Will Stewart, Greater Manchester Chamber of Commerce
When compared to other bills dealing with issues like health care, guns, abortion and unions, Senate Bill 203, relative to limited liability companies, and Senate Bill 205, revising the New Hampshire Business Corporation Act, aren't exactly the most dramatic bills being taken up by the General Court this year.
But that's not to say they're not important. Indeed, the bills will probably be more relevant to Chamber members than many, if not most, of the bills being debated this year. For this reason the Chamber's Government Affairs Committee recommends the organization support these two important bills.
In short, the bills seek to modernize the state's LLC and corporations laws, which haven't been touched since the '90s. Overall, the bills keep most of the provisions governing LLCs and corporations currently in place. The bills do, however, seek to make the existing laws governing business entities easier to understand.
(Ironically, the bills themselves aren't quick, easy reads. SB 203, for example, is some 75 pages long. SB 205 tops out at 136 pages.)
For starters, the bills seek to make better use of plain English. At a Business and Industry Association of New Hampshire-sponsored press conference held in the lobby of the Legislative Office Building Tuesday morning, it was noted that the majority of LLCs, by far the state's most popular business entity choice, formed in New Hampshire are done so without the assistance of legal counsel. The use of plain English in favor of legal jargon will help make business formation and governance easier to understand for new and existing entrepreneurs.
SB 203 also defines a number of technical terms in the current LLC laws that aren't spelled out. These terms include "allocation," "distribution," "dissociation" and "dissolution." Left undefined in the current statute, these terms have been a source of confusion, particularly when business partnerships dissolve.
The bill updating the Business Corporations Act, SB 205, would offer such modernizing aspects such as allowing for electronic notification with regard to corporate governance and meetings. The bill also increases the ability for entities to convert to a corporation, among other provisions.