, see §§ 69-7-501 et seq.

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-5. Definitions.

For the purpose of this chapter unless the context clearly requires otherwise:

“Aquaculture” means any form of agriculture that includes the process of growing, farming, cultivating and/or harvesting cultured aquatic products in marine or freshwaters and includes management by an aquaculturist.

“Aquaculturist” is a person who is engaged in the cultivating of cultured aquatic products.

“Aquaculture facility” means any facility or resources that are used for aquaculture activities and operations in Mississippi.

“Cultured aquatic products” are marine or freshwater plants and animals that are propagated, farmed or cultivated in an aquaculture facility under the supervision and management of an aquaculturist or that are naturally produced in an aquaculture facility which at the time of production are under the active supervision and management of an aquaculturist.

“Department” means the Department of Agriculture and Commerce.

A “cultivation permit” is a permit issued by the department applicable to design criteria to prevent release of certain cultured aquatic products from an aquaculture facility into the environment.

A “marketing permit” is a permit issued by the department to provide a mechanism for tracing certain marketed and cultured aquatic products to verify that they were cultured in an aquaculture facility and were not harvested from wild stocks and to prevent the release of undesirable species into the environment.

HISTORY: Laws, 1988, ch. 481, § 3; Laws, 1991, ch. 530, § 3; Laws, 1993, ch. 457, § 2, eff from and after July 1, 1993.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-7. Marketing permit, generally.

All currently recognized native aquatic plants, animals and nongame fish may be freely produced and marketed by an aquaculturist unless specifically regulated elsewhere. If a marketing permit is needed to aid in selling such cultured aquatic products in other states or countries, then the department shall issue such a permit when requested by an aquaculturist.

HISTORY: Laws, 1988, ch. 481, § 4, eff from and after July 1, 1988.

Cross References —

Domestic fish farming, see §§ 69-7-501 et seq.

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-9. Cultivation and marketing permit necessary for certain aquatic products; requirements for issuance of permit.

  1. An aquaculturist shall obtain a cultivation and marketing permit for cultured aquatic products produced from the following aquatic plants and animals:
    1. All nonnative aquatic plants and animals, including those that are well established in limited or extensive areas of natural lakes, rivers and streams in this state;
    2. Fish classified as game fish in Mississippi; however, except as authorized in subsection (2), the department shall not issue any such permits for the following game fish: black bass, bream, crappie, flathead catfish, walleye and all members of the family Centrarchidae and Percidae;
    3. Endangered, threatened or protected species;
    4. Any aquatic plants or animals which have been genetically modified or are to be genetically modified by means other than breeding and crossbreeding.
  2. Former subsection (2) shall stand repealed from and after July 1, 2003.
  3. The department shall not issue the permits required in this section until the department approves the proposed aquaculture facility design or the actual facility and such permits shall only be issued to citizens of the United States. The department shall inspect the aquaculture facility prior to the introduction of the aquatic products to be cultured to insure compliance with the approved permit specifications. The department may also conduct periodic inspections of all facilities engaged in the propagation of nonnative species to insure that operational activities comply with approved permit specifications. All required permits shall be renewed annually. For a resident of Mississippi, the fee for a marketing or cultivation permit shall not exceed One Hundred Dollars ($100.00) for each species of aquatic products produced. The fee for a marketing or cultivation permit issued to a nonresident of Mississippi shall equal the amount imposed by the nonresident’s state for such permit on a resident of Mississippi.

HISTORY: Laws, 1988, ch. 481, § 5; Laws, 1993, ch. 457, § 3; Laws, 1997, ch. 370, § 1; Laws, 1998, ch. 384, § 1; Laws, 2000, ch. 348, § 1, eff from and after July 1, 2000.

Editor’s Notes —

Former subsection (2), which read: “The department is authorized, after consultation with the Department of Wildlife, Fisheries and Parks, the Department of Marine Resources and the Division of Agriculture, Forestry and Veterinary Medicine at Mississippi State University, to issue five (5) cultivation and marketing permits for the production and sale of hybrid bream (Lepomis spp.) and hybrid black stripe crappie (Pomoxis spp.) in a pilot program as prescribed by the department’s regulations. Such cultured game fish shall be marketed through an approved processing facility in a labeled package and shall remain in the original package when displayed for sale,” was repealed by Laws of 2000, ch. 348 § 1, effective July 1, 2003.

Amendment Notes —

The 2000 amendment substituted “July 1, 2003” for “July 1, 2000” in the second paragraph in (2).

Cross References —

Domestic fish farming, see §§ 69-7-501 et seq.

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Penalties for violations, see § 79-22-29.

Application to the catfish farming industry, see § 79-22-33.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-11. Withholding permit.

By withholding a culture and/or marketing permit, the department may prohibit the aquaculturing of any species at any location if the department determines it would be detrimental to the public interest and presents its determination in writing with supporting justification.

HISTORY: Laws, 1988, ch. 481, § 6, eff from and after July 1, 1988.

Cross References —

Penalties for violations, see § 79-22-29.

Application to the catfish farming industry, see § 79-22-33.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-13. Nonrenewal of permit.

Failure by an aquaculturist to provide any information required by the department to verify that cultured aquatic products are produced under controlled aquacultural conditions and are not harvested from native wild stock shall result in nonrenewal, suspension or cancellation of the permit. The department is authorized, subject to the requirements set forth in the Mississippi Administrative Procedures Law, to promulgate reasonable rules and regulations to carry out the provisions of this chapter. Other state agencies, at the request of the department, shall assist in the promulgation of such regulations by providing technical expertise or such other assistance as, in the department’s discretion, may be required.

HISTORY: Laws, 1988, ch. 481, § 7; Laws, 1993, ch. 457, § 4, eff from and after July 1, 1993.

Cross References —

Mississippi Administrative Procedures Law, see §§ 25-43-1.101 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-15. Issuance of permits for taking of game fish for brood stock; promulgation of regulations; issuance of cultivation and marketing permits; inspections.

  1. The Department of Wildlife, Fisheries and Parks may issue permits to obtain game fish for use as brood stock in accordance with regulations promulgated by the Department of Wildlife, Fisheries and Parks.
  2. In promulgating these regulations for game fish used for brood stock, the Commission on Wildlife, Fisheries and Parks may specify that a permittee:
    1. Obtain a temporary variance permit from the department;
    2. Provide compensation for each fish taken for brood stock as established by the department and outlined in the permit; and
    3. Shall not sell or transport out of the state brood fish taken from state waters.
  3. The Department of Wildlife, Fisheries and Parks shall not permit the collecting of wild brood stock in any waters where the wildlife department determines that the collection is not in the long-term best interest of the resource.
  4. The Department of Marine Resources may issue permits to obtain estuarine and marine brood stock. The commission may promulgate regulations for such permits and may require a permittee to meet any requirements listed in subsection (2).
  5. The Commission on Wildlife, Fisheries and Parks and the Commission on Marine Resources may promulgate regulations which specify design criteria to protect the resources within their jurisdiction and to prevent the release of undesirable species from an aquaculture facility into the environment. The Department of Wildlife, Fisheries and Parks and the Department of Marine Resources may advise the Department of Agriculture and Commerce in issuing cultivation and marketing permits. The permits shall be issued in accordance with the applicable regulations. The Department of Wildlife, Fisheries and Parks, the Department of Marine Resources or the Department of Agriculture and Commerce may inspect operations licensed by cultivation and marketing permits. Any violations of the regulations promulgated by the Commission on Wildlife, Fisheries and Parks or the Commission on Marine Resources shall be punishable as provided in Section 79-22-29.

HISTORY: Laws, 1988, ch. 481, § 8; Laws, 1991, ch. 530, § 4; Laws, 1999, ch. 337, § 1, eff from and after passage (approved Mar. 12, 1999.).

Amendment Notes —

The 1999 amendment inserted present (4), and redesignated and rewrote former (4) as (5); substituted “Commission on Wildlife” for “Department of Wildlife” in (2); deleted “and” following “from the department” in (2)(a); and added “and” to the end of (2)(b).

Cross References —

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Penalties for violations, see § 79-22-29.

Application to the catfish farming industry, see § 79-22-33.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-17. Building requirements.

The department shall issue a cultivation permit for any aquaculture facility located, in whole or in part, in the Mississippi Sound, the Gulf of Mexico, or bays or estuaries thereof at such time that such facility complies with all state and federal requirements to protect marine resources.

HISTORY: Laws, 1988, ch. 481, § 9; Laws, 1993, ch. 457, § 5, eff from and after July 1, 1993.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§§79-22-19 and79-22-21. Repealed.

Repealed by Laws of 1993, ch. 457, § 10, eff from and after July 1, 1993.

§79-22-19. [Laws, 1988, ch. 481, § 10]

§79-22-21. [Laws, 1988, ch. 481, § 11]

Editor’s Notes —

Former § 79-22-19 related to one-stop permitting for aquaculture activities.

Former § 79-22-21 related to the compliance of aquacultural operations with applicable regulations from the Department of Environmental Quality and Department of Health.

§79-22-23. Leasing waters; aquaculture lease management program.

  1. The Secretary of State, upon recommendation of the Mississippi Department of Marine Resources and the Mississippi Department of Environmental Quality may lease waters as provided by Section 29-1-107, Mississippi Code of 1972, within the jurisdiction of the state to a person for aquaculture or the production of aquatic products. The Department of Marine Resources is authorized to develop a marine aquaculture lease management program and may adopt such rules and regulations as may be necessary to implement the marine aquaculture lease management program and to regulate the growth of aquaculture.
  2. All state and governmental entities that are involved in the regulation and enforcement of marine aquaculture activities or related activities shall develop a coordinated procedure for one-stop permitting applicable to marine aquaculture activities. One-stop permitting is defined as a procedure that allows an aquaculturist to fill out a joint application form and deposit it with any of the aforementioned governmental agencies. The receiving agency shall forward the joint application or copies of it to the appropriate entities for review and expeditious action. The one-stop permitting procedure document shall state the time schedules for review and action by the applicable agencies after the permit has been received and dated.

HISTORY: Laws, 1988, ch. 481, § 12; Laws, 1993, ch. 457, § 6; Laws, 1999, ch. 337, § 2, eff from and after passage (approved Mar. 12, 1999.).

Amendment Notes —

The 1999 amendment substituted “Department of Marine Resources” for “Department of Wildlife, Fisheries and Parks” twice in (1); and deleted “and” following “the joint application” in (2).

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-25. Management plan to be developed; Aquatic Ventures Center.

The department may, as funds are made available by the Legislature, develop an Aquatic Ventures Center.

The center may develop but shall not be limited to the following activities:

Plan and conduct a program promoting cultured aquatic products and associated technologies, including demonstration, training and technical assistance;

Disseminate information about the technologies and species suitable for Mississippi and provide informal education relative thereto;

Produce and coordinate the production of species of aquatic products that can be introduced into the state’s waters, particularly its marine waters, to increase recreational and commercial fishing opportunities;

Encourage expanding or new aquaculture activities which add to the economy of the state;

Provide an opportunity for all state agencies, universities and colleges and federal agencies that are involved in activities that relate directly or indirectly to aquaculture to participate in the Center’s program and to display their products;

Maintain a coordinated liaison with other aquacultural enterprises, including federal agencies;

Provide opportunity for Mississippi aquaculture associations to participate in the Center’s program to advertise their cultured aquatic products.

Provide for increased opportunities to market all Mississippi cultured aquatic products.

Increase tourism to Mississippi by attracting tourists to visit the Center, to stay in hotels and to utilize restaurants and the services provided by other Mississippi businesses.

Inform aquaculturists of the availability of forming aquatic products marketing associations under the state “Co-operative Aquatic Products Marketing Law” and, as needed, aid them in forming such associations.

Encourage and authorize the establishment of commercial aquaculture parks where a number of entrepreneur aquaculturists can establish aquaculture ventures. All Mississippi governmental entities, universities and colleges shall provide coordinated support for investors who are citizens of the United States and would like to establish a commercial aquaculture park in Mississippi and who intend to provide for innovative and effective coordinated efforts within the park, as well as among other parks, relative to water resources utilization, production, processing and marketing applicable to cultured aquatic products.

The department may solicit and accept financial and professional support from any private or public sources, including the federal government.

HISTORY: Laws, 1988, ch. 481, § 13; Laws, 1993, ch. 457, § 7, eff from and after July 1, 1993.

Cross References —

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-27. Order to stop sale or distribution of product found in violation of chapter.

The Commissioner of Agriculture and Commerce is authorized, in his discretion, to issue an order to stop the sale or distribution of any product found to be in violation of this chapter. Any order to stop the sale of any product regulated under the provisions of this chapter may be appealed to the Chancery Court of the First Judicial District of Hinds County or the chancery court in the county where the violation occurred within thirty (30) days of receipt of such order.

HISTORY: Laws, 1988, ch. 481, § 14; Laws, 1993, ch. 457, § 8, eff from and after July 1, 1993.

Cross References —

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Penalties for violations of this chapter, see § 79-22-27.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-29. Penalties.

Any person violating this chapter or any regulation of the department issued under this chapter shall be subject to a fine of not more than One Thousand Dollars ($1,000.00) for each violation nor less than Two Hundred Fifty Dollars ($250.00). In the case of a violation involving the marketing of non-cultured game fish, each fish is counted as a separate violation. When necessary to effect the purposes of this chapter, in addition to all other remedies in law or equity, the Commissioner of Agriculture and Commerce may petition the chancery court for an injunction to prevent any violation of the provisions of this chapter, or the continuance of any such violation, or to enforce compliance herewith. The chancery court is hereby vested with authority to enter jurisdiction on any such petition to determine the cause and to issue process as may be necessary to accomplish the purposes of this chapter. Nothing in this chapter shall be construed as exempting any aquaculture facility from local, state or federal requirements applicable to such facilities.

HISTORY: Laws, 1988, ch. 481, § 15; Laws, 1993, ch. 457, § 9, eff from and after July 1, 1993.

Cross References —

Enforcement of section against operations violating regulations governing cultivation and marketing permittees, see § 79-22-15.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-31. Application to state educational institutions.

State educational institutions shall be subject to the above regulations but shall be exempt from fees.

HISTORY: Laws, 1988, ch. 481, § 16, eff from and after July 1, 1988.

Cross References —

Fees, see § 79-22-9.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-33. Application to catfish farming industry.

This chapter shall not apply to the catfish farming industry and the provisions of this chapter shall not be construed to regulate the growing, farming, harvesting, processing and sale of catfish or catfish products which are harvested from privately owned ponds and have been fed commercially prepared feed and have been subject to a quality check before harvesting and processing.

HISTORY: Laws, 1988, ch. 481, § 17, eff from and after July 1, 1988.

Cross References —

Catfish Marketing Law, see §§ 69-7-601 et seq.

Mississippi Catfish Processor Fair Practices Act, see §§ 69-7-651 et seq.

Federal Aspects—

National Aquaculture Act of 1980, see 16 USCS §§ 2801 et seq.

RESEARCH REFERENCES

Am. Jur.

35A Am. Jur. 2d, Fish, Game and Wildlife Conservation § 82.

§79-22-35. Tilapia products; labeling; penalties.

  1. No tilapia products shall be offered for direct sale for human consumption by a processor, distributor or retailer unless the tilapia product name is specifically labeled in the following manner:
    1. “FARM-RAISED TILAPIA,” if the product has been produced under the authority of a permit issued in accordance with the Mississippi Aquaculture Act of 1988; or similar tilapia products produced under comparable conditions in any one (1) of the other states of the United States of America.
    2. “IMPORTED TILAPIA,” provided the tilapia is produced from freshwater or salt water either according to the usual and customary technique of aquaculture or from freshwater lakes, rivers or streams of a country other than the United States of America.
  2. Any retailer selling tilapia products not wrapped or in a container may comply with this section by placing a sign on the display case or refrigeration unit reasonably visible to the consumer, giving notice that such tilapia is either “Farm-Raised Tilapia” or “Imported Tilapia” as such products are defined in subsection (1) of this section.
  3. The Commissioner of Agriculture and Commerce may promulgate such rules and regulations as may be necessary for the efficient enforcement of this section.
  4. Before the issuance, amendment, or repeal of any rule or regulation authorized by this chapter, the commissioner shall publish the proposed regulation, amendment, or notice to repeal an existing regulation in a manner reasonably calculated to give interested parties adequate notice and shall afford all interested persons an opportunity to present their views thereon, orally or in writing, within a reasonable period of time. After consideration of all views presented by interested persons, the commissioner shall take appropriate action to issue the proposed rules or regulations or to amend or repeal an existing rule or regulation.
  5. The commissioner shall issue and enforce a written or printed “stop sale, use or removal” order to the owner or custodian of any lot of tilapia and to hold the tilapia at a designated place when the commissioner finds that the tilapia is being offered or exposed for sale in violation of any of the provisions of this chapter until the law has been complied with and the tilapia is released in writing by the commissioner, or the violation has been otherwise legally disposed of by written authority. The commissioner shall release the tilapia so withdrawn when he determines that such tilapia is in compliance with all provisions of this chapter.
  6. The commissioner shall have authority to publish the names and addresses of violators and such information pertaining to violations of this chapter as he deems appropriate.
  7. Any person who violates any provision of this chapter or which no other civil penalty is provided by this chapter shall, upon conviction, be subject to a fine of not more than Five Hundred Dollars ($500.00); however, no person shall be subject to penalties under this section for receiving for transportation any article in violation of this chapter, if such receipt was made in good faith, unless such person refuses to furnish, on request of a representative of the commissioner, the name and address of the person from whom he received such article, and copies of all documents, if any, pertaining to the delivery of the article to him.
  8. Nothing in this chapter shall be construed as requiring the commissioner to report for prosecution or for the institution of libel or injunction proceedings minor violations of this chapter whenever he believes that the public interest will be adequately served by a suitable written notice of warning.
  9. It shall be the duty of each prosecuting attorney to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in a court of competent jurisdiction without delay. Before the commissioner reports a violation for such prosecution, an opportunity shall be given to the affected parties to present their views to the commissioner.

HISTORY: Laws, 1992, ch. 403, § 1; Laws, 1997, ch. 374, § 1, eff from and after July 1, 1997.

Cross References —

Mississippi Aquaculture Act of 1988, see §§ 79-22-1 et seq.

Chapter 23. Commercial and Proprietary Information

§79-23-1. Commercial and financial information exempt from provisions of public access; application of Trade Secrets Act.

  1. Commercial and financial information of a proprietary nature required to be submitted to a public body, as defined by paragraph (a) of Section 25-61-3, by a firm, business, partnership, association, corporation, individual or other like entity, shall be exempt from the provisions of the Mississippi Public Records Act of 1983; provided, however, that nothing herein shall be construed to deny access to such information submitted to a regulatory agency by a public utility that is related to the establishment of, or changes in, rates regulated by such agency.
  2. Nothing in this section shall be construed to deny a public utility the right to protect trade secrets or confidential commercial or financial information, as provided in subsection (1) of Section 25-61-9.
  3. Trade secrets and confidential commercial and financial information of a proprietary nature developed by a college or university under contract with a firm, business, partnership, association, corporation, individual or other like entity shall be exempt from the provisions of the Mississippi Public Records Act of 1983.
  4. Misappropriation of a trade secret shall be governed by the provisions of Mississippi Uniform Trade Secrets Act, Section 75-26-1 through 75-26-19.

HISTORY: Laws, 1983, ch. 424, § 22; Laws, 1988, ch. 406, § 2; Laws, 1990, ch. 442, § 17, eff from and after July 1, 1990.

Cross References —

Mississippi Public Records Act of 1983, see §§ 25-61-1 et seq.

OPINIONS OF THE ATTORNEY GENERAL

Based on Section 79-23-1, the Joint Water Management District may deny access to public records if it finds, consistent with fact, that they constitute commercial or financial information of a proprietary nature required to be submitted by third parties to the District. 1996 Miss. Op. Att'y Gen. 761.

Records request for lists of names, addresses, phone numbers and other personal identifying data, under the Mississippi Public Records Act of 1983 should not be disclosed absent express permission or waiver from the provider of the information. See Section 79-23-1. 1996 Miss. Op. Att'y Gen. 761.

RESEARCH REFERENCES

ALR.

Bank’s liability, under state law, for disclosing financial information concerning depositor or customer. 81 A.L.R.4th 377.

JUDICIAL DECISIONS

1. Information not disclosed.

Animal rights organization failed to rebut the evidence presented by the university and the company that the data and information requested in the subject records constituted trade secrets and/or confidential commercial and financial information of a proprietary nature developed by the university under contract with the company; therefore, the data and information requested by the organization was exempted from the provisions of the Mississippi Public Records Act, in harmony with applicable federal law, Miss. Code Ann. §§ 25-61-9, through 25-61-13, 79-23-1(3), and 7 U.S.C.S. § 2143(a)(6)(B). Miss. State Univ. v. People for the Ethical Treatment of Animals, Inc., 992 So. 2d 595, 2008 Miss. LEXIS 355 (Miss. 2008).

Publisher was unable to obtain the amount that a utility charged a third party because the information was exempt from disclosure as confidential under Miss. Code Ann. § 79-23-1; the utility had followed the procedures to protect the document under Miss. Code Ann. § 25-61-9(1) and Miss. Pub. Serv. Comm’n R. Prac. & P. 4D, 4I; moreover, the amount charged did not meet the definition of rate under Miss. Code Ann. § 77-3-3(e) because it was a privately negotiated agreement. Gannett River States Publ. Co. v. Entergy Miss., Inc., 940 So. 2d 221, 2006 Miss. LEXIS 447 (Miss. 2006).

Chapter 25. Mississippi Shareholder Protection Act

§79-25-1. Short title.

This chapter may be cited as the “Mississippi Shareholder Protection Act”.

HISTORY: Laws, 1985, ch. 449, § 1, eff from and after July 1, 1985.

Cross References —

Control Share Act as not precluding simultaneous application of provisions of Control Share Act and Shareholder Protection Act, see § 79-27-11.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 642 et seq.

CJS.

18 C.J.S., Corporations §§ 568-582.

§79-25-3. Definitions.

In Sections 79-25-3 through 79-25-9, the following terms have the meanings ascribed herein:

“Affiliate,” including the term “affiliated person,” means a person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person.

“Announcement date” means the first general public announcement of the proposal or intention to make a proposal of a business combination or its first communication generally to shareholders of the corporation, whichever is earlier.

“Associate,” when used to indicate a relationship with any person, means:

Any corporation or organization (other than the corporation or a subsidiary of the corporation) of which such person is an officer, director or partner, or is, directly or indirectly, the beneficial owner of ten percent (10%) or more of any class of equity securities;

Any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and

Any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the corporation or any of its affiliates.

“Beneficial owner,” when used with respect to any voting stock, means a person:

That, individually or with any of its affiliates or associates, beneficially owns voting stock, directly or indirectly; or

That, individually or with any of its affiliates or associates, has:

The right to acquire voting stock (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; or

The right to vote voting stock pursuant to any agreement, arrangement or understanding; or

That has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting, exercising investment power over, or disposing of voting stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such shares of voting stock.

“Business combination” means:

Subject to the limitations provided in Sections 79-33-1 through 79-33-9, unless the merger, consolidation or share exchange does not alter the contract rights of the stock as expressly set forth in the certificate of incorporation or change or convert in whole or in part any of the outstanding shares of stock of the corporation, any merger, consolidation, share exchange or similar transaction of the corporation or any subsidiary with any interested shareholder or any other corporation (whether or not itself an interested shareholder) which is, or after the merger, consolidation or share exchange would be, an affiliate of an interested shareholder that was an interested shareholder prior to the transaction; or

Any sale, lease, transfer or other disposition, other than in the ordinary course of business, in one transaction or a series of transactions, to or with any interested shareholder or any affiliate of any interested shareholder (other than the corporation or any of its subsidiaries) of any assets of the corporation or any subsidiary having, at the time the transactions are approved by the board of directors of the corporation, an aggregate market value of twenty percent (20%) or more of the total market value of the outstanding stock of the corporation or of its assets, all as of the end of its most recently ended fiscal quarter, whichever is lower; or

The issuance or transfer by the corporation, or any subsidiary (in one transaction or a series of transactions) of any securities of the corporation or any subsidiary which have an aggregate market value of five percent (5%) or more of the total market value of the outstanding stock of the corporation to any interested shareholder or any affiliate of any interested shareholder (other than the corporation or any of its subsidiaries), except pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the corporation’s voting stock or any other method affording substantially equal treatment to the holders of voting stock; or

The adoption of any plan or proposal for the liquidation, dissolution of or similar transaction involving the corporation in which anything other than cash will be received by an interested shareholder or any affiliate or any interested shareholder; or

Any reclassification of securities (including any reverse stock split), or recapitalization of the corporation, or any merger, consolidation or share exchange of the corporation with any of its subsidiaries which has the effect, directly or indirectly, in one transaction or a series of transactions, of increasing by five percent (5%) or more of the total number of outstanding shares, the proportionate share of the outstanding shares of any class of equity securities of the corporation or any subsidiary which is directly or indirectly owned by any interested shareholder or any affiliate or associate of any interested shareholder, except as a result of immaterial changes due to fractional share adjustments.

“Common stock” means any stock other than preferred or preference stock.

“Continuing director” means any member of the board of directors of the corporation, while such person is a member of the board of directors, who is not an affiliate or associate or representative of the interested shareholder and was a member of the board of directors prior to the time that the interested shareholder became an interested shareholder, and any successor of a continuing director, while such successor is a member of the board of directors, who is not an affiliate or associate or representative of the interested shareholder and is recommended or elected to succeed the continuing director by a majority of continuing directors.

“Control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly, indirectly or beneficially, of the power, directly or indirectly, to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. The beneficial ownership of ten percent (10%) or more of the votes entitled to be cast by a corporation’s voting stock creates a presumption of control.

“Corporation,” means any domestic corporation, as defined in Section 79-3-3(a), Mississippi Code of 1972, which corporation’s principal place of business is located in Mississippi or which corporation has substantial assets in Mississippi, provided that such corporation has securities listed on a securities exchange registered under the Securities Exchange Act of 1934.

A corporation shall not include:

Any state or national bank or any bank holding company or any affiliate thereof authorized by the appropriate regulatory authority to be owned by any of the above; or

Any state or federal savings and loan association, savings bank or similar savings institution, and any holding company or other affiliate of any state or federal savings and loan association, savings bank or similar savings institution.

“Determination date” means the date on which an interested shareholder first became an interested shareholder.

“Equity security” or “security” means:

Any stock or similar security, certificate of interest, or participation in any profit sharing agreement, voting trust certificate, or certificate of deposit for an equity security;

Any security convertible, with or without consideration, into an equity security, or any warrant or other security carrying any right to subscribe to or purchase an equity security; or

Any put, call, straddle or other option or privilege of buying an equity security from or selling an equity security to another without being bound to do so.

“Interested shareholder” means any person or associated group of persons acting in concert (other than the corporation and/or any subsidiaries) that:

Is the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the outstanding voting stock of the corporation; or

Is an affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of twenty percent (20%) or more of the voting power of the then outstanding voting stock of the corporation.

For the purpose of determining whether a person or group of persons is an interested shareholder, the number of shares of voting stock deemed to be outstanding shall include shares deemed owned by the person or group of persons through application of paragraph (d) of this subsection.

“Market value” means:

In the case of stock, the highest closing sale price during the thirty-day period immediately preceding the date in question of a share of such stock on the composite tape for New York Exchange listed stocks, or, if such stock is not quoted on the composite tape, on the New York Stock Exchange, or if such stock is not listed on such exchange, on the principal United States Securities Exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the thirty-day period preceding the date in question on the National Association of Securities Dealers, Inc., automated quotations system or any system then in use.

In the case of property other than cash or stock, the fair market value of such property on the date in question as determined by a majority of the continuing directors of the corporation in good faith.

“Subsidiary” means any corporation of which voting stock having a majority of the voting stock is owned, directly or indirectly, by the corporation.

“Valuation date” means:

For a business combination voted upon or consented to by shareholders, the latter of the day prior to the date of the shareholders vote or consent or the day twenty (20) days prior to the consummation of the business combination; and

For a business combination not voted upon or consented to by shareholders, the date of the consummation of the business combination.

“Voting stock” means shares of capital stock of the corporation entitled to vote generally in the election of directors.

HISTORY: Laws, 1985, ch. 449, § 2(1); Laws, 1987, ch. 479; Laws, 2004, ch. 353, § 9, eff from and after passage (approved Apr. 20, 2004.).

Editor’s Notes —

Section 79-3-3, referred to in (h), was repealed by Laws of 1987, ch. 486, § 17.06, effective from and after January 1, 1988.

Amendment Notes —

The 2004 amendment added “Subject to the limitations provided in “Sections 79-33-1 through 79-33-9” to the beginning of (e)(i); and made minor stylistic changes.

Cross References —

Corporate successor asbestos-related liability in connection with merger or consolidations, see §§ 79-33-1 et seq.

Federal Aspects—

The Securities Exchange Act of 1934 is codified at 15 USCS §§ 78a et seq.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 642 et seq.

CJS.

18 C.J.S., Corporations §§ 568-582.

§79-25-5. Voting requirements.

In addition to any vote otherwise required by law, by the certificate of incorporation of the corporation, or by the bylaws of the corporation, a business combination shall be approved by the affirmative vote of at least:

Eighty percent (80%) of the votes entitled to be cast by outstanding shares of voting stock of the corporation, voting together as a single class; and

Two-thirds (2/3) of the votes entitled to be cast by holders of voting stock other than voting stock held by the interested shareholder who is (or whose affiliate or associate is) a party to the business combination or an affiliate or associate of the interested shareholder, voting together as a single class.

HISTORY: Laws, 1985, ch. 449, § 2(2), eff from and after July 1, 1985.

Cross References —

Exceptions to voting requirements, see § 79-25-7.

Federal Aspects—

Provisions of the Investment Company Act of 1940, see 15 USCS §§ 80a-1 et seq.

RESEARCH REFERENCES

ALR.

Validity of variations from one share-one vote rule under modern corporate law. 3 A.L.R.4th 1204.

Am. Jur.

18A Am. Jur. 2d, Corporations §§ 850 et seq.

§79-25-7. Exceptions to voting requirements.

The provisions of Section 79-25-5 shall not apply to a business combination involving receipt of consideration in exchange for or in respect of the corporation’s stock or assets in the circumstances specified in subsection (b) or (c) of this section or to a corporation meeting one (1) of the requirements of subsection (d) of this section.

The vote required by Section 79-25-5 is not required if each of the following conditions is met:

The aggregate amount of the cash and the market value as of the valuation date of consideration other than cash to be received per share by holders of common stock in such business combination is at least equal to the highest of the following:

The highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the interested shareholder for any shares of common stock of the same class or series acquired by it

  1. Within the two-year period immediately prior to the announcement date of the proposal of the business combination, or
  2. In the transaction in which it became an interested shareholder, whichever is higher; or

The market value per share of common stock of the same class or series on the announcement date or on the determination date, whichever is higher; or

The price per share equal to the market value per share of common stock of the same class or series determined pursuant to subsection (b)(i)(B) of this section, multiplied by the fraction of:

The highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the interested shareholder for any shares of common stock of the same class or series acquired by it within the two-year period prior to the announcement date; over

The market value per share of common stock of the same class or series on the first day in such two-year period on which the interested stockholder acquired his stock.

The aggregate amount of the cash and the market value as of the valuation date of consideration other than cash to be received per share by holders of shares of any class or series of outstanding stock other than common stock is at least equal to the highest of the following (whether or not the interested shareholder has previously acquired any shares of a particular class or series of stock):

The highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the interested shareholder for any shares of such class of stock acquired by it

Within the two-year period immediately prior to the announcement date of the proposal of the business combination, or

In the transaction in which it became an interested shareholder, whichever is higher; or

The highest preferential amount per share to which the holders of shares of such class of stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; or

The market value per share of such class of stock on the announcement date or on the determination date, whichever is higher; or

The price per share equal to the market value per share of such class of stock determined pursuant to subsection (b)(ii)(c) of this section, multiplied by the fraction of:

The highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers’ fees) paid by the interested shareholder for any shares of any class of voting stock acquired by it within the two-year period immediately prior to the announcement date; over

The market value per share of the same class of voting stock on the first day in such two-year period on which the interested shareholder acquired any shares of the same class of voting stock.

The consideration to be received by holders of any class or series of outstanding stock is to be in cash or in the same form as the interested shareholder has previously paid for shares of the same class or series of stock. If the interested shareholder has paid for shares of any class of stock with varying forms of consideration, the form of consideration for such class of stock shall be either cash or the form used to acquire the largest number of shares of such class or series of stock previously acquired by it. In making any price calculation under subsection (a) of this section, appropriate adjustments shall be made to reflect any reclassification, stock dividend, stock split, recapitalization or similar transaction which may increase or reduce the number of outstanding shares of any class or series of stock of the corporation.

After the interested shareholder has become an interested shareholder and prior to the consummation of such business combination:

There shall have been no failure to declare and pay at the regular date therefor any full periodic dividends (whether or not cumulative) on any outstanding preferred stock of the corporation.

There shall have been:

No reduction in the annual rate of dividends paid on any class or series of stock of the corporation that is not preferred stock of the corporation (except as necessary to reflect any subdivision of the stock); and

An increase in such annual rate of dividends as necessary to reflect any reclassification, stock dividend, stock split, recapitalization, reorganization or any similar transaction, which has the effect of reducing the number of outstanding shares of the stock.

The interested shareholder shall not have become the beneficial owner of any additional shares of stock of the corporation except as part of the transaction which resulted in such interested shareholder becoming an interested shareholder or by virtue of proportionate stock splits or stock dividends.

After the interested shareholder has become an interested shareholder, the interested shareholder shall not have received the benefit, directly or indirectly (except proportionately as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages, provided by the corporation or any of its subsidiaries, whether in anticipation of or in connection with such business combination or otherwise.

Whether or not such business combinations are consummated in whole or in part after July 1, 1985, or after the interested shareholder became an interested shareholder, the requirements of Section 79-25-5, do not apply to business combinations that specifically, generally, or generally by types, as to specifically identified or unidentified existing or future interested stockholders or their affiliates, have been approved or exempted therefrom by resolution approved by at least eighty percent (80%) of the continuing directors of the corporation.

Unless the certificate of incorporation of the corporation provides otherwise, the requirements of subsection (2) of this section do not apply to any business combination of:

A corporation having fewer than five hundred (500) beneficial owners of its stock; or

A corporation which elects not to be governed by the requirements of Section 79-25-5 by the adoption, upon a majority vote of its shareholders, of an amendment to its certificate of incorporation within one (1) year from and after July 1, 1985, for existing corporations, or within one (1) year from and after the date of incorporation for corporations organized after July 1, 1985; or

An investment company registered under the Investment Company Act of 1940; or

Any state or national bank or any bank holding company or any affiliate thereof authorized by the appropriate regulatory authority to be owned by any of the above; or

Any state or federal savings and loan association, savings bank or similar savings institution, and any holding company or other affiliate of any state or federal savings and loan association, savings bank or similar savings institution.

HISTORY: Laws, 1985, ch. 449, § 2(3), eff from and after July 1, 1985.

Cross References —

Investment Company Act of 1940 generally, see 15 USCS §§ 80(a)-1 et seq.

§79-25-9. Severability.

In the event that any portion or provision of the Mississippi Shareholder Protection Act (Sections 79-25-1 et seq.) is void, invalid, invalidated or otherwise found to be unenforceable for any reason, such portion or provision shall be deleted from the act and each and all of the remaining portions or provisions of the act shall remain effective, and the act shall be interpreted as if the void, invalid or unenforceable portion or provision never existed.

HISTORY: Laws, 1985, ch. 449, § 2(4), eff from and after July 1, 1985.

Chapter 27. Mississippi Control Share Act

§79-27-1. Short title.

This chapter shall be known and may be cited as the “Mississippi Control Share Act.”

HISTORY: Laws, 1990, ch. 411, § 1, eff from and after January 1, 1991.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Cross References —

Shareholders rights to dissent, see § 79-4-13.01.

§79-27-3. Application of chapter; election to be subject to chapter.

  1. This chapter applies to all issuing public corporations in existence on and after January 1, 1991.
  2. A domestic corporation that is not an issuing public corporation but that has one hundred (100) or more shareholders of record and meets one (1) of the requirements set forth in Section 79-27-5(g)(i)(B), or an issuing public corporation to which this chapter does not apply, may elect to be subject to this chapter as an issuing public corporation by amending its articles of incorporation to provide that this chapter shall apply to the corporation as of a specified date and filing the amendment in the office of the Secretary of State on or before such date. Any corporation so electing shall be an “issuing public corporation” for purposes of this chapter.

HISTORY: Laws, 1990, ch. 411, § 2, eff from and after January 1, 1991.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

§79-27-5. Definitions.

As used in this chapter:

“Acquiring person” means a person who makes or proposes to make, or persons acting as a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934 who make or propose to make, a control share acquisition; but “acquiring person” does not include the issuing public corporation.

“Affiliate” means a person who directly or indirectly controls the corporation. “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract, or otherwise. A person’s beneficial ownership of ten percent (10%) or more of the voting power of a corporation’s outstanding shares entitled to vote in the election of directors (except a person holding voting power in good faith as an agent, bank, broker, nominee, custodian or trustee for one or more beneficial owners who do not individually or as a group control the corporation) creates a presumption that the person controls the corporation.

“All voting power” means the aggregate voting power that the shareholders of an issuing public corporation would have in the election of directors, except for this chapter.

“Control shares” means issued and outstanding shares of an issuing public corporation that, except for this chapter, would have voting power when added to all other shares of the issuing public corporation owned of record or beneficially by an acquiring person or in respect to which that acquiring person may exercise or direct the exercise of voting power, that would entitle the acquiring person, immediately after acquisition of the shares (directly or indirectly), to exercise or direct the exercise of the voting power of the issuing public corporation in the election of directors within any of the following ranges of voting power:

One-fifth (1/5) or more but less than one-third (1/3) of all voting power;

One-third (1/3) or more but less than a majority of all voting power; or

A majority or more of all voting power.

(i) “Control share acquisition” means acquisition by any person of ownership of, or the power to direct the exercise of voting power with respect to, control shares.

A person who acquires shares in the ordinary course of business for the benefit of others in good faith and not for the purpose of circumventing this chapter has not made a control share acquisition of shares in respect of which that person is not able to exercise or direct the exercise of votes without further instruction from others.

The acquisition of any control shares does not constitute a control share acquisition if the acquisition is made in good faith and not for the purpose of circumventing this chapter in any of the following circumstances:

At a time when the corporation was not subject to this chapter.

Pursuant to a contract entered into at a time when the corporation was not subject to this chapter.

Pursuant to the laws of descent and distribution under Section 91-1-1 et seq., Mississippi Code of 1972.

By a donee under an inter vivos gift.

Pursuant to a transfer between or among immediate family members, or between or among persons under direct common control. An “immediate family member” is any relative or spouse of a person, or any relative of such spouse, who has the same home as such person.

Pursuant to the satisfaction of a pledge or other security interest.

Pursuant to a merger or plan of consolidation or share exchange effected in compliance with Section 79-4-11.01 et seq., Mississippi Code of 1972, if the issuing public corporation is a party to the agreement of merger or plan of consolidation or share exchange.

From any person whose previous acquisition of control shares would have constituted a control share acquisition but for this paragraph (e)(iii) (other than this paragraph (e)(iii)(H)), provided the acquisition does not result in the acquiring person holding voting power within a higher range of voting power than that of a person from whom the control shares were acquired.

Acquisition by a person of additional shares within the range of voting power for which such person has received approval pursuant to Section 79-27-9 or within the range of voting power resulting from shares acquired in a transaction described in this paragraph (e)(iii).

An increase in voting power resulting from any action taken by the issuing public corporation.

Pursuant to the solicitation of proxies subject to Regulation 14A under the Securities Exchange Act of 1934.

Pursuant to the sale of such shares by the issuing public corporation or its parent or subsidiary corporation.

“Interested shares” means the shares of an issuing public corporation in respect of which any of the following persons may exercise or direct the exercise, as of the applicable record date, of the voting power of the corporation in the election of directors, other than solely by the authority of a revocable proxy:

The acquiring person.

Any officer of the issuing public corporation.

Any employee of the issuing corporation who is also a director of the corporation.

(i) “Issuing public corporation” means a domestic corporation that has:

Any securities registered under Section 12 or is subject to Section 15(d) of the Securities Exchange Act of 1934; and

Either:

1. More than ten percent (10%) of its shareholders resident in Mississippi;

2. More than ten percent (10%) of its shares owned by Mississippi residents; or

3. Five hundred (500) shareholders resident in Mississippi.

The residence of a shareholder is presumed to be the address appearing in the records of the corporation.

Shares held by banks (except as trustee or guardian), brokers or nominees are disregarded for purposes of calculating the percentages and numbers in this paragraph (g).

An issuing public corporation shall not include:

Any state or national bank or any bank holding company or any affiliate thereof authorized by the appropriate regulatory authority to be owned by any of the above; or

Any state or federal savings and loan association, savings bank or similar savings institution, and any holding company or other affiliate of any state or federal savings and loan association, savings bank or similar savings institution.

“Person” means any individual, corporation, partnership, unincorporated association or other entity.

HISTORY: Laws, 1990, ch. 411, § 3, eff from and after January 1, 1991.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Cross References —

Election by corporation that is not an issuing public corporation and meets one of the requirements set forth in this section to be subject to this chapter as issuing corporation, see § 79-27-3.

Provisions applicable to all transactions that, but for this section, would be control share acquisitions, see § 79-27-11.

Federal Aspects—

Securities Exchange Act of 1934 is codified as 15 USCS § 78a et seq.

RESEARCH REFERENCES

ALR.

When is corporation close, or closely-held, corporation under common or statutory law. 111 A.L.R.5th 207.

§79-27-7. Voting power of control shares.

  1. Unless otherwise provided in the articles of incorporation before either a control share acquisition occurs or a disclosure statement is delivered, control shares that are the subject of a control share acquisition have only such voting rights as are accorded under this section.
  2. Subject to subsections (3) through (5) of this section, the voting power of control shares having voting power of one-fifth (/f1o5) or more of all voting power is reduced to zero unless the shareholders of the issuing public corporation approve a resolution pursuant to the procedure set forth in Section 79-27-9 according the shares the same voting rights as they had before they became control shares.
  3. Except as provided in Section 79-27-9(6), the voting power of control shares representing voting power of less than one-fifth (1/5) of all voting power is not affected by this chapter.
  4. If control shares of the acquiring person previously have been accorded (pursuant to the procedure set forth in Section 79-27-9) the same voting rights they had before they became control shares, or if such control shares were acquired in a transaction excluded from the definition of “control share acquisition,” then only the voting power of control shares acquired in a subsequent control share acquisition by such acquiring person within a higher range of voting power shall be reduced to zero.
  5. The voting rights of control shares are restored to those accorded such shares prior to the control share acquisition in any of the following circumstances: (a) if, by reason of subsequent issuance of shares or other transactions by the issuing public corporation, the voting power of those control shares is reduced to a range of voting power for which approval has been granted or is not required; or (b) upon transfer to a person other than an acquiring person; or (c) the expiration of three (3) years after the date of a vote of shareholders pursuant to Section 79-27-9 failing to approve the resolution according voting rights to those control shares.

HISTORY: Laws, 1990, ch. 411, § 4, eff from and after January 1, 1991.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Cross References —

Application of this section to the contents of disclosure statement when acquiring control shares, see § 79-27-9.

RESEARCH REFERENCES

ALR.

Application of requirement that newspaper be locally published for official notice publication. 85 A.L.R.4th 581.

§79-27-9. Disclosure requirements when acquiring control shares; special meeting of shareholders; notice; proxies; voting on resolution in disclosure statement; competing control share acquisition.

  1. Any acquiring person who proposes to make a control share acquisition may, and any acquiring person who has made a control share acquisition shall, publish in a newspaper of general circulation and deliver to the issuing public corporation at its principal office a disclosure statement. To be regarded as a disclosure statement, the document must set forth all of the following:
    1. The identity of the acquiring person;
    2. A statement that the disclosure statement is delivered pursuant to this chapter;
    3. The number of shares of the issuing public corporation owned (directly or indirectly) by the acquiring person, the acquisition dates and the prices at which such shares were acquired;
    4. The voting power to which the acquiring person, except for Section 79-27-7, would be entitled;
    5. A form of the resolution to be considered by the shareholders hereunder; and
    6. If the control share acquisition has not yet occurred:
      1. A description in reasonable detail of the terms of the proposed control share acquisition; and
      2. Representations of the acquiring person, together with a statement in reasonable detail of the facts upon which they are based, that the proposed control share acquisition, if consummated, will not be contrary to law, and that the acquiring person has the financial capacity to make the proposed control share acquisition.
  2. If the directors of the issuing public corporation so order, or if the acquiring person so requests at the time of delivery of a disclosure statement and gives an undertaking to pay the issuing public corporation’s expenses in connection therewith, a special meeting of shareholders of the issuing public corporation must be called within ten (10) days after delivery of the disclosure statement for the purpose of considering the resolution relating to the voting rights to be accorded the shares acquired or to be acquired in the control share acquisition. Unless both the acquiring person and the issuing public corporation agree in writing to another date, the special meeting of shareholders must be held not sooner than thirty (30) days nor later than fifty (50) days after receipt by the issuing public corporation of the request or order for a special meeting.
  3. If no special meeting of shareholders is called pursuant to subsection (2) of this section, the resolution relating to the voting rights to be accorded the shares acquired in the control share acquisition must be presented to the next special or annual meeting of shareholders.
  4. If a special meeting is called, notice of the special meeting of shareholders must be given as promptly as reasonably practicable by the issuing public corporation to all shareholders of record as of the record date set for the meeting. If the special meeting was requested by the acquiring person, the directors shall set the record date on a date not later than fifteen (15) days after the request was received by the issuing public corporation.
  5. Notice of the special meeting, or the annual meeting if no special meeting is called, must include or be accompanied by:
    1. A copy of the disclosure statement;
    2. A statement by the board of directors of its position or recommendation, or that it is taking no position or making no recommendation, with respect to the resolution contained in the disclosure statement; and
    3. A description of any dissent and appraisal rights or any redemption procedure that may accompany or result from the vote of shareholders.
  6. Any other provisions of this chapter notwithstanding, a proxy relating to a meeting of shareholders to be held pursuant to this section must be solicited separately from the offer to purchase or solicitation of an offer to sell shares of the issuing public corporation.
  7. All votes cast at the meeting for or against the resolution contained in the disclosure statement must be identified as noninterested shares. To be approved, the resolution must receive the affirmative votes of a majority of all voting power, excluding all interested shares. If the resolution is not approved, the acquiring person, not sooner than six (6) months thereafter, may present a new resolution for a vote of shareholders in accordance with this section at any subsequent shareholder meeting as long as the voting power of the control shares described in the resolution is reduced.
    1. For purposes of this subsection, a “competing control share acquisition” means a control share acquisition that is the subject of a disclosure statement delivered to the issuing public corporation under subsection (1) of this section before a shareholder vote has been held under subsection (7) of this section with respect to a pending control share acquisition.
    2. A resolution relating to the voting rights of control shares that are the subject of a pending control share acquisition is not effective unless it receives approval pursuant to subsection (7) of this section and a resolution relating to the voting rights of control shares that are the subject of a competing control share acquisition does not receive such approval. If a resolution applicable to the competing control share acquisition is approved pursuant to subsection (7) of this section, only that resolution is effective.
    3. If a resolution relating to a pending control share acquisition has been approved pursuant to subsection (7) of this section before a disclosure statement with respect to another control share acquisition is delivered, the resolution is effective in restoring the voting rights of control shares that are the subject of the pending control share acquisition.
    4. If resolutions relating to two (2) or more control share acquisitions are subject to shareholder vote under subsection (7) of this section, shares held by an acquiring person are not considered interested shares with respect to a vote on a resolution relating to a competing control share acquisition.
  8. All provisions of the Mississippi Business Corporation Act, Section 79-4-1.01 et seq., Mississippi Code of 1972, that are not inconsistent with the procedures set forth in this section shall apply to the meeting of shareholders of the issuing public corporation.

HISTORY: Laws, 1990, ch. 411, § 5, eff from and after January 1, 1990.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Cross References —

Acquisition of control shares after receiving approval pursuant to this section as not constituting control share acquisition, see § 79-27-5.

Voting power of control shares, see § 79-27-7.

§79-27-11. Acquisition of control shares at time when corporation was not subject to chapter, or pursuant to contract entered into at time when corporation was not subject to chapter.

  1. This section applies to all transactions that, but for Section 79-27-5(e)(iii)(A) and (B), would be control share acquisitions in which:
    1. The acquiring person is or includes an affiliate of the issuing public corporation;
    2. The corporation has, by a provision in its articles of incorporation adopted within the prior twelve (12) months, elected not to be subject to this chapter; and
    3. The acquiring person has acquired a majority or more of all voting power.
  2. Within thirty (30) days after a control share acquisition subject to subsection (1) of this section, the acquiring person must make a written offer to purchase the shares of each remaining shareholder at a price at least equal to the highest price at which the control shares were acquired by the acquiring person within the twelve (12) months immediately preceding the offer.
  3. Nothing herein shall be construed to preclude the simultaneous application of this section and the Mississippi Shareholder Protection Act, Section 79-25-1 et seq., Mississippi Code of 1972.

HISTORY: Laws, 1990, ch. 411, § 6, eff from and after January 1, 1991.

Editor’s Notes —

Laws of 1990, ch. 411, § 8, provides as follows:

“SECTION 8. The provisions of this act are severable. If any provision is invalid, or if its application to any person or circumstance is invalid, such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application.”

Chapter 29. Revised Mississippi Limited Liability Company Act

Editor’s Notes —

Laws of 2010, ch. 532, § 3, which repealed the Mississippi Limited Liability Company Act (codified in Chapter 29 of Title 79) effective from and after January 1, 2011, provides:

“SECTION 3. Sections 79-29-101, 79-29-102, 79-29-103, 79-29-104, 79-29-105, 79-29-106, 79-29-107, 79-29-108, 79-29-109, 79-29-110, 79-29-111, 79-29-112, 79-29-201, 79-29-202, 79-29-203, 79-29-204, 79-29-205, 79-29-206, 79-29-207, 79-29-208, 79-29-209, 79-29-210, 79-29-211, 79-29-212, 79-29-213, 79-29-214, 79-29-301, 79-29-302, 79-29-303, 79-29-304, 79-29-305, 79-29-306, 79-29-307, 79-29-308, 79-29-401, 79-29-402, 79-29-403, 79-29-50179-29-502, 79-29-503, 79-29-504, 79-29-601, 79-29-602, 79-29-603, 79-29-604, 79-29-605, 79-29-606, 79-29-701, 79-29-702, 79-29-703, 79-29-704, 79-29-705, 79-29-801, 79-29-802, 79-29-803, 79-29-804, 79-29-805, 79-29-806, 79-29-807, 79-29-901, 79-29-902, 79-29-903, 79-29-904, 79-29-905, 79-29-906, 79-29-907, 79-29-908, 79-29-909, 79-29-910, 79-29-911, 79-29-912, 79-29-913, 79-29-914, 79-29-915, 79-29-917, 79-29-918, 79-29-919, 79-29-920, 79-29-921, 79-29-922, 79-29-923, 79-29-924, 79-29-925, 79-29-926, 79-29-930, 79-29-931, 79-29-933, 79-29-1001, 79-29-1002, 79-29-1003, 79-29-1004, 79-29-1005, 79-29-1006, 79-29-1007, 79-29-1008, 79-29-1009, 79-29-1010, 79-29-1101, 79-29-1102, 79-29-1103, 79-29-1104, 79-29-1105, 79-29-1106, 79-29-1107, 79-29-1201, 79-29-1202, 79-29-1203 and 79-29-1204, Mississippi Code of 1972, which comprise the Mississippi Limited Liability Company Act, are hereby repealed.”

Former Chapter 29 of Title 79 contained the following Articles:

Article 1, which was entitled “General Provisions” and included former §§ 79-29-101 through 79-29-112 [Laws, 1994, ch. 402, §§ 1 through 12, effective from and after July 1, 1994].

Article 2, which was entitled “Formation, certificate of formation” and included former §§ 79-29-201 through 79-29-210 [Laws, 1994, ch. 402, §§ 13 through 21, effective from and after July 1, 1994] and former §§ 79-29-210 through 79-29-214 [Laws, 2000, ch. 469, §§ 45 through 49, effective from and after July 1, 2000].

Article 3, which was entitled “Members” and included former §§ 79-29-301 through 79-29-308 [Laws, 1994, ch. 402, §§ 22 through 29, effective from and after July 1, 1994].

Article 4, which was entitled “Management” and included former §§ 79-29-401 through 79-29-403 [Laws, 1994, ch. 402, §§ 30 through 32, effective from and after July 1, 1994].

Article 5, which was entitled “Finance” and included former §§ 79-29-501 through 79-29-504 [Laws, 1994, ch. 402, §§ 33 through 36, effective from and after July 1, 1994].

Article 6, which was entitled “Distributions” and included former §§ 79-29-601 through 79-29-606 [Laws, 1994, ch. 402, §§ 37 through 42, effective from and after July 1, 1994].

Article 7, which was entitled “Assignment of Limited Liability Company Interests” and included former §§ 79-29-701 through 79-29-705 [Laws, 1994, ch. 402, §§ 43 through 47, effective from and after July 1, 1994].

Article 8, which was entitled “Dissolution” and included former §§ 79-29-801 through 79-29-807 [Laws, 1994, ch. 402, §§ 48 through 54, effective from and after July 1, 1994].

Article 9, which was entitled “Professional Limited Liability Companies” and included former §§ 79-29-901 through 79-29-912 [Laws, 1994, ch. 402, § 55 through 66, effective from and after July 1, 1994] and former §§ 79-29-913 through 79-29-933 [Laws, 1995, ch. 494, §§ 48 through 63, eff from and after July 1, 1995].

Article 10, which was entitled “Foreign Limited Liability Companies” and included former §§ 79-29-1001 through 79-29-1010 [Laws, 1994, ch. 402, §§ 67 through 76, effective from and after July 1, 1994].

Article 11, which was entitled “Derivative Actions” and included former §§ 79-29-1101 through 1107 [Laws, 1994, ch. 402, §§ 77 through 83, effective from and after July 1, 1994].

Article 12, which was entitled ‘Miscellaneous‘ and included former §§ 79-29-1201 through 79-29-1204 [Laws, 1994, ch. 402, §§ 84 through 87, effective from and after July 1, 1994].

Laws of 2010, ch. 532, § 1, effective from and after January 1, 2011, enacted a new Chapter 29 of Title 79, (§§ 79-29-101 through 79-29-1211) which contains similar provisions.

Article 1. General Provisions.

§79-29-101. Short title.

This chapter shall be known and may be cited as the “Revised Mississippi Limited Liability Company Act.”

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-101 [Laws, 1994, ch. 402, § 1, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the short title of the chapter. See Editor’s Note under Chapter 29 heading.

Cross References —

Limited liability trust companies, see § 81-27-6.301 et seq.

RESEARCH REFERENCES

ALR.

Construction and application of limited liability company acts. 79 A.L.R.5th 689.

Law Reviews.

Lee, The Future of Limited Liability Companies For Business and Estate Planning Purposes in Mississippi.18 Miss. College L. R. 91.

JUDICIAL DECISIONS

Cited in: Hartwell Handle Co. v. Jack, 149 Miss. 465, 115 So. 586, 1928 Miss. LEXIS 51 (Miss. 1928).

§79-29-102. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, eff from and after Jan. 1, 2011.

79-29-102. [Laws, 1994, ch. 402, § 2, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-102 was entitled: Reservation of power to amend or repeal. For present similar provisions, see § 79-29-103.

§79-29-103. Reservation of power to amend or repeal.

Any provision of this chapter may be altered from time to time or repealed and all rights of members, managers and officers are subject to this reservation.Unless expressly stated to the contrary in this chapter, including Article 13, any amendment of this chapter shall apply to limited liability companies and members, managers and officers without regard to either the date of the formation of the limited liability company or the date of the enactment of the amendment.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-103 [Laws, 1994, ch. 402, § 3; Laws, 1995, ch. 494, § 64; Laws, 1997, ch. 418, § 25; Laws, 1998, ch. 376, § 4; Laws, 2000, ch. 469, § 42, eff from and after July 1, 2000; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] provided definitions of terms used in the chapter. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-105.

§79-29-104. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-104. [Laws, 1994, ch. 402, § 4; Laws, 1997, ch. 418, § 26, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-104 was entitled: Name. For present similar provisions, see § 79-29-109.

§79-29-105. Definitions.

As used in this chapter, unless the context otherwise requires:

“Bankruptcy” means an event that causes a member to cease to be a member as provided in Section 79-29-313 of this chapter.

“Certificate of formation” means the certificate referred to in Section 79-29-201, the certificate as amended or restated, and the certificate of merger.In the case of a foreign limited liability company, the term includes all documents serving a similar function that are required to be filed to form the limited liability company in the state or other jurisdiction where it is organized.

“Contribution” means any cash, property, services rendered, or a promissory note or other obligation to contribute cash or property or to perform services, which a person contributes to a limited liability company in the person’s capacity as a member.

“Deliver” or “delivery” means any method of delivery used in conventional commercial practice, including delivery by hand, mail, commercial delivery and electronic transmission. If delivery is to the Secretary of State, delivery may be made by electronic transmission, if, to the extent, and in the manner permitted by the Secretary of State.

“Derivative proceeding” means a civil suit in the right of a limited liability company or, to the extent provided in Article 10 of this chapter, in the right of a foreign limited liability company.

“Electronic transmission” or “electronically transmitted” means any process of communication not directly involving the physical transfer of paper that is suitable for the retention, retrieval and reproduction of information by the recipient.

“Entity” means any association or legal entity organized to conduct business, whether domestic or foreign, including, without limitation, for profit and nonprofit corporations, limited partnerships, general partnerships, limited liability partnerships, limited liability companies, joint ventures, joint-stock companies, business trusts and estates; and states, the United States, foreign governments, governmental subdivisions or governmental agencies.

“Financial interests” and “financial rights” means (i) rights to share in profits and losses as provided in Section 79-29-505; (ii) rights to share in distributions as provided in Section 79-29-507; (iii) rights to receive interim distributions as provided in Section 79-29-601; (iv) rights to receive distributions upon withdrawal as provided in Section 79-29-603; (v) rights to receive allocations of income, loss, deduction, credit or similar items; (vi) appraisal rights as provided in Section 79-29-231; and (vii) any other rights granted in the certificate of formation or the operating agreement that are in addition to the above and are designated as “financial interests” or “financial rights” by the limited liability company.Financial interests may be owned by members of a limited liability company and may be owned by persons who are not members of a limited liability company. Financial interests are assignable in whole or in part, except as otherwise provided by a limited liability company’s certificate of formation or operating agreement.

“Foreign,” with reference to any entity, means such entity that is formed or organized under laws other than the laws of this state or under the laws of any foreign country or other foreign jurisdiction and denominated as such under the laws of such state or foreign country or other foreign jurisdiction.

“Formation document” means the document that creates an entity which document is duly executed and delivered to a public official or office in the state or other foreign jurisdiction of the entity’s formation pursuant to the laws under which the entity is organized or formed.

“Governance interests” or “governance rights” means all of a member’s rights as a member in the limited liability company other than financial rights and the right to assign financial rights, including without limitation:(i) the rights to participate in the management of the limited liability company; (ii) rights to bind the limited liability company as provided in Sections 79-29-307 and 79-29-811; (iii) the right to vote for or consent to matters requiring the vote of or consent of the members, as specified in this chapter or in the certificate of formation or operating agreement; and, unless the context otherwise requires; and (iv) rights to enjoy any privileges bestowed on members of the limited liability company.Only members shall have governance rights or own governance interests in a limited liability company.

“Individual” means a natural person.

“Interests” means the proprietary interests in an entity and, with respect to a member of a limited liability company, “interests” or “membership interests” are used interchangeably and shall each mean all of the governance interests and financial interests in the limited liability company held by such member or members.

“Knowledge” means a person’s actual knowledge, rather than the person’s constructive knowledge.

“Limited liability company” or “domestic limited liability company” means an entity having one or more members that is an unincorporated company or unincorporated association formed and existing under this chapter and is not subject to Section 97-13-15.

“Manager” or “managers” means a person or persons who are named in or selected or designated pursuant to, the certificate of formation or operating agreement as a manager to manage the limited liability company to the extent and as provided in the certificate of formation or operating agreement.A limited liability company whose management is vested in a manager or managers is referred to in this chapter as a manager-managed limited liability company.

“Member” means a person who has been admitted to a limited liability company as provided in Section 79-29-301 or, in the case of a foreign limited liability company, in accordance with the laws under which the foreign limited liability company is organized.A member includes a member of a limited liability company who does not own a financial interest or who does not have an obligation to contribute capital to the limited liability company.A member may or may not have governance interests, including voting rights.A member may have other rights, powers or privileges as prescribed by the certificate of formation or the operating agreement.A limited liability company whose management is vested in the members is referred to in this chapter as a member-managed limited liability company.

“Merger” means a business combination pursuant to Section 79-29-221.

“Officer” means an individual who is named in or selected or designated pursuant to, the certificate of formation or operating agreement as an officer to manage the limited liability company to the extent and as provided in the certificate of formation or operating agreement.

“Operating agreement” or “limited liability company agreement” means any agreement, whether referred to as a limited liability company agreement or otherwise, written, oral or implied, of the member or members as to the affairs of a limited liability company and the conduct of its business. A member or manager of a limited liability company or an assignee of a financial interest is bound by the operating agreement whether or not the member or manager or assignee executes the operating agreement.A limited liability company is not required to execute its operating agreement.A limited liability company is bound by its operating agreement whether or not the limited liability company executes the operating agreement.An operating agreement of a limited liability company having only one (1) member shall not be unenforceable by reason of there being only one (1) person who is a party to the operating agreement.An operating agreement may provide rights to any person, including a person who is not a party to the operating agreement, to the extent set forth therein.A written operating agreement or another written agreement or writing:

May provide that a person shall be admitted as a member of a limited liability company, or shall become an assignee of a financial interest or of other rights or powers of a member to the extent assigned:

1. If the person, or a representative authorized by the person orally, in writing or by other action such as payment for a financial interest, executes the operating agreement or any other writing evidencing the intent of the person to become a member or assignee; or

2. Without such execution, if such person, or a representative authorized by such person orally, in writing or by other action such as payment for a financial interest, complies with the conditions for becoming a member or assignee as set forth in the operating agreement or any other writing; and

Shall not be unenforceable by reason of its not having been signed by a person being admitted as a member or becoming an assignee as provided in paragraph (t)(i) of this subsection, or by reason of its having been signed by a representative as provided in this chapter.

“Organizational documents” means the document or documents that create, or determine the internal governance of, an entity.The organizational documents of a limited liability company are the certificate of formation and the operating agreement, if any.

“Person” means an individual, entity, trust, or any other legal or commercial nominee or any personal representative.

“Personal representative” means, as to an individual, the executor, administrator, guardian, conservator or other legal representative thereof or the successor of such executor, administrator, guardian, conservator or legal representative; and, as to a person other than an individual, the legal representative or the successor of the legal representative. The legal representative of a member which has been placed in bankruptcy shall be the bankruptcy trustee or other representative designated in accordance with the bankruptcy code.

“Professional limited liability company” is a limited liability company formed and existing under Article 9 of this chapter.

“Sign” or “signature” includes any manual, facsimile, conformed or electronic signature.

“State” means the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession or other jurisdiction of the United States.

“Survivor” of a merger means the entity into which one or more entities are merged.A survivor of a merger may preexist the merger or be created by the merger.

“Withdraw” or “withdrawal” means, with respect to a member of a limited liability company, any voluntary act by which, pursuant to the certificate of formation or written operating agreement, a member ceases to be a member of the limited liability company and ceases to have any governance rights. Withdrawal shall include retirement, resignation or withdrawal, but shall not include the death or expulsion of a member, any event described in Section 79-29-313, or the assignment of the member’s entire interest as provided in Section 79-29-703.Any use of the term “resignation” or “retirement” in an operating agreement or certificate of formation, with respect to a member which is not defined in such document, shall mean the withdrawal of the member from the limited liability company for purposes of this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-105 [Laws, 1994, ch. 402, § 5; Laws, 1997, ch. 418 § 27, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the reservation of the exclusive right to the use of a name. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-111.

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, an error in a statutory reference in (t)(ii) was corrected by substituting “paragraph (t)(i) of this subsection” for “subsection (t)(i) of this subsection.”

§79-29-106. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-106. [Laws, 1994, ch. 402, § 6; Laws, 1997, ch. 418, § 28, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-106 was entitled: Registered office and registered agent. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-29-107. Form of notice and written consents.

  1. Notice under this chapter shall be in writing unless oral notice is reasonable under the circumstances.Notice by electronic transmission is written notice.
  2. Notice may be communicated in person; by mail or other method of delivery; or by telephone, voice mail, email or other electronic means.If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published, or by radio, television or other form of public broadcast communication.
  3. Electronically transmitted written notice by a limited liability company to its members or managers, if in a comprehensible form, is effective when electronically transmitted to the member or manager in a manner authorized by the member or manager, as applicable.
  4. Written notice that is not electronically transmitted by a limited liability company to its members or managers, if in a comprehensible form, is effective at the earliest of the following:
    1. When received;
    2. Five (5) days after its deposit in the United States mail, if mailed postpaid and correctly addressed to the recipients shown in the limited liability company’s current list of members and managers;
    3. On the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
  5. Oral notice is effective when communicated if communicated in a comprehensible manner.
  6. Any notice permitted or required to be made under this chapter or under the operating agreement may be waived at any time.
  7. A consent transmitted by electronic transmission by a person or by a person authorized to act for the person shall be deemed to be written and signed for purposes of this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-107 [Laws, 1994, ch. 402, § 7, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to records that were to be kept by a limited liability company. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-115.

Cross References —

Right of member to inspect and copy and company record required to be maintained by this section, see § 79-29-308.

Profit and loss to be allocated on basis of the value, as stated in the limited liability company records acquired to be kept pursuant to this section, see § 79-29-503.

Distributions must be made on the basis of the value, as stated in the limited liability company records required to be kept pursuant to this section, see § 79-29-504.

§79-29-108. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-108. [Laws, 1994, ch. 402, § 8, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-108 was entitled: Nature of business; powers. For present similar provisions, see § 79-29-117.

§79-29-109. Name.

  1. The name of each limited liability company as set forth in its certificate of formation:
    1. Must contain the words “limited liability company” or the abbreviation “L.L.C.” or “LLC”;
    2. May contain the name of a member or manager;
    3. Except as authorized by subsection (3) of this section, must be distinguishable upon the records of the Secretary of State from (i) the name of any domestic or foreign corporation, nonprofit corporation, limited partnership, limited liability partnership or limited liability company that is organized or registered under the laws of this state and which has not been dissolved; and (ii) a name that is reserved or registered in the Office of the Secretary of State for any of the entities named in paragraph (1)(c)(i) of this section which reservation or registration has not expired; and
    4. May not contain the following words:“bank,” “banker,” “bankers,” “banking,” “trust company,” “insurance,” “trust,” “corporation,” “incorporated,” “partnership,” “limited partnership,” or any combination or abbreviation thereof, or any words or abbreviations of similar import.
  2. The Secretary of State shall reject any certificate of formation that does not comply with subsection (1) of this section.
  3. A limited liability company may apply to the Secretary of State for authorization to use a name that is not distinguishable upon the records in the Office of the Secretary of State from one or more of the names described in subsection (1)(c) of this section.The Secretary of State shall authorize the use of the name applied for if:
    1. The other domestic or foreign limited liability company, limited partnership, limited liability partnership, corporation or nonprofit corporation consents to the use in writing and submits an undertaking in form satisfactory to the Secretary of State to change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the applying limited liability company; or
    2. The applicant delivers to the Office of the Secretary of State for filing a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-109 [Laws, 1994, ch. 402, § 9, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the business transactions of a member or manager with the limited liability company. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-121.

§79-29-110. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-110. [Laws, 1994, ch. 402, § 10, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-110 was entitled: Indemnification.

§79-29-111. Reservation of name.

  1. The right to the use of a legal name under Section 79-29-109 may be reserved by:
    1. A person intending to organize a limited liability company under this chapter and to adopt that name;
    2. A domestic limited liability company or any foreign limited liability company registered in this state which, in either case, intends to adopt that name;
    3. A foreign limited liability company intending to register in this state and adopt that name; and
    4. A person intending to organize a foreign limited liability company and intending to have it registered in this state and adopt that name.
  2. The reservation shall be made by delivering to the Office of the Secretary of State for filing an application, signed by the applicant, specifying the name to be reserved and the name and address of the applicant. If the Secretary of State finds that the name is available for use as a legal name by a domestic or foreign limited liability company, the Secretary of State shall reserve the name for the exclusive use of the applicant as a legal name for a period of one hundred eighty (180) days. The one-hundred-eighty-day period may be renewed once by the applicant by filing a renewal application within thirty (30) days before the expiration of the initial one-hundred-eighty-day period. The right to the exclusive use of a reserved name may be transferred to any other person by delivering to the Office of the Secretary of State a notice of the transfer, signed by the applicant for whom the name was reserved and specifying the name and address of the transferee.
  3. The reservation of a specified name may be cancelled by delivering to the Office of the Secretary of State a notice of cancellation, specifying the name reservation to be cancelled and the name and address of the applicant or transferee.
  4. Unless the Secretary of State finds that any application, notice of transfer, or notice of cancellation filed with the Secretary of State as required by this section does not conform to law, upon receipt of all filing fees required by law the Secretary of State shall prepare and return to the person who filed the instrument a copy of the filed instrument with a notation thereon of the action taken by the Secretary of State.
  5. A fee as set forth in Section 79-29-1203 of this chapter shall be paid at the time of the reservation of any name and at the time of the filing of a notice of the transfer or cancellation of any such reservation.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2014, ch. 468, § 4, eff from and after July 1, 2014.

Editor’s Notes —

A former § 79-29-111 [Laws, 1994, ch. 402, § 11, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to service on a limited liability company. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-125.

Amendment Notes —

The 2014 amendment, in (2), deleted the former third sentence and added the present third sentence; and in (4), inserted “of State” following “fees required by law the Secretary of.”

§79-29-112. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-112. [Laws, 1994, ch. 402, § 12, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-112 was entitled: Taxation. For present similar provisions, see § 79-29-127.

§79-29-113. Repealed.

Repealed by Laws, 2012, ch. 382, § 143, effective January 1, 2013.

§79-29-113. [Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.]

Editor’s Notes —

Former § 79-29-113 required that a limited liability company maintain a registered office and registered agent within the state. For present provisions relating to registered agents, see §§ 79-35-1 et seq.

§79-29-115. Records to be kept.

  1. Each limited liability company shall keep at its principal place of business the following:(a) a current list of the full name and last known street address of each member and manager; (b) a copy of the certificate of formation, together with executed copies of any powers of attorney pursuant to which any certificate has been executed; (c) copies of any then effective operating agreement; and (d) unless contained in the certificate of formation or the operating agreement, a writing setting out:(i) the amount of cash and a description and statement of the agreed value of the other property or services contributed by each member and which each member has agreed to contribute; (ii) the times at which or events on the happening of which any additional contributions agreed to be made by each member are to be made; and (iii) any events upon the happening of which the limited liability company is to be dissolved and its affairs wound up.
  2. The failure of the limited liability company to maintain the foregoing required records shall not, for this reason, cause any member to be liable for any debt, obligation or liability of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

JUDICIAL DECISIONS

I. Under current Law.

1.-5. [Reserved for future use.]

II. Under former §79-29-107.

6. Attorney not negligent.

I. Under current Law.

1.-5. [Reserved for future use.]

II. Under former § 79-29-107.

6. Attorney not negligent.

Summary judgment was proper against a claim that an attorney was negligent in failing to ensure that the parties forming a limited liability company under the provisions of the Mississippi Limited Liability Act completed a statement reflecting the contributions of each of the parties, where the attorney presented an affidavit in support of his motion for summary judgment from an attorney who had extensive experience in the formation of such companies that it was not the responsibility of the attorney to complete such form, and that the fault lay with the failure of the parties to complete the form after being advised to do so by the attorney, and the claimant did not rebut the attorney’s affidavit. McLeod v. Jackson, 829 So. 2d 722, 2002 Miss. App. LEXIS 567 (Miss. Ct. App. 2002).

§79-29-117. Nature of business; powers.

  1. Subject to the provisions of its certificate of formation or the operating agreement and subject to any other laws of this state which govern or limit the conduct of a particular business or activity, a limited liability company may carry on any lawful business, purpose or activity.
  2. Every limited liability company has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Applicability of this section to foreign limited liability company, see § 79-29-1001.

§79-29-119. Governing law.

The law of this state governs:

The internal affairs of a limited liability company; and

The liability of a member as member, a manager as manager and an officer as officer for the debts, obligations, or other liabilities of a limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-121. Business transactions of member or manager with the limited liability company.

A member or manager may lend money to and transact other business with the limited liability company and, subject to other applicable law, has the same rights and obligations with respect thereto as a person who is not a member or manager.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-123. General standards of conduct and construction and application of certificate of formation and operating agreement; scope, function, and limitations.

  1. An operating agreement must initially be agreed to by all of the members.Except as otherwise provided in subsections (2) and (3) of this section, the certificate of formation or operating agreement governs:
    1. The affairs of a limited liability company, the conduct of its business and the relations of its members among the members as members and between the members and the limited liability company;
    2. The rights, powers and duties under this chapter of a person in the capacity of member, manager, officer or other person who is a party to or is otherwise bound by the operating agreement;
    3. The activities of the limited liability company and the conduct of those activities; and
    4. The means and conditions for amending the operating agreement.
  2. To the extent that:(a) the provisions of the operating agreement are not inconsistent with the certificate of formation, the operating agreement governs the matters described in paragraphs (a) through (d) of subsection (1) of this section; (b) the certificate of formation or operating agreement does not provide for the method by which an operating agreement may be amended, then all of the members must agree to any amendment of an operating agreement, except an amendment that occurs as the result of a merger with a domestic or foreign limited liability company must be approved by a majority of the members; and (c) the certificate of formation or operating agreement does not otherwise provide for a matter described in paragraphs (a) through (d) of subsection (1) of this section, this chapter governs the matter.
  3. Except as provided in this subsection (3), the provisions of this chapter that relate to the matters described in paragraphs (a) through (d) of subsection (1) of this section may be waived, restricted, limited, eliminated or varied by the certificate of formation or operating agreement.In addition to the restrictions set forth in subsections (4) and (5) of this section, the certificate of formation or the operating agreement may not:
    1. Vary the requirement set forth in subsection (1) of this section that the initial operating agreement must be agreed to by all of the members;
    2. Vary a limited liability company’s capacity to sue and be sued in its own name;
    3. Vary the law applicable under Section 79-29-119;
    4. Vary the power of the court under Section 79-29-209;
    5. Restrict the right to approve a merger under Section 79-29-223(e) to a member who will have personal liability with respect to a survivor;
    6. Restrict the right to approve a conversion under the Mississippi Entity Conversion and Domestication Act of a member that will have personal liability with respect to an entity following the conversion.
    7. Restrict the right to approve an asset sale agreement under Section 79-29-233(e) to a member who will have personal liability with respect to any entity;
    8. Eliminate the implied contractual covenant of good faith and fair dealing of a member, manager, officer or other person who is a party to the operating agreement or who is otherwise bound by the operating agreement;
    9. Unreasonably restrict the duties and rights stated in Section 79-29-315;
    10. Waive the requirement of Section 79-29-503(1) that a contribution obligation be in writing;
    11. Vary the requirement to windup a limited liability company’s business following the filing of a certificate of dissolution as specified in Section 79-29-801;
    12. Vary the manner of the distribution of assets in connection with the winding-up of a limited liability company’s business as required by Section 79-29-813(1)(a);
    13. Vary the power of a court to decree dissolution in the circumstances specified in Section 79-29-803(1) or to appoint trustees or receivers as specified in Section 79-29-815;
    14. Vary the requirements of Sections 79-29-817 and 79-29-819;
    15. Vary or modify any provision of Article 9 of this chapter unless otherwise expressly provided in Article 9 that the certificate of formation or the operating agreement may vary or modify such provision;
    16. Unreasonably restrict the right of a member to maintain an action under Article 11 of this chapter;
    17. Vary any requirement set forth in this chapter that an agreement must be contained in either the certificate of formation or a written operating agreement to be enforceable; or
    18. Vary any provision set forth in this chapter relating to filing, fees or any action with or by the Secretary of State’s office.
  4. The certificate of formation or an operating agreement may provide for the limitation or elimination of any and all liabilities of any manager, member, officer or other person who is a party to or is otherwise bound by the operating agreement for any action taken, or failure to take any action, as a manager or member or other person, including, for breach of contract and for breach of duties, including all or any fiduciary duties, of a member, manager, officer or other person to a limited liability company or to its members or to another member or manager or officer or to another person; provided, that the certificate of formation or an operating agreement may not limit or eliminate liability for:
    1. The amount of a financial benefit by a member or manager to which the member or manager is not entitled;
    2. An intentional infliction of harm on the limited liability company or the members;
    3. An intentional violation of criminal law;
    4. A violation of Section 79-29-611;
    5. The amount of a distribution in violation of Section 79-29-813(1); or
    6. Any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.
  5. Indemnification.(a)A limited liability company may, and shall have the power to, indemnify and hold harmless any member, manager, officer or other person from and against any and all claims and demands whatsoever, except a limited liability company and an operating agreement shall not indemnify any member, manager, officer or other person from and against any claims or demands in connection with a proceeding by or in the right of the limited liability company in which the member, manager or other person was:
  6. General standards of conduct.Subject to the certificate of formation or the terms of a written operating agreement or other written agreement, which may expand, eliminate or restrict the following, except as provided in subsection (4)(f) of this section,
    1. A manager:

      1. In good faith and with fair dealing;

      2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

      3. In a manner the manager reasonably believes to be in the best interests of the limited liability company.

      1. Shall discharge the duties of a manager;
      2. Shall not be liable to a limited liability company or to another member or manager or to another person who is a party to or is otherwise bound by an operating agreement for the following:

      1. For any action taken as a manager, or any failure to take any action, if such manager performed the duties of such manager in compliance with subsection (6)(a)(i) of this section.

      2. For breach of fiduciary duty for the manager’s good-faith reliance on the provisions of the operating agreement.

    2. An officer:

      1. In good faith and with fair dealing;

      2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

      3. In a manner the officer reasonably believes to be in the best interests of the limited liability company.

      1. Shall discharge the duties of an officer;
      2. Shall not be liable to a limited liability company or to another member or manager or to another person who is a party to or is otherwise bound by an operating agreement for the following:

      1. For any action taken as an officer, or any failure to take any action, if such officer performed the duties of such member in compliance with subsection (6)(b)(i) of this section; and

      2. For breach of fiduciary duty for the officer’s good-faith reliance on the provisions of the operating agreement.

    3. A member of a member-managed limited liability company:

      1. In good faith and with fair dealing;

      2. With the care an ordinarily prudent person in a like position would exercise under similar circumstances; and

      3. In a manner the person reasonably believes to be in the best interests of the limited liability company.

      1. Shall discharge the duties of a member of a member-managed limited liability company;
      2. Shall not be liable to a limited liability company or to another member or manager or to another person who is a party to or is otherwise bound by an operating agreement for the following:

      1. For any action taken as a member of a member-managed limited liability company, or any failure to take any action, if such member performed the duties of such member in compliance with subsection (6)(c)(i) of this section.

      2. For breach of fiduciary duty for the member’s good faith reliance on the provisions of the operating agreement.

    4. To the extent that, at law or in equity, a member of a manager-managed limited liability company or other person has duties, including fiduciary duties set forth in this chapter, to a limited liability company or to another member or manager or to another person who is a party to or is otherwise bound by an operating agreement, such member’s or other person’s fiduciary duties may be expanded, restricted or eliminated by provisions in the certificate of formation or the written operating agreement.
    5. The operating agreement may:
      1. Identify specific categories of activities that do not violate the duty of loyalty;
      2. Alter or eliminate any other fiduciary duty, including eliminating particular aspects of that duty; and
      3. If not manifestly unreasonable, prescribe the standards by which to measure the performance of the implied contractual covenant of good faith and fair dealing under Section 79-29-123(3)(g).
  7. Any agreement relating to or governing any event, act, omission, duty, right, power or liability under or pursuant to the following sections of this chapter must be expressly contained in either the certificate of formation or a written operating agreement in order to be enforceable:
    1. Section 79-29-123(4);
    2. Section 79-29-123(6);
    3. Section 79-29-231;
    4. Section 79-29-301(6);
    5. Section 79-29-303;
    6. Section 79-29-309;
    7. Section 79-29-313(1);
    8. Section 79-29-801; and
    9. Section 79-29-1211.
  8. A court of equity:
    1. May enforce an operating agreement by injunction or by such other relief that the court in its discretion determines to be fair and appropriate in the circumstances or, when the provisions of Section 79-29-803 are applicable, the court may order dissolution of the limited liability company; and
    2. Shall decide any claim under subsection (6)(e)(iii) of this section that such standard is manifestly unreasonable.

      The court:

      1. Shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
      2. May invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:

      1. The objective of the term is unreasonable; or

      2. The term is an unreasonable means to achieve the provision’s objective.

Found to have engaged in acts or omissions that constitute fraudulent conduct and was adjudged liable for claims based on such conduct; or

Was found to have engaged in any actions described in subsection (4) of this section and was adjudged liable for claims based on such actions.

A limited liability company shall indemnify a member, manager, officer or other person who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the person was a party because the person is or was a member, manager, officer or agent of the limited liability company against reasonable expenses incurred by the member, manager, officer or agent in connection with the proceeding.

Each such indemnity may continue as to a person who has ceased to have the capacity referred to in subsection (5)(a) of this section and may inure to the benefit of the heirs, beneficiaries and personal representatives of such person.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2014, ch. 399, § 47, eff from and after Jan. 1, 2015.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, an error in a statutory reference in (2)(a) was corrected by substituting “paragraphs (a) through (d) of subsection (1) of this section” for “subsections (a) through (d) of subsection (1) of this section.”

Amendment Notes —

The 2014 amendment, effective January 1, 2015, added (3)(f) and redesignated remaining subsections accordingly; inserted hyphen in between the words “good faith” in (6)(a)(ii)2. and (6)(b)(ii)2.

§79-29-125. Repealed.

Repealed by Laws, 2012, ch. 382, § 144, effective January 1, 2013.

§79-29-125. [Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.]

Editor’s Notes —

Former § 79-29-125 provided for service of process upon a limited liability company. For present provisions relating to registered agents and service of process, see §§ 79-35-1 et seq.

§79-29-127. Taxation.

Domestic limited liability companies and foreign limited liability companies shall be classified as an entity for purposes of the income tax laws of this state in the same manner as they are classified for federal income tax purposes.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Mississippi income tax laws generally, see §§ 27-7-1 et seq.

Article 2. Formation, Certificate of Formation.

§79-29-201. Certificate of formation.

  1. In order to form a limited liability company, a certificate of formation must be signed and delivered to the Office of the Secretary of State. The certificate must set forth:
    1. The name of the limited liability company;
    2. The information required by Section 79-35-5(a); and
    3. If the limited liability company is to have a specific date of dissolution, the latest date upon which the limited liability company is to dissolve.
  2. The certificate of formation may set forth any other matters the members determine to include therein.
  3. A limited liability company is formed at the date and time of the filing of the certificate of formation by the Secretary of State, as evidenced by such means as the Secretary of State may use for the purpose of recording the date and time of filing, or at any later date or time specified in the certificate of formation if, in either case, the certificate of formation so filed substantially complies with the requirements of this chapter. A delayed effective date specified in a certificate of formation may not be later than the ninetieth day after the date and time it is filed by the Secretary of State.
  4. For all purposes, a copy of the certificate of formation duly certified by the Secretary of State is conclusive evidence of the formation of a limited liability company and prima facie evidence of its existence.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 108, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-201 [Laws, 1994, ch. 402, § 13; Laws, 1997, ch. 418, § 29, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the certificate of formation. See Editor’s Note under Chapter 29 heading.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, rewrote (1)(b), which formerly read: “The street and mailing address of the registered office and the name and the street and mailing address of the registered agent for service of process, required to be maintained by Section 79-29-113.”

Cross References —

Filing fees, see § 79-29-1203.

§79-29-202. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-202. [Laws, 1994, ch. 402, § 14; Laws, 1997, ch. 418, § 30; Laws, 2000, ch. 469, § 43, eff from and after July 1, 2000.]

Editor’s Notes —

Former § 79-29-202 was entitled: Amendment to certificate. For present similar provisions, see § 79-29-203.

§79-29-203. Amendment to or restatement of certificate.

  1. A certificate of formation is amended or restated by delivering a certificate of amendment thereto to the Office of the Secretary of State for filing.The certificate shall set forth:
    1. The name of the limited liability company;
    2. The future effective date of the amendment or restatement, which must be a date certain not later than the ninetieth day after the date it is filed by the Secretary of State, unless it is effective upon the filing of the certificate of amendment; and
    3. The amendment to or restatement of the certificate.
  2. A certificate of formation may be amended or restated at any time for any other proper purpose.
  3. All members must agree to any amendment to or restatement of the certificate of formation.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-203 [Laws, 1994, ch. 402, § 15; Laws, 1997, ch. 418, § 31, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to restated certificates of formation. See Editor’s Note under Chapter 29 heading.

Cross References —

Filing fees, see § 79-29-1203.

§79-29-204. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-204. [Laws, 1994, ch. 402, § 16; Laws, 1997, ch. 418, § 32, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-204 was entitled: Certificates of dissolution and cancellation. For present similar provisions, see § 79-29-205.

§79-29-205. Certificate of dissolution.

  1. A certificate of dissolution must be delivered to the Office of the Secretary of State for filing upon commencement of winding-up of the limited liability company in connection with the dissolution of the limited liability company pursuant to Article 8 of this chapter.A certificate of dissolution must be delivered to the Office of the Secretary of State for filing and must set forth:
    1. The name of the limited liability company;
    2. The future effective date of dissolution, which must be a date certain not later than the ninetieth day after it is filed by the Secretary of State, unless it is effective upon the filing of the certificate; and
    3. Any other information the person delivering the certificate for filing determines.
  2. The Secretary of State shall not issue a certificate of existence with respect to a limited liability company after the effective date of the certificate of dissolution of such limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-205 [Laws, 1994, ch. 402, § 17; Laws, 1995, ch. 362, § 10; Laws, 1997, ch. 418, § 33, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the signing of certificates. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-207.

Cross References —

Disposition of known claims against dissolved limited liability company by filing certificate of dissolution pursuant to this section, see§ 79-29-817.

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

§79-29-206. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-206. [Laws, 1994, ch. 402, § 18; Laws, 1997, ch. 418, § 34, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-206 was entitled: Amendment, dissolution or cancellation by judicial act. For present similar provisions, see § 79-29-209.

§79-29-207. Signing of certificate.

  1. Unless otherwise specified in any other section of this chapter, any document required by this chapter to be delivered to the Office of the Secretary of State for filing shall be signed by any one or more authorized persons.
  2. The person signing the document shall state the person’s name beneath or opposite the person’s signature, the capacity in which the person signs and the person’s street and mailing address.A document required or permitted to be delivered to the Office of the Secretary of State for filing under this chapter which contains a copy of a signature, however made, is acceptable for filing by the Secretary of State.
  3. Any person may sign a certificate, an operating agreement or any amendment to either by an agent, including an attorney-in-fact.
  4. A person commits an offense if the person signs a document with the knowledge that it is false in any material respect with intent that the document be delivered to the Office of the Secretary of State for filing.An offense under this provision is a misdemeanor punishable by a fine not to exceed One Thousand Dollars ($1,000.00).

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-207 [Laws, 1994, ch. 402, § 19; Laws, 1995, ch. 362, § 11; Laws, 1997, ch. 418, § 35, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the filing of certificates with the Secretary of State. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-211.

Cross References —

Applicability of subsection (4) of this section to foreign limited liability companies, see § 79-29-1019.

Imposition of standard state assessment in addition to all court imposed fines or other penalties for any misdemeanor violation, see § 99-19-73.

§79-29-208. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-208. [Laws, 1994, ch. 402, § 20, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-208 was entitled: Notice. For present similar provisions, see § 79-29-217.

§79-29-209. Amendment or dissolution by judicial act.

If a person required by this Article 2 to sign a certificate fails or refuses to do so, any other person who is adversely affected by the failure or refusal may petition the chancery court of the county in which the principal office is located or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the limited liability company does not have a principal office in this state to direct the signing of the certificate. If the court finds that it is proper for the certificate to be signed and that any person so designated has failed or refused to sign the certificate, it shall order appropriate relief, including an order to the Secretary of State to file an appropriate certificate.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 109, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-209 [Laws, 1994, ch. 402, § 21; Laws, 1997, ch. 418, § 36; Laws, 2000, ch. 469, § 44, eff from and after July 1, 2000; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the merger of a limited liability company. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-221.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office is located or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the limited liability company does not have a principal office in this state to direct” for “principal office (or, if none in this state, the registered office) of the limited liability company is located to direct” in the first sentence.”

§79-29-210. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-210. [Laws, 2000, ch. 469, § 45, eff from and after July 1, 2000.]

Editor’s Notes —

Former § 79-29-210 was entitled: Action on a plan of merger. For present similar provisions, see § 79-29-223.

Cross References —

Action on plan of merger under Business Corporation Act, see § 79-4-11.04.

§79-29-211. Filing with the Secretary of State.

  1. The certificate of formation and any certificate of amendment, dissolution, correction or merger and any restated certificate must be delivered to the Office of the Secretary of State. A person who signs a certificate as an agent or fiduciary need not exhibit evidence of the person’s authority as a prerequisite to filing by the Secretary of State. Unless the Secretary of State finds that a certificate is not acceptable for filing, upon receipt of all filing fees required by Section 79-29-1203 and delivery of the certificate the Secretary of State shall:
    1. Certify that the certificate has been filed in the Secretary of State’s office by endorsing upon the signed certificate the word “Filed” and the date and time of the filing. This endorsement is conclusive evidence of the date and time of its filing in absence of actual fraud;
    2. File the certificate; and
    3. Return a copy to the person who delivered it for filing or that person’s representative with an acknowledgment of the date and time of filing.
  2. Upon the filing of a certificate of amendment or upon the future effective date of a certificate of amendment (or judicial decree thereof) or an amended and restated certificate, as provided for therein, the certificate of formation shall be amended, corrected or restated as set forth therein. Upon the filing of a certificate of dissolution (or a judicial decree thereof) by the Secretary of State or upon the future effective date of a certificate of dissolution (or a judicial decree thereof), the certificate of formation is dissolved.
  3. Each certificate delivered to the Office of the Secretary of State for filing must be typewritten or printed, or, if electronically transmitted, it must be in a format that can be retrieved or reproduced by the Secretary of State in typewritten or printed form, and must be in the English language. A limited liability company name need not be in English if written in English letters or Arabic or Roman numerals.
  4. Refused documents shall be returned by the Secretary of State to the limited liability company or its representative within ten (10) days after the document was delivered, together with a brief, written explanation of the reason for the refusal.
    1. If the Secretary of State refuses to file a document, the limited liability company may appeal the refusal to the chancery court of the county where the limited liability company’s principal office is or will be located. The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the Secretary of State’s explanation of the refusal to file.
    2. The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.
    3. The court’s final decision may be appealed as in other civil proceedings.
  5. A certificate from the Secretary of State delivered with a copy of the document filed by the Secretary of State is conclusive evidence that the original document is on file with the Secretary of State.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 110, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-211 [Laws, 2000, ch. 469, § 46, eff from and after July 1, 2000; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to certificates of merger. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-225.

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, a typographical error in the first sentence of (1) was corrected by deleting the word “of” following “The certificate of formation and” and following “or merger and any restated certificate or.”

Amendment Notes —

The 2012 amendment, effective January 1, 2013, deleted “and any certificate filed by the Secretary of State pursuant to Section 79-29-113” following “restated certificate” in the first sentence of (1); and deleted “or judicial decree of amendment, certificate of correction or an amended and restated certificate by the Secretary of State” preceding “upon the future effective date” in the first sentence of (2).

Cross References —

Articles of merger or share exchange under Business Corporation Act, see § 79-4-11.06.

§79-29-212. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-212. [Laws, 2000, ch. 469, § 47, eff from and after July 1, 2000.]

Editor’s Notes —

Former § 79-29-212 was entitled: Effect of merger. For present similar provisions, see § 79-29-227.

Cross References —

Effect of merger or share exchange under Business Corporation Act, see § 79-4-11.07.

§79-29-213. Correction of filings made with the Secretary of State.

In the event that a manager or member becomes aware that any statement in a certificate of formation or any other filing was false or inaccurate when made, or that such filing was defectively or erroneously executed, such member or manager shall then promptly take one (1) of the following actions, as applicable, to correct such filing or certificate:

If the correction is to be made within one (1) year of the date of the filing to be corrected, then the certificate may be corrected by filing a certificate of correction of the certificate with the Office of the Secretary of State.The certificate of correction shall specify the inaccuracy or defect to be corrected, shall set forth the portion of the certificate in corrected form, and shall be executed and filed as required by this chapter.The certificate of correction shall be effective as of the date the original certificate was filed, except as to those persons who are substantially and adversely affected by the correction, and as to those persons the certificate of correction shall be effective from the filing date; or

If the correction is to be made after one (1) year of the date of the filing to be corrected then the person shall correct the certificate or filing by filing a certificate of amendment as provided by Section 79-29-203.Any amendment made pursuant to this subsection (b) shall be effective upon the filing of the certificate of amendment.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-213 [Laws, 2000, ch. 469, § 48, eff from and after July 1, 2000; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to abandonment of a merger. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-229.

Cross References —

Abandonment of merger or share exchange under Business Corporation Act, see § 79-4-11.08.

§79-29-214. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-214. [Laws, 2000, ch. 469, § 49, eff from and after July 1, 2000.]

Editor’s Notes —

Former § 79-29-214 was entitled: Appraisal rights. For present similar provisions, see § 79-29-231.

Cross References —

Appraisal rights under Business Corporation Act, see §§ 79-4-13.01 et seq.

Notice of appraisal rights under Business Corporation Act, see §§ 79-4-13.20 et seq.

§79-29-215. Annual report for Secretary of State.

  1. Each domestic limited liability company and each foreign limited liability company authorized to transact business in this state shall deliver on such date as may be established by the Secretary of State, to the Secretary of State for filing an annual report that sets forth:
    1. The name of the limited liability company and the state or country or other foreign jurisdiction under whose law it is organized;
    2. The name and street or physical address of its registered agent in this state;
    3. The address of its principal office;
    4. The names and business addresses of the managers if manager-managed and the name and address of at least one (1) member if member-managed;
    5. The names, titles and business addresses of its principal officers, if any;
    6. A statement as to whether the limited liability company has a written operating agreement; and
    7. A brief description of the nature of its business.
  2. Information in the annual report must be current as of the date the annual report is executed on behalf of the limited liability company.
  3. If an annual report does not contain the information required by this section, the Secretary of State shall notify promptly in writing the reporting limited liability company and return the report to it for correction.If the report is corrected to contain the information required by this section and delivered to the Secretary of State within thirty (30) days after the effective date of notice, it is deemed to be timely filed.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-217. Notice.

Certificates of formation and all other documents properly filed and of record with the Office of the Secretary of State constitute notice to the public of all information stated therein.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-219. Certificate of existence.

  1. The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of existence for a limited liability company if the records filed in the Office of the Secretary of State show that the limited liability company has been formed under Section 79-29-201 and a certificate of dissolution or certificate of administrative dissolution pertaining to the limited liability company has not been filed that has become effective.A certificate of existence must state:
    1. The name of the limited liability company;
    2. That the limited liability company was duly formed under the laws of this state and the date of formation;
    3. Whether all fees due under this chapter to the Secretary of State have been paid;
    4. Whether the limited liability company’s most recent annual report required by Section 79-29-215 has been filed with the Secretary of State;
    5. Whether a certificate of administrative dissolution has been filed;
    6. Whether a certificate of dissolution has been filed; and
    7. Other facts of record in the Office of the Secretary of State which are specified by the person requesting the certificate.
  2. Subject to any qualification stated in the certificate, a certificate of existence issued by the Secretary of State is conclusive evidence that the limited liability company is in existence.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-221. Merger of limited liability company.

  1. One or more domestic limited liability companies may merge with a domestic or foreign entity pursuant to an agreement of merger.
  2. A domestic or foreign entity may be a party to the merger, or may be created by the terms of the agreement of merger, only if:
    1. The merger is permitted by the laws under which the entity is organized or by which it is governed; and
    2. In effecting the merger, the entity complies with such laws and with its organizational documents.
  3. The agreement of merger must include:
    1. The name of each entity that will merge and the name of the entity that will be the survivor of the merger;
    2. The terms and conditions of the merger;
    3. The manner and basis of converting the interests of each merging entity into shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, other property, or any combination of the foregoing;
    4. The organizational documents of any entity to be created by the merger, or if a new entity is not to be created by the merger, any amendments to the survivor’s organizational documents; and
    5. Any other provisions required by the laws under which any party to the merger is organized or by which it is governed, or by the organizational documents of any such party.
  4. The terms described in subsections (3)(b) and (3)(c) of this section may be made dependent on facts ascertainable outside the agreement of merger, provided that those facts are objectively ascertainable.The term “facts” includes, but is not limited to, the occurrence of any event, including a determination or action by any person, including the limited liability company.
  5. The agreement of merger may also include a provision that the agreement of merger may be amended prior to filing the certificate of merger with the Secretary of State, provided that if the members of a domestic limited liability company that is a party to the merger are required or permitted to vote on the agreement of merger, the agreement of merger must provide that subsequent to approval of the agreement of merger by such members the agreement of merger may not be amended to:
    1. Change the amount or kind of shares or other securities, interests, obligations, rights to acquire shares or other securities, cash, or other property to be received by the owners of interests in any party to the merger upon conversion of their interests under the agreement of merger;
    2. Change the organizational documents of any other entity that will survive or be created as a result of the merger; or
    3. Change any of the other terms or conditions of the agreement of merger if the change would adversely affect such members in any material respect.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-223. Action on an agreement of merger.

In the case of a limited liability company that is a party to a merger:

The agreement of merger must be adopted by the members in accordance with subsection (c) of this section.

Unless the agreement of merger is not required to be approved by the members, the limited liability company must notify each member and each owner of a financial interest, whether or not entitled to vote, of the meeting of members at which the agreement of merger is to be submitted for approval.The notice must state that the purpose, or one of the purposes, of the meeting is to consider the agreement of merger and must contain or be accompanied by a copy or summary of the agreement of merger. If the limited liability company is to be merged into an existing entity, the notice shall also include or be accompanied by a copy or summary of the organizational documents of that entity.If the limited liability company is to be merged into an entity that is to be created pursuant to the merger, the notice shall include or be accompanied by a copy or a summary of the organizational documents of the new entity.

Approval of the agreement of merger requires the approval of at least a majority of the votes entitled to be cast on the agreement of merger, and, if any class or series of interests is entitled to vote as a separate group on the agreement of merger, the approval of at least a majority of the votes entitled to be cast on the merger by that voting group.

Separate voting by voting groups is required:

On an agreement of merger, by each class or series of interests that:1. are to be converted, pursuant to the provisions of the agreement of merger, into shares or other securities, interests, obligations, rights to acquire interests or other securities, cash, other property, or any combination of the foregoing; or 2. would have a right to vote as a separate group on a provision in the agreement of merger that, if contained in a proposed amendment to the certificate of formation or operating agreement, would require action by separate voting groups under the certificate of formation or operating agreement;

On an agreement of merger, if the voting group is entitled under the certificate of formation or operating agreement, to vote as a voting group to approve an agreement of merger.

If as a result of a merger one or more members or owners of a financial interest of a domestic limited liability company would become subject to personal liability for the obligations or liabilities of any entity, approval of the agreement of merger shall require the execution, by each such member and owner of a financial interest, of a separate written consent to become subject to such personal liability.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, an error in punctuation in (b) was corrected by substituting a period for the comma preceding “If the limited liability company.”

§79-29-225. Certificate of merger.

After an agreement of merger has been adopted and approved as required by this chapter, a certificate of merger shall be executed on behalf of each party to the merger by an authorized person.The certificate shall set forth:

The names and jurisdictions of formation or organization of the parties to the merger and the date on which the merger occurred or is to be effective;

If the formation document of the survivor of a merger is amended, or if a new entity is created as a result of a merger, the amendments to the formation document of the survivor or the formation document of the new entity;

A statement that the agreement of merger was duly approved by the members and, if voting by any separate voting group was required, by each such separate voting group, in the manner required by this chapter and the certificate of formation and operating agreement;

As to each entity that was a party to the merger, a statement that the agreement of merger and the performance of its terms were duly authorized by all action required by the laws under which the entity is organized, or by which it is governed, and by its organizational documents; and

The future effective date of the merger, which shall be a date or time certain not later than the ninetieth day after the date it is filed, if it is not to be effective upon the filing of the certificate of merger.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-227. Effect of merger.

  1. When a merger becomes effective:
    1. The entity that is designated in the agreement of merger as the survivor continues or comes into existence, as the case may be;
    2. The separate existence of every entity that is merged into the survivor ceases;
    3. All property owned by, and every contract right possessed by, each entity that merges into the survivor is vested in the survivor without reversion or impairment;
    4. All liabilities of each entity that is merged into the survivor are vested in the survivor;
    5. The name of the survivor may, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;
    6. The organizational documents of the survivor are amended to the extent provided in the agreement of merger;
    7. The organizational documents of a survivor that is created by the merger become effective; and
    8. The interests in an entity that is a party to a merger that are to be converted under the agreement of merger into shares interests, obligations, rights to acquire securities, other securities, cash, other property, or any combination of the foregoing, are converted, and the former holders of such interests are entitled only to the rights provided to them in the agreement of merger or to any rights they may have under Section 79-29-231.
  2. Any member or owner of a financial interest of a domestic limited liability company that is a party to a merger who, prior to the merger, was liable for the liabilities or obligations of such limited liability company shall not be released from such liabilities or obligations by reason of the merger.
  3. Upon a merger becoming effective, a foreign entity that is the survivor of the merger is deemed to:
    1. Appoint the Secretary of State as its agent for service of process in a proceeding to enforce the rights of the members and owners of a financial interest of each domestic limited liability company that is a party to the merger who exercise appraisal rights; and
    2. Agree that it will promptly pay the amount, if any, to which such members and owners of a financial interest are entitled under Section 79-29-231.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-229. Abandonment of a merger.

  1. Unless otherwise provided in an agreement of merger or in the laws under which a domestic or foreign entity that is a party to a merger is organized or by which it is governed, after the agreement of merger has been adopted and approved as required by this chapter, and at any time before the merger has become effective, it may be abandoned by any party thereto without action by the party’s owners of interests, in accordance with any procedures set forth in the agreement of merger or, if no such procedures are set forth in the agreement of merger, in the manner determined by the entity subject to any contractual rights of other parties to the merger.
  2. If a merger is abandoned under subsection (1) of this section after a certificate of merger has been filed with the Secretary of State but before the merger has become effective, a statement that the merger has been abandoned in accordance with this subsection, executed on behalf of a party to the merger by any authorized person shall be delivered to the Secretary of State for filing prior to the effective date of the merger.Upon filing, the statement shall take effect and the merger shall be deemed abandoned and shall not become effective.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-231. Appraisal rights.

  1. The certificate of formation or written operating agreement may eliminate, expand or restrict the appraisal rights granted in this section and may vary, modify, eliminate or expand any of the provisions of this section.
  2. Definitions. In this section:
    1. “Entitled persons” means all owners of financial interests. Financial interests may be owned by members and may also be owned by persons who are not members of the limited liability company. Members of the limited liability company who have no financial interests in the limited liability company are not entitled to appraisal rights pursuant to this section.
    2. “Fair value” means the value of the financial interests of the limited liability company determined:
      1. Immediately before the effectuation of the action to which the entitled person objects;
      2. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and
      3. Without discounting for lack of marketability or minority status.
  3. Right to appraisal.
    1. Unless otherwise provided in the certificate of formation or written operating agreement or other written agreement each entitled person is entitled to appraisal rights, and to obtain payment of the fair value of the entitled person’s financial interest in the event of any of the following actions:
      1. Consummation of a merger to which the limited liability company is a party;
      2. Consummation of a sale, lease, exchange, or other disposition of assets if the disposition would leave the limited liability company without a significant continuing business activity. If a limited liability company retains a business activity that represented at least twenty-five percent (25%) of total assets at the end of the most recently completed fiscal year, and twenty-five percent (25%) of either income from continuing operations or revenues from continuing operations for that fiscal year, in each case of the limited liability company and its subsidiaries on a consolidated basis, the limited liability company will conclusively be deemed to have retained a significant continuing business activity;
      3. Any other action to the extent provided by the certificate of formation or written operating agreement.
    2. An entitled person may not challenge a completed action for which appraisal rights are available unless such action:
      1. Was not effectuated in accordance with the applicable provisions of this chapter or the limited liability company’s certificate of formation or operating agreement; or
      2. Was procured as a result of fraud or material misrepresentation.
  4. Notice of appraisal rights. If a proposed action described in subsection (3) of this section is to be submitted to a vote, the meeting notice must state that the limited liability company has concluded that entitled persons are entitled to assert appraisal rights under this section and a copy of this section or a copy of the appraisal rights and procedures as provided in the written operating agreement, as applicable, must accompany the meeting notice sent to the entitled persons.
  5. Notice of intent to demand payment.
    1. If a proposed action requiring appraisal rights under subsection (3)(a) of this section is submitted to a vote, entitled persons who wish to assert appraisal rights with respect to any class or series of financial interests:
      1. Must deliver to the limited liability company before the vote is taken written notice of the person’s intent to demand payment if the proposed action is effectuated; and
      2. Must not vote, or cause or permit to be voted, any of the person’s financial interests in favor of the proposed action.
    2. An entitled person who does not satisfy the requirements of subsection (5)(a) of this section is not entitled to payment under this section.
  6. Appraisal notice and form.
    1. If a proposed action requiring appraisal rights under subsection (3) of this section becomes effective, the limited liability company must deliver a written appraisal notice and form required by this subsection (6) to all entitled persons who satisfied the requirements of subsection (5) of this section.
    2. The appraisal notice must be sent no earlier than the date the action became effective and no later than ten (10) days after such date and must:
      1. Supply a form that specifies the date of the first announcement to entitled persons of the principal terms of the proposed action and requires the person asserting appraisal rights to certify: 1. whether the entitled person acquired ownership of the interests for which appraisal rights are asserted before that date; and 2. that the person did not vote for the transaction;
      2. State:

      1. Where the form must be sent and where certificates for certificated interests must be deposited and the date by which those certificates must be deposited, which date may not be earlier than the date for receiving the required form under subsection (6)(b)(ii)2 of this section;

      2. A date by which the limited liability company must receive the form which date may not be fewer than forty (40) nor more than sixty (60) days after the date the subsection (6)(a) appraisal notice and form are sent, and state that the person shall have waived the right to demand appraisal with respect to the interests unless the form is received by the limited liability company by such specified date;

      3. The limited liability company’s estimate of the fair value of the financial interests;

      4. That, if requested in writing, the limited liability company will provide to the person so requesting, within ten (10) days after the date specified in subsection (6)(b)(ii)2 of this section, the number of persons who return the forms by the specified date and the aggregate interests owned by them; and

      5. The date by which the notice to withdraw under subsection (7) must be received, which date must be within twenty (20) days after the date specified in subsection (6)(b)(ii)2 of this section; and

    3. Be accompanied by a copy of this section or by a copy of the appraisal rights and procedures as provided in the written operating agreement, as applicable.
  7. Perfection of rights; right to withdraw.
    1. An entitled person who receives notice pursuant to subsection (6) of this section and who wishes to exercise appraisal rights must certify on the form sent by the limited liability company whether the entitled person acquired ownership of the person’s financial interests before the date required to be set forth in the notice pursuant to subsection (6)(b) of this section. If an entitled person fails to make this certification, the limited liability company may elect to treat the entitled person’s financial interests as after-acquired interests under subsection (9) of this section. In addition, an entitled person who wishes to exercise appraisal rights must execute and return the form and, in the case of certificated interests, deposit the entitled person’s certificates in accordance with the terms of the notice by the date referred to in the notice pursuant to subsection (6)(b)(ii)2 of this section. Once an entitled person deposits that person’s certificates or, in the case of uncertificated interests, returns the executed forms, that entitled person loses all rights as a member or owner of a financial interest, unless the entitled person withdraws pursuant to subsection (7)(b) of this section.
    2. An entitled person who has complied with subsection (7)(a) of this section may nevertheless decline to exercise appraisal rights and withdraw from the appraisal process by so notifying the limited liability company in writing by the date set forth in the appraisal notice pursuant to subsection (6)(b)(ii)5 of this section. An entitled person who fails to so withdraw from the appraisal process may not thereafter withdraw from the appraisal process without the limited liability company’s written consent.
    3. An entitled person who does not execute and return the form and, in the case of certificated interests, deposit that person’s certificates where required, each by the date set forth in the notice described in subsection (6)(b)(ii)2 of this section, shall not be entitled to payment under this subsection.
  8. Payment.
    1. Except as provided in subsection (7) of this section, within thirty (30) days after the form required by subsection (6)(b)(ii)2 of this section is due, the limited liability company shall pay in cash to those entitled persons who complied with subsection (7)(a) of this section the amount the limited liability company estimates to be the fair value of their financial interests, plus interest at the legal rate.
    2. The payment to each person pursuant to subsection (8)(a) of this section must be accompanied by:
      1. Financial statements of the limited liability company that issued the financial interests to be appraised, consisting of a balance sheet as of the end of a fiscal year ending not more than sixteen (16) months before the date of payment, an income statement for that year, a statement of changes in equity for that year, and the latest available interim financial statements, if any;
      2. A statement of the limited liability company’s estimate of the fair value of the financial interests, which estimate must equal or exceed the limited liability company’s estimate given pursuant to subsection (6)(b)(ii)3 of this section;
      3. A statement that persons described in this subsection (8) have the right to demand further payment under subsection (10) of this section and that if any such person does not do so within the time period specified therein, the person shall be deemed to have accepted the payment in full satisfaction of the limited liability company’s obligations under this section.
  9. After-acquired interests.
    1. A limited liability company may elect to withhold payment required by subsection (8) of this section from any entitled person who did not certify that ownership of all of the entitled person’s financial interests for which appraisal rights are asserted was acquired before the date set forth in the appraisal notice sent pursuant to subsection (6)(b)(i) of this section.
    2. If the limited liability company elected to withhold payment under subsection (9)(a) of this section, it must, within thirty (30) days after the form required by subsection (6)(b)(ii)2 of this section is due, notify all entitled persons who are described in subsection (9)(a) of this section:
      1. Of the information required by subsection (8)(b)(i) of this section;
      2. Of the limited liability company’s estimate of fair value pursuant to subsection (8)(b)(ii) of this section;
      3. That they may accept the limited liability company’s estimate of fair value, plus interest at the legal rate, in full satisfaction of their demands, or demand appraisal under subsection (10) of this section;
      4. That those entitled persons who wish to accept the offer must so notify the limited liability company of the person’s acceptance of the limited liability company’s offer within thirty (30) days after receiving the offer; and
      5. That those entitled persons who do not satisfy the requirements for demanding appraisal under subsection (10) of this section shall be deemed to have accepted the limited liability company’s offer.
    3. Within ten (10) days after receiving the entitled person’s acceptance pursuant to subsection (9)(b) of this section, the limited liability company must pay in cash the amount it offered under subsection (9)(b)(ii) of this section to each person who agreed to accept the limited liability company’s offer in full satisfaction of the person’s demand.
    4. Within forty (40) days after sending the notice described in subsection (9)(b) of this section, the limited liability company must pay in cash the amount it offered to pay under subsection (8)(b) of this section to each entitled person described in subsection (9)(b)(ii) of this section.
  10. Procedure if entitled person dissatisfied with payment or offer.
    1. An entitled person paid pursuant to subsection (8) of this section who is dissatisfied with the amount of the payment must notify the limited liability company in writing of that person’s estimate of the fair value of the financial interests and demand payment of that estimate plus interest at the legal rate less any payment under subsection (8) of this section. An entitled person offered payment under subsection (9) of this section who is dissatisfied with that offer must reject the offer and demand payment of the person’s stated estimate of the fair value of the financial interests plus interest at the legal rate.
    2. An entitled person who fails to notify the limited liability company in writing of that entitled person’s demand to be paid the entitled person’s stated estimate of the fair value plus interest at the legal rate under subsection (10)(a) of this section within thirty (30) days after receiving the limited liability company’s payment or offer of payment under subsection (8) or (9) of this section, respectively, waives the right to demand payment under this subsection (10) and shall be entitled only to the payment made or offered pursuant to those respective subsections.
  11. Court action.
    1. If an entitled person makes demand for payment under subsection (10) of this section which remains unsettled, the limited liability company shall commence a proceeding within sixty (60) days after receiving the payment demand and petition the court to determine the fair value of the financial interests and accrued interest at the legal rate. If the limited liability company does not commence the proceeding within the sixty-day period, it shall pay in cash to each the entitled person the amount the entitled person demanded pursuant to subsection (10)(a) of this section plus interest at the legal rate.
    2. The limited liability company shall commence the proceeding in the chancery court of the county where the limited liability company’s principal office is located. If the limited liability company is a foreign limited liability company, it shall commence the proceeding in the county in this state where the principal office of the domestic limited liability company merged with the foreign limited liability company was located at the time of the transaction.
    3. The limited liability company shall make all entitled persons whose demands remain unsettled, whether or not residents of this state, parties to the proceeding as in an action against their interests, and all parties must be served with a copy of the complaint. Nonresidents may be served as otherwise provided by law.
    4. The jurisdiction of the court in which the proceeding is commenced under subsection (11)(b) of this section is plenary and exclusive. The court may appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. The appraisers shall have the powers described in the order appointing them, or in any amendment to it. The entitled persons demanding appraisal rights are entitled to the same discovery rights as parties in other civil proceedings. There shall be no right to a jury trial.
    5. Each entitled person made a party to the proceeding is entitled to judgment: (i) for the amount, if any, by which the court finds the fair value of the entitled person’s financial interests, plus interest at the legal rate, exceeds the amount paid by the limited liability company to the entitled person for such financial interests; or (ii) for the fair value, plus interest at the legal rate, of the entitled person’s financial interests for which the limited liability company elected to withhold payment under subsection (9) of this section.
  12. Court costs and counsel fees.
    1. The court in an appraisal proceeding commenced under subsection (11) of this section shall determine all costs of the proceeding including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the limited liability company, except that the court may assess costs against all or some of the entitled persons demanding appraisal, in amounts the court finds equitable, to the extent the court finds such persons acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this subsection.
    2. The court in an appraisal proceeding may also assess the fees and expenses of counsel and experts for the respective parties, in amounts the court finds equitable:
      1. Against the limited liability company and in favor of any or all entitled persons demanding appraisal if the court finds the limited liability company did not substantially comply with the requirements of subsection (4), (6), (8) or (9) of this section; or
      2. Against either the limited liability company or an entitled person demanding appraisal, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by this subsection.
    3. If the court in an appraisal proceeding finds that the services of counsel for any entitled person were of substantial benefit to other persons similarly situated, and that the fees for those services should not be assessed against the limited liability company, the court may award to such counsel reasonable fees to be paid out of the amounts awarded the entitled persons who were benefited.
    4. To the extent the limited liability company fails to make a required payment pursuant to subsection (8), (9) or (10) of this section, the entitled person may sue directly for the amount owed and, to the extent successful, shall be entitled to recover from the limited liability company all costs and expenses of the suit, including counsel fees.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 111, eff from and after Jan. 1, 2013.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, several typographical errors in this section were corrected as follows: in (10)(b), substituted “subsection (8) or (9)” for “subsections (8) or (9)”; in (12)(b)(i), substituted “subsection (4), (6), (8) or (9)” for “subsections (4), (6), (8) or (9)”; and in (12)(d), substituted “subsection (8), (9) or (10)” for “subsections (8), (9) or (10).”

This section is set out above to correct errors in the section as it appears in the 2013 Replacement Volume 18 by adding the following subsection designations: (3), (5), (7), (8), (9), (10), (11) and (12).

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office” for “registered office” two times and deleted “without a registered office in this state” preceding “it shall commence” in (11)(b).

§79-29-233. Action on an agreement to sell, lease, exchange or otherwise dispose of assets.

In the case of a limited liability company that is a party to an agreement outside the ordinary course of the limited liability company’s activities to sell, lease, exchange, or otherwise dispose of assets if the disposition would leave the limited liability company without a significant continuing business activity, as such term is defined in Section 79-29-231(3)(a)(ii):

The agreement, referred to herein as the “asset sale agreement,” must be approved by the members in accordance with subsection (c) of this section.

Unless the asset sale agreement is not required to be approved by the members, the limited liability company must notify each member and each owner of a financial interest, whether or not entitled to vote, of the meeting of members at which the asset sale agreement is to be submitted for approval.The notice must state that the purpose, or one (1) of the purposes, of the meeting is to consider the asset sale agreement and must contain or be accompanied by a copy or summary of the asset sale agreement.

Approval of the asset sale agreement requires the approval of at least a majority of the votes entitled to be cast on the asset sale agreement, and, if any class or series of interests is entitled to vote as a separate group on the asset sale agreement, the approval of at least a majority of the votes entitled to be cast on the asset sale agreement by that voting group.

Separate voting by voting groups is required:

On an asset sale agreement, by each class or series of interests that would have a right to vote as a separate group on a provision in the asset sale agreement that, if contained in a proposed amendment to the certificate of formation or operating agreement, would require action by separate voting groups under the certificate of formation or operating agreement;

On an asset sale agreement, if the voting group is entitled under the certificate of formation or operating agreement, to vote as a voting group to approve an asset sale agreement.

If as a result of the asset disposition one or more members or owners of a financial interest would become subject to personal liability for the obligations or liabilities of any entity, approval of the asset sale agreement shall require the execution, by each such member and owner of a financial interest, of a separate written consent to become subject to personal liability.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 3. Members.

§79-29-301. Admission of members.

  1. A person becomes a member on the later of:
    1. The formation of the limited liability company; or
    2. The date stated in the records of the limited liability company as the date that person becomes a member.
  2. After the formation of the limited liability company, a person is admitted as a member of the limited liability company:
    1. In the case of a person who is not an assignee of a financial interest, including a person acquiring an interest directly from the limited liability company and a person to be admitted as a member of the limited liability company without acquiring a financial interest in the limited liability company at the time provided in and upon the compliance with the certificate of formation or the operating agreement or, if the certificate of formation or the operating agreement does not so provide, upon the written consent of all members.If the parties do not specify an agreed admission date in writing, the admission shall be deemed to have occurred upon the date of the compliance with the conditions set forth in this subsection; and
    2. In the case of an assignee of a financial interest, upon compliance with subsection (1) of Section 79-29-707.If the parties do not specify an agreed admission date in writing the admission shall be deemed to have occurred upon the date of the compliance with the conditions set forth in subsection (1) of Section 79-29-707.
    3. In the case of a person being admitted as a member of a surviving limited liability company pursuant to a merger approved in accordance with Section 79-29-223 of this chapter, as provided in the operating agreement of the surviving limited liability company or in the agreement of merger, and in the event of any inconsistency, the terms of the agreement of merger shall control; and in the case of a person being admitted as a member of a limited liability company pursuant to a merger in which such limited liability company is not the surviving limited liability company in the merger, as provided in the operating agreement of such limited liability company.
    4. In the case of a person who inherits an interest in a limited liability company from a deceased member, upon the distribution of the interest from the estate of the deceased member to the person.
    5. In the case of a person who is the successor of a member that is an entity which has merged, upon the merger of the member.
  3. A person may be admitted to a limited liability company as a member of the limited liability company and may receive an interest in the limited liability company without making a contribution or being obligated to make a contribution to the limited liability company.
  4. A person may be admitted to a limited liability company as a member of the limited liability company without acquiring an interest in the limited liability company.
  5. A person may be admitted as the sole member of a limited liability company without making a contribution or being obligated to make a contribution to the limited liability company or without acquiring an interest in the limited liability company.
  6. A certificate of formation or written operating agreement may provide that a member or members shall have preemptive rights to subscribe to any additional issue of interests in a limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-301 [ Laws, 1994, ch. 402, § 22; Laws, 1997, ch. 418, § 37, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to admission of a member. See Editor’s Note under Chapter 29 heading.

Cross References —

“Member” as meaning a person that has been admitted to a limited liability company as provided in this section see § 79-29-103.

JUDICIAL DECISIONS

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Former §79-29-301.

6. Not a member.

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Former § 79-29-301.

6. Not a member.

Real property buyer was not a member of a limited liability company (LLC) because, under the unambiguous terms of an operating agreement, a $500,000 contribution was required to become a member; under former version of Miss. Code Ann. § 79-29-301, the LLC agreement did not have to be in force at the time of filing a certificate of formation. Moreover, all potential members of the LLC did not have to be accounted for at the time of the certificate’s filing. Kilpatrick v. White Hall on MS River, LLC, 207 So.3d 1241, 2016 Miss. LEXIS 83 (Miss. 2016).

§79-29-302. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-302. [Laws, 1994, ch. 402, § 23, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-302 was entitled: Management of limited liability company. For present similar provisions, see § 79-29-305.

§79-29-303. Withdrawal of member and expulsion of member.

A member may withdraw from a limited liability company only at the time or upon the happening of events specified in a written operating agreement and in accordance with the written operating agreement or upon the written consent of all the members.Notwithstanding anything to the contrary under applicable law, unless the certificate of formation or a written operating agreement provides otherwise, a member may not withdraw from a limited liability company prior to the dissolution and winding-up of the limited liability company without the written consent of all of the members of the limited liability company.Unless otherwise provided by the certificate of formation or written operating agreement, a limited liability company has no power to expel a member. Except as otherwise provided by the certificate of formation or written operating agreement, a member who has withdrawn from or been expelled from a limited liability company ceases to be a member of the limited liability company and ceases to have any governance rights.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-303 [ Laws, 1994, ch. 402, § 24, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to agency power of members and managers. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-307.

JUDICIAL DECISIONS

1. In general.

2. Governance rights.

1. In general.

Members 3 and 4 could not expel members 1 and 2 (M1 and M2) under a limited liability company’s (LLC) operating agreement for their alleged fraud, bad acts, or abandonment of their management duties, and as M1 and M2’s membership had not been withdrawn under this section, M1 and M2 were still members of the LLC. In re Mid-South Bus. Assocs., LLC, 555 B.R. 565, 2016 Bankr. LEXIS 3383 (Bankr. N.D. Miss. 2016).

2. Governance rights.

Chancery court properly granted motions for summary judgment and declaratory judgment filed by a law firm and its individual members in a former member’s action for interpretation of the firm’s partnership agreements and related documents because, although the former member’s withdrawal from the firm severed his statutory governance rights, he continued to have governance rights as outlined in and permitted by the dispute-resolution provision of the supplement agreement, including his participation in a majority vote on “any dispute or decision related to this agreement,” and he was bound by the terms of the dispute-resolution provision and the resulting joint resolution. Sledge v. Grenfell Sledge & Stevens, PLLC, — So.3d —, 2018 Miss. LEXIS 504 (Miss. Dec. 13, 2018).

§79-29-304. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-304. [Laws, 1994, ch. 402, § 25, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-304 was entitled: Classes and voting. For present similar provisions, see § 79-29-309.

§79-29-305. Management of limited liability company.

The management of a limited liability company shall be vested in its members in proportion to the then current percentage or other interest of members in the profits of the limited liability company owned by all of the members, the decision of members owning more than fifty percent (50%) of the said percentage or other interest in the profits controlling; provided however, that if an operating agreement provides for the management, in whole or in part, of a limited liability company by a manager or managers, the management of the limited liability company, to the extent so provided, shall be vested in the manager or managers who shall be chosen in the manner provided in the operating agreement.

A member of a member-managed limited liability company has the power and authority to delegate to one or more other persons the member’s rights and powers to manage and control the business and affairs of the limited liability company, including to delegate to agents, officers and employees of a member or the limited liability company and to delegate by agreement to other persons.The delegation shall not cause the member to cease to be a member of the limited liability company or cause the person to whom any such rights and powers have been delegated to be a member or manager, as the case may be, of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-305 [ Laws, 1994, ch. 402, § 26, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to liability of third parties. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-311.

RESEARCH REFERENCES

ALR.

Construction and Application of Limited Liability Company Acts – Issues Relating to Liability of Limited Liability Company for Acts of Its Members, Managers, Officers, and Agents. 47 A.L.R.6th 1.

Construction and Application of Limited Liability Company Acts – Issues Relating to Personal Liability of Individual Members and Managers of Limited Liability Company as to Third Parties. 46 A.L.R.6th 1.

JUDICIAL DECISIONS

I. Under Current Law.

1. In general.

2.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former §79-29-302.

I. Under Current Law.

1. In general.

Absent a written agreement to the contrary, one member of a limited liability company (LLC) was not liable to other members for the loss of their investment under Miss. Code Ann. § 79-29-305(1). Likewise, neither party in the case had any enforceable obligation to contribute any money or property to the limited liability company under Miss. Code Ann. § 79-29-502(1) [Repealed] since the investor admitted that there was no written operating agreement for either LLC, nor was there any other written agreement that was signed by the investor and the restaurateur obligating them to contribute money or property to the LLCs. Harrell v. St. John, 792 F. Supp. 2d 933, 2011 U.S. Dist. LEXIS 58058 (S.D. Miss. 2011).

Improperly ousted member of two limited liability companies (LLCs) was entitled pursuant to Miss. Code Ann. § 79-29-306 (Rev. 2009) to collect the fair-market value of the member’s interest in the LLCs from the companies and three individual members where the three individual members acted in a willful and grossly negligent manner by improperly squeezing the ousted member out of the companies. Bluewater Logistics, LLC v. Williford, 55 So.3d 148, 2011 Miss. LEXIS 64 (Miss. 2011).

2.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former § 79-29-302.

Where one member of a Mississippi professional limited liability company (PLLC) filed a voluntary Chapter 7 case for the PLLC under 11 U.S.C.S. § 301, but the other member did not consent under Miss. Code Ann. § 79-29-304(2) (2009) [Repealed], and the PLLC documents did not authorize on member to file under Miss. Code Ann. § 79-29-302 (2009), the case was dismissed. In re Wyatt & McAlister, PLLC, 2010 Bankr. LEXIS 1413 (Bankr. S.D. Miss. Apr. 23, 2010).

§79-29-306. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-306. [Laws, 1994, ch. 402, § 27, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-306 was entitled: Limited liability company agreement.

§79-29-307. Agency power of members, managers and officers.

  1. Except as provided in subsection (2) of this section, every member is an agent of the limited liability company for the purpose of conducting its business and affairs, and the act of any member, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the ordinary course the business or affairs of the limited liability company of which the person is a member, binds the limited liability company, unless the member so acting has, in fact, no authority to act for the limited liability company in the particular matter and the person with whom the member is dealing has knowledge of the fact that the member has no such authority.
  2. If the certificate of formation or operating agreement provides that management of the limited liability company is vested in a manager or managers then except as otherwise provided in the certificate of formation or the operating agreement:
    1. No member, acting solely in the capacity as a member, is an agent of the limited liability company; and
    2. Every manager is an agent of the limited liability company for the purpose of its business and affairs, and the act of any manager, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the ordinary course the business or affairs of the limited liability company of which the person is the manager, binds the limited liability company, unless the manager so acting has, in fact, no authority to act for the limited liability company in the particular matter and the person with whom the manager is dealing has knowledge of the fact that the manager has no such authority.
  3. Every officer is an agent of the limited liability company for the purpose of its business and affairs to the extent the agency authority has been delegated to the officer as provided by the operating agreement, and the act of any officer, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the ordinary course the business or affairs of the limited liability company of which the person is an officer, binds the limited liability company, unless the officer so acting has, in fact, no authority to act for the limited liability company in the particular matter and the person with whom the officer is dealing has knowledge of the fact that the officer has no such authority.
  4. No act of a manager, member or officer in contravention of a restriction on authority shall bind the limited liability company to persons having knowledge of the restriction.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-307 [ Laws, 1994, ch. 402, § 28, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to events of dissociation of members. See Editor’s Note under Chapter 29 heading.

Cross References —

“Event of dissociation” as meaning an event that causes a person to cease to be a member as provided in this section, see § 79-29-103.

Dissolution of a limited liability company upon an event of dissociation of a member as provided in this section, see § 79-29-801.

JUDICIAL DECISIONS

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former §79-29-303.

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former § 79-29-303.

Where a minority member of a limited liability company (LLC), without the consent of the majority member, transferred LLC property to a company of which the member was the sole owner, the transfer, and subsequent pledge of the property to a creditor, were null and void because the member lacked the authority under the LLC’s operating agreement and Miss. Code Ann. § 79-29-303. Kinwood Capital Group. LLC v. Northlake Dev., LLC (In re Northlake Dev., LLC), 2007 Bankr. LEXIS 4403 (Bankr. S.D. Miss. Dec. 13, 2007), amended, in part, 2008 Bankr. LEXIS 870 (Bankr. S.D. Miss. Mar. 20, 2008).

§79-29-308. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-308. [Laws, 1994, ch. 402, § 29, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-308 related to a member’s right to inspect, copy and obtain certain limited liability company records. For present similar provisions, see § 79-29-315.

§79-29-309. Voting, classes and meetings.

  1. With respect to any matter to be voted on, consented to or approved by the members, or any action required or permitted to be taken by the members the vote of each member shall be based on the then current percentage held by such member in the profits of the limited liability company owned by all the members.
  2. Unless a greater percentage is expressly required by another section of this chapter, with respect to any matter to be voted on, consented to or approved by the members or any action required or permitted to be taken by the members, the decision of members of a limited liability company owning more than fifty percent (50%) of the said percentage in the profits as described in subsection (1) of this section is controlling.
  3. A certificate of formation or operating agreement may provide for classes or groups of members having such relative rights, powers and duties as may be provided therein, and may make provision for the future creation in the manner provided therein of additional classes or groups of members having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of members.A certificate of formation or written operating agreement may provide that any member or class or group of members shall have no voting rights.
  4. The certificate of formation or operating agreement may grant to all or certain identified members or a specified class or group of the members the right to vote (on any basis) separately or with all or any class or group of the members, on any matter.
  5. A certificate of formation or operating agreement may set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on by any members, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
    1. Meetings of members may be held by means of telephone or other communications equipment by means of which all persons participating in the meeting can speak to and hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at the meeting;
    2. On any matter that is to be voted on, consented to or approved by members, or any action required or permitted to be taken by the members the members may take such action without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the members owning at least the percent of the interests which would be necessary to authorize or take such action at a meeting at which all members entitled to vote thereon were present and voted.If any action of the members is proposed to be taken pursuant to this subsection without the written consent of all of the members, the members who did not sign the written consent shall be provided with notice of the executed consent within twenty (20) days of the execution of the written consent.The execution of a written consent by any member shall constitute a waiver by such member of notice thereof.
    3. On any matter that is to be voted on by members, the members may vote in person or by proxy, and the proxy may be granted in writing, by means of electronic transmission or as otherwise permitted by applicable law.
    4. If a meeting of members has not been held during the immediately preceding fifteen (15) months, a member or members owning twenty percent (20%) or more of the voting power of all members entitled to vote may call a regular meeting of members by giving thirty (30) days’ written notice to the members, all at the expense of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

JUDICIAL DECISIONS

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former §79-29-304.

I. Under Current Law.

1.-5. [Reserved for future use.]

II. Under Prior Law.

6. Under former § 79-29-304.

Where one member of a Mississippi professional limited liability company (PLLC) filed a voluntary Chapter 7 case for the PLLC under 11 U.S.C.S. § 301, but the other member did not consent under Miss. Code Ann. § 79-29-304(2) (2009), and the PLLC documents did not authorize on member to file under Miss. Code Ann. § 79-29-302 (2009), the case was dismissed. In re Wyatt & McAlister, PLLC, 2010 Bankr. LEXIS 1413 (Bankr. S.D. Miss. Apr. 23, 2010).

§79-29-311. Liability to third parties.

  1. Except as otherwise provided by this chapter, the debts, obligations and liabilities of a limited liability company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the limited liability company, and no member, manager or officer of a limited liability company shall be obligated personally for any such debt, obligation or liability of the limited liability company solely by reason of being a member, acting as a manager or acting as an officer of the limited liability company.
  2. A member, manager or officer of a limited liability company is not a proper party to a proceeding by or against a limited liability company, by reason of being a member, manager or officer, as applicable, of the limited liability company, except:
    1. Where the object of the proceeding is to enforce a member’s, manager’s or officer’s right against or liability to the limited liability company; or
    2. In a derivative action brought pursuant to Article 11 of this chapter.
  3. Notwithstanding the provisions of subsections (1) and (2) of this section, under an operating agreement or under another agreement, a member, manager or officer may agree to be obligated personally for any or all of the debts, obligations and liabilities of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-313. Events of bankruptcy.

  1. The certificate of formation or the written operating agreement may provide for events the occurrence of which result in a member either (a) ceasing to have some or all governance rights; (b) ceasing to have some or all financial rights; or (c) ceasing to be a member.
  2. A person who has ceased to be a member shall continue to have any financial rights that the person had at the time of the event but shall cease to have any governance rights or any other rights.
  3. Unless otherwise provided in the certificate of formation or written operating agreement or with the written consent of all members, a member ceases to be a member upon the happening of the following events:
    1. A member:(i) makes an assignment for the benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is adjudicated a bankrupt or insolvent; (iv) files a petition or answer seeking for the person any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of the nature described in this subsection (3)(a); or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of the member’s properties; or
    2. If one hundred twenty (120) days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if within ninety (90) days after the appointment without the member’s consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of the member’s properties, the appointment is not vacated or stayed or within ninety (90) days after the expiration of any stay, the appointment is not vacated.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-315. Access to and confidentiality of information; records.

  1. Each member of a limited liability company has the right, subject to such reasonable standards, including standards governing what information and documents are to be furnished at what time and location and at whose expense, as may be set forth in an operating agreement or otherwise established by the manager or, if there is no manager, then by the members, to obtain from the limited liability company from time to time upon reasonable demand for any good faith purpose reasonably related to the member’s interest as a member of the limited liability company:
    1. True, full and current information regarding the status of the business and financial condition of the limited liability company;
    2. Promptly after becoming available, a copy of the limited liability company’s federal, state and local income tax returns for each year;
    3. A current list of the name and last known business, residence or mailing address of each member and manager;
    4. A copy of any written operating agreement and certificate of formation and all amendments thereto, together with executed copies of any written powers of attorney pursuant to which the operating agreement and any certificate and all amendments thereto have been executed;
    5. True and full information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each member and which each member has agreed to contribute in the future, and the date on which each became a member; and
    6. Other information regarding the affairs of the limited liability company as is just and reasonable.
  2. Each manager shall have the right to examine all of the information described in subsection (1) of this section for a good faith purpose reasonably related to the position of manager.
  3. The manager or members of a limited liability company, referred to herein as the “authority,” shall have the right to keep confidential from the members and managers, for a period of time as the authority deems reasonable, any information which the authority reasonably believes to be in the nature of trade secrets or other information the disclosure of which the authority in good faith believes is not in the best interest of the limited liability company or could damage the limited liability company or its business or which the limited liability company is required by law or by agreement with a third party to keep confidential.
  4. A limited liability company may maintain its records in other than a written form if such form is capable of conversion into written form within a reasonable time.
  5. Any demand under this section shall be in writing and shall state the purpose of such demand with reasonable detail.
  6. Any action to enforce any right arising under this section shall be brought in the chancery court of the county where the limited liability company’s principal office is located.If the limited liability company refuses to permit a member to obtain or a manager to examine the information described in subsection (1) of this section or does not reply to the demand that has been made within five (5) business days after the demand has been made, the demanding member or manager may apply to the chancery court for an order to compel the disclosure.The chancery court is hereby vested with exclusive jurisdiction to determine whether the person seeking the information is entitled to the information sought.The court may summarily order the limited liability company to permit the demanding member to obtain or manager to examine the information described in subsection (1) of this section and to make copies or abstracts therefrom, or the court may summarily order the limited liability company to furnish to the demanding member or manager the information described in subsection (1) of this section on the condition that the demanding member or manager first pay to the limited liability company the reasonable cost of obtaining and furnishing the information and on such other conditions as the court of chancery deems appropriate.When a demanding member seeks to obtain or a manager seeks to examine the information described in subsection (1) of this section, the demanding member or manager shall first establish (a) that the demanding member or manager has complied with the provisions of this section respecting the form and manner of making demand for obtaining or examining of the information, and (b) that the information the demanding member or manager seeks is reasonably related to the member’s interest as a member or the manager’s position as a manager, as the case may be.The court may, in its discretion, prescribe any limitations or conditions with reference to the obtaining or examining of information, or award such other or further relief as the chancery court may deem just and proper.The court may order books, documents and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought within the state and kept in the state upon such terms and conditions as the order may prescribe.
  7. The rights of a member or manager to obtain information as provided in this section may be restricted in the initial operating agreement or in any subsequent amendment approved or adopted by all of the members or in compliance with any applicable requirements of the operating agreement.The provisions of this subsection shall not be construed to limit the ability to impose restrictions on the rights of a member or manager to obtain information by any other means permitted under this section.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 4. Management.

§79-29-401. Management of a limited liability company by a manager or managers.

  1. The certificate of formation or the operating agreement may delegate responsibility for managing a limited liability company to or among one or more managers to the extent provided therein.Managers may also serve as officers to the extent provided in the operating agreement.
  2. Managers need not be residents of this state or members of the limited liability company.The certificate of formation or the operating agreement may prescribe other qualifications for managers.
  3. The number of managers shall be fixed by or in the manner provided in the certificate of formation or the operating agreement.The number of managers may be increased or decreased by amendment to, or in the manner provided in, the certificate of formation or the operating agreement.
  4. Managers shall be elected by the members.
  5. Any vacancy occurring in the office of manager shall be filled by the vote of the members.
  6. All managers or any lesser number may be removed in the manner provided in the certificate of formation or the operating agreement.All managers or any lesser number may be removed with or without cause by the vote of the members required to elect such manager or managers.
  7. Any action required or permitted to be taken by the managers of a limited liability company may be taken upon a majority vote of the managers.
  8. An operating agreement may set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on by any manager or class or group of managers, waiver of any such notice, action by consent without a meeting, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
  9. Meetings of managers may be held by means of telephone or other communications equipment by means of which all persons participating in the meeting can speak to and hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at the meeting.
  10. The managers may take action on any matter that is to be voted on, consented to or approved by managers without a meeting, and without a vote with not less than one (1) but not more than ten (10) days’ prior notice to all the managers if a consent or consents in writing, setting forth the action so taken, shall be signed by the managers having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all managers entitled to vote thereon were present and voted.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-401 [Laws, 1994, ch. 402, § 30, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to management of a limited liability company by a manager or managers. See Editor’s Note under Chapter 29 heading.

§79-29-402. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-402. [Laws, 1994, ch. 402, § 31, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-402 was entitled: General standards of conduct for a manager. For present similar provisions, see § 79-29-403.

§79-29-403. Reliance on reports and information.

A member, manager, officer or liquidating trustee of a limited liability company shall be fully protected in relying in good faith upon:

The records of the limited liability company; and upon

Information, opinions, reports or statements, including, information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the limited liability company, or the value and amount of assets, reserves, contracts, agreements or other undertakings that would be sufficient to pay claims and obligations of the limited liability company or to make reasonable provision to pay such claims and obligations, or any other facts pertinent to the existence and amount of assets from which distributions might properly be paid which are presented by:

Another manager of the limited liability company;

A member of the limited liability company;

A liquidating trustee of the limited liability company;

An officer of the limited liability company;

An employee of the limited liability company;

Committees of the limited liability company, members or managers; or

Any other person as to matters the member, manager, officer or liquidating trustee reasonably believes is within such other person’s professional or expert competence.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-403 [Laws, 1994, ch. 402, § 32, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to limitation of liability of members and managers. See Editor’s Note under Chapter 29 heading.

§79-29-405. Delegation of rights and powers to manage.

  1. The manager of a limited liability company has the power and authority to delegate to one or more other persons the manager’s rights and powers to manage and control the business and affairs of the limited liability company, including to delegate to agents, officers and employees of:(a) a member, (b) a manager or (c) the limited liability company, and to delegate by a management agreement or another agreement with, or otherwise to, other persons.
  2. Such delegation as provided in subsection (1) of this section shall not cause the manager to cease to be a manager of the limited liability company or cause the person to whom any such rights and powers have been delegated to be a manager of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-407. Resignation of manager.

An operating agreement may provide that a manager may resign as a manager of a limited liability company at the time or upon the happening of events specified in an operating agreement and in accordance with the operating agreement.An operating agreement may provide that a manager shall not have the right to resign as a manager of a limited liability company.A manager may resign as a manager of a limited liability company at any time by giving written notice to the members and other managers.If the resignation of a manager violates an operating agreement, in addition to any remedies otherwise available under applicable law, a limited liability company may recover from the resigning manager damages for breach of the operating agreement and offset the damages against the amount otherwise payable to the resigning manager.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 5. Finance.

§79-29-501. Form of contribution.

The contribution of a member may be in cash, property, services rendered, or a promissory note or other obligation to contribute cash or property or to perform services.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-501 [Laws, 1994, ch. 402, § 33, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to forms of contributions of members. See Editor’s Note under Chapter 29 heading.

Cross References —

Assignor of a limited liability company interest not released from liability to the company under this article, see § 79-29-707.

§79-29-502. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-502. [Laws, 1994, ch. 402, § 34, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-502 was entitled: Liability for contributions. For present similar provisions, see § 79-29-503.

§79-29-503. Liability for contributions.

  1. A promise by a member to contribute to the limited liability company is not enforceable unless set out in a writing signed by the member.
  2. A member is obligated to the limited liability company to perform an enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability or any other reason.If a member does not make the required contribution of property or services, the member is obligated at the option of the limited liability company to contribute cash equal to that portion of the value of the stated contribution that has not been made.The foregoing option shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the limited liability company may have against the member under the operating agreement or applicable law.
  3. The obligation of a member to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by specific consent of all the members.However, a creditor of a limited liability company who extends credit, or otherwise acts in reliance on that obligation after the member signs a writing that reflects the obligation and before the amendment or cancellation thereof to reflect the compromise, may enforce the original obligation to the same extent as the limited liability company could pursuant to this section.A conditional obligation of a member to make a contribution or return money or other property to a limited liability company may not be enforced unless the conditions of the obligation have been satisfied or waived as to or by such member.Conditional obligations include contributions payable upon a discretionary call of a limited liability company prior to the time the call occurs.
  4. A certificate of formation or operating agreement may provide that the interest of any member who fails to make any contribution that the member is obligated to make, shall be subject to specified penalties for, or specified consequences of, such failure.Such penalty or consequence may take the form of reducing the defaulting member’s proportionate financial or governance interest in the limited liability company, subordinating the defaulting member’s financial or governance interests to that of nondefaulting members, forcing a sale of the defaulting member’s financial or governance interest, forfeiting the defaulting member’s financial or governance interest, the lending by other members of the amount necessary to meet the defaulting member’s commitment, fixing the value of the defaulting member’s financial or governance interest by appraisal or by formula and redeeming or selling of the defaulting member’s financial or governance interest at such value, or other penalty or consequence.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-503 [Laws, 1994, ch. 402, § 35, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to sharing of profits and looses. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-505.

§79-29-504. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-504. [Laws, 1994, ch. 402, § 36, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-504 was entitled: Sharing of distributions. For present similar provisions, see § 79-29-507.

§79-29-505. Sharing of profits and losses.

The profits and losses of a limited liability company shall be allocated among the members who own financial interests and other owners of financial interests, and among groups or classes of members, in the manner provided in the certificate of formation or operating agreement.Profits and losses must be allocated on the basis of the agreed value, as stated in the limited liability company records required to be kept pursuant to Section 79-29-115, of the contributions made by each owner of a financial interest to the extent they have been received by the limited liability company and have not been returned.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-507. Sharing of distributions.

Distributions of cash or other assets of a limited liability company must be allocated among the members who own financial interests and other owners of financial interests, and among classes or groups of members, in the manner provided in the certificate of formation or operating agreement. Distributions must be made on the basis of the agreed value, as stated in the limited liability company records required to be kept pursuant to Section 79-29-115, of the contributions made by each member who owns a financial interest to the extent they have been received by the limited liability company and have not been returned.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-509. Defense of usury not available.

No obligation of a member, manager or officer of a limited liability company to the limited liability company arising under the operating agreement or a separate agreement or writing, and no note, instrument or other writing evidencing any such obligation of a member, manager or officer, shall be subject to the defense of usury, and no member, manager or officer shall interpose the defense of usury with respect to any such obligation in any action.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 6. Distributions.

§79-29-601. Distributions generally and interim distributions.

For purposes of this article, except for Section 79-29-611(1) which shall apply to any member, any reference to a member of a limited liability company in this article shall mean a member who owns a financial interest and shall not mean a member who does not own a financial interest or hold a financial right in the limited liability company.

Except as provided in this article, to the extent specified in the certificate of formation or the operating agreement and at the times or upon the occurrence of the events specified in the certificate of formation or operating agreement, a member is entitled to receive from a limited liability company distributions before the member’s withdrawal from the limited liability company and before the dissolution and winding-up thereof.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-601 [Laws, 1994, ch. 402, § 37, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to interim distributions. See Editor’s Note under Chapter 29 heading.

Cross References —

Assignor of a limited liability company interest not released from liability to the company under this article, see § 79-29-704.

Assignor of a limited liability company interest not released from liability to the company under this article, see § 79-29-707.

Order of distribution of assets of limited liability company, see § 79-29-813.

§79-29-602. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-602. [Laws, 1994, ch. 402, § 38, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-602 was entitled: Distribution upon dissociation. For present similar provisions, see § 79-29-603.

§79-29-603. Distribution upon withdrawal of member.

Except as provided in this article, upon withdrawal any withdrawing member is entitled to receive any distribution to which the member is entitled under an operating agreement and, if not otherwise provided in an operating agreement, the member is entitled to receive, within a reasonable time after withdrawal the fair value of the member’s financial interest as of the date of withdrawal based upon the member’s right to share in distributions from the limited liability company.

For purposes of this section the fair value of the member’s financial interest shall be determined as of the date of withdrawal:

Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and

Without discounting for lack of marketability or minority status.

The distribution must be accompanied by current financial statements of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-603 [Laws, 1994, ch. 402, § 39, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to distribution in kind. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-605.

§79-29-604. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-604. [Laws, 1994, ch. 402, § 40, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-604 was entitled: Right to distribution. For present similar provisions, see § 79-29-607.

§79-29-605. Distribution in kind.

A member, regardless of the nature of the person’s contribution, has no right to demand and receive any distribution from a limited liability company in any form other than cash.A member may not be compelled to accept a distribution of any asset in kind from a limited liability company to the extent that the percentage of the asset distributed to the person exceeds a percentage of that asset which is equal to the percentage in which the person shares in distributions from the limited liability company.Except as provided in the operating agreement, a member may be compelled to accept a distribution of any asset in kind from a limited liability company to the extent that the percentage of the asset distributed is equal to a percentage of that asset which is equal to the percentage in which the member shares in distributions from the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-605 [Laws, 1994, ch. 402, § 41, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to limitations on distribution. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-609.

§79-29-606. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-606. [Laws, 1994, ch. 402, § 42, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-606 was entitled: Liability for wrongful distribution. For present similar provisions, see § 79-29-611.

§79-29-607. Right to distribution.

Subject to Sections 79-29-609 and 79-29-813, at the time a member becomes entitled to receive a distribution, the member has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.An operating agreement may provide for the establishment of a record date with respect to allocations and distributions by a limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-609. Limitations on distribution.

  1. No distribution may be made if, after giving effect to the distribution:
    1. The limited liability company would not be able to pay its debts as they become due in the usual course of business; or
    2. The limited liability company’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution.

      For purposes of this section, the term “distribution” shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.

  2. The limited liability company may base a determination that a distribution is not prohibited under subsection (1) of this section either on:
    1. Financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or
    2. A fair valuation or other method that is reasonable under the circumstances.
  3. The effect of a distribution under subsection (1) of this section is measured as of:(a) the date the distribution is authorized if the payment occurs within one hundred twenty (120) days after the date of authorization; or (b) the date payment is made if it occurs more than one hundred twenty (120) days after the date of authorization.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Applicability of this section to distributions to which § 79-29-813 applies, see § 79-29-813.

§79-29-611. Liability for wrongful distribution.

  1. A member or manager who votes for or assents to a distribution in violation of the certificate of formation or operating agreement or Section 79-29-609 is personally liable to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating Section 79-29-609 or the certificate of formation or operating agreement if it is established that the member or manager did not act in compliance with Section 79-29-609. Each member or manager held liable under this subsection (1) is entitled to contribution:
    1. From each other member or manager who could be held liable under this subsection (1) for the unlawful distribution; and
    2. From each member for the amount the member received knowing that the distribution was made in violation of Section 79-29-605, the certificate of formation or the operating agreement.
    1. A member who receives a distribution in violation of Section 79-29-609, and who knew at the time of the distribution that the distribution violated Section 79-29-609, shall be liable to a limited liability company for the amount of the distribution.
    2. A member who receives a distribution in violation of Section 79-29-609, and who did not know at the time of the distribution that the distribution violated Section 79-29-609, shall not be liable for the amount of the distribution.
  2. Subject to subsection (4) of this section, this section shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.
  3. Unless otherwise agreed, a member who either assents to or receives a distribution from a limited liability company shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of two (2) years from the date of the distribution unless an action to recover the distribution from the member is commenced before the expiration of the two-year period and an adjudication of liability against the member is made in the action.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 7. Assignment of Financial Interests.

§79-29-701. Nature of financial interest in a limited liability company.

A financial interest in a limited liability company is intangible personal property.A member has no interest in specific limited liability company property.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-701 [Laws, 1994, ch. 402, § 43, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] provided a limited liability company interest is personal property. See Editor’s Note under Chapter 29 heading.

JUDICIAL DECISIONS

1. Member’s interest in specific limited liability company property.

Judgment of the district court in a case to determine ownership of cattle, granting summary judgment for the buyer of the cattle on the ground that the apparent seller was the owner and passed title to the buyer free of a lien, was reversed and remanded, because a fact issue existed on the ownership of the apparent seller; plaintiff bank’s and defendant bank’s security interests properly perfected on an individual and his property, attached to the cattle only if the apparent seller was a sole proprietorship of the individual, but if the apparent seller operated as a partnership or limited liability company, the individual did not have sufficient rights in the cattle to encumber them. Peoples Bank v. Bryan Bros. Cattle Co., 504 F.3d 549, 2007 U.S. App. LEXIS 24018 (5th Cir. Miss. 2007).

§79-29-702. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-702. [Laws, 1994, ch. 402, § 44, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-702 was entitled: Assignment of limited liability company interest. For present provisions relating to assignment of financial interest in a limited liability company, see § 79-29-703.

§79-29-703. Assignment of financial interest in a limited liability company.

  1. A financial interest is assignable, in whole or in part.The assignee of a member’s financial interest shall have no right to participate in the management of the business and affairs of a limited liability company except as provided in an operating agreement and upon:
    1. The approval of all of the members of the limited liability company other than the member assigning the financial interest; or
    2. Compliance with any procedure provided for in the operating agreement.
    1. An assignment of a financial interest does not dissolve a limited liability company or entitle the assignee to become or to exercise any rights or powers of a member;
    2. An assignment of a financial interest entitles the assignee to share in such profits and losses, to receive such distribution or distributions, and to receive such allocation of income, gain, loss, deduction, or credit or similar item to which the assignor was entitled, to the extent assigned; and
    3. A member ceases to be a member, ceases to hold a governance interest, and ceases to have the power to exercise any rights or powers of a member upon assignment of all of the member’s financial interest.The pledge of, or granting of, a security interest, lien or other encumbrance in or against, any or all of the financial interest of a member shall not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member.
  2. A member’s interest in a limited liability company may be evidenced by a certificate issued by the limited liability company.An operating agreement may provide for the assignment or transfer of any interest represented by such a certificate and make other provisions with respect to the certificates.A limited liability company shall not have the power to issue a certificate of an interest in a limited liability company in bearer form.
  3. Except to the extent assumed by written agreement until an assignee of a financial interest becomes a member, the assignee shall have no liability as a member solely as a result of the assignment.
  4. A limited liability company may acquire, by purchase, redemption or otherwise, any interest in the limited liability company.Any such interest so acquired by the limited liability company shall be deemed canceled.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-703 [Laws, 1994, ch. 402, § 45, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to rights of creditors. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-705.

§79-29-704. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-704. [Laws, 1994, ch. 402, § 46, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-704 was entitled: Right of assignee to become a member. For present similar provisions, see § 79-29-707.

§79-29-705. Rights of creditor.

  1. On application to a court of competent jurisdiction by a judgment creditor of a member, referred to in this section as the “judgment debtor,” the court may charge the financial interest of the judgment debtor with payment of the unsatisfied amount of the judgment, with interest (referred to in this section as a “charging order”).To the extent so charged, the judgment creditor has only the rights of an assignee of the financial interest, however, the judgment creditor shall have no rights to bring a proceeding under Article 11 of this chapter.This article does not deprive any judgment debtor of the benefit of any exemption laws applicable to the judgment debtor’s financial interest.
  2. A charging order constitutes a lien on the judgment debtor’s financial interest.
  3. The entry of a charging order is the exclusive remedy by which a judgment creditor of a judgment debtor or its assignee may satisfy a judgment out of the judgment debtor’s financial interest.
  4. No creditor of a judgment debtor or its assignee shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the limited liability company.
  5. The chancery court shall have jurisdiction to hear and determine any matter relating to any such charging order.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-705 [Laws, 1994, ch. 402, § 47, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the powers of estates of deceased or incompetent members. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-709.

§79-29-707. Right of assignee to become a member.

  1. An assignee of a financial interest may become a member with governance interests if and to the extent that:(a) the certificate of formation or operating agreement so provides; (b) all other members consent; or (c) in the case of an assignee of a member’s entire financial interest in which, immediately following the assignment, the limited liability company otherwise would have no members, simultaneously with and upon the assignment of the interest to an assignee who agrees to become a member.
  2. An assignee who has become a member has, to the extent assigned, the governance rights and powers, and is subject to the restrictions and liabilities, of a member under the certificate of formation or operating agreement and this chapter.An assignee who becomes a member also is liable for the obligations of the assignee’s assignor to make and return contributions as provided in Articles 5 and 6 of this chapter.However, the assignee is not obligated for liabilities or obligations unknown to the assignee at the time the assignee became a member and which could not be ascertained from the certificate of formation or the operating agreement.
  3. Whether or not an assignee of a financial interest becomes a member, the assignor is not released from the assignor’s liability to the limited liability company under Articles 5 and 6 of this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-709. Powers of personal representative of deceased, incompetent or dissolved member.

  1. If a court of competent jurisdiction adjudges a member to be incompetent, the member’s personal representative may exercise all rights until such time that the member’s competency is regained, including the member’s governance rights, on behalf of the member and any power under an operating agreement of an assignee to become a member.
  2. If a member who is an individual dies, a personal representative of the member’s estate may exercise all rights for the purpose of settling the estate, including the governance rights that were held by such member at the time of the member’s death and any power under an operating agreement of an assignee to become a member.
  3. If a member is a corporation, trust or other entity and such entity is dissolved, terminated or liquidated, the personal representative of the entity may exercise all rights and powers of that member until a successor is established, including the member’s governance rights.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-711. Enforceability of limitations on assignments of financial interests.

Sections 75-9-406 and 75-9-408 do not apply to a member’s financial interest in a domestic limited liability company, including the rights, powers and interests arising under the limited liability company’s certificate of formation or operating agreement or under this chapter.To the extent of any conflict or inconsistency between this section and Sections 75-9-406 and 75-9-408, this section prevails.It is the express intent of this section to permit the enforcement, as an agreement among the members of a limited liability company, of any provision of an operating agreement that would otherwise be ineffective under Sections 75-9-406 and 75-9-408.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 8. Dissolution.

§79-29-801. Nonjudicial dissolution.

  1. A limited liability company is dissolved and its affairs must be wound up upon the first of the following to occur:
    1. At the time specified in the certificate of formation;
    2. Upon the occurrence of the event specified in the certificate of formation or the written operating agreement;
    3. Upon the consent of all members, or such lesser number as may be provided in the certificate of formation or operating agreement;
    4. At any time there are no members; provided, that the limited liability company is not dissolved and is not required to be wound up if:
      1. Within one hundred eighty (180) days or such other period as is provided for in the certificate of formation or operating agreement after the occurrence of the event that terminated the continued membership of the last remaining member, the personal representative of the last remaining member agrees in writing to continue the limited liability company and to the admission of the personal representative of the member or its nominee or designee to the limited liability company as a member, effective as of the occurrence of the event that terminated the continued membership of the last remaining member; however, an operating agreement may provide that the personal representative of the last remaining member shall be obligated to agree in writing to continue the limited liability company and to the admission of the personal representative of such member or its nominee or designee to the limited liability company as a member, effective as of the occurrence of the event that terminated the continued membership of the last remaining member; or
      2. A member is admitted to the limited liability company in the manner provided in the operating agreement, effective as of the occurrence of the event that terminated the continued membership of the last remaining member, within one hundred eighty (180) days or such other period as is provided in the operating agreement after the occurrence of the event that terminated the continued membership of the last remaining member, pursuant to a provision of the operating agreement that specifically provides for the admission of a member to the limited liability company after there is no longer a remaining member of the limited liability company.
    5. Upon the entry of a decree of judicial dissolution under Section 79-29-803.
  2. The following events with respect to any member shall not cause the limited liability company to be dissolved or its affairs to be wound up, and upon the occurrence of any such event, the limited liability company shall be continued without dissolution:
    1. Death;
    2. Withdrawal;
    3. Expulsion;
    4. Bankruptcy;
    5. Dissolution; or
    6. The occurrence of any other event that terminates the continued membership of any member.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-801 [Laws, 1994, ch. 402, § 48; Laws, 1998, ch. 376, § 6, eff from and after July 1, 1998; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to nonjudicial dissolution. See Editor’s Note under Chapter 29 heading.

§79-29-802. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-802. [Laws, 1994, ch. 402, § 49, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-802 was entitled: Judicial dissolution. For present similar provisions, see § 79-29-803.

§79-29-803. Judicial dissolution.

  1. On application by or for a member, the chancery court for the county in which the principal office of the limited liability company is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the limited liability company does not have a principal office in this state, may decree dissolution of a limited liability company:
    1. Whenever it is not reasonably practicable to carry on the business in conformity with the certificate of formation or the operating agreement;
    2. Whenever the managers or the members in control of the limited liability company have been guilty of or have knowingly countenanced persistent and pervasive fraud or abuse of authority, or the property of the limited liability company is being misapplied or wasted by such persons; or
    3. In a proceeding by the limited liability company to have its voluntary dissolution continued under court supervision.
  2. If a limited liability company has no members due to the expulsion or withdrawal of the last remaining member pursuant to the terms of the certificate of formation or the written operating agreement and the certificate of formation or the written operating agreement of the limited liability company prohibits the substitution of a member, then an officer, manager or any assignee or owner of a financial interest of the limited liability company or the personal representative of the member may apply to the chancery court to dissolve the limited liability company; however, if there are no persons that hold the above-described positions, then any creditor of the limited liability company or the Secretary of State may apply to the chancery court to dissolve the limited liability company.
  3. A court in a judicial proceeding brought to dissolve a limited liability company may appoint one or more receivers to wind-up and liquidate, or one or more custodians to manage, the business and affairs of the limited liability company. The court appointing a receiver or custodian has jurisdiction over the limited liability company and all its property wherever located. The court may appoint an individual or entity (authorized to transact business in this state) as a receiver or custodian. The court may require the receiver or custodian to post bond, with or without sureties, in an amount the court directs.

    The court shall describe the powers and duties of the receiver or custodian in its appointing order, which may be amended from time to time. Among other powers:

    1. The receiver (i) may dispose of all or any part of the assets of the limited liability company wherever located, at a public or private sale, if authorized by the court; and (ii) may sue and defend in the receiver’s own name as receiver of the limited liability company in all courts of this state; and
    2. The custodian may exercise all the powers of the limited liability company, through or in place of its members, managers or officers, to the extent necessary to manage the affairs of the limited liability company in the best interests of its members and creditors.

      The court during a receivership may redesignate the receiver a custodian, and during a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the limited liability company, its members and creditors.

      The court from time to time during the receivership or custodianship may order compensation paid and expenses paid or reimbursed to the receiver or custodian from the assets of the limited liability company or proceeds from the sale of the assets.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 112, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-803 [Laws, 1994, ch. 402, § 50, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to winding up. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-809.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “principal office of the limited liability company is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the limited liability company does not have a principal office in this state, may decree” for “the registered office of the limited liability company is located may decree” in (1); and made minor stylistic changes in (2).

Cross References —

Commencement of proceeding under this section to dissolve a professional limited liability company, see § 79-29-923.

§79-29-804. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-804. [Laws, 1994, ch. 402, § 51, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-804 was entitled: Agency power of managers or members after dissolution. For present similar provisions, see § 79-29-811.

§79-29-805. Decree; winding-up, liquidation, notification.

  1. If after a hearing the court determines that one or more grounds for judicial dissolution exist, it may enter a decree dissolving the limited liability company and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State who shall file it.
  2. After entering the decree of dissolution, the court shall direct the winding-up and liquidation of the limited liability company’s business and affairs in accordance with Section 79-29-809 and the notification of claimants in accordance with Sections 79-29-817 and 79-29-819.
  3. Nothing contained in this section shall diminish the inherent equity powers of the court to fashion alternative remedies to judicial dissolution.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-805 [Laws, 1994, ch. 402, § 52, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to distribution of assets. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-813.

§79-29-806. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-806. [Laws, 1994, ch. 402, § 53, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-806 was entitled: Known claims against dissolved limited liability company. For present similar provisions, see § 79-29-817.

§79-29-807. Safekeeping by State Treasurer.

Assets of a dissolved limited liability company that should be transferred to a creditor, claimant or member of the limited liability company who cannot be found shall be reduced to cash and deposited with the State Treasurer for safekeeping.When the creditor, claimant or member furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer shall pay such person or the person’s personal representative that amount.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-807 [Laws, 1994, ch. 402, § 54, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to unknown claims against dissolved limited liability company. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-819.

§79-29-809. Winding-up.

  1. A manager who has not wrongfully dissolved a limited liability company or, if none, the members or a person approved by the members or, if there is more than one (1) class or group of members, then by each class or group of members, in either case, by members who own more than fifty percent (50%) of the then current percentage or other interest in the profits of the limited liability company owned by all of the members or by the members in each class or group, as appropriate, may wind-up the limited liability company’s affairs; but the chancery court upon cause shown, may wind-up the limited liability company’s affairs upon application of any member or manager, the member’s or manager’s personal representative or assignee, and in connection therewith, may appoint a liquidating trustee.
  2. Upon dissolution of a limited liability company, the persons winding-up the limited liability company’s affairs may, in the name of, and for and on behalf of, the limited liability company, prosecute and defend suits, whether civil, criminal or administrative, gradually settle and close the limited liability company’s business, dispose of and convey the limited liability company’s property, discharge or make reasonable provision for the limited liability company’s liabilities, and distribute to the members any remaining assets of the limited liability company, all without affecting the liability of members and managers and without imposing liability on a liquidating trustee.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Distribution of assets upon the winding up of a limited liability company, see § 79-29-813.

§79-29-811. Agency power of managers, officers or members after dissolution.

  1. Except as provided in subsections (3), (4) and (5) of this section, after an event causing dissolution of the limited liability company, any member can bind the limited liability company:
    1. By any act appropriate for winding-up the limited liability company’s affairs or completing transactions unfinished at dissolution; and
    2. By any transaction that would have bound the limited liability company if it had not been dissolved, if the other party to the transaction does not have notice of the dissolution.
  2. The filing of the certificate of dissolution shall be presumed to constitute notice of dissolution for purposes of subsection (1)(b) of this section.
  3. An act of a manager, officer or member which is not binding on the limited liability company pursuant to subsection (1) of this section is binding if it is otherwise authorized by the limited liability company.
  4. An act of a manager, officer or member which would be binding under subsection (1) or would be otherwise authorized but which is in contravention of a restriction on authority shall not bind the limited liability company to persons having knowledge of the restriction.
  5. If the certificate of formation or the operating agreement vests management of the limited liability company in a manager or managers, the manager or managers shall have the authority of a member provided for in subsection (1) of this section, and no member shall have such authority if the member is acting solely in the capacity of a member.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-813. Distribution of assets.

  1. Upon the winding-up of a limited liability company, the assets shall be distributed as follows:
    1. To creditors, including members and managers who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the limited liability company, whether by payment or the making of reasonable provision for payment thereof, other than liabilities for which reasonable provision for payment has been made and liabilities for distributions to members and former members under Section 79-29-601 or Section 79-29-603;
    2. To members and former members in satisfaction of liabilities for distributions under Section 79-29-601 or Section 79-29-603; and
    3. To members first for the return of their contributions and second respecting their financial interests, in the proportions in which the members share in distributions.
  2. A limited liability company which has dissolved:
    1. Shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims, known to the limited liability company;
    2. Shall make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the limited liability company which is the subject of a pending action, suit or proceeding to which the limited liability company is a party; and
    3. Shall make such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the limited liability company or that have not arisen but that, based on facts known to the limited liability company, are likely to arise or to become known to the limited liability company within three (3) years after the date of dissolution.

      If there are sufficient assets, such claims and obligations shall be paid in full and any such provision for payment made shall be made in full.If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of assets available therefor.Any remaining assets shall be distributed as provided in this chapter.Any liquidating trustee winding-up a limited liability company’s affairs who has complied with this section shall not be personally liable to the claimants of the dissolved limited liability company by reason of such person’s actions in winding-up the limited liability company.

  3. A member who receives a distribution in violation of subsection (1) of this section, and who knew at the time of the distribution that the distribution violated subsection (1) of this section, shall be liable to the limited liability company for the amount of the distribution.For purposes of the immediately preceding sentence, the term “distribution” shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.A member who receives a distribution in violation of subsection (1) of this section, and who did not know at the time of the distribution that the distribution violated subsection (1) of this section, shall not be liable for the amount of the distribution. Subject to subsection (4) of this section, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.
  4. Unless otherwise agreed, a member who receives a distribution from a limited liability company to which this section applies shall have no liability under this chapter or other applicable law for the amount of the distribution after the expiration of two (2) years from the date of the distribution unless an action to recover the distribution from such member is commenced prior to the expiration of the said two-year period and an adjudication of liability against such member is made in the said action.
  5. Section 79-29-609 shall not apply to a distribution to which this section applies.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Subject to this section, at the time a member becomes entitled to receive a distribution, he has the status of, and is entitled to all remedies available to, a creditor, see § 79-29-813.

§79-29-815. Trustees or receivers for limited liability companies; appointment; powers; duties.

When the certificate of formation of any limited liability company formed under this chapter shall be dissolved by the filing of a certificate of dissolution, the chancery court, on application of any creditor, member or manager of the limited liability company, or any other person who shows good cause therefor, at any time, may either appoint one or more of the managers of the limited liability company to be trustees, or appoint one or more persons to be receivers, of and for the limited liability company, to take charge of the limited liability company’s property, and to collect the debts and property due and belonging to the limited liability company, with the power to prosecute and defend, in the name of the limited liability company, or otherwise, all such suits as may be necessary or proper for the purposes aforesaid, and to appoint an agent or agents under them, and to do all other acts which might be done by the limited liability company, if in being, that may be necessary for the final settlement of the unfinished business of the limited liability company.The powers of the trustees or receivers may be continued as long as the chancery court shall think necessary for the purposes aforesaid.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-817. Known claims against dissolved limited liability company.

  1. A dissolved limited liability company may dispose of the known claims against it by filing a certificate of dissolution pursuant to Section 79-29-205 and following the procedure described in this section.
  2. The dissolved limited liability company shall notify its known claimants in writing of the dissolution at any time after the effective date of the dissolution.The written notice must:
    1. Describe information that must be included in a claim;
    2. Provide a mailing address where a claim may be sent;
    3. State the deadline, which may not be fewer than one hundred twenty (120) days from the latter of the mailing date of the written notice or the filing of a certificate of dissolution pursuant to Section 79-29-205, by which the dissolved limited liability company must receive the claim; and
    4. State that the claim will be barred if not received by the deadline.
  3. A claim against the dissolved limited liability company is barred:
    1. If a claimant who was given written notice under subsection (2) of this section does not deliver the claim to the dissolved limited liability company by the deadline; or
    2. If a claimant whose claim was rejected by the dissolved limited liability company does not commence a proceeding to enforce the claim within ninety (90) days from the date the claimant receives notice of the rejection of the claim.
  4. For purposes of this section, “claim” does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-819. Unknown claims against dissolved limited liability company.

  1. A dissolved limited liability company may publish notice of its dissolution pursuant to this section which requests that persons with claims against the limited liability company present them in accordance with the notice.
  2. The notice must:
    1. Be published one time in a newspaper of general circulation in the county where the dissolved limited liability company’s principal office is or was last located, or in Hinds County if the limited liability company does or did not have a principal office in this state;
    2. Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and
    3. State that a claim against the limited liability company not otherwise barred will be barred unless a proceeding to enforce the claim is commenced within three (3) years after the latter of the publication of the notice or the filing of a certificate of dissolution with respect to the limited liability company.
  3. If the dissolved limited liability company publishes a newspaper notice in accordance with subsection (2) and files a certificate of dissolution pursuant to Section 79-29-205, the claim of each of the following claimants which is not otherwise barred is barred unless the claimant commences a proceeding to enforce the claim against the dissolved limited liability company within three (3) years after the latter of the publication date of the newspaper notice or the filing of the certificate of dissolution:
    1. A claimant who did not receive written notice under Section 79-29-817;
    2. A claimant whose claim was timely sent to the dissolved limited liability company but not acted on within the three-year period; and
    3. A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.
  4. A claim may be enforced under this section:
    1. Against the dissolved limited liability company, to the extent of its undistributed assets; or
    2. If the assets have been distributed in liquidation, against a member of the dissolved limited liability company to the extent of the member’s pro rata share of the claim or the assets of the limited liability company distributed to the member in liquidation, whichever is less, but a member’s total liability for all claims under this section may not exceed the total amount of assets distributed to the member, subject to Section 79-29-611(1).

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 113, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “company’s principal office is or was last located, or in Hinds County if the limited liability company does or did not have a principal office in this state” for “company’s principal office, or, if none in this state, its registered office, is or was last located” in (2)(a).

§79-29-821. Grounds for administrative dissolution.

The Secretary of State may commence a proceeding under Section 79-29-823 to administratively dissolve a limited liability company if:

The limited liability company does not pay within sixty (60) days after they are due any fees imposed by this chapter or other law;

The limited liability company does not deliver its annual report to the Secretary of State within sixty (60) days after it is due;

The limited liability company is without a registered agent in this state for sixty (60) days or more;

The limited liability company does not notify the Secretary of State within sixty (60) days that its registered agent has been changed or that its registered agent has resigned; or

The Department of Revenue notifies the Secretary of State that the limited liability company is delinquent in any payments or tax owed by the limited liability company to the State of Mississippi; or

A misrepresentation has been made of any material matter in any application, report, affidavit, or other record submitted by the limited liability company to the Secretary of State pursuant to this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-823. Procedure for administrative dissolution.

  1. If the Secretary of State determines that one or more grounds exist under Section 79-29-821 for administratively dissolving a limited liability company, the Secretary of State shall serve the limited liability company with written notice of the determination under Section 79-35-13, except that such determination may be served by first-class mail.
  2. If the limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after the service of the notice, the Secretary of State shall administratively dissolve the limited liability company by signing a certification of the administrative dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original of the certificate of administrative dissolution and serve the limited liability company with a copy of the certificate of administrative dissolution under Section 79-35-13, except that such certificate of administrative dissolution may be served by first-class mail.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 114, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” preceding “except that such” in (1) and (2).

§79-29-825. Reinstatement following administrative dissolution.

  1. A limited liability company administratively dissolved under Section 79-29-823 may apply to the Secretary of State for reinstatement at any time after the effective date of dissolution. The application must:
    1. Recite the name of the limited liability company and the effective date of its administrative dissolution;
    2. State that the ground or grounds for administrative dissolution either did not exist or have been eliminated; and
    3. State that the limited liability company’s name satisfies the requirements of Section 79-29-109.
  2. If the Secretary of State determines that the application contains the information required by subsection (1) of this section and that the information is correct, the Secretary of State shall cancel the certificate of administrative dissolution and prepare a certificate of reinstatement that recites this determination and the effective date of reinstatement, file the original of the certificate of reinstatement, and serve the limited liability company with a copy of the certificate of reinstatement under Section 79-35-13, except that such certificate of reinstatement may be served by first-class mail.
  3. When the reinstatement is effective:
    1. The reinstatement relates back to and takes effect as of the effective date of the administrative dissolution;
    2. Any liability incurred by the limited liability company or a member after the administrative dissolution and before the reinstatement shall be determined as if the administrative dissolution had never occurred; and
    3. The limited liability company may resume carrying on its business as if the administrative dissolution had never occurred.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 115, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” near the end of (2).

JUDICIAL DECISIONS

1. Reinstatement.

Limited liability company was not reinstated for the sole purpose of evading liability because it was reinstated after the homeowners filed their complaint; the statute is clear that the reinstatement relates back to the date of dissolution and any liability during this period is determined as if the dissolution never occurred. Brown v. Waldron, 186 So.3d 955, 2016 Miss. App. LEXIS 115 (Miss. Ct. App. 2016).

§79-29-827. Appeal from denial of reinstatement.

  1. If the Secretary of State denies a limited liability company’s application for reinstatement following administrative dissolution, the Secretary of State shall serve the limited liability company under Section 79-35-13 with a record that explains the reason or reasons for denial, except that such record may be served by first-class mail.
  2. The limited liability company may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court where the limited liability company is domiciled within thirty (30) days after service of the notice of denial is perfected. The limited liability company appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the Secretary of State’s certificate of administrative dissolution, the limited liability company’s application for reinstatement, and the Secretary of State’s notice of denial.
  3. The court may summarily order the Secretary of State to reinstate the dissolved limited liability company or may take other action the court considers appropriate.
  4. The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 116, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” following “Section” in (1); and deleted “Mississippi” preceding “or the chancery court where the limited liability company” in (2).

§79-29-829. Revocation of dissolution.

Notwithstanding the occurrence of an event set forth in Section 79-29-801(1)(a), (b), (c) or (d) of this chapter, the limited liability company shall not be dissolved and its affairs shall not be wound up if, within one hundred twenty (120) days of the effective date of the dissolution:

The limited liability company is continued pursuant to the affirmative majority vote or consent of all remaining members of the limited liability company or the personal representative of the last remaining member of the limited liability company if there is no remaining member, and any other person whose approval is required under the operating agreement to revoke a dissolution pursuant to this section; however, if the dissolution was caused by a vote or consent, the dissolution shall not be revoked unless each member and other person, or their respective personal representatives, who voted in favor of, or consented to, the dissolution has voted or consented to continue the limited liability company. If there is no remaining member of the limited liability company and the personal representative of the last remaining member votes in favor of or consents to the continuation of the limited liability company, the personal representative shall be required to agree in writing to the admission of the personal representative of the member or its nominee or designee to the limited liability company as a member, effective as of the occurrence of the event that terminated the continued membership of the last remaining member; and

The limited liability company delivers to the Secretary of State for filing a certificate of revocation of dissolution, together with a copy of certificate of dissolution, that sets forth:

The name of the limited liability company;

The effective date of the dissolution that was revoked; and

The date that the revocation of dissolution was authorized.

The revocation of dissolution is effective upon the date of the certificate of revocation of dissolution is filed, but the revocation shall relate back to and take effect as of the effective date of the dissolution and any liability incurred by the limited liability company or a member after the dissolution and before the revocation shall be determined as if the dissolution had never occurred; and the limited liability company may resume or continue carrying on its business as if the dissolution had never occurred.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, a typographical error in the first sentence of (a) was corrected by deleting “and” preceding “however, if the dissolution.”

§79-29-831. Effect of dissolution.

  1. The dissolution of a limited liability company does not terminate the authority of the registered agent of the limited liability company.
  2. The administrative dissolution of a limited liability company shall not impair the validity of any contract, deed, mortgage, security interest, lien or act of such limited liability company or prevent such limited liability company from defending any action, suit or proceeding with any court of this state.
  3. A member, manager or officer of a limited liability company is not liable for the debts, obligations or liabilities of such limited liability company solely by reason of the administrative dissolution of a limited liability company.
  4. A limited liability company that has been administratively dissolved may not maintain any action, suit or proceeding in any court of this state until such limited liability company is reinstated.An action, suit or proceeding may not be maintained in any court of this state by any successor or assignee of such limited liability company on any right, claim or demand arising out of the transaction of business by such limited liability company after the administrative dissolution.
  5. A limited liability company that is dissolved pursuant to Section 79-29-801 or 79-29-803 continues its legal existence but may carry on only business necessary or appropriate to wind-up and liquidate its business and affairs under Section 79-29-809 and to notify claimants under Sections 79-29-817 and 79-29-819.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Joint Legislative Committee Note —

A typographical error in subsection (2) of this section has been corrected by substituting “...shall not impair the validity of any contract...” for “...shall not impair the validity on any contract...”. The Joint Legislative Committee on Compilation, Revision and Publication ratified the correction at its July 22, 2010, meeting.

Article 9. Professional Limited Liability Companies.

§79-29-901. Applicability of remaining articles of chapter.

The other provisions of this chapter apply to professional limited liability companies, both domestic and foreign, to the extent not inconsistent with the provisions of this article.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-901 [Laws, 1994, ch. 402, § 55; Laws, 1995, ch. 494, § 36, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the applicability of the remaining articles of the chapter. See Editor’s Note under Chapter 29 heading.

§79-29-902. Article definitions.

As used in this article, unless the context requires otherwise:

“Disqualified person” means an individual, general partnership, professional limited liability company, professional limited liability partnership or other entity that for any reason is or becomes ineligible under this article to be a member of a professional limited liability company.

“Domestic professional limited liability company” means a professional limited liability company.

“Foreign professional limited liability company” means a limited liability company formed for the purpose of rendering professional services under a law other than the law of this state.

“Law” includes rules promulgated in accordance with Section 79-29-929.

“Licensing authority” means the office, board, agency, court or other authority in this state empowered to license or otherwise authorize the rendition of a professional service.

“Professional limited liability company” means a limited liability company, other than a foreign professional limited liability company, subject to the provisions of this article.

“Professional service” means a service that may be lawfully rendered only by a person licensed or otherwise authorized by a licensing authority in this state to render the service, including, without limitation, certified public accountants, dentists, architects, veterinarians, osteopaths, physicians, surgeons and attorneys at law.

“Qualified person” means an individual, general partnership, professional limited liability company, professional limited liability partnership or other entity that is eligible under this article to be a member of a professional limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-902 [Laws, 1994, ch. 402, § 56; Laws, 1995, ch. 494, § 37, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to article definitions. See Editor’s Note under Chapter 29 heading.

§79-29-903. Election of professional limited liability company status.

  1. One or more persons may form a professional limited liability company by delivering to the Secretary of State for filing a certificate of formation which includes a statement that:(a) it is a professional limited liability company; and (b) its purpose is to render the specified professional services.
  2. Nothing in this article shall be construed to require a person rendering professional services in this state to render such services through a professional limited liability company or foreign professional limited liability company unless a law of this state other than this article so requires.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in a statutory reference in (2). The reference to “Section 79-29-932” was changed to “Section 79-29-933.” The Joint Committee ratified the correction at its August 5, 2008, meeting.

Editor’s Notes —

A former § 79-29-903 [Laws, 1994, ch. 402, § 57; Laws, 1995, ch. 494, § 38, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the election of professional limited liability company status. See Editor’s Note under Chapter 29 heading.

Cross References —

Filing fees, see § 79-29-1203.

§79-29-904. Purposes.

  1. Except to the extent authorized by subsection (2), a limited liability company may elect professional limited liability company status under Section 79-29-903, solely for the purpose of rendering professional services, including services ancillary to them, and solely within a single profession.
  2. A limited liability company may elect professional limited liability company status under Section 79-29-903 for the purpose of rendering professional services within two (2) or more professions, and for the purpose of engaging in any lawful business authorized by Section 79-29-117(1) to the extent the combination of professional purposes or of professional and business purposes is not prohibited by the licensing law of this state applicable to each profession in the combination.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-904 [Laws, 1994, ch. 402, § 58; Laws, 1995, ch. 494, § 39, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the purposes of electing professional limited liability company status. See Editor’s Note under Chapter 29 heading.

Cross References —

Licensing authority’s regulatory jurisdiction over individuals rendering professional service not restricted by this article, see § 79-29-931.

§79-29-905. General powers.

  1. Except as provided in subsection (2) of this section, a professional limited liability company has the powers enumerated in Section 79-29-117(2).
  2. A professional limited liability company may be a promoter, general partner, member, associate or manager of a partnership, joint venture, trust or other entity only if the entity is engaged solely in rendering professional services or in carrying on business authorized by the professional limited liability company’s certificate of formation and not prohibited by the licensing laws applicable to each profession rendering services through the professional limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-905 [Laws, 1994, ch. 402, § 59; Laws, 1995, ch. 494, § 40, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the general powers of a professional limited liability company. See Editor’s Note under Chapter 29 heading.

§79-29-906. Rendering professional services.

  1. A domestic or foreign limited liability company may render professional services in this state only through individuals licensed or otherwise authorized in this state to render the services.
  2. Subsection (1) of this section does not:
    1. Require an individual employed by a professional limited liability company to be licensed to perform services for the limited liability company if a license is not otherwise required;
    2. Prohibit a licensed individual from rendering professional services in the individual’s capacity although the individual is a member, manager, employee or agent of a domestic or foreign professional limited liability company;
    3. Prohibit an individual licensed in another state from rendering professional services for a domestic or foreign professional limited liability company in this state if not prohibited by the licensing authority.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-906 [Laws, 1994, ch. 402, § 60; Laws, 1995, ch. 494, § 41, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the rendering of professional services by domestic or foreign limited liability company. See Editor’s Note under Chapter 29 heading.

§79-29-907. Prohibited activities.

  1. A professional limited liability company may not render any professional service other than the professional service authorized by its certificate of formation.
  2. Subsection (1) of this section does not prohibit a professional limited liability company from investing its funds in real estate, mortgages, securities, or any other type of investment or from owning real or personal property appropriate for carrying on its business.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-907 [Laws, 1994, ch. 402, § 61; Laws, 1995, ch. 494, § 42, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to prohibited activities. See Editor’s Note under Chapter 29 heading.

§79-29-908. Corporate name.

  1. The name of a domestic professional limited liability company and of a foreign professional limited liability company authorized to transact business in this state, in addition to satisfying the requirements of Sections 79-29-109 and 79-29-1007:
    1. Must contain the words “professional limited liability company” or the abbreviations “P.L.L.C.” or “PLLC”;
    2. May not contain language stating or implying that it is formed for a purpose other than that authorized by Section 79-29-904 and its certificate of formation; and
    3. Must conform with any rule promulgated by the licensing authority having jurisdiction over a professional service described in the limited liability company’s certificate of formation.
  2. Sections 79-29-109 and 79-29-1007 do not prevent the use of a name otherwise prohibited by those sections if it is the personal name of a member or former member of the domestic or foreign professional limited liability company or the name of an individual who was associated with a predecessor of the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-908 [Laws, 1994, ch. 402, § 62; Laws, 1995, ch. 494, § 43, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the corporate name of a professional limited liability company. See Editor’s Note under Chapter 29 heading.

§79-29-909. Who may become members.

  1. No professional limited liability company organized under the provisions of this article may have as a member any person other than:
    1. Individuals who are authorized by law in this or another state to render a professional service described in the limited liability company’s certificate of formation;
    2. A professional limited liability company, domestic or foreign, authorized by law in this state to render a professional service described in the limited liability company’s certificate of formation;
    3. General partnerships in which all the partners are individuals or entities otherwise authorized by paragraph (a), (b) or (d) of this subsection (1) to be members of a professional limited liability company under this article;
    4. A professional limited liability partnership, domestic or foreign, authorized by law in this state to render a professional service described in the limited liability partnership’s certificate of registration;
    5. Any other individual or entity not included in paragraph (a), (b), (c) or (d) of this subsection (1) if expressly authorized by the licensing authority having jurisdiction over the professional services described in the certificate of formation of the professional limited liability company.
  2. A licensing authority with jurisdiction over a profession may by rule restrict or condition, or revoke in part, the authority of a professional limited liability company subject to its jurisdiction to issue membership interests.A rule promulgated under this section does not, of itself, make a member of a professional limited liability company at the time the rule becomes effective a disqualified person.
  3. The certificate of formation may provide for additional limitations and restrictions on members or for additional qualifications of members and such limitations, restrictions or qualifications shall be valid and enforceable in each instance.
  4. Membership interests issued in violation of this section or a rule promulgated under this section are void.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-909 [Laws, 1994, ch. 402, § 63; Laws, 1995, ch. 494, § 44, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to who may become a member. See Editor’s Note under Chapter 29 heading.

§79-29-910. Membership interest transfer restrictions.

  1. A member of a professional limited liability company may transfer the member’s membership interests only to qualified persons.Unless otherwise prohibited by the certificate of formation or operating agreement, a member of a professional limited liability company may pledge the member’s membership interest to a qualified person or to a disqualified person.
  2. A transfer of a membership interest made in violation of subsection (1), except one made by operation of law or court judgment, is void.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-910 [Laws, 1994, ch. 402, § 64; Laws, 1995, ch. 494, § 45, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to membership interest transfer restrictions. See Editor’s Note under Chapter 29 heading.

§79-29-911. Compulsory acquisition of membership interests after death or disqualification of a member.

  1. A professional limited liability company must acquire, or cause to be acquired by a qualified person, a member’s membership interest if:
    1. The member dies and the successor in interest to the deceased member is not a qualified person, except as provided in subsection (3) of this section;
    2. The member becomes a disqualified person, except as provided in subsection (3) of this section; or
    3. The membership interest is transferred by operation of law or court judgment to a disqualified person, except as provided in subsection (3) of this section.
  2. If a price for the membership interest is established in accordance with the certificate of formation or written operating agreement or by private agreement, that price controls.If the price is not so established, the limited liability company shall acquire the membership interest in accordance with Section 79-29-912.If the disqualified person rejects the limited liability company’s purchase offer made pursuant to Section 79-29-912, either the person or the limited liability company may commence a proceeding under Section 79-29-913 to determine the price of the membership interest.
  3. This section does not require the acquisition of membership interests in the event of disqualification if the disqualification lasts no more than five (5) months from the date the disqualification or transfer occurs.A member who becomes a disqualified person shall notify the limited liability company promptly.
  4. This section and Section 79-29-912 do not prevent or relieve a professional limited liability company from paying pension benefits or other deferred compensation for services rendered to a former member if otherwise permitted by law.
  5. A provision for the acquisition of membership interests contained in a professional limited liability company’s certificate of formation or operating agreement, or in a private agreement, is specifically enforceable.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-911 [ Laws, 1994, ch. 402, § 65; Laws, 1995, ch. 494, § 46, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to compulsory acquisition of membership interests after death or disqualification of a member. See Editor’s Note under Chapter 29 heading.

JUDICIAL DECISIONS

1.-2. [Reserved for future use.]

3. Expelled member.

1.-2. [Reserved for future use.]

3. Expelled member.

Chancery court did not err in granting a law firm summary judgment in its action alleging that it had satisfied its contractual obligations to an expelled member because in compliance with Miss. Code Ann. § 79-29-911, the firm’s operating agreement specifically provided a formula to determine an expelled member’s interest; by opting against dissolution and instead tendering the member a check, the firm acted as authorized by its agreement. Martindale v. Hortman Harlow Bassi Robinson & McDaniel PLLC, 119 So.3d 338, 2012 Miss. App. LEXIS 603 (Miss. Ct. App. 2012), cert. denied, 119 So.3d 328, 2013 Miss. LEXIS 398 (Miss. 2013).

§79-29-912. Acquisition procedure.

  1. If membership interests must be acquired under Section 79-29-911, the professional limited liability company shall deliver a written notice to the executor or administrator of the estate of its deceased member, or to the disqualified person or transferee, offering to purchase the membership interest at a price the limited liability company believes represents the membership interests’ fair value as of the date of death, disqualification or transfer.The offer notice must be accompanied by the limited liability company’s balance sheet for the most recent fiscal year ending prior to the date of death or disqualification, an income statement for that fiscal year, a reconciliation of members’ capital accounts for that fiscal year, and the latest available interim financial statements, if any.
  2. The disqualified person has thirty (30) days from the effective date of the notice to accept the limited liability company’s offer or demand that the limited liability company commence a proceeding under Section 79-29-913 to determine the fair value of the disqualified person’s membership interest. If the individual accepts the offer, the limited liability company shall make payment for the membership interests within sixty (60) days from the effective date of the offer notice (unless a later date is agreed on) upon the disqualified person’s surrender of the disqualified person’s membership interest to the limited liability company.
  3. After the limited liability company makes payment for the membership interest, the disqualified person has no further interest in the limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-912 [Laws, 1994, ch. 402, § 66; Laws, 1995, ch. 494, § 47, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to acquisition procedures. See Editor’s Note under Chapter 29 heading.

Cross References —

Applicability of this section to professional limited liability company in existence on July 1, 1995, see § 79-29-933.

Substitution of the term “book value” for “fair value” in this section for professional limited liability companies in existence on July 1, 1995, see § 79-29-933.

§79-29-913. Court action to appraise membership interests.

  1. If the disqualified member does not accept the professional limited liability company’s offer under Section 79-29-912(2) within the thirty-day period, the member during the following thirty-day period may deliver a written notice to the professional limited liability company demanding that it commence a proceeding to determine the fair value of the membership interest. The professional limited liability company may commence a proceeding at any time during the sixty (60) days following the effective date of its offer notice. If it does not do so, the member may commence a proceeding against the professional limited liability company to determine the fair value of the disqualified person’s membership interest.
  2. The professional limited liability company or disqualified member shall commence the proceeding in the chancery court of the county where the professional limited liability company’s principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the professional limited liability company does not have a principal office in this state. The professional limited liability company shall make the disqualified person a party to the proceeding as in an action against the disqualified person’s membership interest. The jurisdiction of the court in which the proceeding is commenced is plenary and exclusive.
  3. The court may appoint one or more persons as appraisers to receive evidence and recommend decision on the question of fair value. The appraisers have the power described in the order appointing them, or in any amendment to it.
  4. The disqualified member is entitled to judgment for the fair value of the disqualified person’s membership interest determined by the court as of the date of death, disqualification or transfer, together with interest from that date at a rate found by the court to be fair and equitable.
  5. The court may order the judgment paid in installments determined by the court.
  6. “Fair value” means the value of the membership interest of the professional limited liability company determined:
    1. Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal; and
    2. Without discounting for lack of marketability or minority status.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 117, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in this section. In the section as effective January 1, 2013, in the second sentence in (1), “professional” was inserted preceding “limited liability company.” The Joint Committee ratified the correction at its August 16, 2012, meeting.

Editor’s Notes —

A former § 79-29-913 [Laws, 1995, ch. 494, § 48, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to court action to appraise membership interests. See Editor’s Note under Chapter 29 heading.

Amendment Notes —

The 2012 amendment, in (1), inserted “professional” preceding “limited liability company” the second time it appears in the first sentence and in the last sentence; in (2), in the first sentence, inserted “professional” preceding “limited liability company” the first two times it appears, and substituted “principal office is located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the professional limited liability company does not have a principal office in this state” for “principal office, or, if none in this state, its registered office, is located,” and inserted , inserted “professional” near the beginning of the second sentence.

Cross References —

Applicability of this section to professional limited liability company in existence on July 1, 1995, see § 79-29-933.

Substitution of the term “book value” for “fair value” in this section for professional limited liability companies in existence on July 1, 1995, see § 79-29-933.

§79-29-914. Court costs and fees of experts.

  1. The court in an appraisal proceeding commenced under Section 79-29-913 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court, and shall assess the costs against the professional limited liability company.But the court may assess costs against the disqualified member, in an amount the court finds equitable, if the court finds the member acted arbitrarily, vexatiously or not in good faith in refusing to accept the limited liability company’s offer.
  2. The court may also assess the fees and expenses of counsel and experts for the disqualified member against the limited liability company and in favor of the disqualified member if the court finds that the fair value of the disqualified member’s membership interest substantially exceeded the amount offered by the limited liability company or that the limited liability company did not make an offer.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-914 [Laws, 1995, ch. 494, § 49, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to court costs and fees of experts. See Editor’s Note under Chapter 29 heading.

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, a typographical error in (2) was corrected by inserting the word “the” preceding “disqualified member’s membership interest.”

Cross References —

Applicability of this section to professional limited liability company in existence on July 1, 1995, see § 79-29-933.

Substitution of the term “book value” for “fair value” in this section for professional limited liability companies in existence on July 1, 1995, see § 79-29-933.

§79-29-915. Cancellation of disqualified membership interests.

If the membership interest of a disqualified person is not acquired under Section 79-29-912 or 79-29-913 within ten (10) months after the death of the member or within five (5) months after the disqualification or transfer, the professional limited liability company shall immediately cancel the membership interest on its books and the disqualified person has no further interest as a member in the limited liability company other than the disqualified member’s right to payment of the fair value of the membership interest under Section 79-29-912 or 79-29-913.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-915 [Laws, 1995, ch. 494, § 50, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to cancellation of disqualified membership interests. See Editor’s Note under Chapter 29 heading.

§79-29-917. Voting of membership interests.

  1. Only a qualified person may be appointed a proxy to vote the membership interest of a professional limited liability company.
  2. A voting trust with respect to membership interests of a professional limited liability company is not valid unless all of its trustees and beneficiaries are qualified persons.If a beneficiary who is a qualified person dies or becomes disqualified, a voting trust valid under this subsection continues to be valid for ten (10) months after the date of death or for five (5) months after the disqualification occurred.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-917 [Laws, 1995, ch. 494, § 51, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to voting of membership interests. See Editor’s Note under Chapter 29 heading.

§79-29-918. Confidential relationship.

  1. The relationship between an individual rendering professional services as an employee of a domestic or foreign professional limited liability company and the individual’s client or patient is the same as if the individual were rendering the services as a sole practitioner.
  2. The relationship between a domestic or foreign professional limited liability company and the client or patient for whom its employee is rendering professional services is the same as that between the client or patient and the employee.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-918 [Laws, 1995, ch. 494, § 52, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the confidential nature of the relationship between employee of professional limited liability company rendering professional services and his client. See Editor’s Note under Chapter 29 heading.

§79-29-919. Privileged communications.

A privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statute or common law of this state is not affected by this article.The privilege applies to a domestic or foreign professional limited liability company and to its employees in all situations in which it applies to communications between an individual rendering professional services on behalf of the limited liability company and the person receiving the services.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-919 [Laws, 1995, ch. 494, § 53, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to privileged communications. See Editor’s Note under Chapter 29 heading.

§79-29-920. Responsibility for professional services.

  1. Each individual who renders professional services as an employee of a domestic or foreign professional limited liability company is liable for a negligent or wrongful act or omission in which the member personally participates to the same extent as if the member rendered the services as a sole practitioner.A member or an employee of a domestic or foreign professional limited liability company is not liable, however, for the conduct of other members or employees of the limited liability company, except a person under the member’s direct supervision and control, while rendering professional services on behalf of the professional limited liability company to the person for whom such professional services were being rendered.
  2. A domestic or foreign professional limited liability company whose employees perform professional services within the scope of their employment or of their apparent authority to act for the limited liability company is liable to the same extent as its employees.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-920 [Laws, 1995, ch. 494, § 54, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the responsibility for professional services rendered by employee of professional limited liability company. See Editor’s Note under Chapter 29 heading.

RESEARCH REFERENCES

ALR.

Construction and Application of Limited Liability Company Acts – Issues Relating to Liability of Limited Liability Company for Acts of Its Members, Managers, Officers, and Agents. 46 A.L.R.6th 1.

Construction and Application of Limited Liability Company Acts – Issues Relating to Liability of Limited Liability Company for Acts of Its Members, Managers, Officers, and Agents. 47 A.L.R.6th 1.

Am. Jur.

59A Am. Jur. 2d, Partnerships §§ 831-883.

CJS.

68 C.J.S., Partnerships §§ 583, 584 et seq.

JUDICIAL DECISIONS

1. Attorney liability.

Pursuant to Miss. Code Ann. § 79-29-920, the attorney could not be held liable unless he either personally participated in a negligent or wrongful act or directly supervised someone who committed wrongful conduct; the client’s allegations that the attorney was a member of the firm and that the firm used the terms “we,” “us,” and “the firm” in correspondence, even if accepted as true, did not meet either of these two requirements, and there was nothing in the record to suggest that the attorney had any contact whatsoever with the client. Keszenheimer v. Boyd, 897 So. 2d 190, 2004 Miss. App. LEXIS 874 (Miss. Ct. App. 2004), cert. denied, 896 So. 2d 373, 2005 Miss. LEXIS 196 (Miss. 2005).

§79-29-921. Merger.

  1. If all the members of the disappearing and surviving limited liability companies, unless prohibited by certificate of formation or the operating agreement, are qualified to be members of the surviving limited liability company, a professional limited liability company may merge with another domestic or foreign professional limited liability company or with a domestic or foreign limited liability company.
  2. If the surviving limited liability company is to render professional services in this state, it must comply with this article.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-921 [Laws, 1995, ch. 494, § 55, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to merger. See Editor’s Note under Chapter 29 heading.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnerships § 811.

§79-29-922. Termination of professional activities.

If a professional limited liability company ceases to render professional services, it must amend its certificate of formation to delete references to rendering professional services and to conform its name to the requirements of Section 79-29-109.After the amendment becomes effective the limited liability company may continue in existence as a limited liability company under this chapter other than the provisions of this article.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-922 [Laws, 1995, ch. 494, § 56, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to termination of professional activities. See Editor’s Note under Chapter 29 heading.

Cross References —

Filing fees, see § 79-29-1203.

§79-29-923. Judicial dissolution.

The Attorney General may commence a proceeding under Section 79-29-803 to dissolve a professional limited liability company if:

The Secretary of State or a licensing authority with jurisdiction over a professional service described in the limited liability company’s certificate of formation serves written notice on the limited liability company under Section 79-35-13 that it has violated or is violating a provision of this article;

The limited liability company does not correct each alleged violation, or demonstrate to the reasonable satisfaction of the Secretary of State or licensing authority that it did not occur, within sixty (60) days after service of the notice is perfected under Section 79-35-13; and

The Secretary of State or licensing authority certifies to the Attorney General a description of the violation, that it notified the limited liability company of the violation, and that the limited liability company did not correct it, or demonstrate that it did not occur, within sixty (60) days after perfection of service of the notice.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 118, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-923 [Laws, 1995, ch. 494, § 57, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to judicial dissolution. See Editor’s Note under Chapter 29 heading.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” near the end of (a) and (b).

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnerships §§ 910-915.

CJS.

68 C.J.S., Partnerships §§ 610-613.

§79-29-924. Authority to transact business.

  1. A foreign professional limited liability company may not transact business in this state until it obtains a certificate of authority from the Secretary of State.
  2. A foreign professional limited liability company may not obtain a certificate of authority unless:
    1. Its name satisfies the requirements of Section 79-29-908;
    2. It is formed for one or more of the purposes described in Section 79-29-904; and
    3. All of its members would be qualified persons if the foreign professional limited liability company were a domestic professional limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-924 [Laws, 1995, ch. 494, § 58, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to authority to transact business. See Editor’s Note under Chapter 29 heading.

RESEARCH REFERENCES

Am. Jur.

18 Am. Jur. 2d, Corporations §§ 9-15.

18A Am. Jur. 2d, Corporations §§ 165-187, 225-227, 264, 265.

§79-29-925. Application for certificate of authority.

The application of a foreign professional limited liability company for a certificate of authority to render professional services in this state must contain the information called for by Section 79-29-1003 and in addition include a statement that all of its members meet the requirements of Section 79-29-924.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-925 [Laws, 1995, ch. 494, § 59, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to application for certificate of authority to render professional services in Mississippi by foreign professional limited liability company. See Editor’s Note under Chapter 29 heading.

Cross References —

Filing fees, see § 79-29-1203.

RESEARCH REFERENCES

Am. Jur.

18A Am. Jur. 2d, Corporations § 204.

CJS.

19 C.J.S., Corporations §§ 968 et seq.

§79-29-926. Revocation of certificate of authority.

The Secretary of State may administratively revoke the certificate of authority of a foreign professional limited liability company authorized to transact business in this state if a licensing authority with jurisdiction over a professional service described in the limited liability company’s certificate of formation certifies to the Secretary of State that the limited liability company has violated or is violating a provision of this article and describes the violation.Such administrative revocation may be challenged by the foreign professional limited liability company in the chancery court of the county where the foreign professional limited liability company maintains its principal place of business in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-926 [Laws, 1995, ch. 494, § 60, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to revocation of certificate of authority. See Editor’s Note under Chapter 29 heading.

RESEARCH REFERENCES

Am. Jur.

59A Am. Jur. 2d, Partnerships §§ 784, 894.

§79-29-930. Rulemaking by licensing authority.

Each licensing authority is empowered to promulgate rules expressly authorized by this article if the rules are consistent with the public interest or required by the public health or welfare or by generally recognized standards of professional conduct.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-930 [Laws, 1995, ch. 494, § 61, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to rulemaking by licensing authorities. See Editor’s Note under Chapter 29 heading.

§79-29-931. Licensing authority’s regulatory jurisdiction.

This article does not restrict the jurisdiction of a licensing authority over individuals rendering a professional service within the jurisdiction of the licensing authority, nor does it affect the interpretation or application of any law pertaining to standards of professional conduct.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-931 [Laws, 1995, ch. 494, § 62, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to licensing authority’s regulatory jurisdiction. See Editor’s Note under Chapter 29 heading.

§79-29-933. Application to existing professional limited liability companies.

  1. This article does not apply to a limited liability company now existing or later formed under a law of this state that is not a professional limited liability company unless the limited liability company elects professional limited liability company status under Section 79-29-903.
  2. This article does not affect an existing or future right or privilege to render professional services through the use of any other form of business entity.
  3. Unless otherwise specifically provided by an amendment to the certificate of formation, for professional limited liability companies in existence on July 1, 1995, Sections 79-29-912, 79-29-913 and 79-29-914 shall be applied by substituting the term “book value“ for the term “fair value” in such sections only.Book value shall be determined from the books and records of the professional limited liability company in accordance with the regular method of accounting used by the professional limited liability company and shall be determined as of the end of the month immediately preceding the death or disqualification of the member.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-933 [Laws, 1995, ch. 494, § 63, eff from and after July 1, 1995; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the applicability of former Article 9 to professional limited liability companies in existence of July 1, 1995. See Editor’s Note under Chapter 29 heading.

Article 10. Foreign Limited Liability Companies.

§79-29-1001. Law governing.

  1. Subject to the Constitution of this state, the laws of the state or country or other jurisdiction under which a foreign limited liability company is organized govern its organization and internal affairs and the liability of its members, and a foreign limited liability company may not be denied registration by reason of any difference between those laws and the laws of this state.
  2. A foreign limited liability company shall be subject to Section 79-29-117 of this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1001 [Laws, 1994, ch. 402, § 67, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the laws governing the organization and internal affairs of a foreign limited liability company. See Editor’s Note under Chapter 29 heading.

Cross References —

“Derivative proceeding” as meaning a civil suit in the right of a foreign limited liability company, to the extent provided in this article, see § 79-29-103.

§79-29-1002. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1002. [Laws, 1994, ch. 402, § 68; Laws, 1995, ch. 362, § 12; Laws, 1997, ch. 418, § 38, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-1002 was entitled: Registration; application to registered foreign limited liability companies. For present similar provisions, see § 79-29-1003.

§79-29-1003. Registrations; application to register foreign limited liability companies.

  1. Before transacting business in this state, a foreign limited liability company, including a foreign limited liability company formed to render professional services, shall register with the Secretary of State. In order to register, a foreign limited liability company shall deliver the application for registration of the foreign limited liability company to the Office of the Secretary of State for filing, signed by a person with authority to do so under the laws of the state, country or other jurisdiction of its formation who is either a member, manager or officer of the foreign limited liability company and setting forth:
    1. The name of the foreign limited liability company which must meet the requirements of Section 79-29-1007 and, if different, the name under which it proposes to transact business in this state which must meet the requirements of Section 79-29-1007;
    2. The state or other jurisdiction and date of its formation and a statement that, as of the date of filing, the foreign limited liability company validly exists as a limited liability company under the laws of the jurisdiction of its formation;
    3. The information required by Section 79-35-13;
    4. [Reserved]
    5. The date on which the foreign limited liability company first did, or intends to do, business in the State of Mississippi;
    6. The address of the office required to be maintained in the state or other jurisdiction of its formation by the laws of that state or other jurisdiction or, if not so required, the address of the principal office of the foreign limited liability company;
    7. If the foreign limited liability company is to have a specific date of dissolution, the latest date upon which the foreign limited liability company is to dissolve; and
    8. Any other matters the manager or members determine to include therein.

      The person signing the application shall state the person’s name, the capacity in which the person signs and the street and mailing address of the person beneath or opposite the person’s signature. A document required or permitted to be delivered to the Office of the Secretary of State for filing under this chapter which contains a copy of a signature, however made, is acceptable for filing by the Secretary of State.

  2. The foreign limited liability company shall deliver with the completed application a certificate of existence, or a document of similar import, duly authenticated by the Secretary of State or other public official having custody of corporate records in the state or country under whose law it is formed.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 119, eff from and after Jan. 1, 2013.

Editor’s Notes —

A former § 79-29-1003 [Laws, 1994, ch. 402, § 69; Laws, 1995, ch. 362, § 13; Laws, 1997, ch. 418, § 39, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to issuance of registration. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1005.

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, typographical errors in this section were corrected as follows: in the section heading, the word “liability” was inserted; and in (1)(g), the word “foreign” was inserted preceding the first reference to “limited liability company.”

Amendment Notes —

The 2012 amendment, effective January 1, 2013, in (1), rewrote (b), which formerly read: “The name and street and mailing address of the registered agent for service of process on the foreign limited liability company which the foreign limited liability company has elected to appoint and who meets the requirements of Section 79-29-113(1)(b)” and deleted (d), which read: “A statement that the Secretary of State is appointed the registered agent of the foreign limited liability company for service of process if the registered agent’s authority has been revoked or if the registered agent cannot be found or served with the exercise of reasonable diligence” and reserved the paragraph designator.

§79-29-1004. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1004. [Laws, 1994, ch. 402, § 70, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1004 was entitled: Name. For present similar provisions, see § 79-29-1007.

§79-29-1005. Issuance of registration.

If the Secretary of State finds that an application for registration meets the requirements of Sections 79-29-1003 and 79-29-1007 and all requisite fees as provided in Section 79-29-1203 have been paid, the Secretary of State shall:

Certify that the application has been filed in the Secretary of State’s office by endorsing upon the signed application the word “Filed” and the date and time of the filing.This endorsement is conclusive evidence of the date and time of its filing in the absence of actual fraud;

File the application; and

Return a copy to the person who delivered it for filing or that person’s representative.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1005 [Laws, 1994, ch. 402, § 71; Laws, 1997, ch. 418, § 40, eff from and after July 1, 1997; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to changes and amendments to statements in the registration. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1009.

§79-29-1006. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1006. [Laws, 1994, ch. 402, § 72; Laws, 1997, ch. 418, § 41, eff from and after July 1, 1997.]

Editor’s Notes —

Former § 79-29-1006 was entitled: Cancellation of registration. For present similar provisions, see § 79-29-1011.

§79-29-1007. Name.

A foreign limited liability company shall register with the Secretary of State under any name, whether or not it is the name under which it is registered in its state of organization, that includes the words “limited liability company” or the abbreviation “L.L.C.” or “LLC” and that could be registered by a domestic limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1007 [Laws, 1994, ch. 402, § 73, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to the transaction of business without registration. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1013.

RESEARCH REFERENCES

CJS.

18 C.J.S., Corporations §§ 1023-1036.

§79-29-1008. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1008. [Laws, 1994, ch. 402, § 74, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1008 was entitled: Transactions not constituting transacting business. For present similar provisions, see § 79-29-1015.

§79-29-1009. Changes and amendments.

If any statement, arrangements or other facts described in the application for registration of a foreign limited liability company have changed, making the application inaccurate in any respect, the foreign limited liability company shall promptly amend the application by delivering to the Office of the Secretary of State for filing a certificate of amendment that includes the amendment to the certificate correcting such statement, signed and acknowledged by a person authorized to do so under the laws of the state or other jurisdiction of its formation who is either a member, manager or officer of the foreign limited liability company, together with a fee as set forth in Section 79-29-1203.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1009 [Laws, 1994, ch. 402, § 75, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to action by the Attorney General. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1017.

At the direction of the co-counsel for the Joint Legislative Committee on Compilation, Revision and Publication of Legislation, a typographical error near the end of the section was corrected by inserting the word “foreign” preceding “limited liability company, together with a fee.”

§79-29-1010. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1010. [Laws, 1994, ch. 402, § 76, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1010 was entitled: Execution; liability. For present similar provisions, see § 79-29-1019.

§79-29-1011. Cancellation of registration.

  1. A foreign limited liability company registered under this chapter shall cancel its registration upon completion of the winding-up of its affairs.
  2. A foreign limited liability company may cancel its registration whenever it ceases transacting business in this state.
  3. Registration is canceled by delivering to the Office of the Secretary of State for filing a certificate of cancellation signed by a person authorized to do so under the laws of the state or other jurisdiction of its formation and paying the fee set forth in Section 79-29-1203.
  4. A cancellation revokes the authority of the registered agent for service of process designated pursuant to Section 79-29-1003 and operates as a consent that the Secretary of State may accept service of process on the foreign limited liability company with respect to causes of action arising out of the transaction of business in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1013. Transaction of business without registration.

  1. A foreign limited liability company transacting business in this state may not maintain any action, suit, or proceeding in any court of this state until it has registered in this state.
  2. The failure of a foreign limited liability company to register in this state does not:
    1. Impair the validity of any contract or act of the foreign limited liability company;
    2. Impair the right of any other party to the contract to maintain any action, suit or proceeding on the contract; or
    3. Prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this state.
  3. A member of a foreign limited liability company is not liable for the debts, obligations or liabilities of the foreign limited liability company solely by reason of the foreign limited liability company having transacted business in this state without registration.
  4. By transacting business in this state without registration, a foreign limited liability company appoints the Secretary of State as its registered agent for service of process with respect to causes of action arising out of the transaction of business in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1015. Transactions not constituting transacting business.

  1. The following activities of a foreign limited liability company, among others, do not constitute transacting business in this state within the meaning of this article:
    1. Maintaining, defending, or settling any proceeding;
    2. Holding meetings of its members or managers or carrying on any other activities concerning its internal affairs;
    3. Maintaining bank accounts;
    4. Maintaining offices or agencies for the transfer, exchange and registration of the foreign limited liability company’s own securities or interests or maintaining trustees or depositories with respect to those securities or interests;
    5. Selling through independent contractors;
    6. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;
    7. Creating or acquiring indebtedness, mortgages, and security interests in real or personal property;
    8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts and holding, protecting and maintaining property so acquired;
    9. Owning, without more, real or personal property;
    10. Conducting an isolated transaction that is completed within thirty (30) days and that is not one in the course of repeated transactions of a like nature; or
    11. Transacting business in interstate commerce.
  2. A foreign limited liability company shall not be considered to be transacting business in this state solely because it:
    1. Is a shareholder in a corporation or a foreign corporation that transacts business in this state;
    2. Is a limited partner of a limited partnership or foreign limited partnership that is transacting business in this state; or
    3. Is a member or manager of a limited liability company or foreign limited liability company that is transacting business in this state.
  3. This section does not apply in determining the contracts or activities that may subject a foreign limited liability company to service of process or taxation in this state or to regulation under any other law of this state.
  4. A foreign limited liability company which is a general partner of any general or limited partnership, which partnership is transacting business in this state, is hereby declared to be transacting business in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1017. Action by Attorney General.

The Attorney General may bring an action to restrain a foreign limited liability company from transacting business in this state in violation of this article.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

RESEARCH REFERENCES

ALR.

Power of state to subject foreign corporation to jurisdiction of its courts on sole ground that corporation committed tort within state. 25 A.L.R.2d 1202.

§79-29-1019. Execution; liability.

Section 79-29-207(4) shall be applicable to foreign limited liability companies as if they were domestic limited liability companies.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1021. Administrative revocation of registration of foreign limited liability company.

  1. The Secretary of State may commence a proceeding under Section 79-29-1023 to administratively revoke the registration of a foreign limited liability company authorized to transact business in this state if:
    1. The foreign limited liability company does not pay within sixty (60) days after they are due any fees imposed by this chapter or other law;
    2. The foreign limited liability company does not deliver its annual report to the Secretary of State within sixty (60) days after it is due;
    3. The foreign limited liability company is without a registered agent in this state for sixty (60) days or more;
    4. The foreign limited liability company does not notify the Secretary of State within sixty (60) days that its registered agent has been changed or that its registered agent has resigned;
    5. The Secretary of State receives a duly authenticated certificate from the Secretary of State or other public official having custody of corporate records in the state or country under whose law the foreign limited liability company is organized stating that it has been dissolved or ceased to exist as the result of a merger; or
    6. A misrepresentation has been made of any material matter in any application, report, affidavit, or other record submitted by the foreign limited liability company to the Secretary of State pursuant to this chapter.
  2. The Secretary of State may not administratively revoke a registration of a foreign limited liability company unless the Secretary of State sends the foreign limited liability company notice of the administrative revocation under Section 79-29-1023, at least sixty (60) days before its effective date, by a record addressed to its registered agent, or to the foreign limited liability company if the foreign limited liability company fails to appoint and maintain a proper agent in this state.The notice must specify the cause for the administrative revocation of the registration.The authority of the foreign limited liability company to transact business in this state ceases on the effective date of the administrative revocation unless the foreign limited liability company cures the failure before that date.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1023. Administrative revocation of registration, procedure and effect.

  1. If the Secretary of State determines that one or more grounds exist under Section 79-29-1021 for administrative revocation of registration, the Secretary of State shall serve the foreign limited liability company with written notice of the determination under Section 79-35-13, except that such determination may be served by first-class mail.
  2. If the foreign limited liability company does not correct each ground for administrative revocation or demonstrate to the reasonable satisfaction of the Secretary of State that each ground determined by the Secretary of State does not exist within sixty (60) days after the service of the notice, the Secretary of State may administratively revoke the foreign limited liability company’s registration by signing a certificate of administrative revocation that recites the ground or grounds for administrative revocation and its effective date. The Secretary of State shall file the original of the certificate of administrative revocation and serve the foreign limited liability company with a copy of the certificate of administrative revocation under Section 79-35-13, except that such certificate of administrative revocation may be served by first-class mail.
  3. The authority of a foreign limited liability company to transact business in this state ceases on the date shown on the certificate of administrative revocation.
  4. The Secretary of State’s administrative revocation of a foreign limited liability company’s registration appoints the Secretary of State the foreign limited liability company’s agent for service of process in any proceeding based on a cause of action which arose during the time the foreign limited liability company was authorized to transact business in this state. Service of process on the Secretary of State under this subsection is service on the foreign limited liability company. Upon receipt of process and the payment of the fee specified in Section 79-35-13, the Secretary of State shall mail a copy of the process to the foreign limited liability company at the office of its registered agent, or if the agent has resigned or cannot be located, at its principal office shown in its most recent communication received from the foreign limited liability company stating the current mailing address of its principal office, or, if none are on file, in its application for registration of foreign limited liability company.
  5. Administrative revocation of a foreign limited liability company’s registration does not terminate the authority of the registered agent of the foreign limited liability company.
  6. The administrative revocation of the registration of a foreign limited liability company shall not impair the validity of any contract, deed, mortgage, security interest, lien or act of such foreign limited liability company or prevent the foreign limited liability company from defending any action, suit or proceeding with any court of this state.
  7. A member, manager or officer of a foreign limited liability company is not liable for the debts, obligations or liabilities of such foreign limited liability company solely by reason of the administrative revocation of the registration of a foreign limited liability company.
  8. A foreign limited liability company whose registration has been administratively revoked may not maintain any action, suit or proceeding in any court of this state until such foreign limited liability company’s registration has been reinstated. An action, suit or proceeding may not be maintained in any court of this state by any successor or assignee of such foreign limited liability company on any right, claim or demand arising out of the transaction of business by a foreign limited liability company after the administrative revocation.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 120, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected a typographical error in subsection (6) of this section by substituting “...shall not impair the validity of any contract...” for “...shall not impair the validity on any contract...”. The Joint Committee ratified the correction at its July 22, 2010, meeting.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” following “Section” in (1), (2), and (4).

§79-29-1025. Administrative revocation of registration, appeal and reinstatement.

  1. A foreign limited liability company whose registration is administratively revoked under Section 79-29-1021 may apply to the Secretary of State for reinstatement at any time after the effective date of such administrative revocation. The application must:
    1. Recite the name of the foreign limited liability company and the effective date of the administrative revocation;
    2. State that the ground or grounds for administrative revocation either did not exist or have been eliminated; and
    3. State that the foreign limited liability company’s name satisfies the requirements of Section 79-29-1007.
  2. If the Secretary of State determines that the application contains the information required by subsection (1) of this section and that the information is correct, the Secretary of State shall reinstate the registration of a foreign limited liability company, prepare a certificate of reinstatement that recites this determination and the effective date of reinstatement, file the original of the certificate of reinstatement, and serve the foreign limited liability company with a copy of the certificate of reinstatement under Section 79-35-13, except that such certificate may be served by first-class mail.
  3. When the reinstatement is effective:
    1. The reinstatement relates back to and takes effect as of the effective date of the administrative revocation;
    2. Any liability incurred by the foreign limited liability company or a member after the administrative revocation and before the reinstatement shall be determined as if the administrative revocation had never occurred; and
    3. The foreign limited liability company may resume carrying on its business as if the administrative revocation had never occurred.

HISTORY: Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 382, § 121, eff from and after Jan. 1, 2013.

Amendment Notes —

The 2012 amendment, effective January 1, 2013, substituted “79-35-13” for “79-29-125” following “Section” near the end of (2).

§79-29-1027. Administrative revocation of registration, denial of reinstatement; further review.

  1. If the Secretary of State denies a foreign limited liability company’s application for reinstatement of the registration following administrative revocation, the Secretary of State shall serve the foreign limited liability company with a record that explains the reason or reasons for denial.
  2. The foreign limited liability company may appeal the denial of reinstatement to the Chancery Court of the First Judicial District of Hinds County or the chancery court of the county where the foreign limited liability company is domiciled within thirty (30) days after service of the notice of denial is perfected.The foreign limited liability company appeals by petitioning the court to set aside the administrative revocation and attaching to the petition copies of the Secretary of State’s certificate of administrative revocation, the foreign limited liability company’s application for reinstatement and the Secretary of State’s notice of denial.
  3. The court may summarily order the Secretary of State to reinstate the registration of the foreign limited liability company or may take other action the court considers appropriate.
  4. The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1029. Certificate of authorization.

  1. The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of authorization for a foreign limited liability company if the records filed in the Office of the Secretary of State show that the foreign limited liability company has registered as a foreign limited liability company, the registration has not been administratively revoked, and a certificate of cancellation has not been filed which has become effective.A certificate of authorization must state:
    1. The foreign limited liability company’s name and any alternate name adopted under Section 79-29-1003(1)(a) for use in this state;
    2. That the foreign limited liability company is authorized to transact business in this state;
    3. Whether all fees due under this chapter to the Secretary of State have been paid;
    4. Whether the foreign limited liability company’s most recent annual report required by Section 79-29-215 has been filed with the Secretary of State;
    5. Whether a certificate of administrative revocation of registration has been filed;
    6. Whether a certificate of cancellation of registration as a foreign limited liability company has been filed for the limited liability company; and
    7. Other facts of record in the Office of the Secretary of State which are specified by the person requesting the certificate.
  2. Subject to any qualification stated in the certificate, a certificate of authorization issued by the Secretary of State is conclusive evidence that the foreign limited liability company is authorized to transact business in this state.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 11. Derivative Actions.

§79-29-1101. Right to bring action.

A member or an owner of a financial interest may bring an action in chancery court in the right of a limited liability company to recover a judgment in its favor if managers or members with authority to do so have refused to bring the action or if an effort to cause those managers or members to bring the action is not likely to succeed.

HISTORY: Laws, 1994, ch. 402, § 77; Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1101 [Laws, 1994, ch. 402, § 77, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to members who may commence or maintain a derivative proceeding. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1103.

§79-29-1102. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1102. [Laws, 1994, ch. 402, § 78, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1102 was entitled: Demand.

§79-29-1103. Proper plaintiff.

In a derivative action, the plaintiff must be a member or an owner of a financial interest at the time of bringing the action and:

At the time of the transaction of which the plaintiff complains; or

The plaintiff’s status as a member or an owner of a financial interest had devolved upon the plaintiff by operation of law or pursuant to the terms of an operating agreement from a person who was a member or an owner of a financial interest at the time of the transaction.

A plaintiff may not commence or maintain a derivative proceeding unless the plaintiff fairly and adequately represents the interests of the limited liability company in enforcing the right of the limited liability company.

HISTORY: Laws, 1994, ch. 402, § 79; Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1103 [Laws, 1994, ch. 402, § 79, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related stay of proceedings. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1107.

§79-29-1104. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1104. [Laws, 1994, ch. 402, § 80, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1104 was entitled: Dismissal. For present similar provisions, see § 79-29-1109.

§79-29-1105. Complaint.

In a derivative action, the complaint shall set forth with particularity the effort, if any, of the plaintiff to secure initiation of the action by a manager or member pursuant to Section 79-29-1101 or the reasons for not making the effort.

HISTORY: Laws, 1994, ch. 402, § 81; Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1105 [Laws, 1994, ch. 402, § 81, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to discontinuance or settlement. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1111.

Cross References —

Jurisdiction in derivative proceeding in the right of a foreign limited liability company for matters covered by this section, see § 79-29-1115.

§79-29-1106. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1106. [Laws, 1994, ch. 402, § 82, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1106 was entitled: Payment of expenses. For present similar provisions, see § 79-29-1113.

§79-29-1107. Stay of proceedings.

If the limited liability company commences an inquiry into the allegations made in the complaint, the court may stay any derivative proceeding for such period as the court deems appropriate.

HISTORY: Laws, 1994, ch. 402, § 83; Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1107 [Laws, 1994, ch. 402, § 83, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to applicability to foreign limited liability companies. See Editor’s Note under Chapter 29 heading. For present similar provisions, see § 79-29-1115.

Cross References —

Jurisdiction in derivative proceeding in the right of a foreign limited liability company for matters covered by this section, see § 79-29-1115.

§79-29-1109. Dismissal.

  1. A derivative proceeding shall be dismissed by the court on motion by the limited liability company if one of the groups specified in subsection (2) or (6) of this section has determined in good faith, after conducting a reasonable inquiry upon which its conclusions are based, that the maintenance of the derivative proceeding is not in the best interests of the limited liability company.
  2. Unless a panel is appointed pursuant to subsection (6) of this section, the determination in subsection (1) of this section shall be made by one (1) of the following:
    1. A majority vote of independent managers present at a meeting of managers if independent managers constitute a majority of all managers;
    2. A majority vote of independent members at a meeting of the members, whether or not such independent members constituted a majority of all members; or
    3. A majority vote of a committee consisting of two (2) or more independent managers appointed by the majority vote of independent managers present at a meeting of managers, whether or not such independent managers constituted a majority of all managers.
  3. None of the following shall by itself cause a manager or member to be considered not independent for purposes of this section:
    1. The nomination or election of the manager by persons who are defendants in the derivative proceeding or against whom action is demanded;
    2. The naming of the manager or member as a defendant in the derivative proceeding or as a person against whom action is demanded; or
    3. The approval by the manager or member of the act being challenged in the derivative proceeding if the act resulted in no personal benefit to the manager or member.
  4. If a derivative proceeding is commenced after a determination has been made rejecting a demand by a member, the complaint shall allege with particularity facts establishing either:
    1. That a majority of the persons making the determination under subsection (2) of this section were not independent at the time the determination was made; or
    2. That the requirements of subsection (1) of this section have not been met.
  5. If the determination in subsection (1) of this section is made by a committee pursuant to subsection (2)(c) of this section and a majority of managers are not independent at the time the determination is made, or if the determination in subsection (1) is made by the members pursuant to subsection (2)(b) of this section and a majority of the members are not independent at the time the determination is made, then the limited liability company shall have the burden of proving that the requirements of subsection (1) have been met.In all other cases, the plaintiff shall have the burden of proving that the requirements of subsection (1) of this section have not been met.
  6. The court may appoint a panel of one or more independent persons upon motion by the limited liability company to make a determination whether the maintenance of the derivative proceeding is in the best interests of the limited liability company.In such case, the plaintiff shall have the burden of proving that the requirements of subsection (1) of this section have not been met.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1111. Discontinuance or settlement.

A derivative proceeding may not be discontinued or settled without the court’s approval.If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the limited liability company’s members or a class of members, the court shall direct that notice be given to the members affected.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Cross References —

Jurisdiction in derivative proceeding in the right of a foreign limited liability company for matters covered by this section, see § 79-29-1115.

§79-29-1113. Payment of expenses.

  1. If a derivative action is successful, in whole or in part, as a result of a judgment, compromise or settlement of any such action, the court may award the plaintiff reasonable expenses, including reasonable attorney’s fees, from any recovery in any such action or from a limited liability company.
  2. On termination of the derivative proceeding the court may order the plaintiff to pay any defendant’s reasonable expenses, including reasonable attorney’s fees, incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1115. Applicability to foreign limited liability companies.

In any derivative proceeding brought in the courts of this state in the right of a foreign limited liability company, the matters covered by this article shall be governed by this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 12. Miscellaneous.

§79-29-1201. Construction and application.

  1. The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.
  2. It is the policy of this chapter to give the maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.
  3. Unless the context otherwise requires, as used herein, the singular shall include the plural and the plural may refer to the singular.The captions contained herein are for the purposes of convenience only and shall not control or affect the construction of this chapter.
  4. As used herein, the words “include,” “includes” and “including” will be deemed to be followed by the phrase “without limitation,” whether or not such phrase is included therein.

HISTORY: Laws, 1994, ch. 402, § 84; Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

A former § 79-29-1201 [Laws, 1994, ch. 402, § 84, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to chapter construction and application. See Editor’s Note under Chapter 29 heading.

§79-29-1202. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1202. [Laws, 1994, ch. 402, § 85, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1202 was entitled: Severability. For present similar provisions, see § 79-29-1205.

§79-29-1203. Fees; funding of Office of Secretary of State expenses; deposit of user charges and fees authorized under this section into State General Fund and use of monies so deposited.

  1. No document required to be filed under this chapter shall be effective until the applicable fee required by this section is paid. The following fees shall be paid to and collected by the Secretary of State for the use of the State of Mississippi:
    1. Filing of Reservation of Limited Liability Company Name or Transfer or Cancellation of Reservation, Twenty-five Dollars ($25.00).
    2. [Reserved]
    3. [Reserved]
    4. Filing of Certificate of Formation, Fifty Dollars ($50.00).
    5. Filing of Amendment to Certificate of Formation, Fifty Dollars ($50.00).
    6. Filing of Certificate of Dissolution, Fifty Dollars ($50.00).
    7. Filing of Application for Registration of Foreign Limited Liability Company, Two Hundred Fifty Dollars ($250.00) and Ten Dollars ($10.00) for each day, but not to exceed a total of One Thousand Dollars ($1,000.00) for each year the foreign limited liability company transacts business in this state without a registration as a foreign limited liability company.
    8. Filing of Certificate of Correction, Fifty Dollars ($50.00).
    9. Filing of Certificate of Cancellation of Registration of Foreign Limited Liability Company, Fifty Dollars ($50.00).
    10. Filing of an Annual Report of Domestic Limited Liability Company, (no fee).
    11. Filing of an Annual Report of Foreign Limited Liability Company, to be deposited in the Elections Support Fund created in Section 23-15-5, Two Hundred Fifty Dollars ($250.00).
    12. Certificate of Administrative Dissolution, (no fee).
    13. Filing of Application for Reinstatement Following Administrative Dissolution, Fifty Dollars ($50.00).
    14. Certificate of Administrative Revocation of Authority to Transact Business, (no fee).
    15. Filing of Application for Reinstatement Following Administrative Revocation, One Hundred Dollars ($100.00).
    16. Certificate of Reinstatement Following Administrative Dissolution, (no fee).
    17. Certificate of Reinstatement Following Administrative Revocation of Authority to Transact Business, (no fee).
    18. Filing of Certificate of Revocation of Dissolution, Twenty-five Dollars ($25.00).
    19. Application for Certificate of Existence or Authorization, Twenty-five Dollars ($25.00).
    20. Any other document required or permitted to be filed under this chapter, Twenty-five Dollars ($25.00).
  2. The Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) each time process is served on the Secretary of State under Section 79-29-101 et seq.
  3. The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign limited liability company:
    1. One Dollar ($1.00) a page for copying; and
    2. Ten Dollars ($10.00) for the certificate.
  4. The Secretary of State may promulgate rules to:
    1. Reduce the filing fees set forth in this section or provide for discounts of fees as set forth in this section to encourage online filing of documents or for other reasons as determined by the Secretary of State; and
    2. Provide for documents to be filed and accepted on an expedited basis upon the request of the applicant. The Secretary of State may promulgate rules to provide for an additional reasonable filing fee to be paid by the applicant and collected by the Secretary of State for the expedited filing services.
  5. From and after July 1, 2016, the expenses of the Office of Secretary of State shall be defrayed by line item appropriation from the State General Fund to the Office of Secretary of State and all user charges and fees authorized under this section shall be deposited into the State General Fund as authorized by law and as determined by the State Fiscal Officer, and shall not be authorized for expenditure by the Secretary of State to reimburse or otherwise defray the expenses of any office administered by the Secretary of State.
  6. From and after July 1, 2016, no state agency shall charge another state agency a fee, assessment, rent or other charge for services or resources received by authority of this section.

HISTORY: Laws, 1994, ch. 402, § 86; Laws, 2010, ch. 532, § 1; Laws, 2012, ch. 368, § 1; Laws, 2012, ch. 382, § 122; Laws, 2014, ch. 468, § 8; Laws, 2015, ch. 349, § 1; Laws, 2017, 1st Ex Sess, ch. 7, § 6, eff from and after passage (approved June 23, 2017).

Joint Legislative Committee Note —

Section 122 of ch. 382, Laws of 2012, effective from and after January 1, 2013, amended this section. Section 1 of ch. 368, Laws of 2012, effective July 1, 2012, also amended this section. As set out above, this section reflects the language of Section 122 of ch. 382, Laws of 2012, pursuant to Section 1-3-79 which provides that whenever the same section of law is amended by different bills during the same legislative session, the amendment with the latest effective date shall supersede all other amendments to the same section taking effect on an earlier date.

Editor’s Notes —

A former § 79-29-1203 [ Laws, 1994, ch. 402, § 86, eff from and after July 1, 1994; Repealed by Laws, 2010, ch. 532, § 3, eff from and after January 1, 2011] related to fees. See Editor’s Note under Chapter 29 heading.

Amendment Notes —

The first 2012 amendment (ch. 368), substituted “Secretary of State” for “Secretary” in (4)(a) and (b); and extended the repealer provision from “July 1, 2012” to “July 1, 2015” in (5).

The second 2012 amendment (ch. 382), effective January 1, 2013, deleted (1)(b) and (c), which provided fees for filing a change of address of registered agent and filing a resignation of registered agent, respectively, and reserved both paragraph designators; added “of State” following “Secretary” throughout (4)(a) and (b); and extended the repealer provision from “July 1, 2012” to “July 1, 2015” in (5).

The 2014 amendment, in (1)(a), inserted “or Cancellation” following “Company Name or Transfer.”

The 2015 amendment deleted the former repealer provision in (5), which read “This section shall stand repealed on July 1, 2015.”

The 2017 amendment, effective June 23, 2017, added (5) and (6).

Cross References —

Issuance of registration to foreign limited liability company if all requisite fees specified in this section have been paid, see § 79-29-1005.

§79-29-1204. Repealed.

Repealed by Laws, 2010, ch. 532, §§ 3 and 4, effective January 1, 2011.

§79-29-1204. [Laws, 1994, ch. 402, § 87, eff from and after July 1, 1994.]

Editor’s Notes —

Former § 79-29-1204 was entitled: Powers of Secretary of State. For present similar provisions, see § 79-29-1207.

§79-29-1205. Severability.

If any provision of this chapter or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1207. Powers of the Secretary of State.

The Secretary of State shall have the powers reasonably necessary to perform the duties required of the Office of the Secretary of State under the provisions of this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1209. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USCS Section 7001 et seq., but does not modify, limit or supersede Section 101(c) of that act, 15 USCS Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 USCS Section 7003(b).

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1211. Enforceability of written agreements to choose forum, authorize arbitration and to choose prescribed manner of service of process.

In a written operating agreement or other writing, a manager, member or officer may consent to be subject to the nonexclusive jurisdiction of the courts of, or arbitration in, a specified jurisdiction, or the exclusive jurisdiction of the courts of this state, or the exclusivity of arbitration in a specified jurisdiction or in this state, and to be served with legal process in the manner prescribed in such operating agreement or other writing.Except by agreeing to arbitrate any arbitrable matter in a specified jurisdiction or in this state, a member who is not a manager may not waive its right to maintain a legal action or proceeding in the courts of this state with respect to matters relating to the organization or internal affairs of a limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Article 13. Transition Provisions.

§79-29-1301. Applicability upon effective date.

On or after January 1, 2011, this chapter applies to:

A domestic limited liability company formed on or after January 1, 2011; and

A foreign limited liability company entity that is not registered with the Secretary of State to transact business in this state before January 1, 2011.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1303. Early effectiveness of fees and annual reports.

  1. On or after January 1, 2011, the fees required by Section 79-29-1203 apply to all filings made with the Secretary of State, including comparable filings under prior law, regardless of whether a limited liability company is subject to or has adopted this chapter.The intent of this section is to require a filing fee for all documents filed under either this chapter or the prior law without regard to the difference in designation of the document.
  2. On or after January 1, 2011, Sections 79-29-215, 79-29-219, 79-29-821, 79-29-823, 79-29-825, 79-29-827 and 79-29-831, shall apply to all domestic limited liability companies formed before or after January 1, 2011, and Sections 79-29-215, 79-29-1021, 79-29-1023, 79-29-1025, 79-29-1027 and 79-29-1029 shall apply to all foreign limited liability companies registered with the Secretary of State before or after January 1, 2011.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1305. Early adoption of this chapter by existing limited liability company.

A domestic limited liability company formed before January 1, 2011, may voluntarily elect to adopt and become subject to this chapter by:

Adopting the chapter by complying with the procedures for approval, under prior law and its organizational documents, of an amendment to its certificate of formation;

Amending any noncomplying organizational documents to comply with this chapter if any of its organizational documents, including its certificate of formation, do not comply with this chapter by complying with the procedures, under prior law and its organizational documents, to amend the noncomplying organizational documents to comply with this chapter, including filing with the Secretary of State in accordance with Section 79-29-203 a certificate of amendment to cause its certificate of formation to comply with this chapter; and

Filing with the Secretary of State in accordance with Section 79-29-203 a statement that the domestic limited liability company is electing to adopt this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1307. Early adoption of chapter by registered foreign limited liability company.

A foreign limited liability company registered with the Secretary of State to transact business in this state before January 1, 2011, may voluntarily elect to adopt and become subject to this chapter by filing with the Secretary of State in accordance with Section 79-29-203:

A statement that the foreign limited liability company is electing to adopt this chapter; and

An amendment to its registration of foreign limited liability company that would cause its certificate of registration of foreign limited liability company to comply with this chapter.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1309. Applicability to existing limited liability companies.

On or after January 1, 2012, such date referred to in this article as the “mandatory application date,” if a domestic limited liability company formed before January 1, 2011, or a foreign limited liability company registered with the Secretary of State to transact business in this state before January 1, 2011, has not taken the actions specified by Section 79-29-1305 or 79-29-1307 to elect to adopt this chapter:

This chapter applies to the domestic or foreign limited liability company and all actions taken by the managers, officers, or members of the limited liability company, except as otherwise expressly provided by this article;

A domestic or foreign limited liability company shall not be considered to have failed to comply with this chapter if the entity’s certificate of formation or application for registration of foreign limited liability company, as appropriate, does not comply with the chapter;

A domestic limited liability company shall conform its certificate of formation to the requirements of this chapter when it next files an amendment to its certificate of formation; and

A foreign limited liability company shall conform its registration of foreign limited liability company to the requirements of this chapter when it next files an amendment to its registration of foreign limited liability company.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1311. Applicability to certain acts, contracts, and transactions.

All of the provisions of this chapter govern the acts, contracts, or other transactions by a limited liability company subject to Section 79-29-1301 or by its managers, members or officers that occur on or after January 1, 2011. Unless the limited liability company that is formed or registered before January 1, 2011, has elected to be subject to the Revised Act prior to the mandatory application date the prior law governs the acts, contracts, or transactions of the limited liability company that is formed or registered before January 1, 2011, or its managers, members or officers that occur before the mandatory application date.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1313. Indemnification.

Section 79-29-123 governs any proposed indemnification by a limited liability company after the mandatory application date, regardless of whether the events on which the indemnification is based occurred before or after the mandatory application date.In a case in which indemnification is permitted but not required under Section 79-29-123, a provision relating to indemnification contained in the organizational documents of a limited liability company on the mandatory application date that would otherwise have the effect of limiting the nature or type of indemnification permitted by Section 79-29-123 may not be construed after the mandatory application date as limiting the indemnification authorized by Section 79-29-123 unless the provision so intended to limit or restrict permissive indemnification under applicable law.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Editor’s Notes —

Chapter 29 of Title 79 has been set out twice. This chapter is effective from and after January 1, 2011. For the chapter as effective until January 1, 2011, see the preceding chapter, also numbered Chapter 29.

§79-29-1315. Dissolution.

    1. Section 79-29-803 applies to an action for judicial dissolution commenced after the mandatory application date; or
    2. Section 79-29-801 applies to a voluntary dissolution initiated after the mandatory application date.
  1. The prior law governs:
    1. An action described by subsection (1)(a) of this section that is pending on the mandatory application date; or
    2. A proceeding described by subsection (1)(b) of this section initiated before the mandatory application date.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

§79-29-1317. Maintenance of prior action.

Except as expressly provided by this article, this chapter does not apply to an action or proceeding commenced before the mandatory application date.Prior law applies to the action or proceeding.

HISTORY: Laws, 2010, ch. 532, § 1, eff from and after Jan. 1, 2011.

Chapter 31. Mississippi Registration of Foreign Limited Liability Partnerships Act [Repealed]

§§79-31-1 through79-31-39. Repealed.

Repealed by Laws, 1995, ch. 353, § 25, eff from and after July 1, 1995.

§79-31-1. [Laws, 1994, ch. 390, § 1]

§79-31-3. [Laws, 1994, ch. 390, § 2]

§79-31-5. [Laws, 1994, ch. 390, § 3]

§79-31-7. [Laws, 1994, ch. 390, § 4]

§79-31-9. [Laws, 1994, ch. 390, § 5]

§79-31-11. [Laws, 1994, ch. 390, § 6]

§79-31-13. [Laws, 1994, ch. 390, § 7]

§79-31-15. [Laws, 1994, ch. 390, § 8]

§79-31-17. [Laws, 1994, ch. 390, § 9]

§79-31-19. [Laws, 1994, ch. 390, § 10]

§79-31-21. [Laws, 1994, ch. 390, § 11]

§79-31-23. [Laws, 1994, ch. 390, § 12]

§79-31-25. [Laws, 1994, ch. 390, § 13]

§79-31-27. [Laws, 1994, ch. 390, § 14]

§79-31-29. [Laws, 1994, ch. 390, § 15]

§79-31-31. [Laws, 1994, ch. 390, § 16]

§79-31-33. [Laws, 1994, ch. 390, § 17]

§79-31-35. [Laws, 1994, ch. 390, § 18]

§79-31-37. [Laws, 1994, ch. 390, § 19]

§79-31-39. [Laws, 1994, ch. 390, § 20]

Editor’s Notes —

Former § 79-31-1 was entitled: Short title. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-3 was entitled: Amendment and repeal of provisions of chapter. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-5 was entitled: Definitions. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-7 was entitled: Which law shall govern; liability of partners; difference in laws not grounds to deny registration. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-9 was entitled: Registration. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-11 was entitled: Filing of application. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-13 was entitled: Name of partnership; required language; prohibited words. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-15 was entitled: Correction of application. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-17 was entitled: Cancellation of registration. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-19 was entitled: Effect of failure to register. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-21 was entitled: Activities of partnership not constituting transacting business in state; exceptions. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-23 was entitled: Attorney General may restrict transactions in violation of chapter. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-25 was entitled: Penalty for signing false document. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-27 was entitled: Agent for service of process on partnership. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-29 was entitled: Permissible activities of partnership. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-31 was entitled: Construction of terms and provisions of chapter. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-33 was entitled: Fees. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-35 was entitled: Powers of Secretary of State to implement chapter. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-37 was entitled: Tax classification of partnerships. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Former § 79-31-39 was entitled: Severability of provisions of chapter. For current provisions relating to foreign limited liability partnerships, see §§ 79-13-1101 et seq.

Chapter 33. Corporate Successor Asbestos-Related Liability in Connection with Mergers or Consolidations

§79-33-1. Definitions.

The following words and phrases shall have the meanings ascribed herein, unless the context clearly indicates otherwise:

“Asbestos claim” means any claim, wherever or whenever made, for damages, losses, indemnification, contribution, or other relief arising out of, based on, or in any way related to asbestos, including:

Property damage caused by the installation, presence or removal of asbestos;

The health effects of exposure to asbestos, including any claim for:

1. Personal injury or death;

2. Mental or emotional injury;

3. Risk of disease or other injury; or

4. The costs of medical monitoring or surveillance; and

Any claim made by or on behalf of any person exposed to asbestos, or a representative, spouse, parent, child or other relative of the person.

“Corporation” means a corporation for profit, including:

A domestic corporation organized under the laws of this state; or

A foreign corporation organized under laws other than the laws of this state.

“Successor asbestos-related liabilities” means any liabilities, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, that are related in any way to asbestos claims that were assumed or incurred by a corporation as a result of or in connection with a merger or consolidation, or the plan of merger or consolidation related to the merger or consolidation, with or into another corporation or that are related in any way to asbestos claims based on the exercise of control or the ownership of stock of the corporation before the merger or consolidation. The term includes liabilities that, after the time of the merger or consolidation for which the fair market value of total gross assets is determined under Section 79-33-7, were or are paid or otherwise discharged, or committed to be paid or otherwise discharged, by or on behalf of the corporation, or by a successor of the corporation, or by or on behalf of a transferor, in connection with settlements, judgments, or other discharges in this state or another jurisdiction.

“Successor” means a corporation that assumes or incurs, or has assumed or incurred, successor asbestos-related liabilities.

“Transferor” means a corporation from which successor asbestos-related liabilities are or were assumed or incurred.

HISTORY: Laws, 2004, ch. 353, § 1, eff from and after passage (approved Apr. 20, 2004.).

§79-33-3. Applicability.

  1. The limitations in Section 79-33-5 shall apply to the following:
    1. A domestic corporation or a foreign corporation that has had a certificate of authority to transact business in this state and who is or has done business in this state that is a successor which became a successor prior to May 13, 1968, or which is any of that successor corporation’s successors but in the latter case only to the extent of the limitations of liability applied under Section 79-33-5(2);
    2. All asbestos claims, including asbestos claims that are pending on April 20, 2004, and all litigation involving asbestos claims, including litigation that is pending on April 20, 2004;
    3. Successors of a corporation to which this chapter applies.
  2. The limitations in Section 79-33-5 shall not apply to:
    1. Workers’ compensation benefits paid by or on behalf of an employer to an employee under this state’s workers’ compensation act or a comparable workers’ compensation law of another jurisdiction;
    2. Any claim against a corporation that does not constitute a successor asbestos-related liability;
    3. An insurance company, as that term is defined in Section 83-5-5; or
    4. Any obligations under the National Labor Relations Act (29 USCS Section 151 et seq.), as amended, or under any collective bargaining agreement.

HISTORY: Laws, 2004, ch. 353, § 2, eff from and after passage (approved Apr. 20, 2004.).

§79-33-5. Liabilities limited to fair market value of total gross assets at time of merger or consolidation; liabilities assumed or incurred in connection with prior merger or consolidation.

  1. Except as further limited in subsection (2) of this section, the cumulative successor asbestos-related liabilities of a corporation are limited to the fair market value of the total gross assets of the transferor determined as of the time of the merger or consolidation. The corporation does not have any responsibility for successor asbestos-related liabilities in excess of this limitation.
  2. If the transferor had assumed or incurred successor asbestos-related liabilities in connection with a prior merger or consolidation with a prior transferor, then the fair market value of the total assets of the prior transferor, determined as of the time of such earlier merger or consolidation, shall be substituted for the limitation set forth in subsection (1) of this section, for purposes of determining the limitation of liability of a corporation.

HISTORY: Laws, 2004, ch. 353, § 3, eff from and after passage (approved Apr. 20, 2004.).

§79-33-7. Establishment of fair market value of total gross assets.

  1. A corporation may establish the fair market value of total gross assets for the purpose of the limitations under Section 79-33-5 through any method reasonable under the circumstances, including:
    1. By reference to the going concern value of the assets or to the purchase price attributable to or paid for the assets in an arm’s-length transaction; or
    2. In the absence of other readily available information from which fair market value can be determined, by reference to the value of the assets recorded on a balance sheet. A showing by the successor of a reasonable determination of fair market value of total assets if prima facie evidence of the fair market value of those assets.
  2. Total gross assets include intangible assets.
  3. Total gross assets include the aggregate coverage under any applicable liability insurance that was issued to the transferor whose assets are being valued for purposes of this title and which insurance has been collected or is collectable to cover successor asbestos-related liabilities (except compensation for liabilities arising from workers’ exposure to asbestos solely during the course of their employment by the transferor). A settlement of a dispute concerning such insurance coverage entered into by a transferor or successor with the insurers of the transferor before April 20, 2004, shall be determinative of the aggregate coverage of such liability insurance to be included in the calculation of the transferor’s total gross assets.
  4. After a successor has established a reasonable determination of the fair market value of total assets under this title, a claimant that disputes that determination of the fair market value has the burden of establishing a different fair market value of those assets.

HISTORY: Laws, 2004, ch. 353, § 4, eff from and after passage (approved Apr. 20, 2004.).

§79-33-9. Adjustments to fair market value of total gross assets.

  1. Except as provided in subsections (2), (3) and (4) of this section, the fair market value of total gross assets at the time of a merger or consolidation increases annually at a rate equal to the sum of:
    1. The prime rate as listed in the first edition of the Wall Street Journal published for each calendar year since the merger or consolidation, unless the prime rate is not published in that edition of the Wall Street Journal, in which case any reasonable determination of the prime rate on the first business day of the year may be used; and
    2. One percent (1%).
  2. The rate in subsection (1) of this section is not compounded.
  3. The adjustment of fair market value of total gross assets continues as provided under subsection (1) of this section until the date the adjusted value is exceeded by the cumulative amounts of successor asbestos-related liabilities paid or committed to be paid by or on behalf of the corporation or a predecessor, or by or on behalf of a transferor, after the time of the merger or consolidation for which the fair market value of total gross assets is determined.
  4. No adjustment of the fair market value of total gross assets shall be applied to any liability insurance otherwise included in the definition of the total gross assets by Section 79-33-7(3).

HISTORY: Laws, 2004, ch. 353, § 5, eff from and after passage (approved Apr. 20, 2004.).

§79-33-11. Choice of law.

The courts in this state shall apply, to the fullest extent permissible under the United States Constitution, this state’s substantive law, including the limitation under this chapter, to the issue of successor asbestos-related liabilities.

HISTORY: Laws, 2004, ch. 353, § 6, eff from and after passage (approved Apr. 20, 2004.).

Chapter 35. The Mississippi Registered Agents Act

Comparable Laws from other States —

Arkansas: A.C.A. § 4-20-101 et seq.

Hawaii: HRS § 425R-1 et seq.

Idaho: Idaho Code § 30-401 et seq.

Maine: 5 M.R.S. § 101 et seq.

Montana: Mont. Code Anno., § 35-7-101 et seq.

Nevada: Nev. Rev. Stat. Ann. § 77.010 et seq.

North Dakota: N.D. Cent. Code, § 10-01.1-01 et seq.

South Dakota: S.D. Codified Laws § 59-11-1 et seq.

Utah: Utah Code Ann. § 16-17-101 et seq.

§79-35-1. Short title.

This chapter shall be known and may be cited as the Mississippi Registered Agents Act.

HISTORY: Laws, 2012, ch. 382, § 1, eff from and after Jan. 1, 2013.

§79-35-2. Definitions.

As used in this chapter unless the context otherwise requires:

  1. “Appointment of agent” means a statement appointing an agent for service of process filed by a domestic entity that is not a filing entity or a nonqualified foreign entity under Section 79-35-12.
  2. “Commercial registered agent” means an individual or a domestic or foreign entity listed under Section 79-35-6.
  3. “Domestic entity” means an entity whose internal affairs are governed by the law of this state.
  4. “Entity” means a person that has a separate legal existence or has the power to acquire an interest in real property in its own name other than:
  5. “Filing entity” means an entity that is created by the filing of a public organic document.
  6. “Foreign entity” means an entity other than a domestic entity.
  7. “Foreign qualification document” means an application for a certificate of authority or other foreign qualification filing with the Secretary of State by a foreign entity.
  8. “Governance interest” means the right under the organic law or organic rules of an entity, other than as a governor, agent, assignee, or proxy, to:
  9. “Governor” means a person by or under whose authority the powers of an entity are exercised and under whose direction the business and affairs of the entity are managed pursuant to the organic law and organic rules of the entity.
  10. “Interest” means:
  11. “Interest holder” means a direct holder of an interest.
  12. “Jurisdiction of organization,” with respect to an entity, means the jurisdiction whose law includes the organic law of the entity.
  13. “Noncommercial registered agent” means a person that is not listed as a commercial registered agent under Section 79-35-6 and that is an individual or a domestic or foreign entity that serves in this state as the agent for service of process of an entity.
  14. “Nonqualified foreign entity” means a foreign entity that is not authorized to transact business in this state pursuant to a filing with the Secretary of State.
  15. “Nonresident LLP statement” means:
  16. “Organic law” means the statutes, if any, other than this chapter, governing the internal affairs of an entity.
  17. “Organic rules” means the public organic document and private organic rules of an entity.
  18. “Person” means an individual, corporation, estate, trust, partnership, limited liability company, business or similar trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
  19. “Private organic rules” mean the rules, whether or not in a record, that govern the internal affairs of an entity, are binding on all of its interest holders, and are not part of its public organic document, if any.
  20. “Public organic document” means the public record the filing of which creates an entity, and any amendment to or restatement of that record.
  21. “Qualified foreign entity” means a foreign entity that is authorized to transact business in this state pursuant to a filing with the Secretary of State.
  22. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
  23. “Registered agent” means a commercial registered agent or a noncommercial registered agent.
  24. “Registered agent filing” means:
  25. “Represented entity” means:
  26. “Sign” means, with present intent to authenticate or adopt a record:
  27. “Transferable interest” means the right under an entity’s organic law to receive distributions from the entity.
  28. “Type,” with respect to an entity, means a generic form of entity:

An individual;

A testamentary, inter vivos, or charitable trust, with the exception of a business trust, statutory trust, or similar trust;

An association or relationship that is not a partnership by reason of Section 79-13-202(c) or a similar provision of the law of any other jurisdiction;

A decedent’s estate; or

A public corporation, government or governmental subdivision, agency, or instrumentality, or quasi-governmental instrumentality.

Receive or demand access to information concerning, or the books and records of, the entity;

Vote for the election of the governors of the entity; or

Receive notice of or vote on any or all issues involving the internal affairs of the entity.

A governance interest in an unincorporated entity;

A transferable interest in an unincorporated entity; or

A share or membership in a corporation.

A statement of qualification of a domestic limited liability partnership that does not have an office in this state; or

A statement of foreign qualification of a foreign limited liability partnership that does not have an office in this state.

The public organic document of a domestic filing entity;

A nonresident LLP statement;

A foreign qualification document; or

An appointment of agent.

A domestic filing entity;

A domestic or qualified foreign limited liability partnership that does not have an office in this state;

A qualified foreign entity;

A domestic entity that is not a filing entity for which an appointment of agent has been filed; or

A nonqualified foreign entity for which an appointment of agent has been filed.

To execute or adopt a tangible symbol; or

To attach to or logically associate with the record an electronic sound, symbol, or process.

Recognized at common law; or

Organized under an organic law, whether or not some entities organized under that organic law are subject to provisions of that law that create different categories of the form of entity.

HISTORY: Laws, 2012, ch. 382, § 2, eff from and after Jan. 1, 2013.

§79-35-3. Fees.

The Secretary of State shall collect the following fees when a filing is made under this chapter:

Document Fee (1) Commercial registered agent listing statement $ 100.00 (2) Commercial registered agent termination statement $ 50.00 (3) Statement of change $ 10.00 per entity not to exceed $1,000.00 (4)(A) Statement of resignation No fee (B) Statement of nonacceptance No fee (5) Statement appointing an agent for service of process pursuant to $ 10.00 Section 79-35-12

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The Secretary of State shall collect the following fees for copying and certifying a copy of any document filed under this chapter:

  1. $1.00 a page for copying; and
  2. $10.00 for a certificate.

The Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) each time process is served on the Secretary of State under this chapter. The party to a proceeding causing service of process is entitled to recover the fee as costs if he prevails in the proceeding.

The Secretary of State may collect a filing fee greater than the fee as prescribed by rule, not to exceed Twenty-five Dollars ($25.00), if the form for such filings prescribed by the Secretary of State has not been used.

The Secretary of State may promulgate rules to reduce the filing fees set forth in this section or provide for discounts of fees as set forth in this section to encourage online filing of documents or for other reasons as determined by the secretary.

HISTORY: Laws, 2012, ch. 382, § 3, eff from and after Jan. 1, 2013.

§79-35-4. Addresses in filings.

Whenever a provision of this chapter requires that a filing state an address, the filing must state:

  1. An actual street address in this state; and
  2. A mailing address in this state, if different from the address under paragraph (1) of this section.

HISTORY: Laws, 2012, ch. 382, § 4, eff from and after Jan. 1, 2013.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in this section. In the introductory paragraph, “other than Section 79-35-11(a)(4)” was deleted preceding “Whenever a provision of this chapter.” The Joint Committee ratified the correction at its August 16, 2012, meeting.

§79-35-5. Appointment of registered agent.

A registered agent filing must state:

  1. The name of the represented entity’s commercial registered agent; or
  2. If the entity does not have a commercial registered agent, the name and address of the entity’s noncommercial registered agent.
  3. State the type of filing and name of the represented entity making the filing.

The appointment of a registered agent pursuant to subsection (a)(1) or (a)(2) of this section is an affirmation by the represented entity that:

The entity has:

Notified the agent of the appointment; and

Provided the agent with a forwarding address as provided in Section 79-35-14; and

The agent has consented to serve as such.

The Secretary of State shall make available in a record as soon as practicable a daily list of filings that contain the name of a registered agent. The list must:

Be available for at least fourteen (14) calendar days;

List in alphabetical order the names of the registered agents; and

HISTORY: Laws, 2012, ch. 382, § 5, eff from and after Jan. 1, 2013.

§79-35-6. Listing of commercial registered agent.

An individual or a domestic or foreign entity may become listed as a commercial registered agent by filing with the Secretary of State a commercial registered agent listing statement signed by or on behalf of the person which states:

  1. The name of the individual or the name, type, and jurisdiction of organization of the entity; and
  2. The address of a place of business of the person in this state to which service of process and other notice and documents being served on or sent to entities represented by it may be delivered.

A commercial registered agent listing statement may include the information regarding acceptance of service of process in a record by the commercial registered agent provided for in Section 79-35-13(d).

If the name of a person filing a commercial registered agent listing statement is not distinguishable on the records of the Secretary of State from the name of another commercial registered agent listed under this section, the person must adopt a fictitious name that is distinguishable and use that name in its statement and when it does business in this state as a commercial registered agent.

A commercial registered agent listing statement takes effect on filing.

The commercial registered agent listing statement must be accompanied by a list in alphabetical order of the entities represented by the person. The Secretary of State shall note the filing of the commercial registered agent listing statement in the index of filings maintained by the Secretary of State for each listed entity. The statement has the effect of deleting the address of the registered agent from the registered agent filing of each of those entities.

HISTORY: Laws, 2012, ch. 382, § 6, eff from and after Jan. 1, 2013.

§79-35-7. Termination of listing of commercial registered agent.

A commercial registered agent may terminate its listing as a commercial registered agent by filing with the Secretary of State a commercial registered agent termination statement signed by or on behalf of the agent which states:

  1. The name of the agent as currently listed under Section 79-35-6; and
  2. That the agent is no longer in the business of serving as a commercial registered agent in this state.

A commercial registered agent termination statement takes effect on the thirty-first day after the day on which it is filed.

The commercial registered agent shall promptly furnish each entity represented by it with notice in a record of the filing of the commercial registered agent termination statement.

When a commercial registered agent termination statement takes effect, the registered agent ceases to be an agent for service of process on each entity formerly represented by it. Until an entity formerly represented by a terminated commercial registered agent appoints a new registered agent, service of process may be made on the entity as provided in Section 79-35-13.

Termination of the listing of a commercial registered agent under this section does not affect any contractual rights a represented entity may have against the agent or that the agent may have against the entity.

HISTORY: Laws, 2012, ch. 382, § 7, eff from and after Jan. 1, 2013.

§79-35-8. Change of registered agent by entity.

A represented entity may change the information currently on file under Section 79-35-5(a) by filing with the Secretary of State a statement of change signed on behalf of the entity which states:

  1. The name of the entity; and
  2. The information that is to be in effect as a result of the filing of the statement of change.

The interest holders or governors of a domestic entity need not approve the filing of:

A statement of change under this section; or

A similar filing changing the registered agent or registered office of the entity in any other jurisdiction.

The appointment of a registered agent pursuant to subsection (a) of this section is an affirmation by the represented entity that the entity has notified the agent of the appointment and that the agent has consented to serve as such.

A statement of change filed under this section takes effect on filing.

HISTORY: Laws, 2012, ch. 382, § 8, eff from and after Jan. 1, 2013.

§79-35-9. Change of name or address by noncommercial registered agent.

If a noncommercial registered agent changes its name or its address as currently in effect with respect to a represented entity pursuant to Section 79-35-5(a), the agent shall file with the Secretary of State, with respect to each entity represented by the agent, a statement of change signed by or on behalf of the agent which states:

  1. The name of the entity;
  2. The name and address of the agent as currently in effect with respect to the entity;
  3. If the name of the agent has changed, its new name; and
  4. If the address of the agent has changed, the new address.

A statement of change filed under this section takes effect on filing.

A noncommercial registered agent shall promptly furnish the represented entity with notice in a record of the filing of a statement of change and the changes made by the filing.

HISTORY: Laws, 2012, ch. 382, § 9, eff from and after Jan. 1, 2013.

§79-35-10. Change of name, address, or type of organization by commercial registered agent.

If a commercial registered agent changes its name, its address as currently listed under Section 79-35-6(a), or its type or jurisdiction of organization, the agent shall file with the Secretary of State a statement of change signed by or on behalf of the agent which states:

  1. The name of the agent as currently listed under Section 79-35-6(a);
  2. If the name of the agent has changed, its new name;
  3. If the address of the agent has changed, the new address; and
  4. If the type or jurisdiction of organization of the agent has changed, the new type or jurisdiction of organization.

The filing of a statement of change under subsection (a) of this section is effective to change the information regarding the commercial registered agent with respect to each entity represented by the agent.

A statement of change filed under this section takes effect on filing.

A commercial registered agent shall promptly furnish each entity represented by it with notice in a record of the filing of a statement of change relating to the name or address of the agent and the changes made by the filing.

If a commercial registered agent changes its address without filing a statement of change as required by this section, the Secretary of State may cancel the listing of the agent under Section 79-35-6. A cancellation under this subsection has the same effect as a termination under Section 79-35-7. Promptly after canceling the listing of an agent, the Secretary of State shall serve notice in a record in the manner provided in Section 79-35-13(b) or (c) on:

Each entity represented by the agent, stating that the agent has ceased to be an agent for service of process on the entity and that, until the entity appoints a new registered agent, service of process may be made on the entity as provided in Section 79-35-13; and

The agent, stating that the listing of the agent has been canceled under this section.

HISTORY: Laws, 2012, ch. 382, § 10, eff from and after Jan. 1, 2013.

§79-35-11. Resignation of registered agent.

A registered agent may resign at any time with respect to a represented entity by filing with the Secretary of State a statement of resignation signed by or on behalf of the agent which states:

  1. The name of the entity;
  2. The name of the agent; and
  3. That the agent resigns from serving as agent for service of process for the entity.

(1) The statement of resignation shall include a certification of the registered agent that at least thirty (30) days prior to the filing of the statement of resignation written notice of the resignation of the registered agent was sent to each represented entity for which the registered agent is resigning as registered agent. This notice shall be addressed and delivered to the last known principal office of each represented entity identified in the statement. The agent shall indicate in the statement each name and address to which the notice was sent. After receipt of the notice of resignation of its registered agent, the represented entity for which the registered agent was acting shall obtain and designate a registered agent.

For purposes of this subsection, the “last known principal office” of the represented entity shall be the address of the entity on file with the Secretary of State’s office or the address most recently supplied to the agent by the entity, whichever is more current, or the actual principal office address if the actual address is known to the agent.

A statement of resignation takes effect on the earlier of the thirty-first day after the day on which it is filed or the appointment of a new registered agent for the represented entity.

When a statement of resignation takes effect, the registered agent ceases to have responsibility for any matter tendered to it as agent for the represented entity. A resignation under this section does not affect any contractual rights the entity has against the agent or that the agent has against the entity.

A registered agent may resign with respect to a represented entity whether or not the entity is in good standing.

HISTORY: Laws, 2012, ch. 382, § 11, eff from and after Jan. 1, 2013.

§79-35-12. Appointment of agent by nonfiling or nonqualified foreign entity.

A domestic entity that is not a filing entity or a nonqualified foreign entity may file with the Secretary of State a statement appointing an agent for service of process signed on behalf of the entity which states:

  1. The name, type, and jurisdiction of organization of the entity; and
  2. The information required by Section 79-35-5(a).

A statement appointing an agent for service of process takes effect on filing.

The appointment of a registered agent under this section does not qualify a nonqualified foreign entity to do business in this state and is not sufficient alone to create personal jurisdiction over the nonqualified foreign entity in this state.

A statement appointing an agent for service of process may not be rejected for filing because the name of the entity filing the statement is not distinguishable on the records of the Secretary of State from the name of another entity appearing in those records. The filing of a statement appointing an agent for service of process does not make the name of the entity filing the statement unavailable for use by another entity.

An entity that has filed a statement appointing an agent for service of process may cancel the statement by filing a statement of cancellation, which shall take effect upon filing, and must state the name of the entity and that the entity is canceling its appointment of an agent for service of process in this state.

A statement appointing an agent for service of process for a nonqualified foreign entity terminates automatically on the date the entity becomes a qualified foreign entity.

HISTORY: Laws, 2012, ch. 382, § 12, eff from and after Jan. 1, 2013.

§79-35-13. Service of process on entities.

A registered agent is an agent of the represented entity authorized to receive service of any process, notice, or demand required or permitted by law to be served on the entity.

If an entity that previously filed a registered agent filing with the Secretary of State no longer has a registered agent, or if its registered agent cannot with reasonable diligence be served, the governors of the entity will be treated as the entity’s agent for service of process who may be served pursuant to the provisions of the Mississippi Rules of Civil Procedure. The names of the governors and the address of the principal office may be as shown in the most recent annual report filed with the Secretary of State. If the governors of the entity cannot with reasonable diligence be served, service of process against the entity shall be upon the Secretary of State in accordance with the Mississippi Rules of Civil Procedure.

If notice or demand cannot be made on an entity pursuant to subsection (a) or (b) of this section, notice or demand may be made by handing a copy to the manager or other individual in charge of any regular place of business or activity of the entity.

Notice or demand on a registered agent must be in the form of a written document, except that notice or demand may be made on a commercial registered agent in such other forms of a record, and subject to such requirements as the agent has stated from time to time in its listing under Section 79-35-6 that it will accept.

Service of process, notice, or demand may be perfected by any other means prescribed by law other than this chapter, including provisions in the organic entity laws that provide for service of process on the Secretary of State in the event that registration of an organic entity has been canceled, withdrawn or revoked or the domestic organic entity has been administratively dissolved or voluntarily dissolved under the applicable organic entity statute.

HISTORY: Laws, 2012, ch. 382, § 13, eff from and after Jan. 1, 2013.

JUDICIAL DECISIONS

I. Under Current Law.

1. Service improper.

2 Service proper.

2.-5. [Reserved for future use.]

II. Under Former Law.

6. Under former §79-29-111.

I. Under Current Law.

1. Service improper.

Circuit court erred in denying a limited liability company’s (LLC) motion to set aside a default judgment because service through the Secretary of State was not proper since the corporation did not exercise reasonable diligence in attempting to serve the LLC’s members prior to attempting service through the Secretary of State; the LLC did not waive its objection to improper service by entering an appearance or by participating in the judgment debtor exam because it was not defending the case. S&M Trucking, LLC v. Rogers Oil Co. of Columbia, Inc., 195 So.3d 217, 2016 Miss. App. LEXIS 368 (Miss. Ct. App. 2016).

2 Service proper.

Circuit court had jurisdiction over a passenger’s action against an airline because service of process was proper and sufficient; service of process on the airline’s registered agent was sufficient to give the circuit court jurisdiction over the airline because the complaint specifically identified the former address of the airline’s principal place of business, and the complaint should have dispelled any confusion as to the true identity of the airline. United Airlines, Inc. v. McCubbins, — So.3d —, 2018 Miss. App. LEXIS 188 (Miss. Ct. App. Apr. 17, 2018), cert. denied, — So.3d —, 2019 Miss. LEXIS 46 (Miss. Jan. 24, 2019).

2.-5. [Reserved for future use.]

II. Under Former Law.

6. Under former § 79-29-111.

Ruling that no good cause had existed for a 60-day extension of the time for serving process on a limited liability company (LLC) in a wrongful eviction action was not an abuse of discretion where plaintiffs had previously been granted a 120-day extension, four years had elapsed between that extension and the 60-day extension in which it appeared plaintiffs had not taken any steps toward serving defendants, and while the LLC had failed to update the address of its registered agent, service of process via the Secretary of State had always been available under former Miss. Code Ann. § 79-29-111(2). Yarbrough v. Hiti Invs. LLC, 111 So.3d 1270, 2013 Miss. App. LEXIS 183 (Miss. Ct. App. 2013).

§79-35-14. Duties of registered agent.

The only duties under this chapter of a registered agent that has complied with this chapter are:

  1. To forward to the represented entity at the address most recently supplied to the agent by the entity any process, notice, or demand that is served on the agent;
  2. To provide the notices required by this chapter to the entity at the address most recently supplied to the agent by the entity;
  3. If the agent is a noncommercial registered agent, to keep current the information required by Section 79-35-5(a) in the most recent registered agent filing for the entity; and
  4. If the agent is a commercial registered agent, to keep current the information listed for it under Section 79-35-6(a).

    Upon the filing of the notice of nonacceptance, the Secretary of State shall notify the entity in writing of the nonacceptance. After receipt of the notice from the Secretary of State, the entity shall obtain and designate a registered agent.

A person named as the registered agent for a represented entity in a registered agent filing pursuant to this chapter without the person’s consent is not considered to be a “registered agent” of the entity for purposes of this chapter and therefore the person shall not have, and shall not be required to perform, the duties prescribed by this section with respect to the represented entity described in this subsection (b).

In the event a person described in this subsection (b) is served with notice of service of process pursuant to Section 79-35-13(a), service on the person shall be deemed to be service on the entity that named the agent, even if the person does not forward the service to the entity.

The person described in this subsection (b) shall have no responsibility to forward the service described in this subsection (b) to the entity, even if the person accepts the service by mistake; and the person further may not be held liable regardless of whether the person files a notice of nonacceptance with the Secretary of State:

Under a judgment, decree, or order of a court, agency, or tribunal of any type, or in any other manner, in this or any other state, or on any other basis, for a debt, obligation, or liability of the represented entity, whether arising in contract, tort, or otherwise, solely because of the person’s designation or appointment as registered agent; or

To the represented entity or to a person who reasonably relied on the unauthorized designation or appointment solely because of the person’s failure or refusal to perform the duties of a registered agent under this section.

A person described in subsection (b) of this section may file a notice of nonacceptance with the Secretary of State’s office for the purpose of removing the person’s name from the records of the Secretary of State that relate to the entity described in subsection (b) of this section.

HISTORY: Laws, 2012, ch. 382, § 14, eff from and after Jan. 1, 2013.

§79-35-15. Jurisdiction and venue.

The appointment or maintenance in this state of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in this state. The address of the agent does not determine venue in an action or proceeding involving the entity.

HISTORY: Laws, 2012, ch. 382, § 15, eff from and after Jan. 1, 2013.

JUDICIAL DECISIONS

1. Venue.

Registered Agents Act effectively makes the location of a corporation’s registered agent irrelevant to the venue analysis; because the Registered Agents Act excludes consideration of the location of a corporation’s registered agent from the question of venue, the Mississippi Consumer Protection Act’s venue statute provides no choice of venue for foreign corporations. Purdue Pharma L.P. v. State, 256 So.3d 1, 2018 Miss. LEXIS 415 (Miss. 2018).

Registered Agents Act overruled Penn Nat’l Gaming, Inc. v. Ratliff, 954 So. 2d 427 (Miss. 2007) and its holding that a non-resident defendant “resides” in the county where its agent for service of process is located; as the statute provides, the address of a registered agent does not determine venue. Purdue Pharma L.P. v. State, 256 So.3d 1, 2018 Miss. LEXIS 415 (Miss. 2018).

General venue statute for chancery court did not apply in the State’s action against pharmaceutical manufacturers because the location of a foreign corporation’s registered agent was irrelevant to determine venue; because the general venue statute for chancery court did not apply, and the general venue statute provided criteria that did not rely on the location of a registered agent, the trial court’s reliance on the general venue state was appropriate. Purdue Pharma L.P. v. State, 256 So.3d 1, 2018 Miss. LEXIS 415 (Miss. 2018).

§79-35-16. Consistency of application.

In applying and construing this chapter, consideration must be given to the need to promote consistency of the law with respect to its subject matter among states that enact it.

HISTORY: Laws, 2012, ch. 382, § 16, eff from and after Jan. 1, 2013.

Comparable Laws from other States —

Arkansas: A.C.A. § 4-20-101 et seq.

Hawaii: HRS § 425R-1 et seq.

Idaho: Idaho Code § 30-401 et seq.

Maine: 5 M.R.S. § 101 et seq.

Montana: Mont. Code Anno., § 35-7-101 et seq.

Nevada: Nev. Rev. Stat. Ann. § 77.010 et seq.

North Dakota: N.D. Cent. Code, § 10-01.1-01 et seq.

South Dakota: S.D. Codified Laws § 59-11-1 et seq.

Utah: Utah Code Ann. § 16-17-101 et seq.

§79-35-17. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 USCS Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 USCS Section 7001(c), or authorize delivery of any of the notices described in Section 103(b) of that act, 15 USCS Section 7003(b).

HISTORY: Laws, 2012, ch. 382, § 17, eff from and after Jan. 1, 2013.

§79-35-18. Savings clause.

This chapter does not affect an action or proceeding commenced or right accrued before January 1, 2013.

HISTORY: Laws, 2012, ch. 382, § 18, eff from and after Jan. 1, 2013.

§79-35-19. Designation of registered agent without consent; penalties and liablilties.

In addition to other penalties, a person commits an offense if the person makes a false statement in a registered agent filing that names a person the registered agent of a represented entity without the person’s written consent. The following penalties and liabilities shall apply with respect to a false statement in a registered agent filing made under this chapter that names a person the registered agent of a represented entity without the person’s consent:

  1. Section 79-4-1.29 (Domestic Corporations); Section 79-4-15.30 (Foreign Corporations); Section 79-11-123 (Domestic Nonprofit Corporations); Section 79-11-385 (Foreign Nonprofit Corporations); Section 79-29-207 (Domestic Limited Liability Companies); Section 79-29-1019 (Foreign Limited Liability Companies); Section 79-13-1003 (Limited Liability Partnerships); Section 79-13-1106 (Foreign Limited Liability Partnerships); Section 79-15-129 (Foreign Investment Trusts); and Section 79-16-27 (Foreign Business Trusts).
  2. The Secretary of State may commence a proceeding to administratively dissolve the domestic entity or to revoke the foreign entity’s certificate of authority or similar certificate as prescribed by Section 79-4-14.20 (Corporations); Section 79-4-15.30 (Foreign Corporations); Section 79-11-347 (Nonprofit Corporations); Section 79-11-385 (Foreign Nonprofit Corporations); Section 79-13-1003 (Limited Liability Partnerships); Section 79-13-1106 (Foreign Limited Liability Partnerships); Section 79-29-809 (Limited Liability Companies); Section 79-29-1011 (Foreign Limited Liability Companies); Section 79-14-811 (Limited Partnerships); Section 79-14-1010 (Foreign Limited Partnerships); Section 79-15-129 (Foreign Investment Trusts); and Section 79-16-27 (Foreign Business Trusts). Any entity that is administratively dissolved or whose certificate of authority is revoked pursuant to this paragraph shall not be reinstated unless it complies with the applicable statutory reinstatement requirements and unless it provides to the Secretary of State with its application for reinstatement a statement of appointment of registered agent signed by its appointed registered agent and an additional reinstatement fee of Two Hundred Fifty Dollars ($250.00), in addition to the applicable statutory reinstatement fee.

HISTORY: Laws, 2012, ch. 382, § 19; Laws, 2015, ch. 453, § 5, eff from and after July 1, 2015.

Amendment Notes —

The 2015 amendment deleted “Section 79-14-207 (Domestic Limited Partnerships)” preceding “Section 79-15-129 (Foreign Investment Trusts)” near the end of (1); and in (2), substituted “Section 79-14-811” for “Section 79-14-809” and “Section 79-14-1010” for “Section 79-14-910” near the end of the first sentence.

Chapter 37. Mississippi Entity Conversion and Domestication Act

Article 1. General Provisions.

§79-37-101. Short title.

This chapter shall be known and may be cited as the Mississippi Entity Conversion and Domestication Act.

HISTORY: Laws, 2014, ch. 399, § 1, eff from and after Jan. 1, 2015.

§79-37-102. Definitions.

As used in this chapter, unless the context otherwise requires:

  1. [Reserved]
  2. [Reserved]
  3. “Approve” means, in the case of an entity, for its governors and interest holders to take whatever steps are necessary under the entity’s organic rules, organic law, and other law to:
  4. “Conversion” means a transaction authorized by Article 4 of this chapter.
  5. “Converted entity” means the converting entity as it continues in existence after a conversion.
  6. “Converting entity” means the domestic entity that approves a plan of conversion pursuant to Section 79-37-403 or the foreign entity that approves a conversion pursuant to the law of its jurisdiction of formation.
  7. “Distributional interest” means the right under an unincorporated entity’s organic law and organic rules to receive distributions from the entity.
  8. “Domestic,” with respect to an entity, means governed as to its internal affairs by the law of this state.
  9. “Domesticated entity” means the domesticating entity as it continues in existence after a domestication.
  10. “Domesticating entity” means the domestic entity that approves a plan of domestication pursuant to Section 79-37-503 or the foreign entity that approves a domestication pursuant to the law of its jurisdiction of formation.
  11. “Domestication” means a transaction authorized by Article 5 of this chapter.
  12. “Entity”:
  13. “Filing entity” means an entity whose formation requires the filing of a public organic record.The term does not include a limited liability partnership.
  14. “Foreign,” with respect to an entity, means an entity governed as to its internal affairs by the law of a jurisdiction other than this state.
  15. “Governance interest” means a right under the organic law or organic rules of an unincorporated entity, other than as a governor, agent, assignee, or proxy, to:
  16. “Governor” means:
  17. “Interest” means:
  18. [Reserved]
  19. “Interest holder‘ means:
  20. “Interest holder liability” means:
  21. “Jurisdiction”, used to refer to a political entity, means the United States, a state, a foreign country, or a political subdivision of a foreign country.
  22. “Jurisdiction of formation” means the jurisdiction whose law includes the organic law of an entity.
  23. [Reserved]
  24. [Reserved]
  25. “Organic law” means the law of an entity’s jurisdiction of formation governing the internal affairs of the entity.
  26. “Organic rules” means the public organic record and private organic rules of an entity.
  27. “Person” means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, agricultural association, agricultural co-operative marketing association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.
  28. “Plan” means a plan of conversion or plan of domestication.
  29. “Plan of conversion” means a plan under Section 79-37-402.
  30. “Plan of domestication” means a plan under Section 79-37-502.
  31. [Reserved]
  32. [Reserved]
  33. “Private organic rules” mean the rules, whether or not in a record, that govern the internal affairs of an entity, are binding on all of its interest holders, and are not part of its public organic record, if any.The term includes:
  34. “Property” means all property, whether real, personal, or mixed or tangible or intangible, or any right or interest therein.
  35. “Protected agreement” means:
  36. “Public organic record” means the record the filing of which by the Secretary of State is required to form an entity and any amendment to or restatement of that record.The term includes:
  37. “Record,” used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
  38. “Registered foreign entity” means a foreign entity that is registered to do business in this state pursuant to a record filed by the Secretary of State.
  39. “Sign” means, with present intent to authenticate or adopt a record:
  40. “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.
  41. “Statement of conversion” means a statement under Section 79-37-405.
  42. “Statement of domestication” means a statement under Section 79-37-505.
  43. [Reserved]
  44. [Reserved]
  45. [Reserved]
  46. “Transfer” includes:
  47. “Type of entity” means a generic form of entity:

Propose a transaction subject to this chapter;

Adopt and approve the terms and conditions of the transaction; and

Conduct any required proceedings or otherwise obtain any required votes or consents of the governors or interest holders.

Means:

A business corporation;

A nonprofit corporation;

A general partnership, including a limited liability partnership;

A limited partnership, including a limited liability limited partnership;

A limited liability company;

[Reserved];

[Reserved];

[Reserved];

A statutory trust, business trust, or common-law business trust;

An agricultural association, including an agricultural co-operative marketing association; or

Any other person that has:

A legal existence separate from any interest holder of that person; or

The power to acquire an interest in real property in its own name; and

Does not include:

An individual;

A trust with a predominantly donative purpose or a charitable trust;

An association or relationship that is not an entity listed in subparagraph (A) and is not a partnership under the rules stated in Section 79-13-202(c) or a similar provision of the law of any other jurisdiction;

A decedent’s estate; or

A government or a governmental subdivision, agency, or instrumentality.

Receive or demand access to information concerning, or the books and records of, the entity;

Vote for or consent to the election of the governors of the entity; or

Receive notice of or vote on or consent to an issue involving the internal affairs of the entity.

A director of a business corporation;

A director or trustee of a nonprofit corporation;

A general partner of a general partnership;

A general partner of a limited partnership;

A manager of a manager-managed limited liability company;

A member of a member-managed limited liability company;

[Reserved];

[Reserved];

[Reserved];

A trustee of a statutory trust, business trust, or common-law business trust; or

Any other person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law and organic rules of the entity.

A share in a business corporation;

A membership in a nonprofit corporation;

A partnership interest in a general partnership;

A partnership interest in a limited partnership;

A membership interest in a limited liability company;

[Reserved];

[Reserved];

[Reserved];

A beneficial interest in a statutory trust, business trust, or common-law business trust;

A membership in an agricultural association, including an agricultural co-operative marketing association; or

A governance interest or distributional interest in any other type of unincorporated entity.

A shareholder of a business corporation;

A member of a nonprofit corporation;

A general partner of a general partnership;

A general partner of a limited partnership;

A limited partner of a limited partnership;

A member of a limited liability company;

[Reserved];

[Reserved];

[Reserved];

A beneficiary or beneficial owner of a statutory trust, business trust, or common-law business trust;

A member of an agricultural association, including an agricultural co-operative marketing association; or

Any other direct holder of an interest.

Personal liability for a liability of an entity that is imposed on a person:

Solely by reason of the status of the person as an interest holder; or

By the organic rules of the entity which make one or more specified interest holders or categories of interest holders liable in their capacity as interest holders for all or specified liabilities of the entity; or

An obligation of an interest holder under the organic rules of an entity to contribute to the entity.

The bylaws of a business corporation;

The bylaws of a nonprofit corporation;

The partnership agreement of a general partnership;

The partnership agreement of a limited partnership;

The operating agreement of a limited liability company;

[Reserved];

[Reserved];

[Reserved];

The bylaws of an agricultural association, including an agricultural co-operative marketing association; and

The trust instrument of a statutory trust or similar rules of a business trust or common-law business trust.

A record evidencing indebtedness and any related agreement in effect on January 1, 2015;

An agreement that is binding on an entity on January 1, 2015;

The organic rules of an entity in effect on January 1, 2015; or

An agreement that is binding on any of the governors or interest holders of an entity on January 1, 2015.

The articles of incorporation of a business corporation;

The articles of incorporation of a nonprofit corporation;

The certificate of limited partnership of a limited partnership;

The certificate of formation of a limited liability company;

[Reserved];

[Reserved];

The articles of association of an agricultural association, including an agricultural co-operative marketing association; and

The certificate of trust of a statutory trust or similar record of a business trust.

To execute or adopt a tangible symbol; or

To attach to or logically associate with the record an electronic symbol, sound, or process.

An assignment;

A conveyance;

A sale;

A lease;

An encumbrance, including a mortgage or security interest;

A gift; and

A transfer by operation of law.

Recognized at common law; or

Formed under an organic law, whether or not some entities formed under that law are subject to provisions of that law that create different categories of the form of entity.

HISTORY: Laws, 2014, ch. 399, § 2, eff from and after Jan. 1, 2015.

§79-37-103. Relationship of chapter to other laws.

Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

This chapter does not authorize an act prohibited by, and does not affect the application or requirements of, law other than this chapter.

A transaction effected under this chapter may not create or impair a right, duty, or obligation of a person under the statutory law of this state relating to a change in control, takeover, business combination, control-share acquisition, or similar transaction involving a domestic converting or domesticating business corporation unless the corporation survives the transaction, the approval of the plan is by a vote of the shareholders or directors which would be sufficient to create or impair the right, duty, or obligation directly under the law.

HISTORY: Laws, 2014, ch. 399, § 3, eff from and after Jan. 1, 2015.

§79-37-104. Required notice or approval.

A domestic or foreign entity that is required to give notice to, or obtain the approval of, a governmental agency or officer of this state to be a party to a merger must give the notice or obtain the approval to be a party to a conversion or domestication.

Property held for a charitable purpose under the law of this state by a domestic or foreign entity immediately before a transaction under this chapter becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred unless, to the extent required by or pursuant to the law of this state concerning cy pres or other law dealing with nondiversion of charitable assets, the entity obtains an appropriate order of the appropriate court specifying the disposition of the property.

HISTORY: Laws, 2014, ch. 399, § 4, eff from and after Jan. 1, 2015.

§79-37-105. Status of filings.

A filing under this chapter signed by a domestic entity becomes part of the public organic record of the entity if the entity’s organic law provides that similar filings under that law become part of the public organic record of the entity.

HISTORY: Laws, 2014, ch. 399, § 5, eff from and after Jan. 1, 2015.

§79-37-106. Nonexclusivity.

The fact that a transactionunder this chapter produces a certain result does not preclude the same result from being accomplished in any other manner permitted by law other than this chapter.

HISTORY: Laws, 2014, ch. 399, § 6, eff from and after Jan. 1, 2015.

§79-37-107. Reference to external facts.

A plan may refer to facts ascertainable outside the plan if the manner in which the facts will operate upon the plan is specified in the plan.The facts may include the occurrence of an event or a determination or action by a person, whether or not the event, determination, or action is within the control of a party to the transaction.

HISTORY: Laws, 2014, ch. 399, § 7, eff from and after Jan. 1, 2015.

§79-37-108. Alternative means of approval of transactions.

Except as otherwise provided in the organic law or organic rules of a domestic entity, approval of a transaction under this chapter by the affirmative vote or consent of all its interest holders satisfies the requirements of this chapter for approval of the transaction.

HISTORY: Laws, 2014, ch. 399, § 8, eff from and after Jan. 1, 2015.

§79-37-109. Appraisal rights.

An interest holder of a domestic converting or domesticating entity is entitled to appraisal rights in connection with the transaction if the interest holder would have been entitled to appraisal rights under the entity’s organic law in connection with a merger in which the interest of the interest holder was changed, converted, or exchanged unless:

  1. The organic law permits the organic rules to limit the availability of appraisal rights; and
  2. The organic rules provide such a limit or elimination.
  3. The case of a business corporation, by action of its governors.

An interest holder of a domestic converting or domesticating entity is entitled to contractual appraisal rights in connection with a transaction under this chapter to the extent provided in:

The entity’s organic rules;

The plan; or

If an interest holder is entitled to contractual appraisal rights under subsection (b) and the entity’s organic law does not provide procedures for the conduct of an appraisal rights proceeding, Article 13 of the Mississippi Business Corporation Act applies to the extent practicable or as otherwise provided in the entity’s organic rules or the plan.

HISTORY: Laws, 2014, ch. 399, § 9, eff from and after Jan. 1, 2015.

Joint Legislative Committee Note —

Pursuant to Section 1-1-109, the Joint Legislative Committee on Compilation, Revision and Publication of Legislation corrected an error in a statutory reference in (c) by substituting “Article 13 of the Mississippi Business Corporation Act” for “Chapter 13 of the Mississippi Business Corporation Act.” The Joint Committee ratified the correction at its July 24, 2014, meeting.

§79-37-110. [Reserved].

[Reserved for future codification purposes.]

HISTORY: Laws, 2014, ch. 399, § 10, eff from and after Jan. 1, 2015.

§79-37-111. Requirements for documents.

To be entitled to filing by the Secretary of State, a document must satisfy the following requirements and the requirements of any other provision of this chapter that adds to or varies these requirements:

  1. This chapter requires or permits filing the document in the Office of the Secretary of State.
  2. The document contains the information required by this chapter and may contain other information.
  3. The document is in a record.
  4. The document is in the English language, but the name of an entity need not be in English if written in English letters or Arabic or Roman numerals.
  5. The document is signed:
  6. The document must state the name and capacity of the person that signed it.
  7. The document must be delivered to the Office of the Secretary of State for filing in the format and in the manner required by the Secretary of State.

By an officer or director of a domestic or foreign corporation;

By a person authorized by a domestic or foreign entity that is not a corporation; or

If the entity is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

When a document is delivered to the Office of the Secretary of State for filing, the correct filing fee must be paid or provision for payment made in a manner permitted by the Secretary of State.

HISTORY: Laws, 2014, ch. 399, § 11; Laws, 2017, ch. 308, § 1, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment, in (a), inserted “or director” in (5)(A), and added “in the format and in the manner required by the Secretary of State” at the end of (7).

§79-37-112. Filing, service, and copying fees.

The Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) each time process is served on the Secretary of State under this chapter. The party to a proceeding causing service of process may recover this fee as costs if the party prevails in the proceeding.

The Secretary of State shall collect the following fees for copying and certifying the copy of any document filed under this chapter:

  1. One Dollar ($1.00) a page for copying; and
  2. Ten Dollars ($10.00) for the certificate.
  3. [Reserved]
  4. [Reserved]
  5. Statement of conversion. . . . .$50.00
  6. Statement of abandonment of conversion. . . . .$25.00
  7. Statement of domestication. . . . .$50.00
  8. Statement of abandonment of domestication. . . . .$25.00

The Secretary of State shall collect the following fees when the documents described are delivered for filing:

[Reserved]

[Reserved]

HISTORY: Laws, 2014, ch. 399, § 12, eff from and after Jan. 1, 2015.

§79-37-113. Effective time and date of document.

Except as provided in Section 79-37-114, a document accepted for filing is effective:

  1. At the date and time of filing, as evidenced by the means used by the Secretary of State for recording the date and time of filing;
  2. At the time specified in the document as its effective time on the date it is filed;
  3. At a specified delayed effective time and date if permitted by this chapter; or
  4. If a delayed effective date but no time is specified, at the close of business on the date specified.

HISTORY: Laws, 2014, ch. 399, § 13, eff from and after Jan. 1, 2015.

§79-37-114. Correcting filed document.

A domestic or foreign entity may correct a document filed by the Secretary of State within one hundred twenty (120) days of the filing if:

  1. The document contains an inaccuracy;
  2. The document was defectively signed; or
  3. The electronic transmission of the document to the Secretary of State was defective.

A document is corrected by filing with the Secretary of State a statement of correction that:

Describes the document to be corrected and states its filing date or has attached a copy of the document;

Specifies the inaccuracy or defect to be corrected; and

Corrects the inaccuracy or defect.

A statement of correction is effective on the effective date of the document it corrects except as to persons relying on the uncorrected document and adversely affected by the correction.As to those persons, a statement of correction is effective when filed.

HISTORY: Laws, 2014, ch. 399, § 14; Laws, 2017, ch. 308, § 2, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment substituted “within one hundred twenty (120) days” for “within sixty (60) days” in the introductory paragraph of (a).

§79-37-115. Filing duty of Secretary of State.

A document delivered to the Office of the Secretary of State for filing that satisfies the requirements of Section 79-37-111 must be filed by the Secretary of State.

The Secretary of State files a document by recording it as filed on the date and time of receipt.After filing a document, the Secretary of State shall deliver to the domestic or foreign entity or its representative a copy of the document with an acknowledgement of the date and time of filing.

If the Secretary of State refuses to file a document, the Secretary of State shall return the document to the domestic or foreign entity or its representative within five (5) days after the document was delivered, together with a brief, written explanation of the reason for the refusal.

The duty of the Secretary of State to file documents under this section is ministerial.The filing or refusal to file a document does not:

  1. Affect the validity or invalidity of the document in whole or in part;
  2. Relate to the correctness or incorrectness of information contained in the document; or
  3. Create a presumption that the document is valid or invalid or that information contained in the document is correct or incorrect.

HISTORY: Laws, 2014, ch. 399, § 15, eff from and after Jan. 1, 2015.

§79-37-116. Appeal from refusal to file a document.

If the Secretary of State refuses to file a document delivered for filing, the domestic or foreign entity that submitted the document for filing may appeal the refusal within thirty (30) days after the return of the document to the Chancery Court of the First Judicial District of Hinds County, Mississippi.The appeal is commenced by petitioning the court to compel filing the document and by attaching to the petition the document and the explanation of the Secretary of State for the refusal to file.

The court may summarily order the Secretary of State to file the document or take other action the court considers appropriate.

The court’s final decision may be appealed as in other civil proceedings.

HISTORY: Laws, 2014, ch. 399, § 16; Laws, 2017, ch. 308, § 3, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment rewrote the first sentence of (a), which read: “If the Secretary of State refuses to file a document delivered for filing, the domestic or foreign entity that submitted the document for filing may appeal the refusal within thirty (30) days after the return of the document to the chancery court of the county where the entity’s principal office is or will be located, or the Chancery Court of the First Judicial District of Hinds County, Mississippi, if the entity does not have a principal office in this state.”

§79-37-117. Evidentiary effect of copy of filed document.

A filed-stamped copy from the Secretary of State conclusively establishes that the original document is on file with the Secretary of State.

HISTORY: Laws, 2014, ch. 399, § 17, eff from and after Jan. 1, 2015.

§79-37-118. Penalty for signing false document.

A person commits an offense if he signs a document he knows is false in any material respect with intent that the document be delivered to the Secretary of State for filing.

An offense under this section is a misdemeanor punishable by a fine of not to exceed One Thousand Dollars ($1,000.00).

HISTORY: Laws, 2014, ch. 399, § 18, eff from and after Jan. 1, 2015.

§79-37-119. Powers of Secretary of State.

The Secretary of State has the power reasonably necessary to perform the duties required by this chapter and adopt rules and regulations for enforcement.

HISTORY: Laws, 2014, ch. 399, § 19, eff from and after Jan. 1, 2015.

Article 2. [Reserved].

Article 3. [Reserved].

Article 4. Conversion.

§79-37-401. Conversion authorized.

A charitable organization as defined in Section 79-11-501 may not convert under this Article 4.

By complying with this article, a domestic entity may become:

  1. A domestic entity that is a different type of entity; or
  2. A foreign entity that is a different type of entity, if the conversion is authorized by the law of the foreign entity’s jurisdiction of formation and the domestic entity has complied with Article 5 of this chapter.

By complying with the provisions of this article applicable to foreign entities, a foreign entity may become a domestic entity that is a different type of entity if the conversion is authorized by the law of the foreign entity’s jurisdiction of formation and the foreign entity has first domesticated to this state under Article 5 of this chapter.

If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a conversion, the provision applies to a conversion of the entity as if the conversion were a merger until the provision is amended after January 1, 2015.

HISTORY: Laws, 2014, ch. 399, § 20; Laws, 2017, ch. 308, § 4, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment added (a) and redesignated the remaining subsections accordingly; added “and the domestic entity has complied with Article 5 of this chapter” at the end of (b)(2); and added “and the foreign entity has first domesticated to this state under Article 5 of this chapter.”

§79-37-402. Plan of conversion.

A domestic entity may convert to a different type of entity under this article by approving a plan of conversion. The plan must be in a record and contain:

  1. The name and type of entity of the converting entity;
  2. The name, jurisdiction of formation, and type of entity of the converted entity;
  3. The manner of converting the interests in the converting entity into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing;
  4. The proposed public organic record of the converted entity if it will be a filing entity;
  5. The full text of the private organic rules of the converted entity which are proposed to be in a record;
  6. The other terms and conditions of the conversion; and
  7. Any other provision required by the law of this state or the organic rules of the converting entity.

In addition to the requirements of subsection (a), a plan of conversion may contain any other provision not prohibited by law.

HISTORY: Laws, 2014, ch. 399, § 21, eff from and after Jan. 1, 2015.

§79-37-403. Approval of conversion.

A plan of conversion is not effective unless it has been approved:

  1. By a domestic converting entity:
  2. In a record, by each interest holder of a domestic converting entity which will have interest holder liability for debts, obligations, and other liabilities that arise after the conversion becomes effective, unless, in the case of an entity that is not a business or nonprofit corporation:

In accordance with the requirements, if any, in its organic rules for approval of a conversion;

If its organic rules do not provide for approval of a conversion, in accordance with the requirements, if any, in its organic law and organic rules for approval of:

In the case of an entity that is not a business corporation, a merger, as if the conversion were a merger;

In the case of a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation, as if the conversion were that type of merger; or

By all of the interest holders of the entity entitled to vote on or consent to any matter if in the case of any entity that is not a business corporation, neither its organic law nor organic rules provide for approval of a conversion or a merger; and

The organic rules of the entity provide in a record for the approval of a conversion or a merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all the interest holders; and

The interest holder voted for or consented in a record to that provision of the organic rules or became an interest holder after the adoption of that provision.

A conversion of a foreign converting entity is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation.

HISTORY: Laws, 2014, ch. 399, § 22, eff from and after Jan. 1, 2015.

§79-37-404. Amendment or abandonment of plan of conversion.

A plan of conversion of a domestic converting entity may be amended:

  1. In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
  2. By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the conversion is entitled to vote on or consent to any amendment of the plan that will change:
  3. A statement that the conversion has been abandoned in accordance with this section.

The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the converting entity under the plan;

The public organic record, if any, or private organic rules of the converted entity which will be in effect immediately after the conversion becomes effective, except for changes that do not require approval of the interest holders of the converted entity under its organic law or organic rules; or

Any other terms or conditions of the plan, if the change would adversely affect the interest holder in any material respect.

After a plan of conversion has been approved and before a statement of conversion becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic converting entity may abandon the plan in the same manner as the plan was approved.

If a plan of conversion is abandoned after a statement of conversion has been delivered to the Secretary of State for filing and before the statement becomes effective, a statement of abandonment, signed by the converting entity, must be delivered to the Secretary of State for filing before the statement of conversion becomes effective. The statement of abandonment takes effect on filing, and the conversion is abandoned and does not become effective. The statement of abandonment must contain:

The name of the converting entity;

The date on which the statement of conversion was filed by the Secretary of State; and

HISTORY: Laws, 2014, ch. 399, § 23, eff from and after Jan. 1, 2015.

§79-37-405. Statement of conversion; effective date.

A statement of conversion must be signed on behalf of the converting entity and delivered to the Secretary of State for filing.

A statement of conversion must contain:

  1. The name, jurisdiction of formation, and type of entity of the converting entity;
  2. The name, jurisdiction of formation, and type of entity of the converted entity;
  3. If the statement of conversion is not to be effective upon filing, the later date and time on which it will become effective, which may not be more than ninety (90) days after the date of filing;
  4. If the converting entity is a domestic entity, a statement that the plan of conversion was approved in accordance with this article or, if the converting entity is a foreign entity, a statement that the conversion was approved by the foreign entity in accordance with the law of its jurisdiction of formation; copies of the conversion documents from its jurisdiction of formation must be filed;
  5. If the converted entity is a domestic filing entity, its public organic record, as an attachment;
  6. If the converted entity is a domestic limited liability partnership, its statement of qualification, as an attachment; and
  7. If the converted entity is a foreign entity, a mailing address to which the Secretary of State may send any process served on the Secretary of State pursuant to Section 79-37-406(e).

In addition to the requirements of subsection (b), a statement of conversion may contain any other provision not prohibited by law.

If the converted entity is a domestic entity, its public organic record, if any, must satisfy the requirements of the law of this state, except that the public organic record does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.

A statement of conversion is effective on the date and time of filing or the later date and time specified in the statement of conversion.

If the converted entity is a domestic entity, the conversion is effective when the statement of conversion is effective. If the converted entity is a foreign entity, the conversion is effective on the later of:

The date and time provided by the organic law of the converted entity; or

When the statement is effective.

HISTORY: Laws, 2014, ch. 399, § 24; Laws, 2017, ch. 308, § 5, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment added “copies of the conversion documents from its jurisdiction of formation must be filed” at the end of (b)(4); and deleted former (e), which read: “A plan of conversion that is signed by a domestic converting entity and meets all the requirements of subsection (b) may be delivered to the Secretary of State for filing instead of a statement of conversion and on filing has the same effect. If a plan of conversion is filed as provided in this subsection, references in this chapter to a statement of conversion refer to the plan of conversion filed under this subsection” and redesignated the remaining subsections accordingly.

§79-37-406. Effect of conversion.

When a conversion becomes effective:

  1. The converted entity is:
  2. All property of the converting entity continues to be vested in the converted entity without transfer, reversion, or impairment;
  3. All debts, obligations, and other liabilities of the converting entity continue as debts, obligations, and other liabilities of the converted entity;
  4. Except as otherwise provided by law or the plan of conversion, all the rights, privileges, immunities, powers, and purposes of the converting entity remain in the converted entity;
  5. The name of the converted entity may be substituted for the name of the converting entity in any pending action or proceeding;
  6. If a converted entity is a filing entity, its public organic record is effective;
  7. If the converted entity is a limited liability partnership, its statement of qualification is effective;
  8. The private organic rules of the converted entity which are to be in a record, if any, approved as part of the plan of conversion are effective; and
  9. The interests in the converting entity are converted, and the interest holders of the converting entity are entitled only to the rights provided to them under the plan of conversion and to any appraisal rights they have under Section 79-37-109 and the converting entity’s organic law.

Organized under and subject to the organic law of the converted entity; and

The same entity without interruption as the converting entity;

Except as otherwise provided in the organic law or organic rules of the converting entity, the conversion does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of the converting entity.

When a conversion becomes effective, a person that did not have interest holder liability with respect to the converting entity and becomes subject to interest holder liability with respect to a domestic entity as a result of a conversion has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations, and other liabilities that arise after the conversion becomes effective.

When a conversion becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic converting entity with respect to which the person had interest holder liability is subject to the following rules:

The conversion does not discharge any interest holder liability under the organic law of a domestic converting entity to the extent the interest holder liability arose before the conversion became effective.

The person does not have interest holder liability under the organic law of the domestic converting entity for any debt, obligation, or other liability that arises after the conversion becomes effective.

The organic law of the domestic converting entity continues to apply to the release, collection, or discharge of any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.

The person has whatever rights of contribution from any other person as are provided by other law or the organic rules of the domestic converting entity with respect to any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.

When a conversion becomes effective, a foreign entity that is the converted entity may be served with process in this state for the collection and enforcement of any of its debts, obligations, and other liabilities in accordance with applicable law.

If the converting entity is a registered foreign entity, its registration to do business in this state is amended to reflect its new status when the conversion becomes effective.

A conversion does not require the entity to wind up its affairs and does not constitute or cause the dissolution of the entity.

HISTORY: Laws, 2014, ch. 399, § 25; Laws, 2017, ch. 308, § 6, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment substituted “is amended to reflect its new status when” for “is canceled when” in (f).

Article 5. Domestication.

§79-37-501. Domestication authorized.

Except as otherwise provided in this section, by complying with this article, a domestic entity may become a domestic entity of the same type of entity in a foreign jurisdiction if the domestication is authorized by the law of the foreign jurisdiction.

Except as otherwise provided in this section, by complying with the provisions of this article applicable to foreign entities a foreign entity may become a domestic entity of the same type of entity in this state if the domestication is authorized by the law of the foreign entity’s jurisdiction of formation.

If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a domestication, the provision applies to a domestication of the entity as if the domestication were a merger until the provision is amended after January 1, 2015.

HISTORY: Laws, 2014, ch. 399, § 26, eff from and after Jan. 1, 2015.

§79-37-502. Plan of domestication.

A domestic entity may become a foreign entity in a domestication by approving a plan of domestication.The plan must be in a record and contain:

  1. The name and type of entity of the domesticating entity;
  2. The name and jurisdiction of formation of the domesticated entity;
  3. The manner of converting the interests in the domesticating entity into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing;
  4. The proposed public organic record of the domesticated entity if it is a filing entity;
  5. The full text of the private organic rules of the domesticated entity that are proposed to be in a record;
  6. The other terms and conditions of the domestication; and
  7. Any other provision required by the law of this state or the organic rules of the domesticating entity.

In addition to the requirements of subsection (a), a plan of domestication may contain any other provision not prohibited by law.

HISTORY: Laws, 2014, ch. 399, § 27, eff from and after Jan. 1, 2015.

§79-37-503. Approval of domestication.

A plan of domestication is not effective unless it has been approved:

  1. By a domestic domesticating entity:
  2. In a record, by each interest holder of a domestic domesticating entity that will have interest holder liability for debts, obligations, and other liabilities that arise after the domestication becomes effective, unless, in the case of an entity that is not a business corporation or nonprofit corporation:

In accordance with the requirements, if any, in its organic rules for approval of a domestication;

If its organic rules do not provide for approval of a domestication, in accordance with the requirements, if any, in its organic law and organic rules for approval of:

In the case of an entity that is not a business corporation, a merger, as if the domestication were a merger;

In the case of a business corporation, a merger requiring approval by a vote of the interest holders of the business corporation, as if the domestication were that type merger; or

By all of the interest holders of the entity entitled to vote on or consent to any matter if in the case of an entity that is not a business corporation, neither its organic law nor organic rules provide for approval of a domestication or a merger; and

The organic rules of the entity in a record provide for the approval of a domestication or merger in which some or all of its interest holders become subject to interest holder liability by the vote or consent of fewer than all of the interest holders; and

The interest holder consented in a record to or voted for that provision of the organic rules or became an interest holder after the adoption of that provision.

A domestication of a foreign domesticating entity is not effective unless it is approved in accordance with the law of the foreign entity’s jurisdiction of formation.

HISTORY: Laws, 2014, ch. 399, § 28, eff from and after Jan. 1, 2015.

§79-37-504. Amendment or abandonment of plan of domestication.

A plan of domestication of a domestic domesticating entity may be amended:

  1. In the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
  2. By its governors or interest holders in the manner provided in the plan, but an interest holder that was entitled to vote on or consent to approval of the domestication is entitled to vote on or consent to any amendment of the plan that will change:
  3. A statement that the domestication has been abandoned in accordance with this section.

The amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing, to be received by any of the interest holders of the domesticating entity under the plan;

The public organic record, if any, or private organic rules of the domesticated entity that will be in effect immediately after the domestication becomes effective, except for changes that do not require approval of the interest holders of the domesticated entity under its organic law or organic rules; or

Any other terms or conditions of the plan, if the change would adversely affect the interest holder in any material respect.

After a plan of domestication has been approved by a domestic domesticating entity and before a statement of domestication becomes effective, the plan may be abandoned as provided in the plan.Unless prohibited by the plan, a domestic domesticating entity may abandon the plan in the same manner as the plan was approved.

If a plan of domestication is abandoned after a statement of domestication has been delivered to the Secretary of State for filing and before the statement becomes effective, a statement of abandonment, signed by the entity, must be delivered to the Secretary of State for filing before the statement of domestication becomes effective.The statement of abandonment takes effect on filing, and the domestication is abandoned and does not become effective.The statement of abandonment must contain:

The name of the domesticating entity;

The date on which the statement of domestication was filed by the Secretary of State; and

HISTORY: Laws, 2014, ch. 399, § 29, eff from and after Jan. 1, 2015.

§79-37-505. Statement of domestication; effective date.

A statement of domestication must be signed by the domesticating entity and delivered to the Secretary of State for filing.

A statement of domestication must contain:

  1. The name, jurisdiction of formation, and type of entity of the domesticating entity;
  2. The name and jurisdiction of formation of the domesticated entity;
  3. If the statement of domestication is not to be effective upon filing, the later date and time on which it will become effective, which may not be more than ninety (90) days after the date of filing;
  4. If the domesticating entity is a domestic entity, a statement that the plan of domestication was approved in accordance with this article or, if the domesticating entity is a foreign entity, a statement that the domestication was approved in accordance with the law of its jurisdiction of formation;
  5. If the domesticated entity is a domestic filing entity, its public organic record, as an attachment;
  6. If the domesticated entity is a domestic limited liability partnership, its statement of qualification, as an attachment;
  7. If the domesticated entity is a foreign entity that is not a registered foreign entity, a mailing address to which the Secretary of State may send any process served on the Secretary of State pursuant to Section 79-37-506(e);
  8. If the domesticated entity is a foreign entity, a copy of the filed domestication documents from the new jurisdiction as an attachment; and
  9. If the domesticated entity is a domestic entity, a certificate of good standing or certificate of existence from its jurisdiction of formation that is issued less than one hundred eighty (180) days before filing under this section.

In addition to the requirements of subsection (b), a statement of domestication may contain any other provision not prohibited by law.

If the domesticated entity is a domestic entity, its public organic record, if any, must satisfy the requirements of the law of this state, but the public organic record does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.

A plan of domestication that is signed by a domesticating domestic entity and meets all of the requirements of subsection (b) may be delivered to the Secretary of State for filing instead of a statement of domestication and on filing has the same effect. If a plan of domestication is filed as provided in this subsection, references in this chapter to a statement of domestication refer to the plan of domestication filed under this subsection.

A statement of domestication is effective on the date and time of filing or the later date and time specified in the statement of domestication.

A domestication in which the domesticated entity is a domestic entity is effective when the statement of domestication is effective. A domestication in which the domesticated entity is a foreign entity is effective on the later of:

The date and time provided by the organic law of the domesticated entity; or

When the statement is effective.

HISTORY: Laws, 2014, ch. 399, § 30; Laws, 2017, ch. 308, § 7, eff from and after July 1, 2017.

Amendment Notes —

The 2017 amendment added (b)(8) and (9), and made related stylistic changes.

§79-37-506. Effect of domestication.

When a domestication becomes effective:

  1. The domesticated entity is:
  2. All property of the domesticating entity continues to be vested in the domesticated entity without transfer, reversion, or impairment;
  3. All debts, obligations, and other liabilities of the domesticating entity continue as debts, obligations, and other liabilities of the domesticated entity;
  4. Except as otherwise provided by law or the plan of domestication, all of the rights, privileges, immunities, powers, and purposes of the domesticating entity remain in the domesticated entity;
  5. The name of the domesticated entity may be substituted for the name of the domesticating entity in any pending action or proceeding;
  6. If the domesticated entity is a filing entity, its public organic record is effective;
  7. If the domesticated entity is a limited liability partnership, its statement of qualification is effective simultaneously;
  8. The private organic rules of the domesticated entity that are to be in a record, if any, approved as part of the plan of domestication are effective; and
  9. The interests in the domesticating entity are converted to the extent and as approved in connection with the domestication, and the interest holders of the domesticating entity are entitled only to the rights provided to them under the plan of domestication and to any appraisal rights they have under Section 79-37-109 and the domesticating entity’s organic law.

Organized under and subject to the organic law of the domesticated entity; and

The same entity without interruption as the domesticating entity;

Except as otherwise provided in the organic law or organic rules of the domesticating entity, the domestication does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of the domesticating entity.

When a domestication becomes effective, a person that did not have interest holder liability with respect to the domesticating entity and that becomes subject to interest holder liability with respect to a domestic entity as a result of the domestication has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations, and other liabilities that arise after the domestication becomes effective.

When a domestication becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic domesticating entity with respect to which the person had interest holder liability is subject to the following rules:

The domestication does not discharge any interest holder liability under the organic law of a domesticating domestic entity to the extent the interest holder liability arose before the domestication became effective.

A person does not have interest holder liability under the organic law of the domestic domesticating entity for any debt, obligation, or other liability that arises after the domestication becomes effective.

The organic law of a domestic domesticating entity continues to apply to the release, collection, or discharge of any interest holder liability preserved under paragraph (1) as if the domestication had not occurred.

A person has whatever rights of contribution from any other person as are provided by other law or the organic rules of the domestic domesticating entity with respect to any interest holder liability preserved under paragraph (1) as if the domestication had not occurred.

When a domestication becomes effective, a foreign entity that is the domesticated entity may be served with process in this state for the collection and enforcement of any of its debts, obligations, and other liabilities in accordance with applicable law.

If a domesticating entity is a registered foreign entity, the registration to do business in this state of the domesticating entity is canceled when the domestication becomes effective.

A domestication does not require the entity to wind up its affairs and does not constitute or cause the dissolution of the entity.

HISTORY: Laws, 2014, ch. 399, § 31, eff from and after Jan. 1, 2015.

Article 6. Miscellaneous Provisions.

§79-37-601. Consistency of application.

In applying and construing this chapter, consideration must be given to the need to promote consistency of the law with respect to its subject matter among states that enact it.

HISTORY: Laws, 2014, ch. 399, § 32, eff from and after Jan. 1, 2015.

§79-37-602. Relation to Electronic Signatures in Global and National Commerce Act.

This chapter modifies, limits, and supersedes the Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001, et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 USC Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 USC Section 7003(b).

HISTORY: Laws, 2014, ch. 399, § 33, eff from and after Jan. 1, 2015.

§79-37-603. Savings clause.

This chapter does not affect an action commenced, proceeding brought, or right accrued before January 1, 2015.

HISTORY: Laws, 2014, ch. 399, § 34, eff from and after Jan. 1, 2015.

§79-37-604. Severability clause.

If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

HISTORY: Laws, 2014, ch. 399, § 35, eff from and after Jan. 1, 2015.