15 Pa.C.S. § 1707 — PA Code / Title 15 / Chapter 17 / Section 1707
Exception to requirement of notice.
Status: in_force

(a) General rule.--Whenever any notice or communication is required to be given to any person under the provisions of this subpart or by the articles or bylaws of any business corporation or by the terms of any agreement or other instrument or as a condition precedent to taking any corporate action and communication with that person is then unlawful, the giving of the notice or communication to that person shall not be required, and there shall not be any duty to apply for a license or other permission to do so. Any action or meeting that is taken or held without notice or communication to that person shall have the same validity as if the notice or communication had been duly given. If the action taken is such as to require the filing of any document with respect thereto under any provision of law or any agreement or other instrument, it shall be sufficient, if such is the fact and if notice or communication is required, to state therein that notice or communication was given to all persons entitled to receive

notice or communication except persons with whom communication was unlawful. See section 1701 (relating to applicability of subchapter).

(b) Shareholders without forwarding addresses.--Subsection

(a) shall also be applicable to any shareholder with whom the corporation has been unable to communicate for more than 24 consecutive months because communications to the shareholder are returned unclaimed or the shareholder has otherwise failed to provide the corporation with a current address. Whenever the shareholder provides the corporation with a current address, subsection (a) shall cease to be applicable to the shareholder under this subsection. Cross References. Section 1707 is referred to in section 1701 of this title.
15 Pa.C.S. § 7715 — PA Code / Title 15 / Chapter 77 / Section 7715
Audit.
Status: in_force

(a) Procedure.--At the close of each fiscal year, a complete certified audit of the operations of the corporation shall be made by a qualified certified public accountant employed by the board of directors, a written report of which shall include the balance sheet, operating statement, commissions, salaries and other remunerations of directors, officers and employees and other proper information. The audit shall be submitted to the members at the next regular meeting. The annual audit of a corporation with annual gross sales of $100,000 or less may be performed by an audit committee of three or more members of the corporation appointed by the board of directors; however, one of the three members must be a member of the board of directors. The members of the committee need not be certified public accountants or public accountants.

(b) Withdrawal of audit and improper audits.--A certified audit may not be withdrawn without approval of the board of directors. The board of directors may seek legal recourse if the audit is conducted improperly.
15 Pa.C.S. § 2513 — PA Code / Title 15 / Chapter 25 / Section 2513
Disparate treatment of certain persons.
Status: in_force

(a) General rule.--A registered corporation, except one described in section 2502(1)(ii) or (2) (relating to registered corporation status), that creates and issues any securities, contracts, warrants or other instruments evidencing any shares, option rights, securities having conversion or option rights,

or obligations under section 1525 (relating to stock rights and options) may set forth therein such terms as are fixed by the board of directors, including, without limiting the generality of such authority, conditions including, but not limited to, conditions that preclude or limit any person or persons owning or offering to acquire a specified number or percentage of the outstanding common shares, other shares, option rights, securities having conversion or option rights, or obligations of the corporation or transferee or transferees of the person or persons from exercising, converting, transferring or receiving the shares, option rights, securities having conversion or option rights, or obligations.

(b) Cross reference.--See section 1525(c) (relating to standard of care unaffected). Cross References. Section 2513 is referred to in sections 1525, 1715 of this title.
15 Pa.C.S. § 102 — PA Code / Title 15 / Chapter 1 / Section 102
Definitions.
Status: in_force

(a) Defined terms.--Subject to additional or inconsistent definitions contained in subsequent provisions of this title that are applicable to specific provisions of this title, the following words and phrases when used in this title shall have, unless the context clearly indicates otherwise, the meanings given to them in this section: "Act" or "action." Includes failure to act.

"Affiliate." A person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with a specified person.

"Associate." When used to indicate a relationship with any person:

(1) a corporation or other association of which the person is a governor or officer, or is, directly or indirectly, the beneficial owner of interests entitling the person to cast at least 10% of the votes that all interest holders would be entitled to cast in an election of governors of the corporation or other association;

(2) a trust or other estate in which the person has a substantial beneficial interest or as to which the person serves as trustee or in a similar fiduciary capacity; and

(3) a relative or spouse of the person, or a relative of the spouse, who has the same home as the person.

"Association." A corporation, for profit or not-for-profit, a partnership, a limited liability company, a business or statutory trust, an entity or two or more persons associated

in a common enterprise or undertaking. The term does not include:

(1) a testamentary trust or an inter vivos trust as defined in 20 Pa.C.S. § 711(3) (relating to mandatory exercise of jurisdiction through orphans' court division in general);

(2) an association or relationship that:

(i) is not a person that has:

(A) a legal existence separate from any interest holder of the person; or

(B) the power to acquire an interest in real property in its own name; and

(ii) is not a partnership under the rules stated in section 8422(c) (relating to formation of partnership) or a similar provision of the laws of another jurisdiction;

(3) a decedent's estate; or

(4) a government or a governmental subdivision, agency or instrumentality.

"Banking institution." An institution as defined in section 102(r) of the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965.

"Bureau." The Bureau of Corporations and Charitable Organizations of the Department of State.

"Business corporation." A domestic or foreign business corporation as defined in section 1103 (relating to definitions), whether or not it is a cooperative corporation.

"Business trust." A trust subject to Chapter 95 (relating to business trusts).

"Charitable purposes." The relief of poverty, the advancement and provision of education, including postsecondary education, the advancement of religion, the prevention and treatment of disease or injury, including mental retardation and mental disorders, governmental or municipal purposes and any other purpose the accomplishment of which is recognized as important and beneficial to the public.

"Conversion." A transaction authorized by Subchapter E of
15 Pa.C.S. § 5986 — PA Code / Title 15 / Chapter 59 / Section 5986
Qualifications of receivers.
Status: in_force

A receiver shall in all cases be a natural person of full age or a corporation authorized to act as receiver, which corporation, if so authorized, may be a domestic corporation for profit or not-for-profit or a foreign corporation for profit or not-for-profit authorized to do business in this Commonwealth, and shall give such bond, if any, as the court may direct, with such sureties, if any, as the court may require. (July 9, 2013, P.L.476, No.67, eff. 60 days)
15 Pa.C.S. § 502 — PA Code / Title 15 / Chapter 5 / Section 502
Application of chapter.
Status: in_force

(a) General rule.--Except as otherwise provided in the scope provisions of subsequent provisions of this chapter, this chapter shall apply to and the word "corporation" in this chapter shall mean:

(1) A domestic or foreign corporation for profit.

(2) A domestic or foreign corporation not-for-profit.

(b) Corporations claiming exemption from power of the General Assembly.--Any provision of this chapter otherwise applicable to a corporation claiming exemption from the power of the General Assembly shall be inapplicable to such corporation to the extent, and only to the extent, required by the Constitution of the United States or the Constitution of Pennsylvania, or both.
15 Pa.C.S. § 7101 — PA Code / Title 15 / Chapter 71 / Section 7101
Short title of subpart.
Status: in_force

This subpart shall be known and may be cited as the Cooperative Corporation Law of 1988.
15 Pa.C.S. § 141 — PA Code / Title 15 / Chapter 1 / Section 141
Abandonment of filing before effectiveness.
Status: in_force

(a) General rule.--A document in record form delivered to the department for filing may be abandoned before it takes effect by delivering to the department for filing a statement of abandonment.

(b) Requirements for statement of abandonment.--A statement of abandonment must:

(1) be signed by a person with the authority to sign the statement;

(2) identify the document to be abandoned; and

(3) state that abandonment of the document has been validly approved.

(c) Effect of statement of abandonment.--Upon filing by the department of a statement of abandonment, the action or transaction evidenced by the original document shall not take effect. (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)

2014 Amendment. Act 172 added section 141. Cross References. Section 141 is referred to in sections 136, 334, 344, 354, 365, 374, 8419, 8622, 8624, 8822, 8824 of this title.
15 Pa.C.S. § 8881 — PA Code / Title 15 / Chapter 88 / Section 8881
Direct action by member.
Status: in_force

(a) General rule.--Subject to subsection (b), a member may maintain a direct action against another member, a manager or the limited liability company to enforce the member's rights and protect the member's interests, including rights and interests under the operating agreement or this title or arising independently of the membership relationship.

(b) Required injury.--A member 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 liability company.

(c) Cross reference.--See section 8815(c)(17) (relating to contents of operating agreement). Cross References. Section 8881 is referred to in sections 8849.1, 8849.2, 8861, 8862 of this title.
15 Pa.C.S. § 8651 — PA Code / Title 15 / Chapter 86 / Section 8651
Form of contribution.
Status: in_force

A contribution may consist of:

(1) property transferred to, services performed for or another benefit provided to the limited partnership;

(2) an agreement to transfer property to, perform services for or provide another benefit to the partnership; or

(3) any combination of items listed in paragraphs (1) and (2). Cross References. Section 8651 is referred to in section 8612 of this title.
15 Pa.C.S. § 7532 — PA Code / Title 15 / Chapter 75 / Section 7532
Removal of directors.
Status: in_force

A director may be removed from office by the affirmative vote of not less than a majority of the members present and voting at any regular or special meeting called for that purpose or, where the bylaws provide for the election of directors by districts, by the affirmative vote of not less than a majority of the members or delegates residing in or representing the district from which he was elected. The bylaws shall provide for the filing of charges, the giving of notice thereof, an opportunity to be heard and the procedures under which a director may be removed.
15 Pa.C.S. § 8438 — PA Code / Title 15 / Chapter 84 / Section 8438
Liability of purported partner.
Status: in_force

(a) General rule.--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 jointly and severally liable, with any other person consenting to the representation, with respect to that liability.

(b) Authority of purported partner.--If a person is represented in the manner described in subsection (a) 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 the partners of the existing partnership consent to the representation, a partnership act or obligation results. If fewer than all 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.

(c) Effect of certificate of partnership authority.--A person is not liable as a partner merely because the person is named by another as a partner in a certificate of partnership authority.

(d) No effect of failure to disclaim authority.--A person does not continue to be liable as a partner merely because of a failure to file a certificate of dissociation or to amend a certificate of partnership authority to indicate the person's dissociation as a partner.

(e) Nonliability of persons not partners.--Except as provided in subsections (a) and (b), persons who are not partners as to each other are not liable as partners to other persons. Cross References. Section 8438 is referred to in section 8437 of this title.
15 Pa.C.S. § 5752 — PA Code / Title 15 / Chapter 57 / Section 5752
Organization on a stock share basis.
Status: in_force

(a) General rule.--A nonprofit corporation may be organized upon either a nonstock basis or, if so provided in its articles, upon a stock share basis.

(b) Form of certificates; uncertificated shares.--The shares of nonprofit corporations organized upon a stock share basis shall be of the denominations provided in the bylaws and shall be represented by share certificates unless the articles provide that any or all classes and series of shares, or any part thereof, shall be uncertificated shares. A provision of the articles providing for uncertificated shares shall not apply to shares represented by a certificate until the certificate is surrendered to the corporation. Except as otherwise expressly provided by law, the rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class and series shall be identical. The fact that the corporation is a nonprofit corporation shall be noted conspicuously on the face of each certificate. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice stating:

(1) That the corporation is a nonprofit corporation incorporated under the laws of this Commonwealth.

(2) The name of the registered owner.

(3) The denomination and class of shares and the designation of the series, if any, of the shares issued or transferred.

(c) Rights of shareholders.--Unless otherwise provided in a bylaw adopted by the members, each share shall entitle the holder thereof to one vote. No dividends shall be directly or indirectly paid on the shares, nor shall the shareholders be entitled to any portion of the earnings of the corporation derived through increment of value upon its property, or otherwise incidentally made, until the dissolution of the corporation.

(d) Transferability of shares.--Unless otherwise provided in the bylaws, the shares shall not be transferable by operation of law or otherwise.

(e) Power to cancel shares.--A nonprofit corporation shall have power to exclude from further membership any shareholder who fails to comply with the reasonable and lawful bylaws of the corporation, and may cancel the shares of any offending member without liability for an accounting except as may be provided in the bylaws.

(f) Applicability of the Uniform Commercial Code.--The provisions of 13 Pa.C.S. Div. 8 (relating to investment securities) shall not apply in any manner to the shares of a nonprofit corporation.

(g) Cross reference.--See the definition of "member" in section 5103 (relating to definitions).

(Nov. 1, 1979, P.L.255, No.86, eff. Jan. 1, 1980; July 9, 2013, P.L.476, No.67, eff. 60 days) Cross References. Section 5752 is referred to in sections 5504, 5541 of this title.
15 Pa.C.S. § 8419 — PA Code / Title 15 / Chapter 84 / Section 8419
Liability of general partner or other person for false or missing information in filed document.
Status: in_force

(a) General rule.--If a document delivered to the department for filing under this title and filed by the department contains a materially false statement or fails to state a material fact required to be stated, a person that suffers loss by reasonable reliance on the statement or failure to state a material fact may recover damages for the loss from:

(1) a person that signed the document or caused another to sign it on the person's behalf and knew there was false or missing information in the document at the time it was signed; and

(2) subject to subsection (b), a partner if:

(i) the document was delivered for filing on behalf of the partnership; and

(ii) the partner knew or had notice there was false or missing information for a reasonably sufficient time before the document was relied upon so that, before the reliance, the partner reasonably could have:

(A) filed a petition under section 144 (relating to signing and filing pursuant to judicial order); or

(B) delivered to the department for filing a statement of correction under section 138 (relating to statement of correction) or a statement of

abandonment under section 141 (relating to abandonment of filing before effectiveness).

(b) Partner relieved of responsibility.--To the extent the partnership agreement expressly relieves a partner of responsibility for maintaining the accuracy of information contained in records delivered on behalf of the partnership to the department for filing under this title and imposes that responsibility on one or more other partners, the liability stated in subsection (a)(2) applies to those other partners and not to the partner that the partnership agreement relieves of the responsibility.

(c) Cross reference.--See section 143 (relating to liability for inaccurate information in filing).
15 Pa.C.S. § 2721 — PA Code / Title 15 / Chapter 27 / Section 2721
Bylaw and fundamental change procedures.
Status: in_force

So long as a business corporation is a management corporation subject to this chapter:

(1) The board of directors shall have the full authority vested by this subpart in the shareholders to amend the articles under section 2704(b) (relating to procedure) to renew the election of the corporation to be subject to this chapter and to adopt or change the bylaws, and a bylaw adopted by the board of directors pursuant to this section may continue in effect as long as the corporation remains subject to this chapter.

(2) None of the following shall be adopted or changed by the shareholders without the approval of the board of directors:

(i) a plan under Chapter 3 (relating to entity transactions);

(ii) an amendment of the articles;

(iii) an amendment, adoption or repeal of a bylaw;

(iv) a plan of asset transfer; or

(v) a resolution recommending dissolution.

(3) In the case of a corporation that in the ordinary course of business redeems all outstanding shares at the option of the shareholder at the net asset value or at another agreed method or amount of value thereof, a plan under Chapter 3, an amendment of the articles or a plan of

asset transfer under section 1932 (relating to voluntary transfer of corporate assets) shall not require the approval of the shareholders of the corporation for adoption by the corporation. (Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)
15 Pa.C.S. § 2304 — PA Code / Title 15 / Chapter 23 / Section 2304
Additional contents of articles of statutory close corporations.
Status: in_force

(a) General rule.--In addition to the provisions otherwise required by this subpart, the articles of a statutory close corporation shall provide that neither the corporation nor any shareholder shall make an offering of any of its shares of any class that would constitute a "public offering" within the meaning of the Securities Act of 1933.

(b) Number or qualifications of shareholders.--The articles of a statutory close corporation may set forth:

(1) The maximum number of persons who are entitled to be record holders or beneficial owners of its shares.

(2) The qualifications of shareholders, either by specifying classes of persons who shall be entitled to be holders of record of shares of any class or by specifying classes of persons who shall not be entitled to be holders of shares of any class or both.

(c) Aggregation of holdings.--Except as otherwise provided in the articles, for purposes of determining the number of holders of record or beneficial owners of the shares of a statutory close corporation, shares that are held jointly or in common or in a trust, by two or more persons, as fiduciaries or otherwise, or that are held by spouses, shall be treated as held by one shareholder. (Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 amended subsec. (a). Cross References. Section 2304 is referred to in sections 2303, 2305, 2306, 2308, 2309, 2322 of this title.
15 Pa.C.S. § 7537 — PA Code / Title 15 / Chapter 75 / Section 7537
Contract assignments to association.
Status: in_force

If any contract authorized by a cooperative contains an assignment to the association of any part or all of funds due or to become due the member during the life of the contract for any product produced or to be produced by him or for any services performed or to be performed in producing any product, any person who accepts or receives the product from the member is bound by the assignment after receiving written notice from the association and the member of the amount and duration of the assignment. However, as to any seasonal crop, if no funds are paid or become payable by any person under such an assignment for a period of two consecutive years during the life of the contract, thereafter the assignment shall not be binding upon any person who receives or accepts the product from the member until the assignment is reaffirmed by the member in writing and written notice thereof is given by the association or the member. Any such reaffirmation shall continue to be effective during the life of the contract until another lapse of two consecutive years occurs.
15 Pa.C.S. § 5503 — PA Code / Title 15 / Chapter 55 / Section 5503
Defense of ultra vires.
Status: in_force

(a) General rule.--A limitation upon the business, purposes or powers of a nonprofit corporation, expressed or implied in its articles or bylaws or implied by law, shall not be asserted in order to defend any action at law or in equity between the corporation and a third person, or between a member and a third person, involving any contract to which the corporation is a party or any right of property or any alleged liability of whatever nature, but the limitation may be asserted:

(1) In an action by a member against the corporation to enjoin the doing of unauthorized acts or the transaction or continuation of unauthorized business. If the unauthorized acts or business sought to be enjoined are being transacted pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the action and if it deems the result to be equitable, set aside and enjoin the performance of the contract, and in so doing shall allow to the corporation, or to the other parties to the contract, as the case may be, such compensation as may be appropriate for the loss or damage sustained by any of them from the action of the court in setting aside and enjoining the performance of the contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a loss or damage sustained.

(2) In any action by or in the right of the corporation to procure a judgment in its favor against an incumbent or

former officer, director or member of an other body of the corporation for loss or damage due to his unauthorized acts.

(3) In a proceeding by the Commonwealth under section 503 (relating to actions to revoke corporate franchises) or in a proceeding by the Commonwealth to enjoin the corporation from the doing of unauthorized or unlawful business.

(b) Conveyances of property by or to a corporation.--A conveyance or transfer by or to a nonprofit corporation of property, real or personal, of any kind or description, shall not be invalid or fail because in making the conveyance or transfer, or in acquiring the property, real or personal, any representative of the corporation acting within the scope of the actual or apparent authority given to him by the corporation has exceeded any of the purposes or powers of the corporation.

(c) Cross reference.--See section 6146 (relating to provisions applicable to all foreign corporations). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; June 22, 2001, P.L.418, No.34, eff. 60 days) Cross References. Section 5503 is referred to in section 6146 of this title.
15 Pa.C.S. § 1726 — PA Code / Title 15 / Chapter 17 / Section 1726
Removal of directors.
Status: in_force

(a) Removal by the shareholders.--

(1) Unless otherwise provided in a bylaw adopted by the shareholders, the entire board of directors, or a class of the board where the board is classified with respect to the power to select directors, or any individual director of a business corporation may be removed from office without assigning any cause by the vote of shareholders, or of the holders of a class or series of shares, entitled to elect directors, or the class of directors. In case the board or a class of the board or any one or more directors are so removed, new directors may be elected at the same meeting. Notwithstanding the first sentence of this paragraph, unless otherwise provided in the articles by a specific and unambiguous statement that directors may be removed from office without assigning any cause, the entire board of directors, or any class of the board, or any individual director of a corporation having a board classified as permitted by section 1724(b) (relating to classified board of directors), may be removed from office by vote of the shareholders entitled to vote thereon only for cause, if such classification has been effected in the articles or by a bylaw adopted by the shareholders.

(2) The repeal of a provision of the articles or bylaws prohibiting, or the addition of a provision to the articles or bylaws permitting, the removal by the shareholders of the board, a class of the board or a director without assigning any cause shall not apply to any incumbent director during the balance of the term for which he was selected.

(3) An individual director shall not be removed (unless the entire board or class of the board is removed) from the board of a corporation in which shareholders are entitled to vote cumulatively for the board or a class of the board if sufficient votes are cast against the resolution for his removal which, if cumulatively voted at an annual or other regular election of directors, would be sufficient to elect one or more directors to the board or to the class.

(4) The board of directors may be removed at any time with or without cause by the unanimous vote or consent of shareholders entitled to vote thereon.

(5) The articles may not prohibit the removal of directors by the shareholders for cause.

(b) Removal by the board.--Unless otherwise provided in a bylaw adopted by the shareholders, the board of directors may declare vacant the office of a director who has been judicially declared of unsound mind or who has been convicted of an offense punishable by imprisonment for a term of more than one year or for any other proper cause which the bylaws may specify or if, within 60 days or such other time as the bylaws may specify after notice of his selection, he does not accept the office either in writing or by attending a meeting of the board of directors and fulfill such other requirements of qualification as the bylaws may specify.

(c) Removal by the court.--Upon application of any shareholder or director, the court may remove from office any director in case of fraudulent or dishonest acts, or gross abuse of authority or discretion with reference to the corporation, or for any other proper cause, and may bar from office any director so removed for a period prescribed by the court. The corporation shall be made a party to the action and as a prerequisite to the maintenance of an action under this subsection a shareholder shall comply with Subchapter F (relating to derivative actions).

(d) Effect of reinstatement.--An act of the board done during the period when a director has been suspended or removed for cause shall not be impugned or invalidated if the suspension or removal is thereafter rescinded by the shareholders or by the board or by the final judgment of a court.

(e) Cross reference.--See section 1106(b)(4) (relating to uniform application of subpart). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Feb. 10, 2006, P.L.21, No.6, eff. imd.) 2006 Amendment. Act 6 amended subsec. (a)(1). 1990 Amendment. Act 198 amended subsec. (c) and added subsecs. (a)(5) and (e). Cross References. Section 1726 is referred to in sections 1106, 1504 of this title.
15 Pa.C.S. § 1791 — PA Code / Title 15 / Chapter 17 / Section 1791
Corporate action subject to subchapter.
Status: in_force

(a) General rule.--This subchapter shall apply to and the term "corporate action" in this subchapter shall mean any of the following actions:

(1) The election, appointment, designation or other selection and the suspension or removal of directors or officers of a business corporation.

(2) The taking of any action on any matter that is required under this subpart or under any other provision of law to be, or that under the bylaws may be, submitted for action to the shareholders, directors or officers of a business corporation.

(b) Cross reference.--See section 3138 (relating to judicial supervision of corporate action). (Dec. 19, 1990, P.L.834, No.198, eff. imd.) Cross References. Section 1791 is referred to in section 4102 of this title.
15 Pa.C.S. § 366 — PA Code / Title 15 / Chapter 3 / Section 366
Statement of division; effectiveness.
Status: in_force

(a) General rule.--A statement of division shall be signed by the dividing association and delivered to the department for filing along with the certificates, if any, required by section 139 (relating to tax clearance of certain fundamental transactions).

(b) Contents.--A statement of division shall contain all of the following:

(1) With respect to the dividing association:

(i) its name;

(ii) its jurisdiction of formation;

(iii) its type;

(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address);

(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and

(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:

(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or

(B) if it is not required to maintain a registered or similar office, its principal office.

(2) A statement as to whether the dividing association will survive the division.

(3) With respect to each resulting association created by the division:

(i) its name;

(ii) its jurisdiction of formation;

(iii) its type;

(iv) if it is a domestic filing association, domestic limited liability partnership or registered foreign association, the address of its registered office, including street and number, if any, in this Commonwealth, subject to section 109;

(v) if it is a domestic association that is not a domestic filing association or limited liability partnership, the address, including street and number, if any, of its principal office; and

(vi) if it is a nonregistered foreign association, the address, including street and number, if any, of:

(A) its registered or similar office, if any, required to be maintained by the laws of its jurisdiction of formation; or

(B) if it is not required to maintain a registered or similar office, its principal office.

(4) If the statement of division is not to be effective on filing, the later date or date and time on which it will become effective.

(5) A statement that the division was approved in the following ways:

(i) By a dividing association that is a domestic entity, in accordance with this chapter.

(ii) By a dividing association that is a foreign association, in accordance with the laws of its jurisdiction of formation.

(6) If the dividing association is a domestic filing entity and survives the division, any amendment to its public organic record approved as part of the plan of division.

(7) For each resulting association created by the division that is a domestic entity, its public organic record, if any, as an attachment. The public organic record does not need to state the name or address of an incorporator

of a corporation, organizer of a limited liability company or similar person with respect to any other type of entity.

(8) For each new association that is a domestic limited liability partnership or a domestic limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration as an attachment.

(9) For each new association that is an electing partnership, its statement of election as an attachment.

(10) The property and liabilities of the dividing association that are to be allocated to each resulting association, but it shall not be necessary to list in the statement of division each individual liability or item of property of the dividing association to be allocated to a resulting association so long as the liabilities and property are described in a reasonable manner.

(c) Other provisions.--In addition to the requirements of subsection (b), a statement of division may contain any other provision not prohibited by law.

(d) New domestic entity.--If a new association is a domestic entity, its public organic record, if any, must satisfy the requirements of the laws of this Commonwealth, except that it 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.

(e) Filing of plan.--A plan of division that is signed by the dividing association and meets all of the requirements of subsection (b) may be delivered to the department for filing instead of a statement of division and on filing has the same effect. If a plan of division is filed as provided in this subsection, references in this chapter to a statement of division refer to the plan of division filed under this subsection.

(f) Effectiveness of statement of division.--A statement of division is effective as provided in section 136(c) (relating to processing of documents by Department of State).

(g) Effectiveness of division.--A division takes effect as follows:

(1) If the division is one in which all of the resulting associations are domestic associations, the division is effective when the statement of division is effective.

(2) If the division is one in which one or more of the resulting associations is a foreign association, the division is effective on the later of:

(i) the effectiveness of the statement of division; or

(ii) when the division is effective under the laws of each of the jurisdictions of formation of the foreign resulting associations.

(h) Coordination of transactions.--A new association may be a party to another transaction under this chapter that takes effect simultaneously with the division. The new association shall be deemed to exist before the effectiveness of the other transaction, but solely for the purpose of being a party to the other transaction. The plan relating to the other transaction shall be deemed to have been approved by the new association if the plan is approved by the dividing association in connection with its approval of the plan of division. The statement that is delivered to the department for filing with respect to the other transaction shall state that it was approved by the new association under this subsection.

(i) Cross references.--See sections 134 (relating to docketing statement) and 135 (relating to requirements to be met by filed documents). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 relettered former subsec. (h) to subsec. (i) and added a new subsec. (h).
15 Pa.C.S. § 8998 — PA Code / Title 15 / Chapter 89 / Section 8998
Annual registration.
Status: in_force

(a) General rule.--Every domestic restricted professional company in existence on December 31 of any year and every qualified foreign restricted professional company that is registered to do business in this Commonwealth on December 31 of any year shall file in the Department of State with respect to that year, and on or before April 15 of the following year, a certificate of annual registration on a form provided by the department, executed by the company and accompanied by the annual registration fee prescribed by subsection (b). The department shall not charge a fee other than the annual registration fee for filing the certificate of annual

registration. The certificate of annual registration shall include a statement by the company as to whether or not it engaged in any business not permitted by section 8996(a) (relating to purposes of restricted professional companies) during the year with respect to which the certificate is being filed.

(b) Annual registration fee.--

(1) The annual registration fee to be paid when filing a certificate of annual registration shall be equal to a base fee of $300 times the number of persons who:

(i) were members of the company on December 31 of the year with respect to which the certificate of annual registration is being filed;

(ii) were licensed persons; and

(iii) had their principal residence at the time in this Commonwealth.

(2) The base fee of $300 shall be increased on December 31, 1997, and December 31 of every third year thereafter by the percentage increase in the Consumer Price Index for Urban Workers during the most recent three calendar years for which that index is available on the date of adjustment. Each adjustment under this paragraph shall be rounded up to the nearest $10.

(c) Notice of annual registration.--Not later than February 1 of each year, the department shall give notice to every restricted professional company required to file a certificate of annual registration with respect to the preceding year of the requirement to file the certificate. The notice shall state the amount of the base fee payable under subsection (b)(1), as adjusted pursuant to subsection (b)(2), if applicable, and shall be accompanied by the form of certificate to be filed. Failure by the department to give notice to any party or failure by any party to receive notice of the annual registration requirement shall not relieve the party of the obligation to file the certificate.

(d) Credit to Corporation Bureau Restricted Account.--The annual registration fee shall not be deemed to be an amount received by the department under Subchapter C of Chapter 1 (relating to Corporation Bureau and UCC fees) for purposes of section 155 (relating to disposition of funds), except that $25 of the fee shall be credited to the Corporation Bureau Restricted Account.

(e) Functions of Department of State.--The department shall send to the Department of Revenue a copy of any certificate that discloses the conduct of any business not permitted by section 8996(a).

(f) Annual fee to be lien.--

(1) Failure to file the certificate of annual registration required by this section shall not affect the existence or status of the restricted professional company as such, but the annual registration fee that would have been payable shall be a lien in the manner provided in this subsection from the time the annual registration fee is due and payable. If a certificate of annual registration is not filed within 30 days after the date on which it is due, the department shall assess a penalty of $500 against the company, which shall also be a lien in the manner provided in this subsection. The imposition of that penalty shall not be construed to relieve the company from liability for any other penalty or interest provided for under other applicable law.

(2) If the annual registration fee paid by a restricted professional company is subsequently determined to be less than should have been paid because it was based on an incorrect number of members or was otherwise incorrectly computed, that fact shall not affect the existence or status of the restricted professional company as such, but the amount of the additional annual registration fee that should have been paid shall be a lien in the manner provided in this subsection from the time the incorrect payment is discovered by the department.

(3) The annual registration fee shall bear simple interest from the date that it becomes due and payable until paid. The interest rate shall be that provided for in section 806 of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, with respect to unpaid taxes. The penalty provided for in paragraph (1) shall not bear interest. The payment of interest shall not relieve the restricted professional company from liability for any other penalty or interest provided for under other applicable law.

(4) The lien created by this subsection shall attach to all of the property and proceeds thereof of the restricted professional company in which a security interest can be perfected, in whole or in part, by filing in the department under 13 Pa.C.S. Div. 9 (relating to secured transactions; sales of accounts, contract rights and chattel paper), whether the property and proceeds are owned by the company at the time the annual registration fee or any penalty or interest becomes due and payable or whether the property and proceeds are acquired thereafter. Except as otherwise provided by statute, the lien created by this subsection shall have priority over all other liens, security interests or other charges, except liens for taxes or other charges due the Commonwealth. The lien created by this subsection shall be entered on the records of the department and indexed in the same manner as a financing statement filed under 13 Pa.C.S. Div. 9. At the time an annual registration fee, penalty or interest that has resulted in the creation of a lien under this subsection is paid, the department shall terminate the lien with respect to that annual registration fee, penalty or interest without requiring a separate filing by the company for that purpose.

(5) If the annual registration fee paid by a restricted professional company is subsequently determined to be more than should have been paid for any reason, no refund of the additional fee shall be made.

(g) Cross reference.--See 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities). (June 22, 2001, P.L.418, No.34, eff. 60 days; Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 amended subsec. (g). 2001 Amendment. Act 34 amended subsec. (f). References in Text. Division 9 of Title 13, referred to in subsec. (f), was repealed and added by the act of June 8, 2001 (P.L.123, No.18). Present Division 9 relates to secured transactions.
15 Pa.C.S. § 2543 — PA Code / Title 15 / Chapter 25 / Section 2543
Controlling person or group.
Status: in_force

(a) General rule.--For the purpose of this subchapter, a "controlling person or group" means a person who has, or a group of persons acting in concert that has, voting power over voting shares of the registered corporation that would entitle the holders thereof to cast at least 20% of the votes that all shareholders would be entitled to cast in an election of directors of the corporation.

(b) Exceptions generally.--Notwithstanding subsection (a):

(1) A person or group which would otherwise be a controlling person or group within the meaning of this section shall not be deemed a controlling person or group unless, subsequent to the later of March 23, 1988, or the

date this subchapter becomes applicable to a corporation by bylaw or article amendment or otherwise, that person or group increases the percentage of outstanding voting shares of the corporation over which it has voting power to in excess of the percentage of outstanding voting shares of the corporation over which that person or group had voting power on such later date, and to at least the amount specified in subsection (a), as the result of forming or enlarging a group or acquiring, by purchase, voting power over voting shares of the corporation.

(2) No person or group shall be deemed to be a controlling person or group at any particular time if voting power over any of the following voting shares is required to be counted at such time in order to meet the 20% minimum:

(i) Shares which have been held continuously by a natural person since January 1, 1983, and which are held by such natural person at such time.

(ii) Shares which are held at such time by any natural person or trust, estate, foundation or other similar entity to the extent the shares were acquired solely by gift, inheritance, bequest, devise or other testamentary distribution or series of these transactions, directly or indirectly, from a natural person who had acquired the shares prior to January 1, 1983.

(iii) Shares which were acquired pursuant to a stock split, stock dividend, reclassification or similar recapitalization with respect to shares described under this paragraph that have been held continuously since their issuance by the corporation by the natural person or entity that acquired them from the corporation or that were acquired, directly or indirectly, from such natural person or entity, solely pursuant to a transaction or series of transactions described in subparagraph (ii), and that are held at such time by a natural person or entity described in subparagraph (ii).

(iv) Control shares as defined in section 2562 (relating to definitions) which have not yet been accorded voting rights pursuant to section 2564(a) (relating to voting rights of shares acquired in a control-share acquisition).

(v) Shares, the voting rights of which are attributable to a person under subsection (d) if:

(A) the person acquired the option or conversion right directly from or made the contract, arrangement or understanding or has the relationship directly with the corporation; and

(B) the person does not at the particular time own or otherwise effectively possess the voting rights of the shares.

(vi) Shares acquired directly from the corporation or an affiliate or associate, as defined in section 2552 (relating to definitions), of the corporation by a person engaged in business as an underwriter of securities who acquires the shares through his participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933.

(vii) Shares acquired directly from the corporation in a transaction exempt from the registration requirements of the Securities Act of 1933.

(3) In determining whether a person or group is or would be a controlling person or group at any particular time,

there shall be disregarded voting power arising from a contingent right of the holders of one or more classes or series of preference shares to elect one or more members of the board of directors upon or during the continuation of a default in the payment of dividends on such shares or another similar contingency.

(c) Certain record holders.--A person shall not be a controlling person under subsection (a) if the person holds voting power, in good faith and not for the purpose of circumventing this subchapter, as an agent, bank, broker, nominee or trustee for one or more beneficial owners who do not individually or, if they are a group acting in concert, as a group have the voting power specified in subsection (a), or who are not deemed a controlling person or group under subsection

(b).

(d) Existence of voting power.--For the purposes of this subchapter, a person has voting power over a voting share if the person has or shares, directly or indirectly, through any option, contract, arrangement, understanding, conversion right or relationship, or by acting jointly or in concert or otherwise, the power to vote, or to direct the voting of, the voting share. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Feb. 10, 2006, P.L.21, No.6, eff. imd.) 2006 Amendment. Act 6 added subsec. (b)(2)(vii). 1990 Amendment. Act 198 amended subsecs. (a) and (b). Cross References. Section 2543 is referred to in sections 1106, 2542 of this title.
15 Pa.C.S. § 5501 — PA Code / Title 15 / Chapter 55 / Section 5501
Corporate capacity.
Status: in_force

Except as provided in section 103 (relating to subordination of title to regulatory laws), a nonprofit corporation shall have the legal capacity of natural persons to act. (July 9, 2013, P.L.476, No.67, eff. 60 days)
15 Pa.C.S. § 8618 — PA Code / Title 15 / Chapter 86 / Section 8618
Required information.
Status: in_force

(a) General rule.--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 address 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 certificate or statement of merger, interest exchange, conversion, division or domestication.

(4) A copy of the partnership's Federal, State and local income tax returns and reports, if any, for the three most recent years.

(5) A copy of any provisions of the partnership agreement in record form and any amendment made in record form to any partnership agreement.

(6) A copy of any financial statement of the partnership for the three most recent years.

(7) A copy of any record made by the partnership during the past three years of any consent given by or vote taken of any partner under this title or the partnership agreement.

(8) Unless contained in a provision of the partnership agreement in record form, a record stating:

(i) a description and statement of the agreed value of contributions other than money made and agreed to be made by each partner;

(ii) 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;

(iii) 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

(iv) any events upon the happening of which the partnership is to be dissolved and its activities and affairs wound up.

(b) Cross reference.--See section 8615 (relating to contents of partnership agreement). Cross References. Section 8618 is referred to in sections 8612, 8615 of this title.
15 Pa.C.S. § 5713 — PA Code / Title 15 / Chapter 57 / Section 5713
Personal liability of directors.
Status: in_force

(a) General rule.--If a bylaw adopted by the members of a nonprofit corporation so provides, a director shall not be personally liable, as such, for monetary damages for any action taken unless:

(1) the director has breached or failed to perform the duties of his office under this subchapter; and

(2) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.

(b) Exception.--Subsection (a) shall not apply to:

(1) the responsibility or liability of a director pursuant to any criminal statute; or

(2) the liability of a director for the payment of taxes pursuant to Federal, State or local law.

(c) Application.--An amendment or repeal of a provision adopted under subsection (a) does not affect its application with respect to an act by a director occurring before the amendment or repeal unless the provision in effect at the time of the act explicitly authorizes its amendment or repeal after an act has occurred.

(d) Cross reference.--See 42 Pa.C.S. § 8332.5 (relating to corporate representatives). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 relettered former subsec. (c) to subsec. (d) and added present subsec. (c). Cross References. Section 5713 is referred to in sections 5504, 5505 of this title.
15 Pa.C.S. § 1742 — PA Code / Title 15 / Chapter 17 / Section 1742
Derivative and corporate actions.
Status: in_force

Unless otherwise restricted in its bylaws, a business corporation shall have power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including

attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of the action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation. Indemnification shall not be made under this section in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the corporation unless and only to the extent that the court of common pleas of the judicial district embracing the county in which the registered office of the corporation is located or the court in which the action was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court of common pleas or other court deems proper. (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment. Act 169 amended the section heading. Cross References. Section 1742 is referred to in sections 1743, 1744 of this title.
15 Pa.C.S. § 134 — PA Code / Title 15 / Chapter 1 / Section 134
Docketing statement.
Status: in_force

(a) General rule.--The department may, but shall not be required to, prescribe by regulation one or more official docketing statement forms designed to elicit from a person effecting a filing under this title information that the department has found to be necessary or desirable in connection with the processing of a filing. A form of docketing statement prescribed under this subsection:

(1) Shall be published in the Pennsylvania Code.

(2) Shall not be integrated into a single document covering the requirements of the filing and its related docketing statement.

(3) May be required by the department in connection with a filing only if notice of the requirement appears on the official format for the filing prescribed by the department.

(4) Shall not be required to be submitted on department-furnished forms.

(5) Shall not constitute a document filed in, with or by the department for the purposes of this title or any other provision of law except 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities).

(b) Transmission to Department of Revenue.--The department shall note on the docketing statement the fact and date of the filing to which the docketing statement relates and shall transmit a copy of the docketing statement or the information contained therein to the Department of Revenue. If a docketing statement is not required for a particular filing, the Department of State may transmit a copy of the filing or the information contained therein to the Department of Revenue at no cost to the person effecting the filing.

(c) Transmission to other agencies.--If the docketing statement delivered to the Department of State sets forth any kind of business in which a corporation, partnership or other association may not engage without the approval of or a license from any department, board or commission of the Commonwealth, the Department of State shall, upon processing the filing, promptly transmit a copy of the docketing statement or the information contained therein to each such department, board or commission. (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 amended subsec. (a)(3). Cross References. Section 134 is referred to in sections 135, 161, 208, 209, 210, 335, 345, 355, 366, 375, 412, 413, 415, 417, 418, 1308, 1311, 1341, 1507, 1522, 1902, 1916, 1971, 1977, 1989, 2309, 2704, 2905, 5308, 5311, 5341, 5507, 5902, 5916, 5971, 5977, 5989, 7306, 7704, 7720, 8201, 8433, 8434, 8474, 8482, 8621, 8622, 8625, 8636, 8665, 8681.1, 8682, 8701, 8821, 8822, 8825, 8832, 8833, 8872, 8878, 9305, 9503 of this title; sections 304, 903, 904, 1101, 1102, 1105, 1302, 1305 of Title 17 (Credit Unions); sections 311, 312, 313, 1112, 1114, 1115, 1116, 1311, 1312, 1313, 1314, 1511, 1512, 1513, 1514, 1515 of Title 54 (Names).
15 Pa.C.S. § 8441 — PA Code / Title 15 / Chapter 84 / Section 8441
Partner's rights and duties.
Status: in_force

(a) Distributions.--Each partner is entitled to share in distributions as provided in section 8445 (relating to sharing of and right to distribution before dissolution).

(b) Reimbursement.--A partnership shall reimburse a partner for:

(1) Any payment made by the partner in the course of the partner's activities on behalf of the partnership, if the partner complied with this section and section 8447 (relating to standards of conduct for partners) in making the payment.

(2) An advance to the partnership beyond the amount of capital the partner agreed to contribute.

(c) Indemnification.--A 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 partner, if the claim, demand, debt, obligation or other liability does not arise from the person's breach of this section or section 8232 (relating to liability for improper distributions by limited liability partnership) or 8447.

(d) Advances.--In the ordinary course of its business, a partnership may advance expenses, including attorney 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 partner, if the person promises to repay the partnership if the person ultimately is determined not to be entitled to be indemnified under subsection (c).

(e) Insurance.--A partnership may purchase and maintain insurance on behalf of a partner against liability asserted against or incurred by the partner in that capacity or arising from that status even if, under subsection (m), the partnership agreement could not eliminate or limit the person's liability to the partnership for the conduct giving rise to the liability.

(f) Loan to partnership.--A payment or advance made by a partner which gives rise to a partnership obligation under subsection (b) constitutes a loan to the partnership which accrues interest from the date of the payment or advance.

(g) Management rights.--Each partner has equal rights in the management and conduct of the partnership's business.

(h) Rights to property.--A partner may use or possess partnership property only on behalf of the partnership.

(i) Compensation for services.--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.

(j) Required approvals by 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 affirmative vote or consent of all the partners.

(k) Nonexclusivity.--The rights provided by subsections

(b), (c), (d) and (e) shall not be deemed exclusive of any other rights to which a person seeking reimbursement, indemnification, advancement of expenses or insurance may be entitled under the partnership agreement, vote of partners, contract or otherwise, both as to action in his official capacity and as to action in another capacity while holding that position. Section 8447(f) shall be applicable to a vote, contract or other action under this subsection. A partnership may create a fund of any nature, which may, but need not be, under the control of a trustee, or

otherwise secure or insure in any manner its indemnification obligations, whether arising under this section or otherwise.

(l) Grounds.--Indemnification under subsection (k) may be granted for any action taken and may be made whether or not the partnership would have the power to indemnify the person under any other provision of law except as provided in this section and whether or not the indemnified liability arises or arose from any threatened, pending or completed action by or in the right of the partnership. Indemnification under subsection (k) is declared to be consistent with the public policy of this Commonwealth.

(m) Limitation.--Indemnification under this section shall not be made in any case where the act giving rise to the claim for indemnification is determined by a court to constitute recklessness, willful misconduct or a knowing violation of law. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a). Cross References. Section 8441 is referred to in sections 8415, 8417, 8486 of this title.
15 Pa.C.S. § 8431 — PA Code / Title 15 / Chapter 84 / Section 8431
Partner agent of partnership.
Status: in_force

Subject to the effect of a certificate of partnership authority under section 8433 (relating to certificate of partnership authority), the following rules apply:

(1) Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the signing 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 did not have authority to act for the partnership in the particular matter and the person with which the partner was dealing knew or had notice that the partner lacked authority.

(2) An act of a partner which is not apparently for carrying on in the ordinary course the partnership's business or business of the kind carried on by the partnership binds the partnership only if the partner had actual authority to take the action. Cross References. Section 8431 is referred to in sections 8432, 8472, 8484 of this title.
15 Pa.C.S. § 5745 — PA Code / Title 15 / Chapter 57 / Section 5745
Advancing expenses.
Status: in_force

Expenses (including attorneys' fees) incurred in defending any action or proceeding referred to in this subchapter may be paid by a nonprofit corporation in advance of the final disposition of the action or proceeding upon receipt of an undertaking by or on behalf of the representative to repay the amount if it is ultimately determined that he is not entitled to be indemnified by the corporation as authorized in this subchapter or otherwise. Except as otherwise provided in the bylaws, advancement of expenses shall be authorized by the board of directors. Section 5728 (relating to interested members, directors or officers; quorum) shall not be applicable to the advancement of expenses under this section.

(Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days)
15 Pa.C.S. § 8443 — PA Code / Title 15 / Chapter 84 / Section 8443
Form of contribution.
Status: in_force

A contribution may consist of:

(1) property transferred to, services performed for or another benefit provided to the partnership;

(2) an agreement to transfer property to, perform services for or provide another benefit to the partnership; or

(3) any combination of items listed in paragraphs (1) and (2). Cross References. Section 8443 is referred to in section 8412 of this title.
15 Pa.C.S. § 7524 — PA Code / Title 15 / Chapter 75 / Section 7524
Issuance of shares.
Status: in_force

(a) General rule.--Every association without capital stock shall issue a certificate of membership to each member. Every association with capital stock shall issue a certificate of common shares to each member certifying the number of shares of stock held by him. An association shall issue common shares or a membership certificate only to persons eligible for membership upon such terms and conditions as shall be provided in the bylaws. Fractional shares may be issued.

(b) Voting rights.--Each eligible member shall be entitled to only one vote on each question that may be presented at any meeting of the members regardless of the number of shares or amount of membership capital owned by him.

(c) Preferred stock.--An association may issue preferred shares to any person upon such terms and conditions as shall be provided in the bylaws. The preferred shares shall carry no voting rights other than as provided by section 7529(a)(3) (relating to fundamental changes).

(d) Consideration.--No association shall issue a certificate of membership, and no certificate for common shares shall be issued until fully paid for, but promissory notes may be accepted by the association as full or partial payment. The association shall hold the membership certificate or shares as security for the payment of the note, but such retention as security shall not affect the right of the member to vote and hold office.

(e) Evidence of equity in assets.--The association may, from time to time, issue to any patron a certificate or other evidence of the equity of the patron in any fund, capital investment or other asset of the association. The certificate or other evidence of equity may bear interest at a rate not in excess of two points under the average treasury bill rate for the 12 months preceding the date on which the payment is made and may be transferred only to the association or to such other person as may be approved by the association.

(f) Dividends.--Dividends may be paid on any shares and dividends on preferred shares may be cumulative if so provided in the articles. An association shall have a lien on all of its issued shares and dividends declared or accrued thereon for all indebtedness of the holders thereof to the association if provision therefor is stated on the face of the share certificate.
15 Pa.C.S. § 8898 — PA Code / Title 15 / Chapter 88 / Section 8898
Annual benefit report.
Status: in_force

(a) Contents.--A benefit company must deliver to each member an annual benefit report, including:

(1) A narrative description of:

(i) the ways in which the benefit company pursued general public benefit during the year and the extent to which general public benefit was created;

(ii) the ways in which the benefit company pursued any specific public benefit that the certificate of organization states is the purpose of the benefit company to create and the extent to which that specific public benefit was created;

(iii) any circumstances that have hindered the creation by the benefit company of general or specific public benefit; and

(iv) the process and rationale for selecting or changing the third-party standard used to prepare the benefit report.

(2) An assessment of the overall social and environmental performance of the benefit company against a third-party standard applied consistently with any application of that standard in prior benefit reports or accompanied by an explanation of the reasons for any inconsistent application. The assessment does not need to be audited or certified by a third-party standards provider.

(3) A statement of any connection between the organization that established the third-party standard, or its directors, officers or any holder of 5% or more of the governance interests in the organization, and the benefit company or its members, managers or officers or any holder of 5% or more of the outstanding interests in the benefit company, including any financial or governance relationship which might materially affect the credibility of the use of the third-party standard.

(b) Timing of report.--A benefit company shall annually send a benefit report to each member either:

(1) within 120 days following the end of the fiscal year of the benefit company; or

(2) at the same time that the benefit company delivers any other annual report to its members.

(c) Internet website posting.--A benefit company must post all of its benefit reports on the public portion of its Internet website, if any, except that any financial or proprietary information included in the benefit report may be omitted from the benefit report as posted.

(d) Availability of copies.--If a benefit company does not have an Internet website, the benefit company shall provide a copy of its most recent benefit report, without charge, to any person that requests a copy, but any financial or proprietary information included in the benefit report may be omitted from the copy of the benefit report provided.

(e) Filing of report.--Concurrently with the delivery of the benefit report to members pursuant to subsection (b), the benefit company must deliver a copy of the benefit report to the department for filing, except that any financial or proprietary information included in the benefit report may be omitted from the benefit report as filed under this section. The department shall charge a fee of $70 for filing a benefit report.
15 Pa.C.S. § 55 — PA Code / Title 15 / Chapter 55 / Section 55
Publication of notice.
Status: in_force

When the Department of State is ready to provide expedited services under the addition of 15 Pa.C.S. § 153(a)(16), it shall transmit notice of that fact to the Legislative Reference Bureau for publication as a notice in the Pennsylvania Bulletin. Explanatory Note. Act 67 amended, reenacted, added, deleted or repealed sections 102, 107, 111, 131, 133, 134, 135, 136, 152, 153, 155, 156, 1103, 1104, 1306, 1504, 1523, 1527, 1528, 1529, 1552, 1575, 1704, 1705, 1727, 1756, 1759, 1764, 1766, 1906, 1907, 1908, 1911, 1913, 1922, 1923, 1931, 1957, 1973, 1978, 2522, 2528, 2529, 2545, 3133, 3135, 3322, 3325, 3331, 4127, 5103, 5104, 5105, 5106, 5107, 5108, 5109, 5302, 5306, 5307, 5308, 5309, 5310, 5331, 5501, 5504, 5509, 5511, 5541, 5542, 5543, 5544, 5546, 5547, 5548, 5550, 5551, 5552, 5553, 5554, 5585, 5586, 5587, 5588, 5589, 5702, 5704, 5705, 5708, 5722, 5723, 5724, 5725, 5726, 5727, 5728, 5729, 5730, 5731, 5733, 5746, 5751, 5752, 5753, 5754, 5755, 5756, 5757, 5759, 5760, 5761, 5762, 5763, 5764, 5765, 5766, 5767, 5768, 5769, 5770, 5791, 5792, 5793, 5911, 5913, 5914, 5921, 5923, 5924, 5925, 5926, 5928, 5930, 5951, 5956, 5957, 5972, 5973, 5975, 5976, 5977, 5978, 5979, 5980, 5981, 5982, 5983, 5984, 5986, 5987, 5988, 5992, 5997, 6101, 6102, 6103, 6104, 6122, 6123, 6141, 6142, 6143, 6145, 8911 and 8925, the heading of Chapter 91 and sections 9101, 9102, 9103, 9111, 9112, 9113, 9114, 9115, 9116, 9117, 9118, 9119, 9120, 9121, 9122, 9123, 9124, 9125, 9126, 9127, 9128, 9129, 9130, 9131, 9132, 9133, 9134, 9135, 9136 and 9503 of Title 15 and sections 101 and 501 of Title 54.
15 Pa.C.S. § 376 — PA Code / Title 15 / Chapter 3 / Section 376
Effect of domestication.
Status: in_force

(a) General rule.--When a domestication becomes effective, all of the following apply:

(1) The domesticated entity is:

(i) organized under and subject to the organic law of the domesticated entity;

(ii) the same entity without interruption as the domesticating entity;

(iii) deemed to have commenced its existence on the date the domesticating entity commenced its existence in the jurisdiction in which the domesticating entity was first created, formed, incorporated or otherwise came into existence; and

(iv) also organized under and subject to the organic law of the domesticating entity if the statement of domestication includes the statement provided for in section 375(b)(8) (relating to statement of domestication; effectiveness).

(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 provided by law, all of the rights, privileges, immunities and powers of the domesticating entity continue to be vested without change 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 and is binding on its interest holders.

(7) If the domesticated entity is a domestic limited liability partnership or a limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration is effective.

(8) If the domesticated entity is an electing partnership, its statement of election is effective.

(9) The private organic rules of the domesticated entity that are to be in record form, if any, approved as part of the plan of domestication are effective.

(10) The interest holders in the domesticating entity are interest holders in the domesticated entity except to the extent that an interest holder does not receive interests in the domesticated entity pursuant to a provision in the plan of domestication for special treatment pursuant to section 329 (relating to special treatment of interest holders).

(b) No dissolution rights.--Except as otherwise provided in the organic law or organic rules of a domestic 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.

(c) Collection of liabilities.--When a domestication becomes effective, a foreign domesticated entity may be served with process in this Commonwealth for the collection and enforcement of any of its debts, obligations and other liabilities in accordance with applicable law.

(d) New interest holder liability.--When a domestication becomes effective, a person that becomes subject to interest holder liability with respect to a domestic association as a result of the domestication has interest holder liability only to the extent provided by the organic law of the association and only for those debts, obligations and other liabilities that arise after the domestication is effective.

(e) Prior interest holder liability.--When a domestication becomes effective, the following rules apply:

(1) 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.

(2) A person does not have interest holder liability under the organic law of a domestic domesticating entity for any debt, obligation or other liability that arises after the domestication becomes effective.

(3) 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.

(4) A person has whatever rights of contribution from any other person as are provided by other law or the organic rules of a domestic domesticating entity with respect to any interest holder liability preserved under paragraph (1) as if the domestication had not occurred.

(f) Service of process.--(Deleted by amendment).

(g) No dissolution.--A domestication does not require a domestic domesticating entity to liquidate, dissolve or wind up its affairs and does not constitute or cause the liquidation or dissolution of the entity.

(h) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the domesticating entity that are settled, assessed or determined prior to or after the domestication shall be the liability of the domesticated entity and, together with interest thereon, shall be a lien against the franchises and property of the domesticated entity.

(i) Cross references.--See sections 416 (relating to withdrawal deemed on certain transactions) and 417 (relating to required withdrawal on certain transactions). (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days) 2016 Amendment. Act 170 deleted subsec. (f).
15 Pa.C.S. § 344 — PA Code / Title 15 / Chapter 3 / Section 344
Amendment or abandonment of plan of interest exchange.
Status: in_force

(a) General rule.--A plan of interest exchange may be amended or abandoned only with the consent of each party to the plan, except as otherwise provided in the plan.

(b) Approval of amendment.--A domestic entity that is the acquired association may approve an amendment of a plan of interest exchange in one of the following ways:

(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.

(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 plan is entitled to vote on or consent to any amendment of the plan that will change any of the following:

(i) 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 entity under the plan.

(ii) The public organic record, if any, or private organic rules of the entity that will be in effect immediately after the interest exchange becomes effective, except for changes that do not require approval of the interest holders of the entity under its organic law or organic rules.

(iii) Any other terms or conditions of the plan, if the change would:

(A) increase the interest holder liability to which the interest holder will be subject; or

(B) otherwise adversely affect the interest holder in any material respect.

(c) Approval of abandonment.--After a plan of interest exchange has been approved by a domestic entity that is the acquired entity and before a statement of interest exchange becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic entity that is the acquired association may abandon the plan in the same manner as the plan was approved.

(d) Statement of abandonment.--If a plan of interest exchange is abandoned after a statement of interest exchange has been delivered to the department for filing and before the statement becomes effective, a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness), signed by the acquired association, must be delivered to the department for filing before the time the statement of interest exchange becomes effective.
15 Pa.C.S. § 137 — PA Code / Title 15 / Chapter 1 / Section 137
Court to pass upon rejection of documents by Department of State.
Status: in_force

(a) General rule.--Whenever the Department of State rejects a document delivered for filing under this title, the original document or a copy thereof and any papers relating thereto may be delivered to the prothonotary or clerk of the court vested by or pursuant to Title 42 (relating to judiciary and judicial procedure) with jurisdiction of appeals from the department. Immediately the prothonotary or clerk shall transmit the papers to the court without formality or expense to the person who delivered the original document to the department. The question of the eligibility of the document for filing by the department shall thereupon, at the earliest possible time, be heard by a judge of the court, without jury, in the court or in chambers. The finding of the court, or any judge thereof, that the document is eligible for filing by the department shall be final and the department shall act in accordance therewith. The true intent of this section is to secure for applicants an immediate

hearing in court and a determination by the court without delay or expense to the applicants.

(1) (Deleted by amendment).

(2) (Deleted by amendment).

(3) (Deleted by amendment).

(b) Further appellate review.--The corporation or any incorporator of a proposed corporation or other aggrieved applicant may within the time and in the manner provided by law seek judicial review of an adverse order of court entered pursuant to subsection (a). The department shall not have any right in the exercise of its functions under this title to seek judicial review of an adverse order entered pursuant to subsection (a) and any such right which the department might otherwise enjoy under the Constitution of Pennsylvania or otherwise is hereby waived, but any department, board or commission of the Commonwealth which contends that the document fails to comply with section 135(a)(6) (relating to requirements to be met by filed documents) may seek judicial review of the order.

(c) Exceptions.--

(1) This section shall not impair the right of any person to proceed under section 138 (relating to statement of correction) nor impair the right of the Attorney General to institute proceedings under section 503 (relating to actions to revoke corporate franchises).

(2) A determination by the department with respect to the registrability of a label or other mark under Title 54 (relating to names) or otherwise affecting the status of a label or other mark shall be subject to judicial review under Title 2 (relating to administrative law and procedure) and not under this section. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a). Saved from Suspension. Pennsylvania Rule of Appellate Procedure No. 5102, as amended July 7, 1997, provided that section 137 shall not be deemed suspended or affected by the Pennsylvania Rules of Appellate Procedure. Cross References. Section 137 is referred to in section 384 of this title.
15 Pa.C.S. § 317 — PA Code / Title 15 / Chapter 3 / Section 317
Contractual dissenters rights in entity transactions.
Status: in_force

(a) General rule.--An interest holder of a domestic entity other than a nonprofit corporation or unincorporated nonprofit association shall be entitled to contractual dissenters rights in connection with a transaction under this chapter, even though the interest holder would not otherwise be entitled to dissenters rights under this title to the extent provided:

(1) in the entity's organic rules; or

(2) in the plan.

(b) Procedures for contractual dissenters rights.--If an interest holder is entitled to contractual dissenters rights pursuant to subsection (a), Subchapter D of Chapter 15 (relating to dissenters rights) applies to the extent practicable except as otherwise provided in the organic rules of the domestic entity or the plan.

(c) Cross references.--See sections 329 (relating to special treatment of interest holders) and 1571(c) (relating to application and effect of subchapter). Cross References. Section 317 is referred to in sections 333, 336, 343, 346, 353, 356, 363, 367, 373, 1571 of this title.
15 Pa.C.S. § 3131 — PA Code / Title 15 / Chapter 31 / Section 3131
Directors.
Status: in_force

(a) Qualifications.--Two-thirds of the directors of an insurance corporation shall be citizens of the United States.

(b) Number.--The board of directors of an insurance corporation shall consist of not less than seven members. Cross References. Section 3131 is referred to in sections 1722, 1723 of this title.
15 Pa.C.S. § 2904 — PA Code / Title 15 / Chapter 29 / Section 2904
Election of an existing business corporation to become a professional corporation.
Status: in_force

(a) General rule.--A business corporation may become a professional corporation under this chapter by filing articles of amendment which shall contain, in addition to the requirements of section 1915 (relating to articles of amendment):

(1) A heading stating the name of the corporation and that it is a professional corporation.

(2) A statement that it elects to become a professional corporation.

(3) Such other changes, if any, that may be desired in the articles, including any changes necessary to conform to section 2903(c) and (d) (relating to formation of professional corporations).

(b) Procedure.--The amendment shall be adopted in accordance with the requirements of Subchapter B of Chapter 19 (relating to amendment of articles). If any shareholder of a business corporation that proposes to amend its articles to become a professional corporation objects to that amendment and complies with the provisions of Subchapter D of Chapter 15 (relating to dissenters rights), the shareholder shall be entitled to the

rights and remedies of dissenting shareholders therein provided, if any. (June 22, 2001, P.L.418, No.34, eff. 60 days) 2001 Amendment. Act 34 amended subsec. (b). Cross References. Section 2904 is referred to in section 1571 of this title.
15 Pa.C.S. § 5107 — PA Code / Title 15 / Chapter 51 / Section 5107
Subordination of subpart to canon law.
Status: in_force

If and to the extent canon law or similar principles applicable to a corporation incorporated for religious purposes sets forth provisions relating to the government and regulation of the affairs of the corporation that are inconsistent with the provisions of this subpart on the same subject, the canon law or similar principles shall control except to the extent prohibited by the Constitution of the United States or the Constitution of Pennsylvania. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; July 9, 2013, P.L.476, No.67, eff. 60 days) Cross References. Section 5107 is referred to in sections 5513, 5903 of this title.
15 Pa.C.S. § 1576 — PA Code / Title 15 / Chapter 15 / Section 1576
Failure to comply with notice to demand payment, etc.
Status: in_force

(a) Effect of failure of shareholder to act.--A shareholder who fails to timely demand payment, or fails (in the case of certificated shares) to timely deposit certificates, as required by a notice pursuant to section 1575 (relating to notice to demand payment) shall not have any right under this subchapter to receive payment of the fair value of his shares.

(b) Restriction on uncertificated shares.--If the shares are not represented by certificates, the business corporation

may restrict their transfer from the time of receipt of demand for payment until effectuation of the proposed corporate action or the release of restrictions under the terms of section 1577(a) (relating to failure to effectuate corporate action).

(c) Rights retained by shareholder.--The dissenter shall retain all other rights of a shareholder until those rights are modified by effectuation of the proposed corporate action. (Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 amended subsec. (a).
15 Pa.C.S. § 8615 — PA Code / Title 15 / Chapter 86 / Section 8615
Contents of partnership agreement.
Status: in_force

(a) Scope of partnership agreement.--Except as provided under 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 rights and duties under this title of a person in the capacity of a partner;

(3) the activities and affairs of the partnership and the conduct of those activities and affairs;

(4) the means and conditions for amending the partnership agreement; and

(5) the means and conditions for approving a transaction under Chapter 3 (relating to entity transactions).

(b) Title applies generally.--To the extent the partnership agreement does not provide for a matter described in subsection

(a), this title governs the matter.

(c) Limitations.--A partnership agreement may not do any of the following:

(1) Vary a provision of Chapter 1 (relating to general provisions) or Subchapter A of Chapter 2 (relating to names).

(2) Vary the right of a partner to approve a merger, interest exchange, conversion or division under section 333(a)(2) (relating to approval of merger), 343(a)(2) (relating to approval of interest exchange), 353(a)(3) (relating to approval of conversion) or 363(a)(2) (relating to approval of division).

(3) Vary the required contents of a plan of merger under section 332(a) (relating to plan of merger), plan of interest exchange under section 342(a) (relating to plan of interest exchange), plan of conversion under section 352(a) (relating to plan of conversion), plan of division under section 362(a) (relating to plan of division) or plan of domestication under section 372(a) (relating to plan of domestication).

(4) Vary a provision of Chapter 81 (relating to general provisions) or 82 (relating to limited liability partnerships and limited liability limited partnerships).

(5) Vary the provisions of section 8611(b), (c), (d) and (e) (relating to short title and application of chapter).

(6) Vary the law applicable under section 8614 (relating to governing law).

(7) Vary any requirement, procedure or other provision of this title pertaining to:

(i) registered offices; or

(ii) the department, including provisions pertaining to documents authorized or required to be delivered to the department for filing under this title.

(8) Vary a limited partnership's capacity under section 8620(d) (relating to characteristics of limited partnership) to sue and be sued in its own name.

(9) Vary a provision of section 8620(e).

(10) Eliminate the duty of loyalty provided for in section 8649(b)(1)(i) or (ii) or (2) (relating to standards of conduct for general partners) or the duty of care, except as provided in subsection (d).

(11) Vary the contractual obligation of good faith and fair dealing under sections 8635(a) (relating to limited duties of limited partners) and 8649(d), except as provided in subsection (d).

(12) Provide indemnification or exoneration in violation of the limitations in sections 8648(g) (relating to reimbursement, indemnification, advancement and insurance) and 8649(i).

(13) Vary the information required under section 8618 (relating to required information) or unreasonably restrict the duties and rights under section 8634 (relating to limited partner rights to information) or 8647 (relating to general partner rights to information), except as provided under subsection (d).

(14) Vary the power of a person to dissociate as a general partner under section 8664(a) (relating to power to dissociate as general partner and wrongful dissociation), except to require that the notice under section 8663(a)(1) (relating to dissociation as general partner) be in record form.

(15) Vary the causes of dissolution specified in section 8681(a)(6) (relating to events causing dissolution).

(16) Vary the requirements to wind up the partnership's activities and affairs specified in section 8682(a), (b)(1),

(d) and (e) (relating to winding up and filing of certificates).

(17) Unreasonably restrict the right of a partner to maintain an action under Subchapter I (relating to actions by partners).

(18) Vary the provisions of section 8694 (relating to special litigation committee), except that the partnership agreement may provide that the partnership may not have a special litigation committee.

(19) Except as provided in section 8617(b) (relating to amendment and effect of partnership agreement), restrict the rights under this title of a person other than a partner.

(d) Rules.--Subject to subsection (c)(12), the following rules apply:

(1) The partnership agreement may:

(i) 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;

(ii) alter the prohibition in section 8654(a)(2) (relating to limitations on distributions) so that the prohibition requires only that the partnership's total

assets not be less than the sum of its total liabilities; and

(iii) impose reasonable restrictions on the availability and use of information obtained under section 8618, 8634 or 8647 and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use.

(2) To the extent the partnership agreement expressly relieves a partner of a responsibility that the partner would otherwise have under this title and imposes the responsibility on one or more other partners, the agreement also may eliminate or limit any fiduciary duty of the partner relieved of the responsibility which would have pertained to the responsibility.

(3) If not manifestly unreasonable, the partnership agreement may:

(i) alter the aspects of the duty of loyalty stated in section 8649(b)(1)(i) or (ii) or (2);

(ii) identify specific types or categories of activities that do not violate the duty of loyalty;

(iii) alter the duty of care;

(iv) alter or eliminate any other fiduciary duty; and

(v) prescribe the standards by which the performance of the contractual obligation of good faith and fair dealing is to be measured.

(e) Determination of manifest unreasonableness.--A court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under subsection (d)(3). The court:

(1) 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

(2) may invalidate the term only if, in light of the purposes, activities and affairs of the limited partnership, it is readily apparent that:

(i) the objective of the term is unreasonable; or

(ii) the term is an unreasonable means to achieve the term's objective. (July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (c)(2). Cross References. Section 8615 is referred to in sections 8611, 8612, 8614, 8617, 8618, 8620, 8621, 8625, 8634, 8635, 8647, 8649, 8654, 8664, 8681, 8682, 8691, 8692, 8694, 8695 of this title.
15 Pa.C.S. § 8447 — PA Code / Title 15 / Chapter 84 / Section 8447
Standards of conduct for partners.
Status: in_force

(a) General rule.--A partner owes to the partnership and the other partners the duties of loyalty and care stated in subsections (b) and (c).

(b) Duty of loyalty.--The fiduciary duty of loyalty of a partner includes the duties:

(1) to account to the partnership and hold as trustee for it any property, profit or benefit derived by the partner:

(i) in the conduct or winding up of the partnership's business;

(ii) from a use by the partner of the partnership's property; or

(iii) from 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 person having an interest adverse to the partnership; and

(3) to refrain from competing with the partnership in the conduct of the partnership's business before the dissolution of the partnership.

(c) Duty of care.--The duty of care of a partner in the conduct or winding up of the partnership business is to refrain from engaging in gross negligence, recklessness, willful misconduct or a knowing violation of law.

(d) Good faith and fair dealing.--A partner shall discharge the duties and obligations under this title or under the partnership agreement and exercise any rights consistent with the contractual obligation of good faith and fair dealing.

(e) Self-serving conduct.--A partner does not violate a duty or obligation under this title or under the partnership agreement solely because the partner's conduct furthers the partner's own interest.

(f) Authorization or ratification.--All the partners may authorize or ratify, after disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty of a partner.

(g) Fairness as a defense.--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 partnership at the time it was authorized or ratified under subsection (f).

(h) Rights and obligations in approved transaction.--If a partner enters into a transaction with the partnership which otherwise would be prohibited under subsection (b)(2), but the transaction is authorized or ratified as provided under subsection (f) or the partnership agreement, the partner's rights and obligations arising from the transaction are the same as those of a person that is not a partner.

(i) Exoneration.--The partnership agreement may provide that a partner shall not be personally liable for monetary damages to the partnership or the other partners for a breach of subsection (c), except that a partner may not be exonerated for an act that constitutes recklessness, willful misconduct or a knowing violation of law.

(j) Cross reference.--See section 8415 (relating to contents of partnership agreement).

Cross References. Section 8447 is referred to in sections 8231, 8232, 8415, 8441, 8461, 8463 of this title.
15 Pa.C.S. § 1901 — PA Code / Title 15 / Chapter 19 / Section 1901
Omission of certain provisions from filed plans (Deleted by amendment).
Status: in_force

2014 Amendment. Section 1901 was deleted by amendment October 22, 2014, P.L.2640, No.172 effective July 1, 2015.
15 Pa.C.S. § 8472 — PA Code / Title 15 / Chapter 84 / Section 8472
Power to bind and liability of person dissociated as partner.
Status: in_force

(a) When partnership bound.--After a person is dissociated as a partner without the dissociation resulting in a dissolution and winding up of the partnership business and before the partnership is merged or divided out of existence, converted or domesticated under Chapter 3 (relating to entity transactions), or dissolved, the partnership is bound by an act of the person only if:

(1) the act would have bound the partnership under section 8431 (relating to partner agent of partnership) before dissociation; and

(2) at the time the other party enters into the transaction:

(i) less than two years have passed since the dissociation; and

(ii) the other party does not know or have notice of the dissociation and reasonably believes that the person is a partner.

(b) Liability of person dissociated as partner.--If a partnership is bound under subsection (a), the person dissociated as a partner which caused the partnership to be bound is liable:

(1) to the partnership for any damage caused to the partnership arising from the obligation incurred under subsection (a); and

(2) if a partner or another person dissociated as a partner is liable for the obligation, to the partner or other person for any damage caused to the partner or other person arising from the liability.

Cross References. Section 8472 is referred to in section 8471 of this title.
15 Pa.C.S. § 2538 — PA Code / Title 15 / Chapter 25 / Section 2538
Approval of transactions with interested shareholders.
Status: in_force

(a) General rule.--The following transactions shall require the affirmative vote of the shareholders entitled to cast at least a majority of the votes that all shareholders other than the interested shareholder are entitled to cast with respect to the transaction, without counting the vote of the interested shareholder:

(1) Any transaction authorized under Subchapter C of
15 Pa.C.S. § 2567 — PA Code / Title 15 / Chapter 25 / Section 2567
Redemption.
Status: in_force

Unless prohibited by the terms of the articles of a registered corporation in effect before a control-share acquisition has occurred, the corporation may redeem all control shares from the acquiring person at the average of the high and low sales price of shares of the same class and series as such prices are specified on a national securities exchange, national quotation system or similar quotation listing service on the date the corporation provides notice to the acquiring person of the call for redemption:

(1) at any time within 24 months after the date on which the acquiring person consummates a control-share acquisition, if the acquiring person does not, within 30 days after consummation of the control-share acquisition, properly request that the issue of voting rights to be accorded control shares be presented to the shareholders under section 2565(a) or (b) (relating to procedure for establishing voting rights of control shares); and

(2) at any time within 24 months after the issue of voting rights to be accorded such shares is submitted to the shareholders pursuant to section 2565(a) or (b); and

(i) such voting rights are not accorded pursuant to section 2564(a) (relating to voting rights of shares acquired in control-share acquisition); or

(ii) such voting rights are accorded and subsequently lapse pursuant to section 2564(b) (relating to lapse of voting rights). (Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 amended and renumbered section 2566 to section 2567 and renumbered former section 2567 to section 2568.
15 Pa.C.S. § 2102 — PA Code / Title 15 / Chapter 21 / Section 2102
Formation of nonstock corporations.
Status: in_force

(a) General rule.--A nonstock corporation shall be formed in accordance with Article B (relating to domestic business corporations generally) except that its articles shall contain:

(1) A heading stating the name of the corporation and that it is a nonstock corporation.

(2) The provisions required by section 2103 (relating to contents of articles and other documents of nonstock corporations).

(b) Initial members.--Upon the filing of articles of a nonstock corporation, the subscribers to the minimum guaranteed capital of the corporation, if any, and the incorporators shall be the initial members of the corporation. Cross References. Section 2102 is referred to in sections 2105, 7105 of this title.
15 Pa.C.S. § 2545 — PA Code / Title 15 / Chapter 25 / Section 2545
Notice to shareholders.
Status: in_force

(a) General rule.--Prompt notice that a control transaction has occurred shall be given by the controlling person or group to:

(1) Each shareholder of record of the registered corporation holding voting shares.

(2) The court, accompanied by a petition to the court praying that the fair value of the voting shares of the corporation be determined pursuant to section 2547 (relating to valuation procedures) if the court should receive, pursuant to section 2547, certificates from shareholders of the corporation or an equivalent request for transfer of uncertificated securities.

(b) Obligations of the corporation.--If the controlling person or group so requests, the corporation shall, at the option of the corporation and at the expense of the person or group, either furnish a list of all such shareholders and their postal addresses to the person or group or provide the notice to all such shareholders.

(c) Contents of notice.--The notice shall state that:

(1) All shareholders are entitled to demand that they be paid the fair value of their shares.

(2) The minimum value the shareholder can receive under this subchapter is the highest price paid per share by the controlling person or group within the 90-day period ending on and including the date of the control transaction, and stating that value.

(3) If the shareholder believes the fair value of his shares is higher, this subchapter provides an appraisal procedure for determining the fair value of such shares, specifying the name of the court and its address and the caption of the petition referenced in subsection (a)(2), and stating that the information is provided for the possible use by the shareholder in electing to proceed with a court-appointed appraiser under section 2547. There shall be included in, or enclosed with, the notice a copy of this subchapter.

(d) Optional procedure.--The controlling person or group may, at its option, supply with the notice referenced in subsection (c) a form for the shareholder to demand payment of the partial payment amount directly from the controlling person or group without utilizing the court-appointed appraiser procedure of section 2547, requiring the shareholder to state the number and class or series, if any, of the shares owned by him, and stating where the payment demand must be sent and the procedures to be followed.

(e) Cross reference.--See section 1702 (relating to manner of giving notice). (July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 amended subsec. (b) and added subsec.

(e). Cross References. Section 2545 is referred to in sections 2542, 2546, 2547 of this title.
15 Pa.C.S. § 2574 — PA Code / Title 15 / Chapter 25 / Section 2574
Controlling person or group safe harbor.
Status: in_force

(a) Nonparticipant.--For the purpose of this subchapter, a person or group shall not be deemed a controlling person or group, absent significant other activities indicating that a person or group should be deemed a controlling person or group, by reason of voting or giving a proxy or consent as a shareholder of the corporation if the person or group is one who or which:

(1) did not acquire any voting shares of the corporation with the purpose of changing or influencing control of the corporation or seeking to acquire control of the corporation or in connection with or as a participant in any agreement,

arrangement, relationship, understanding or otherwise having any such purpose;

(2) if control were acquired, would not be a person or group or a participant in a group that has control over the corporation and will not receive, directly or indirectly, any consideration from a person or group that has control over the corporation other than consideration offered proportionately to all holders of voting shares of the corporation; and

(3) if a proxy or consent is given, executes a revocable proxy or consent given without consideration in response to a proxy or consent solicitation made in accordance with the applicable rules and regulations under the Exchange Act under circumstances not then reportable on Schedule 13d under the Exchange Act (or any comparable or successor report) by the person or group who gave the proxy or consent.

(b) Certain holders.--For the purpose of this subchapter, a person or group shall not be deemed a controlling person or group under paragraph (1)(i) of the definition of "controlling person or group" in section 2573 (relating to definitions) if such person or group holds voting power:

(1) in good faith and not for the purpose of circumventing this subchapter, as an agent, bank, broker, nominee or trustee for one or more beneficial owners who do not individually or, if they are a group acting in concert, as a group have the voting power specified in paragraph

(1)(i) of the definition of "controlling person or group" in section 2573;

(2) in connection with the solicitation of proxies or consents by or on behalf of the corporation in connection with shareholder meetings or actions of the corporation; or

(3) in the amount specified in paragraph (1)(i) of the definition of "controlling person or group" in section 2573 as a result of the solicitation of revocable proxies or consents with respect to voting shares if such proxies or consents both:

(i) are given without consideration in response to a proxy or consent solicitation made in accordance with the applicable rules and regulations under the Exchange Act; and

(ii) do not empower the holder thereof, whether or not this power is shared with any other person, to vote such shares except on the specific matters described in such proxy or consent and in accordance with the instructions of the giver of such proxy or consent.

(c) Preference shares.--In determining whether a person or group would be a controlling person or group within the meaning of this subchapter, there shall be disregarded voting power, and the seeking to acquire control of a corporation to the extent based upon voting power arising from a contingent right of the holders of one or more classes or series of preference shares to elect one or more members of the board of directors upon or during the continuation of a default in the payment of dividends on such shares or another similar contingency. (Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 renumbered section 2573.1 to section 2574 and added subsec. (c) and renumbered former section 2574 to present section 2575. Cross References. Section 2574 is referred to in section 2573 of this title.
15 Pa.C.S. § 315 — PA Code / Title 15 / Chapter 3 / Section 315
Nature of transactions.
Status: in_force

(a) General rule.--The fact that a sale or conversion of the interests in or assets of an association or a transaction under this chapter or other law produces a result that could be accomplished in any other manner permitted by a different set of provisions of this chapter or other law shall not be a basis for recharacterizing the sale, conversion or transaction as a different form of sale, conversion or transaction under this chapter or other law.

(b) Business purpose not required.--A transaction under this chapter does not require an independent business purpose in order for the transaction to be lawful. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days; July 15, 2024, P.L.728, No.59, eff. 60 days) 2024 Amendment. Act 59 amended subsec. (a). Cross References. Section 315 is referred to in section 1571 of this title.
15 Pa.C.S. § 7724 — PA Code / Title 15 / Chapter 77 / Section 7724
Conversion to a corporation governed by the Business Corporation Law.
Status: in_force

(a) Amendment of articles.--A corporation may revoke its election to be governed by this chapter by filing an adopted amendment to its articles of incorporation with the department.

(b) Conversion of shares and accounts.--When a corporation revokes its election under subsection (a), the amendment to the articles of incorporation shall provide for the conversion of membership shares and internal capital accounts to securities or other property in a manner consistent with this title.
15 Pa.C.S. § 2306 — PA Code / Title 15 / Chapter 23 / Section 2306
Limitations on continuation of statutory close corporation status.
Status: in_force

A statutory close corporation continues to be such and to be subject to this chapter until:

(1) it terminates its status as a statutory close corporation pursuant to section 2307 (relating to voluntary termination of statutory close corporation status by amendment of articles); or

(2) the provisions required or permitted by section 2304 (relating to additional contents of articles of statutory close corporations) to be stated in the articles to qualify a business corporation as a statutory close corporation have in fact been breached and neither the corporation nor any of its shareholders takes the steps required by section 2309 (relating to involuntary termination of statutory close corporation status; proceeding to prevent loss of status) to prevent such loss of status or to remedy such breach.
15 Pa.C.S. § 1747 — PA Code / Title 15 / Chapter 17 / Section 1747
Power to purchase insurance.
Status: in_force

Unless otherwise restricted in its bylaws, a business corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against that

liability under the provisions of this subchapter. Such insurance is declared to be consistent with the public policy of this Commonwealth. (Dec. 19, 1990, P.L.834, No.198, eff. imd.)
15 Pa.C.S. § 1749 — PA Code / Title 15 / Chapter 17 / Section 1749
Application to employee benefit plans.
Status: in_force

For purposes of this subchapter:

(1) References to "other enterprises" shall include employee benefit plans and references to "serving at the request of the corporation" shall include any service as a representative of the business corporation that imposes duties on, or involves services by, the representative with respect to an employee benefit plan, its participants or beneficiaries.

(2) Excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be deemed "fines."

(3) Action with respect to an employee benefit plan taken or omitted in good faith by a representative of the corporation in a manner he reasonably believed to be in the interest of the participants and beneficiaries of the plan shall be deemed to be action in a manner that is not opposed to the best interests of the corporation.
15 Pa.C.S. § 8412 — PA Code / Title 15 / Chapter 84 / Section 8412
Definitions.
Status: in_force

(a) General definitions.--The following words and phrases when used in this chapter shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:

"Business." Includes every trade, occupation and profession.

"Contribution." Property or a benefit described in section 8443 (relating to form of contribution) which is provided by a person to a partnership to become a partner or in the person's capacity as a partner.

"Distribution." A transfer of money or other property from a partnership to a person on account of a transferable interest or in a person's capacity as a partner. The term:

(1) includes:

(i) a redemption or other purchase by a partnership of a transferable interest; and

(ii) 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 business or have access to records or other information concerning the partnership's business; and

(2) does not include:

(i) 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;

(ii) the making of, or payment or performance on, a guaranty or similar arrangement by a partnership for the benefit of any or all of its partners;

(iii) a direct or indirect allocation or transfer effected under Chapter 3 (relating to entity transactions) with the approval of the partners; or

(iv) a direct or indirect transfer of:

(A) a governance or transferable interest; or

(B) options, rights or warrants to acquire a governance or transferable interest.

"Partner." A person that:

(1) has become a partner in a partnership under section 8442 (relating to becoming partner) or was a partner in a partnership when the partnership became subject to this chapter under section 8411 (relating to short title and application of chapter); and

(2) has not dissociated as a partner under section 8461 (relating to events causing dissociation).

"Partnership." An association of two or more persons to carry on as co-owners a business for profit formed under this chapter or that becomes subject to this chapter under Chapter 3 (relating to entity transactions) or section 8411 (relating to short title and application of chapter). The term includes a limited liability partnership or an electing partnership that is not also a limited partnership.

"Partnership agreement." The agreement, whether or not referred to as a partnership agreement and whether oral, implied, in record form or in any combination thereof, of all the partners of a partnership concerning the matters described in section 8415(a) (relating to contents of partnership agreement). The term includes the agreement as amended or restated.

"Partnership at will." 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.

"Transferable interest." The right, as initially owned by a person in the person's capacity as a partner, to receive distributions from a 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.

"Transferee." A person to which all or part of a transferable interest has been transferred, whether or not the transferor is a partner.

(b) Index of definitions.--The following is a nonexclusive list of definitions in section 102 (relating to definitions) that apply to this chapter: "Act" or "action."

"Court."

"Debtor in bankruptcy."

"Department."

"Jurisdiction."

"Jurisdiction of formation."

"Obligation."

"Principal office."

"Professional services."

"Property."

"Record form."

"Sign."

"Transfer." Cross References. Section 8412 is referred to in section 102 of this title.
15 Pa.C.S. § 304 — PA Code / Title 15 / Chapter 3 / Section 304
Effective date and applicability.
Status: in_force

(a) Effective date.--This act shall take effect October 1, 1989, except that:

(1) Sections 101, 104, 301, 303 and 304 shall take effect immediately.

(2) The following provisions of Title 15 and as much of the act as may be necessary to make those provisions operative shall take effect immediately and shall be retroactive to January 27, 1987, insofar as relates to the

implementation of 42 Pa.C.S. Ch. 83 Subch. F (relating to corporate directors' liability): 15 Pa.C.S. § 1102(b) (relating to coordination with other laws), 15 Pa.C.S. § 1310(a) (relating to organization meeting), 15 Pa.C.S. § 1504(c) (relating to bylaw provisions in articles), 15 Pa.C.S. § 1757(a) (relating to action by shareholders), 15 Pa.C.S. § 1762(c) (relating to controlled shares) and 15 Pa.C.S. § 1766 (relating to consent of shareholders in lieu of meeting).

(3) The amendment to 54 Pa.C.S. § 311(b)(1) (relating to use of corporate designators) shall take effect immediately and shall be retroactive to March 16, 1983.

(4) Section 138 (relating to statement of correction) of Title 15 shall take effect immediately and shall be retroactive to January 1, 1980, insofar as relates to filings under the Business Corporation Law of 1933. With respect to matters covered by this paragraph, the one-year period of the last sentence of 15 Pa.C.S. § 138(c) shall run from the later of the date of enactment of this act or the date upon which such filing was or is made by or with respect to a corporation subject to the Business Corporation Law of 1933.

(5) Section 302(e), insofar as it repeals 59 Pa.C.S. Ch. 5 (relating to limited partnerships), and section 103, insofar as it enacts 15 Pa.C.S. § 8502(a) (relating to applicability of chapter to existing limited partnerships), shall take effect 90 days after the Governor publishes a proclamation in the Pennsylvania Bulletin stating that the Governor has found that the United States Internal Revenue Service has determined that 15 Pa.C.S. Ch. 85 (relating to limited partnerships) corresponds to the Uniform Limited Partnership Act for purposes of 26 C.F.R. § 301.7701-2. The Governor shall issue such a proclamation upon being furnished with a copy of a ruling by the Internal Revenue Service to that effect. Delay in the repeal of 59 Pa.C.S. Ch. 5 and enactment of 15 Pa.C.S. § 8502(a) shall not postpone the effective date of 15 Pa.C.S. Ch. 85, and pending repeal of 59 Pa.C.S. Ch. 5, persons may utilize either statute at their election, which shall be expressed in the partnership agreement, for the government and regulation of the affairs of the limited partnership. A partnership agreement that fails to identify expressly the statute applicable to the partnership shall be deemed to contain an election to be governed by 59 Pa.C.S. Ch. 5. On the effective date of the repeal of 59 Pa.C.S. Ch. 5, any partnership then governed by that chapter shall thereafter be governed by 15 Pa.C.S. Ch. 85.

(6) (Repealed).

(7) The amendments to 15 Pa.C.S. Ch. 87 (relating to electing partnerships) shall take effect immediately and shall be retroactive to July 10, 1981.

(8) Section 103, insofar as it enacts 15 Pa.C.S. Ch. 77 (relating to workers' cooperative corporations), shall take effect in 180 days.

(b) Applicability.--(Repealed). 1994 Proclamation. The proclamation of the Governor referred to in section 304(a)(5) was published in the Pennsylvania Bulletin on June 18, 1994, at 24 Pa.B. 3001 and is set forth in full in this appendix. 1990 Repeal. Subsections (a)(6) and (b) were repealed December 19, 1990, P.L.834, No.198, effective immediately.

References in Text. 42 Pa.C.S. Ch. 83 Subch. F (relating to corporate directors' liability), referred to in subsec. (a), was repealed by the act of December 19, 1990, P.L.834, No.198. The subject matter is now contained in Subchapter B of Chapter 5, Subchapter B of Chapter 17 and Subchapter B of Chapter 57 of Title 15. 1990, APRIL 27, P.L.129, NO.36
15 Pa.C.S. § 5554 — PA Code / Title 15 / Chapter 55 / Section 5554
Annual report of directors or other body.
Status: in_force

(a) Contents.--The board of directors or other body of a nonprofit corporation shall present annually to the members a report, verified by the president and treasurer or by a majority of the directors or members of the other body, showing in appropriate detail the following:

(1) The assets and liabilities, including trust funds, of the corporation as of the end of the fiscal year immediately preceding the date of the report.

(2) The principal changes in assets and liabilities, including trust funds, during the fiscal year immediately preceding the date of the report.

(3) The revenue or receipts of the corporation, both unrestricted and restricted to particular purposes, for the fiscal year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the corporation.

(4) The expenses or disbursements of the corporation, for both general and restricted purposes, during the fiscal year immediately preceding the date of the report, including separate data with respect to each trust fund held by or for the corporation.

(5) The number of members of the corporation as of the date of the report, together with a statement of increase

or decrease in their number during the year immediately preceding the date of the report, and a statement of the place where the names and addresses of the current members may be found.

(b) Place of filing.--The annual report of the board of directors or other body shall be filed with the minutes of the meetings of members.

(c) Report in absence of meeting of members.--The board of directors or other body of a corporation having no members shall direct the president and treasurer to present at the annual meeting of the board or other body a report in accordance with subsection (a), but omitting the requirement of paragraph (5). The report shall be filed with the minutes of the annual meeting of the board or other body.

(d) Cross reference.--See section 6145 (relating to applicability of certain safeguards to foreign domiciliary corporations). (July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 renumbered and amended former section 5553 to section 5554. Cross References . Section 5554 is referred to in section 6145 of this title.
15 Pa.C.S. § 1759 — PA Code / Title 15 / Chapter 17 / Section 1759
Voting and other action by proxy.
Status: in_force

(a) General rule.--

(1) Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action without a meeting may authorize another person to act for him by proxy.

(2) The vote or other action on behalf of a shareholder at a meeting of shareholders, or the expression of consent or dissent to corporate action, by a proxy of a shareholder shall constitute the vote or action by, or consent or dissent of the shareholder for the purposes of this subpart.

(3) Where two or more proxies of a shareholder are present, the corporation shall, unless otherwise expressly provided in the proxy, accept as the vote or other action of all shares represented thereby the vote cast or other action taken by a majority of them and, if a majority of the proxies cannot agree whether the shares represented shall be voted or upon the manner of voting the shares or taking the other action, the voting of the shares or right to take other action shall be divided equally among those persons.

(b) Execution and filing.--Every proxy shall be executed or authenticated by the shareholder or by his duly authorized attorney-in-fact and filed with or transmitted to the secretary of the corporation or its designated agent. A shareholder or his duly authorized attorney-in-fact may execute or authenticate a writing or transmit an electronic message authorizing another person to act for him by proxy. A telegram, telex, cablegram, datagram, e-mail, Internet communication or other means of electronic transmission from a shareholder or attorney-in-fact,

or a photographic, facsimile or similar reproduction of a writing executed by a shareholder or attorney-in-fact:

(1) may be treated as properly executed or authenticated for purposes of this subsection; and

(2) shall be so treated if it sets forth or utilizes a confidential and unique identification number or other mark furnished by the corporation to the shareholder for the purposes of a particular meeting or transaction.

(c) Revocation.--A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until notice thereof has been given to the secretary of the corporation or its designated agent in writing or by electronic transmission. An unrevoked proxy shall not be valid after three years from the date of its signature, authentication or transmission unless a longer time is expressly provided therein. A proxy shall not be revoked by the death or incapacity of the maker unless, before the vote is counted or the authority is exercised, notice in record form of the death or incapacity is given to the secretary of the corporation or its designated agent.

(d) Proxy coupled with an interest.--As used in this section, the term "proxy coupled with an interest" includes:

(1) a vote pooling or similar arrangement among shareholders;

(2) an agreement permitted by section 1768(b) (relating to other agreements); and

(3) an unrevoked proxy in favor of an existing or potential creditor of a shareholder. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the share itself or an interest in the corporation generally.

(e) Cross references.--See sections 1702 (relating to manner of giving notice) and 3135 (relating to proxies of members of mutual insurance companies). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; June 22, 2001, P.L.418, No.34, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days)

Amendment . Act 67 amended subsecs. (a), (c) and (e). 2001 Amendment. Act 34 amended subsecs. (b) and (c). 1990 Amendment. Act 198 amended subsec. (b), relettered part of subsec. (b) to subsec. (c), relettered former subsec.

(c) to subsec. (d) and added subsec. (e).
15 Pa.C.S. § 5732 — PA Code / Title 15 / Chapter 57 / Section 5732
Officers.
Status: in_force

(a) General rule.--Every nonprofit corporation shall have a president, a secretary, and a treasurer, or persons who shall act as such, regardless of the name or title by which they may be designated, elected or appointed and may have such other officers as it may authorize from time to time. The bylaws may prescribe special qualifications for the officers. The president and secretary shall be natural persons of full age. The treasurer may be a corporation, but if a natural person shall be of full age. Unless otherwise restricted in the bylaws, it shall not be necessary for the officers to be directors. Any number of offices may be held by the same person.

(b) Term of office.--The officers shall be elected or appointed at such time, in such manner and for such terms as may be fixed by or pursuant to the bylaws. Unless otherwise provided by or pursuant to the bylaws, each officer shall hold office for a term of one year and until the officer's successor has been selected and qualified or until the officer's earlier death, resignation or removal.

(c) Resignation.--Any officer may resign at any time upon written notice to the corporation. The resignation shall be effective upon receipt thereof by the corporation or at such subsequent time as may be specified in the notice of resignation.

(d) Bonding.--The corporation may secure the fidelity of any or all of the officers by bond or otherwise.

(e) Vacancies.--Unless otherwise provided in the bylaws, the board of directors shall have power to fill any vacancies in any office occurring from whatever reason.

(f) Authority.--Unless otherwise provided in the bylaws, all officers of the corporation, as between themselves and the corporation, shall have such authority and perform such duties in the management of the corporation as may be provided by or pursuant to the bylaws or, in the absence of controlling provisions in the bylaws, as may be determined by or pursuant to actions of the board of directors or other body.

(g) Right to bylaws.--Every officer shall have the right to receive, promptly after demand and without charge, a copy

in record form of the currently effective text of the bylaws, but only to the extent reasonably related to the officer's duties. (Dec. 12, 1984, P.L.977, No.193, eff. 60 days; Dec. 19, 1990, P.L.834, No.198, eff. imd.; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days)
15 Pa.C.S. § 3303 — PA Code / Title 15 / Chapter 33 / Section 3303
Formation of benefit corporations.
Status: in_force

A benefit corporation shall be formed in accordance with
15 Pa.C.S. § 403 — PA Code / Title 15 / Chapter 4 / Section 403
Transitional provision (Repealed).
Status: repealed

1992 Repeal. Section 403 was repealed December 18, 1992, P.L.1333, No.169, effective in 60 days.
15 Pa.C.S. § 5506 — PA Code / Title 15 / Chapter 55 / Section 5506
Form of execution of instruments.
Status: in_force

(a) General rule.--Any form of execution provided in the articles or bylaws to the contrary notwithstanding, any note, mortgage, evidence of indebtedness, contract or other document, or any assignment or endorsement thereof, executed or entered into between any nonprofit corporation and any other person, when signed by one or more officers or agents having actual or apparent authority to sign it, or by the president or vice-president and secretary or assistant secretary or treasurer or assistant treasurer of the corporation, shall be held to have been properly executed for and in behalf of the corporation.

(b) Seal unnecessary.--The affixation of the corporate seal shall not be necessary to the valid execution, assignment or endorsement by a corporation of any instrument or other document.

(c) Cross reference.--See section 6146 (relating to provisions applicable to all foreign corporations). (June 22, 2001, P.L.418, No.34, eff. 60 days) Cross References. Section 5506 is referred to in section 6146 of this title.
15 Pa.C.S. § 8884 — PA Code / Title 15 / Chapter 88 / Section 8884
Special litigation committee.
Status: in_force

(a) General rule.--If a limited liability company or its members or managers receive a demand to bring an action to enforce a right of the company, or if a derivative action is commenced before demand has been made on the company or its members or managers, the members in a member-managed limited liability company, or the managers in a manager-managed limited liability company, may appoint a special litigation committee to investigate the claims asserted in the demand or action and to determine on behalf of the company or recommend to the managers or members whether pursuing any of the claims asserted is in the best interests of the company. The company must deliver a notice in record form to the person making the demand, or to the plaintiff if a derivative action has been commenced, promptly after the appointment of a committee under this section notifying the person making the demand or the plaintiff that a committee has been appointed and identifying by name the members

of the committee. A committee may not be appointed under this section if:

(1) every member of the company is also a manager of the company; or

(2) the company is member-managed and every member is actively involved in the management of the company.

(b) Discovery stay.--If the members or managers appoint a special litigation committee and an action is commenced before a determination has been made under subsection (e):

(1) On motion by the limited liability company, or the committee made in the name of the company, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation, except for good cause shown.

(2) The time for the defendants to plead shall be tolled until the process provided for under subsection (f) has been completed.

(c) Composition of committee.--A special litigation committee shall be composed of two or more individuals who:

(1) are not interested in the claims asserted in the demand;

(2) are capable as a group of objective judgment in the circumstances; and

(3) may, but need not, be members or managers.

(c.1) Committee members who are not managers.--A member of a special litigation committee who is not a manager, when acting as a member of the committee, is subject to the liabilities imposed, and entitled to the rights and immunities conferred, by sections 8848 (relating to reimbursement, indemnification, advancement and insurance) and 8849.2 (relating to standards of conduct for managers).

(d) Appointment of committee.--A special litigation committee may be appointed:

(1) in a member-managed limited liability company:

(i) by a majority of the members not named as actual or potential parties in the demand or action; and

(ii) if all members are named as actual or potential parties in the demand or action, by a majority of the members so named; or

(2) in a manager-managed limited liability company:

(i) by a majority of the managers not named as actual or potential parties in the demand or action; and

(ii) if all managers are named as actual or potential parties in the demand or action, by a majority of the managers so named.

(e) Determination.--After appropriate investigation by a special litigation committee, the committee may determine, or the committee may recommend to the managers or members that they determine, that it is in the best interests of the limited liability company that:

(1) an action based on some or all of the claims asserted in the demand not be brought by the company but that the company not object to an action being brought by the party that made the demand:

(2) an action based on some or all of the claims asserted in the demand be brought by the company;

(3) some or all of the claims asserted in the demand be settled on terms determined or recommended by the committee;

(4) an action not be brought based on any of the claims asserted in the demand;

(5) an action already commenced continue under the control of:

(i) the plaintiff;

(ii) the company; or

(iii) the committee;

(6) some or all of the claims asserted in an action already commenced be settled on terms determined or recommended by the committee; or

(7) an action already commenced be dismissed.

(f) Court review and action.--If a special litigation committee is appointed and a derivative action is commenced either before or after either the committee makes a determination under subsection (e) or the members or managers determine under that subsection to accept the recommendation of the committee:

(1) The limited liability company or the committee shall file with the court after a determination is made under subsection (e) a statement of the determination and a report of the committee supporting the determination. The company or the committee shall serve each party with a copy of the determination and report. If the company or the committee moves to file the report under seal, the report shall be served on the parties subject to an appropriate stipulation agreed to by the parties or a protective order issued by the court.

(2) The company or the committee shall file with the court a motion, pleading or notice consistent with the determination under subsection (e).

(3) If the determination is one described in subsection

(e)(2), (3), (4), (5)(ii), (6) or (7), the court shall determine whether the members of the committee met the qualifications required under subsection (c)(1) and (2) and whether the committee conducted its investigation and made its determination or recommendation in good faith, independently and with reasonable care. The plaintiff has the burden of proving that the committee did not meet those qualifications or act in the required manner. If the court finds that the members of the committee met the qualifications required under subsection (c)(1) and (2) and that the committee acted in good faith, independently and with reasonable care, the court shall enforce the determination of the committee or the members or managers. Otherwise, the court shall:

(i) dissolve any stay of discovery entered under subsection (b);

(ii) allow the action to continue under the control of the plaintiff; and

(iii) permit the defendants to file preliminary objections and other appropriate motions and pleadings.

(g) Attorney General.--Nothing in this section shall limit the rights, powers and duties of the Attorney General under other applicable law with respect to a limited liability company organized for a charitable purpose.

(h) Interest of a defendant.--The fact that a person is named as a defendant does not make the person interested in the claims asserted in a demand or action for purposes of subsection

(c)(1) if the claims against the person:

(1) are based only on an allegation that the person approved of or acquiesced in the transaction or conduct that is the subject of the claims; and

(2) do not otherwise allege with particularity facts that, if true, raise a significant prospect that the person would be adjudged liable.

(i) Cross reference.--See section 8815(c)(18) (relating to contents of operating agreement). (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsecs. (a), (b)(1), (e) intro. par., (3) and (6) and (f), added subsec. (c.1) and relettered former subsec. (h) to subsec. (i) and added present subsec. (h). Cross References. Section 8884 is referred to in sections 8815, 8882 of this title.
15 Pa.C.S. § 381 — PA Code / Title 15 / Chapter 3 / Section 381
Grounds for administrative dissolution or cancellation.
Status: in_force

(a) General rule.--The department may commence a proceeding under section 382 (relating to procedure and effect) to administratively dissolve a domestic filing entity or cancel the statement of registration of a domestic limited liability partnership or the statement of election of an electing partnership that is not also a limited partnership if the entity does not deliver an annual report to the department within six months after the annual report is due.

(b) Transitional provision.--Subsection (a) applies with respect to annual reports due on or after January 4, 2027. Cross References. Section 381 is referred to in section 382 of this title.
15 Pa.C.S. § 8241 — PA Code / Title 15 / Chapter 82 / Section 8241
Known claims against dissolved limited liability partnership.
Status: in_force

(a) General rule.--Except as provided in subsection (d), a dissolved limited liability partnership may give notice of a known claim under subsection (b), which has the effect provided in subsection (c).

(b) Notice.--A dissolved limited liability partnership may notify in record form 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 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 partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on section 8436 (relating to partner's liability).

(c) Claims barred.--A claim against a dissolved limited liability partnership is barred if the requirements of subsection (b) are met and:

(1) the claim is not received by the specified deadline; or

(2) if the claim is timely received but rejected by the partnership:

(i) the partnership causes the claimant to receive a notice in record form stating that the claim is rejected and will be barred unless the claimant commences

an action against the partnership to enforce the claim within 90 days after the claimant receives the notice; and

(ii) the claimant does not commence the required action within 90 days after the claimant receives the notice.

(d) Later arising claims.--This section shall not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent. Cross References. Section 8241 is referred to in sections 8231, 8242, 8243 of this title.
15 Pa.C.S. § 5586 — PA Code / Title 15 / Chapter 55 / Section 5586
Restrictions on investments.
Status: in_force

(a) Legal investments.--If the trust instrument limits or restricts the investment of the assets to investments of the class authorized by law as legal investments, a nonprofit corporation may invest and reinvest the assets of the trust or fund in any common trust fund maintained by the corporation if the investments composing the fund consist solely of investments of the class authorized by 20 Pa.C.S. Ch. 72 (relating to prudent investor rule) to be held by fiduciaries.

(b) Other than legal investments.--If the trust instrument does not limit or restrict the investment of the assets to investments of the class authorized by law as legal investments, the corporation may invest and reinvest the assets of the trust or fund in any common trust fund maintained by the corporation composed of the investments as in the honest exercise of the judgment of the directors or other body of the corporation they may, after investigation, determine to be safe and proper investments. (July 9, 2013, P.L.476, No.67, eff. 60 days)
15 Pa.C.S. § 401 — PA Code / Title 15 / Chapter 4 / Section 401
Application of chapter.
Status: in_force

(a) General rule.--Except as otherwise provided in this section or in subsequent provisions of this chapter, this chapter shall apply to all foreign associations.

(b) Application to foreign banking institutions.--The words "foreign filing association" or "foreign association" in this chapter include an association that, if a domestic association, would be a banking institution or credit union. The term does not include an interstate bank as defined in section 102 of the act of November 30, 1965 (P.L.847, No.356), known as the Banking Code of 1965.

(c) Domestic Federal financial association exclusion.--Except as permitted by act of Congress, this chapter shall not apply to:

(1) Any of the following institutions or similar federally chartered institutions engaged in this Commonwealth in activities similar to those conducted by banking institutions or credit unions:

(i) National banking associations organized under The National Bank Act (13 Stat. 99, 12 U.S.C. § 1 et seq.).

(ii) Federal savings and loan associations and Federal mutual savings banks organized under the Home Owners' Loan Act (48 Stat. 128, 12 U.S.C. § 1461 et seq.).

(iii) Federal credit unions organized under the Federal Credit Union Act (48 Stat. 1216, 12 U.S.C. § 1751 et seq.).

(2) Any other Federal association intended by the Congress to be treated for State law purposes as a domestic association of this Commonwealth.

(d) Foreign insurance corporations.--A foreign insurance corporation shall be subject to this chapter, except as provided in section 402(e) (relating to governing law) or 411(g) (relating to registration to do business in this Commonwealth).

(e) Government entities.--This chapter shall apply to and the words "association" and "foreign association" shall include a government or other sovereign, other than the Commonwealth or any of its political subdivisions, and any governmental corporation, agency or other entity thereof.

(f) Admitted foreign fraternal benefit society exclusion.--This chapter shall not apply to any foreign corporation not-for-profit licensed to transact business in this Commonwealth under section 2455 of the act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921. Cross References. Section 401 is referred to in section 411 of this title. § 402. Governing law.

(a) General rule.--The laws of the jurisdiction of formation of a foreign association govern the following:

(1) The internal affairs of the association.

(2) Except as provided in subsection (h), the liability that a person has solely as an interest holder or governor for a debt, obligation or other liability of the association.

(3) The liability of a series or protected cell of the association.

(b) Effect of differences in law.--A foreign association is not precluded from registering to do business in this Commonwealth because of any difference between the laws of the jurisdiction of formation of the foreign association and the laws of this Commonwealth.

(c) Limitations on domestic associations applicable.--Registration of a foreign association to do business in this Commonwealth does not authorize the foreign association to engage in any activities and affairs or exercise any power that a domestic association of the same type may not engage in or exercise in this Commonwealth.

(d) Equal rights and privileges of registered foreign associations.--Except as otherwise provided by law, a registered foreign association, so long as its registration to do business is not terminated or canceled, shall enjoy the same rights and privileges as a domestic entity and shall be subject to the same liabilities, restrictions, duties and penalties now in force or hereafter imposed on domestic entities, to the same extent as if it had been formed under this title. A foreign insurance corporation shall be deemed a registered foreign association except as provided in subsection (e).

(e) Foreign insurance corporations.--A foreign insurance corporation shall, insofar as it is engaged in the business of writing insurance or reinsurance as principal, be subject to the laws of this Commonwealth regulating the conduct of the business of insurance by a foreign insurance corporation in lieu of the provisions of subsection (d) regarding its rights, privileges, liabilities, restrictions and duties and the penalties to which it may be subject.

(f) Agricultural lands.--Interests in agricultural land shall be subject to the restrictions of, and escheatable as provided by, the act of April 6, 1980 (P.L.102, No.39), referred to as the Agricultural Land Acquisition by Aliens Law.

(g) Defense of usury.--A foreign association shall be subject to section 1510 (relating to certain specifically authorized debt terms) with respect to obligations, as defined in that section, governed by the laws of this Commonwealth or affecting real property situated in this Commonwealth, to the same extent as if the foreign association were a domestic business corporation.

(h) Exception.--Subsection (a)(2) does not relieve a governor or interest holder of a foreign association from a liability under the laws of this Commonwealth other than this title to which a governor or interest holder of a domestic association of the same type would be subject.

(i) Duties.--Except as otherwise provided in section 411(b) (relating to registration to do business in this Commonwealth), every nonregistered foreign association doing business in this Commonwealth shall be subject to the same liabilities, restrictions, duties and penalties now or hereafter imposed upon a registered foreign association. (Nov. 21, 2016, P.L.1328, No.170, eff. 90 days; Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a) and added subsecs. (h) and (i). 2016 Amendment. Act 170 added subsec. (g). Cross References. Section 402 is referred to in sections 401, 411 of this title. § 403. Activities not constituting doing business.

(a) General rule.--Activities of a foreign filing association or foreign limited liability partnership that do not constitute doing business in this Commonwealth under this chapter shall include the following:

(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 interest holders or governors.

(3) Maintaining accounts in financial institutions.

(4) Maintaining offices or agencies for the transfer, exchange and registration of securities of the association or maintaining trustees or depositories with respect to the securities.

(5) Selling through independent contractors.

(6) Soliciting or obtaining orders by any means if the orders require acceptance outside of this Commonwealth before the orders become contracts.

(7) Creating, acquiring or incurring obligations, 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 so acquired.

(9) Conducting an isolated transaction that is not in the course of similar transactions.

(10) (Deleted by amendment).

(11) Doing business in interstate or foreign commerce.

(12) Acquiring, owning, holding, leasing as a lessee, conveying and transferring, without more and whether as fiduciary or otherwise:

(i) real estate and mortgages and other liens thereon; or

(ii) personal property and security interests therein.

(13) Conducting operations or performing work or services in good faith in response to a disaster or emergency event.

(b) Participation in other associations.--Being an interest holder or governor of a foreign association that does business in this Commonwealth shall not by itself constitute doing business in this Commonwealth.

(c) Applicability.--This section shall not apply in determining the contacts or activities that may subject a foreign filing association or foreign limited liability partnership to service of process, taxation or regulation under laws of this Commonwealth other than this title. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 amended subsec. (a)(7), added subsec. (a)(12) and (13) and deleted subsec. (a)(10).
15 Pa.C.S. § 8242 — PA Code / Title 15 / Chapter 82 / Section 8242
Other claims against dissolved limited liability partnership.
Status: in_force

(a) Permissive notice.--A dissolved limited liability partnership may publish notice of its dissolution and request persons having claims against the partnership to present them in accordance with the notice.

(b) Notice procedure.--A notice under subsection (a) must:

(1) be officially published one time;

(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 within two years after publication of the notice; and

(4) unless the partnership has been throughout its existence a limited liability partnership, state that the barring of a claim against the partnership will also bar any corresponding claim against any partner or person dissociated as a partner which is based on section 8436 (relating to partner's liability).

(c) Claims barred.--If a dissolved limited liability 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 within two years after the publication date of the notice:

(1) a claimant that did not receive notice in record form under section 8241 (relating to known claims against dissolved limited liability partnership);

(2) a claimant whose claim was timely sent to the partnership but not acted on; and

(3) a claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution.

(d) Claims not barred.--A claim not barred under this section or section 8241 may be enforced:

(1) against a dissolved limited liability partnership, to the extent of its undistributed assets;

(2) except as provided in section 8243 (relating to court proceedings), 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, except that 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

(3) against any person liable on the claim under sections 8436, 8473 (relating to liability of person dissociated as partner to other persons) and 8485 (relating to liability after dissolution).

Cross References. Section 8242 is referred to in sections 8231, 8243 of this title.
15 Pa.C.S. § 8661 — PA Code / Title 15 / Chapter 86 / Section 8661
Dissociation as limited partner.
Status: in_force

(a) No right to dissociate.--A person does not have a right to dissociate as a limited partner before the completion of the winding up of the limited partnership.

(b) Events causing dissociation.--A person is dissociated as a limited partner when any of the following apply:

(1) The limited partnership knows or has notice of the person's express will to withdraw as a limited partner rightfully or wrongfully, except that, 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:

(i) it is unlawful to carry on the partnership's activities and affairs with the person as a limited partner;

(ii) there has been a transfer of all the person's transferable interest in the partnership, other than:

(A) a transfer for security purposes; or

(B) a charging order in effect under section 8673 (relating to charging order) which has not been foreclosed;

(iii) the person is an entity and:

(A) the partnership notifies the person that it will be expelled as a limited partner because:

(I) the person has filed a certificate of dissolution or the equivalent;

(II) the person has been administratively dissolved; (III) the person's charter or the equivalent has been revoked; or (IV) the person's right to conduct business has been suspended by the person's jurisdiction of formation; and

(B) within 90 days after the notification:

(I) the certificate of dissolution or the equivalent has not been withdrawn, rescinded or revoked; (II) the person has not been reinstated; (III) the person's charter or the equivalent has not been reinstated; or (IV) the person's right to conduct business has not been reinstated; or

(iv) the person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up.

(5) On application by the partnership or a partner in a direct action under section 8691 (relating to direct action by partner), the person is expelled as a limited partner by judicial order because the person:

(i) 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;

(ii) has committed willfully or persistently, or is committing willfully or persistently, a material breach of the partnership agreement or the contractual obligation of good faith and fair dealing under section 8635(a) (relating to limited duties of limited partners); or

(iii) 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.

(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 partnership participates in a merger under
15 Pa.C.S. § 1530 — PA Code / Title 15 / Chapter 15 / Section 1530
Preemptive rights of shareholders.
Status: in_force

(a) General rule.--Except as otherwise provided in the articles, a business corporation may issue shares, option rights or securities having conversion or option rights, or obligations without first offering them to shareholders of any class or classes.

(b) Cross references.--See sections 1525(e) (relating to shares subject to preemptive rights) and 2321(b) (relating to preemptive rights). (Dec. 19, 1990, P.L.834, No.198, eff. imd.; Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) 1992 Amendment. Act 169 amended subsec. (b).
15 Pa.C.S. § 5548 — PA Code / Title 15 / Chapter 55 / Section 5548
Investment of trust funds.
Status: in_force

(a) General rule.--Unless otherwise specifically directed in the trust instrument, the board of directors or other body of a nonprofit corporation incorporated for charitable purposes shall have power to invest any assets vested in the corporation by such instrument or the proceeds thereof separately or together with other assets of the corporation, in the manner authorized for fiduciaries by 20 Pa.C.S. Ch. 72 (relating to prudent investor rule), and to retain any investments heretofore so made. Any such nonprofit corporation may, by appropriate action of its board of directors or other body, keep any investments or fractional interests in any investments, held by it or made by it, in the name of the corporation or in the name of a nominee of the corporation.

(b) Use and management.--Except as otherwise permitted under 20 Pa.C.S. Ch. 77 (relating to trusts), the board of directors or other body shall apply all assets thus received to the purposes specified in the trust instrument. The directors or other body shall keep accurate accounts of all trust funds, separate and apart from the accounts of other assets of the corporation.

(c) Determination of income.--

(1) Unless otherwise specifically directed in the trust instrument, the board of directors or other body may elect to be governed by this subsection with respect to assets thus received, including any participation in any common trust fund.

(2) To make an election under this subsection, the board of directors or other body shall adopt and follow an investment policy seeking a total return for the assets held by the corporation or in the name of a nominee of the corporation or by an institutional trustee pursuant to section 5549 (relating to transfer of trust or other assets to institutional trustee), whether the return is to be derived from capital appreciation, earnings or distributions with respect to the capital or both. The policy constituting the election shall be in writing, shall be maintained as part of the permanent records of the corporation and shall recite that it constitutes an election to be governed by this subsection.

(3)

(i) If an election is made to be governed by this subsection, the term "income" shall mean a percentage of the value of the assets so held by or for the corporation.

(ii) Except as otherwise provided in subparagraph

(iii), the board of directors or other body shall in a writing maintained as part of the permanent records of the corporation annually select a percentage and determine that it is consistent with the long-term preservation of the real value of the assets, but in no event shall the percentage be less than 2% nor more than 7% per year.

(iii) The board of directors or other governing body shall, in selecting a percentage, consider both the long-term preservation of the real value of the assets and the corporation's need for capital to fulfill its mission and may select a percentage of not more than 10% per year. This subparagraph shall only apply during calendar years 2020, 2021 and 2022, or for the corporation's fiscal years that end during those calendar years.

(4) The board of directors or other body may revoke an election to be governed by this subsection if the revocation is made as part of an alternative investment policy seeking the long-term preservation of the real value of the assets thus received. The revocation and alternative investment policy shall be in writing and maintained as part of the permanent records of the corporation.

(5) For purposes of applying this subsection, the value of the assets of the corporation shall be the fair market value of the assets so held by or for the corporation, determined at least annually and averaged over a period of three or more preceding years. However, if the assets have been held for less than three years, the average shall be determined over the period during which the assets have been held.

(d) Scope of section.--This section shall apply to assets hereafter received pursuant to section 5547 (relating to authority to take and hold trust property), to assets heretofore so received and held at the time when this article takes effect and to reinvestments of all such assets.

(e) Definition.--(Deleted by amendment). (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; Dec. 21, 1998, P.L.1067, No.141, eff. imd.; June 25, 1999, P.L.212, No.28, eff. 6 months; Oct. 27, 2010, P.L.837, No.85, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days; July 23, 2020, P.L.681, No.71, eff. imd.) 2020 Amendment. Act 71 amended subsec. (c). 2013 Amendment. Act 67 amended subsec. (b). 1999 Amendment. Act 28 amended subsec. (a). 1998 Amendment. Act 141 amended subsecs. (b) and (c) and deleted subsec. (e). Section 4 of Act 141 provided that the amendment of subsecs. (b), (c) and (e) shall apply to all trusts, whether created before, on or after the effective date of Act 141. 1988 Amendment. Act 177 amended subsec. (d). Cross References. Section 5548 is referred to in sections 5549, 5585 of this title.
15 Pa.C.S. § 8822 — PA Code / Title 15 / Chapter 88 / Section 8822
Amendment or restatement of certificate of organization.
Status: in_force

(a) General rule.--A certificate of organization may be amended or restated at any time.

(b) Required contents of certificate of amendment.--To amend its certificate of organization, a limited liability company must deliver to the department for filing a certificate of amendment that states:

(1) the name of the company;

(2) the date of filing of its initial certificate of organization;

(3) subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office; and

(4) the amendment.

(c) Restatement.--To restate its certificate of organization, a limited liability company must deliver to the department for filing a certificate of amendment that:

(1) is designated as a restatement; and

(2) includes a statement that the restated certificate supersedes the original certificate and all previous amendments.

(d) Obligation to correct.--If a member of a member-managed limited liability company, or a manager of a manager-managed limited liability company, knows that any information in a filed certificate of organization is inaccurate, the member or manager shall promptly:

(1) cause the certificate to be amended; or

(2) if appropriate, deliver to the department for filing a statement of correction under section 138 (relating to statement of correction) or a statement of abandonment under section 141 (relating to abandonment of filing before effectiveness).

(e) Cross references.--See: Section 134 (relating to docketing statement). Section 135 (relating to requirements to be met by filed documents). Section 136(c) (relating to processing of documents by Department of State). Section 8823 (relating to signing of filed documents). Cross References. Section 8822 is referred to in sections 8824, 8847 of this title.
15 Pa.C.S. § 5994 — PA Code / Title 15 / Chapter 59 / Section 5994
Disposition of unmatured claims.
Status: in_force

(a) Contractual claims.--The dissolved nonprofit corporation or successor entity shall offer any claimant whose contractual claim made pursuant to section 5992 (relating to notice to claimants) is contingent, conditional or unmatured, such security as the corporation or successor entity determines is sufficient to provide compensation to the claimant if the claim matures. The corporation or successor entity shall send the offer to the claimant by certified or registered mail, return receipt requested, within 90 days after receipt of the claim and, in all events, at least 30 days before the expiration of the two-year period specified in section 5979(a)(2) (relating to survival of remedies and rights after dissolution). A notice sent pursuant to this section shall include or be accompanied by a copy of this subchapter and of section 5979. If the claimant offered the security does not deliver to the corporation or successor entity a written notice rejecting the offer within 60 days after mailing of the offer for security, the claimant shall be deemed to have accepted the security as the sole source from which to satisfy his claim against the corporation.

(b) Other claims.--Except as provided in section 5997(d) (relating to liability of directors), the holder of any other claim may bring an action against the dissolved corporation or

its directors, members of an other body, officers or members within the time limited by section 5979(a). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days) Cross References. Section 5994 is referred to in sections 5979, 5995, 5997 of this title.
15 Pa.C.S. § 5997 — PA Code / Title 15 / Chapter 59 / Section 5997
Payments and distributions.
Status: in_force

(a) General rule.--A dissolved nonprofit corporation or successor entity that has elected to proceed under this subchapter shall:

(1) Pay the claims made and not rejected under section 5993 (relating to acceptance or rejection of matured claims).

(2) Post the security offered and not rejected under section 5994 (relating to disposition of unmatured claims).

(3) Post security ordered by the court in any proceeding under section 5995 (relating to court proceedings).

(4) Pay or make provision for all other claims that are mature, known and uncontested or that have been finally determined to be owing by the corporation or the successor entity.

(b) Disposition.--The claims and liabilities shall be paid in full and any provision for payment shall be made in full if there are sufficient assets. If there are insufficient assets, the claims and liabilities shall be paid or provided for in order of their priority and, among claims of equal priority, ratably to the extent of funds legally available therefor. Any

remaining assets shall be distributed as provided in the last sentence of section 5975(c) (relating to winding up and distribution), except that the distribution shall not be made less than 60 days after the last notice of rejection, if any, was given under section 5993.

(c) Evaluation of other liabilities.--In the absence of actual fraud, the judgment of the board of directors or other body of the dissolved corporation or the governing persons of the successor entity as to the provision made for the payment of all claims under subsection (a)(4) shall be conclusive.

(d) Liability of directors.--(Deleted by amendment). (Dec. 18, 1992, P.L.1333, No.169, eff. 60 days; July 9, 2013, P.L.476, No.67, eff. 60 days) 2013 Amendment. Act 67 deleted subsec. (d). 1992 Amendment. Act 169 amended subsecs. (a) and (c), deleted former subsec. (d) and relettered subsec. (e) to subsec.

(d). Cross References. Section 5997 is referred to in sections 5979, 5991, 5994 of this title.
15 Pa.C.S. § 1719 — PA Code / Title 15 / Chapter 17 / Section 1719
Renunciation of business opportunities.
Status: in_force

The articles of incorporation, or an action of the board of directors, may renounce any interest or expectancy of a business corporation in, or in being offered an opportunity to participate in, a specified business opportunity or specified classes or categories of business opportunities that are presented to the corporation or to one or more of its directors, officers or shareholders. (Nov. 3, 2022, P.L.1791, No.122, eff. 60 days) 2022 Amendment. Act 122 added section 1719.
15 Pa.C.S. § 8646 — PA Code / Title 15 / Chapter 86 / Section 8646
Management rights.
Status: in_force

(a) General rule.--Each general partner has equal rights in the management and conduct of the limited partnership's activities and affairs. Except as provided in this title, 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.

(b) Actions requiring unanimous approval.--The affirmative vote or consent of all the partners is required to:

(1) amend the partnership agreement; and

(2) amend the certificate of limited partnership to delete a statement that the limited partnership is a limited liability limited partnership.

(c) Reimbursement of advance.--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.

(d) Status of advance.--A payment or advance made by a general partner which gives rise to an obligation of the limited partnership under subsection (c) or section 8648(a) (relating to reimbursement, indemnification, advancement and insurance) constitutes a loan to the partnership which accrues interest from the date of the payment or advance.

(e) No right to remuneration.--A general partner is not entitled to remuneration for services performed for the limited partnership.

(f) Sale of assets.--A sale, lease, exchange or other disposition of all, or substantially all, the property and assets of a limited partnership that is not made in the usual and regular course of the activities and affairs of the partnership must be approved by:

(1) all the general partners; and

(2) limited partners owning the rights to receive a majority of the distributions as limited partners.

(g) Cross reference.--See section 324 (relating to approval by limited partnership). Cross References. Section 8646 is referred to in section 8648 of this title.
15 Pa.C.S. § 8631 — PA Code / Title 15 / Chapter 86 / Section 8631
Becoming a limited partner.
Status: in_force

(a) Upon formation.--Upon formation of a limited partnership, a person becomes a limited partner as agreed among the persons that are to be the initial partners.

(b) After formation.--After formation, a person becomes a limited partner:

(1) as provided in the partnership agreement;

(2) as the result of a transaction effective under
15 Pa.C.S. § 4125 — PA Code / Title 15 / Chapter 41 / Section 4125
Issuance of certificate of authority (Repealed).
Status: repealed

2014 Repeal. Section 4125 was repealed October 22, 2014, P.L.2640, No.172, effective July 1, 2015.
15 Pa.C.S. § 3102 — PA Code / Title 15 / Chapter 31 / Section 3102
Definitions.
Status: in_force

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Insurance corporation" or "domestic insurance corporation." A domestic business corporation that is engaged in the business of writing insurance or reinsurance as principal and as such is subject to regulation by the Insurance Department.

"Mutual insurance company." An insurance corporation that is organized on the mutual principle. Cross References. Section 3102 is referred to in sections 102, 1103, 1929.1 of this title.
15 Pa.C.S. § 5930 — PA Code / Title 15 / Chapter 59 / Section 5930
Voluntary transfer of corporate assets.
Status: in_force

(a) General rule.--A sale, lease, exchange or other disposition of all, or substantially all, of the property and assets, with or without goodwill, of a nonprofit corporation, if not made pursuant to Subchapter F of Chapter 3 (relating to division), may be made only pursuant to a plan of asset transfer. The property or assets of a direct or indirect subsidiary corporation that is controlled by a parent corporation shall also be deemed the property or assets of the parent corporation for purposes of this subsection. The plan of asset transfer shall set forth the terms and consideration of the sale, lease, exchange or other disposition or may authorize the board of directors or other body to fix any or all of the terms and conditions, including the consideration to be received by the corporation. Any of the terms of the plan may be made dependent upon facts ascertainable outside of the plan if the manner in which the facts will operate upon the terms of the plan is set forth in the plan. The plan of asset transfer shall be proposed and adopted, and may be amended after its adoption and terminated, by a nonprofit corporation in the manner provided in this subchapter for the proposal, adoption, amendment and termination of a plan of merger. A copy or summary of the plan shall be included in, or enclosed with, the notice of the meeting at which members will act on the plan. In order to make effective any plan so adopted, it shall not be necessary to file any articles or other document in the department, but the corporation shall comply with the requirements of section 5547(b) (relating to nondiversion of certain property).

(b) Exceptions.--Subsection (a) shall not apply to a sale, lease, exchange or other disposition of all, or substantially all, the property and assets of a nonprofit corporation:

(1) that directly or indirectly owns all of the outstanding shares or other ownership interest of another corporation to the other corporation;

(2) if made in connection with the dissolution or liquidation of the corporation, which transaction shall be governed by the provisions of Subchapter F (relating to voluntary dissolution and winding up) or G of Chapter 19 (relating to involuntary liquidation and dissolution), as appropriate; or

(3) if made in connection with a transaction pursuant to which all the assets sold, leased, exchanged or otherwise disposed of are simultaneously leased back to the corporation.

(c) Mortgage.--A mortgage, pledge or grant of a security interest or dedication of property to the repayment of indebtedness, with or without recourse, shall not be deemed a sale, lease, exchange or other disposition for the purposes of this section.

(d) Restrictions.--This section shall not be construed to authorize the conversion or exchange of property or assets in fraud of corporate creditors or in violation of law. (Dec. 21, 1988, P.L.1444, No.177, eff. Oct. 1, 1989; July 9, 2013, P.L.476, No.67, eff. 60 days; Oct. 22, 2014, P.L.2640, No.172, eff. July 1, 2015)

Amendment. Act 172 amended subsec. (a). Cross References. Section 5930 is referred to in section 5546 of this title.
15 Pa.C.S. § 2547 — PA Code / Title 15 / Chapter 25 / Section 2547
Valuation procedures.
Status: in_force

(a) General rule.--If, within 45 days (or such other time period, if any, as required by applicable law) after the date of the notice required by section 2545 (relating to notice to shareholders), or, if such notice was not provided prior to the date of the written demand by the shareholder under section 2546 (relating to shareholder demand for fair value), then within 45 days (or such other time period, if any, required by applicable law) of the date of such written demand, the controlling person or group and the shareholder are unable to agree on the fair value of the shares or on a binding procedure to determine the fair value of the shares, then each shareholder who is unable to agree on both the fair value and on such a procedure with the controlling person or group and who so desires to obtain the rights and remedies provided in this subchapter shall, no later than 30 days after the expiration of the applicable 45-day or other period, surrender to the court certificates representing any of the shares that are certificated shares, duly endorsed for transfer to the controlling person or group, or cause any uncertificated shares to be transferred to the court as escrow agent under subsection

(c) with a notice stating that the certificates or uncertificated shares are being surrendered or transferred, as the case may be, in connection with the petition referenced in section 2545 or, if no petition has theretofore been filed, the shareholder may file a petition within the 30-day period in the court praying that the fair value (as defined in this subchapter) of the shares be determined.

(b) Effect of failure to give notice and surrender certificates.--Any shareholder who does not so give notice and surrender any certificates or cause uncertificated shares to be transferred within such time period shall have no further right to receive, with respect to shares the certificates of which were not so surrendered or the uncertificated shares which were not so transferred under this section, payment under this subchapter from the controlling person or group with respect to the control transaction giving rise to the rights of the shareholder under this subchapter.

(c) Escrow and notice.--The court shall hold the certificates surrendered and the uncertificated shares transferred to it in escrow for, and shall promptly, following the expiration of the time period during which the certificates may be surrendered and the uncertificated shares transferred, provide a notice to the controlling person or group of the number of shares so surrendered or transferred.

(d) Partial payment for shares.--The controlling person or group shall then make a partial payment for the shares so surrendered or transferred to the court, within ten business days of receipt of the notice from the court, at a per-share price equal to the partial payment amount. The court shall then make payment as soon as practicable, but in any event within ten business days, to the shareholders who so surrender or transfer their shares to the court of the appropriate per-share amount received from the controlling person or group.

(e) Appointment of appraiser.--Upon receipt of any share certificate surrendered or uncertificated share transferred under this section, the court shall, as soon as practicable but in any event within 30 days, appoint an appraiser with experience in appraising share values of companies of like nature to the registered corporation to determine the fair value of the shares.

(f) Appraisal procedure.--The appraiser so appointed by the court shall, as soon as reasonably practicable, determine the

fair value of the shares subject to its appraisal and the appropriate market rate of interest on the amount then owed by the controlling person or group to the holders of the shares. The determination of any appraiser so appointed by the court shall be final and binding on both the controlling person or group and all shareholders who so surrendered their share certificates or transferred their shares to the court, except that the determination of the appraiser shall be subject to review to the extent and within the time provided or prescribed by law in the case of other appointed judicial officers. See 42 Pa.C.S. §§ 5105(a)(3) (relating to right to appellate review) and 5571(b) (relating to appeals generally).

(g) Supplemental payment.--Any amount owed, together with interest, as determined pursuant to the appraisal procedures of this section shall be payable by the controlling person or group after it is so determined and upon and concurrently with the delivery or transfer to the controlling person or group by the court (which shall make delivery of the certificate or certificates surrendered or the uncertificated shares transferred to it to the controlling person or group as soon as practicable but in any event within ten business days after the final determination of the amount owed) of the certificate or certificates representing shares surrendered or the uncertificated shares transferred to the court, and the court shall then make payment, as soon as practicable but in any event within ten business days after receipt of payment from the controlling person or group, to the shareholders who so surrendered or transferred their shares to the court of the appropriate per-share amount received from the controlling person or group.

(h) Voting and dividend rights during appraisal proceedings.--Shareholders who surrender their shares to the court pursuant to this section shall retain the right to vote their shares and receive dividends or other distributions thereon until the court receives payment in full for each of the shares so surrendered or transferred of the partial payment amount (and, thereafter, the controlling person or group shall be entitled to vote such shares and receive dividends or other distributions thereon). The fair value (as determined by the appraiser) of any dividends or other distributions so received by the shareholders shall be subtracted from any amount owing to such shareholders under this section.

(i) Powers of the court.--The court may appoint such agents, including the transfer agent of the corporation, or any other institution, to hold the share certificates so surrendered and the shares surrendered or transferred under this section, to effect any necessary change in record ownership of the shares after the payment by the controlling person or group to the court of the amount specified in subsection (h), to receive and disburse dividends or other distributions, to provide notices to shareholders and to take such other actions as the court determines are appropriate to effect the purposes of this subchapter.

(j) Costs and expenses.--The costs and expenses of any appraiser or other agents appointed by the court shall be assessed against the controlling person or group. The costs and expenses of any other procedure to determine fair value shall be paid as agreed to by the parties agreeing to the procedure.

(k) Jurisdiction exclusive.--The jurisdiction of the court under this subchapter is plenary and exclusive and the controlling person or group, and all shareholders who so surrendered or transferred their shares to the court shall be

made a party to the proceeding as in an action against their shares.

(l) Duty of corporation.--The corporation shall comply with requests for information, which may be submitted pursuant to procedures maintaining the confidentiality of the information, made by the court or the appraiser selected by the court. If any of the shares of the corporation are not represented by certificates, the transfer, escrow or retransfer of those shares contemplated by this section shall be registered by the corporation, which shall give the written notice required by section 1528(f) (relating to uncertificated shares) to the transferring shareholder, the court and the controlling shareholder or group, as appropriate in the circumstances.

(m) Payment under optional procedure.--Any amount agreed upon between the parties or determined pursuant to the procedure agreed upon between the parties shall be payable by the controlling person or group after it is agreed upon or determined and upon and concurrently with the delivery of any certificate or certificates representing such shares or the transfer of any uncertificated shares to the controlling person or group by the shareholder.

(n) Title to shares.--Upon full payment by the controlling person or group of the amount owed to the shareholder or to the court, as appropriate, the shareholder shall cease to have any interest in the shares. Cross References. Section 2547 is referred to in sections 2545, 2546, 2556 of this title.
15 Pa.C.S. § 356 — PA Code / Title 15 / Chapter 3 / Section 356
Effect of conversion.
Status: in_force

(a) General rule.--When a conversion becomes effective, all of the following apply:

(1) The converted association is:

(i) Organized under and subject to the organic law of the converted association.

(ii) The same association without interruption as the converting association.

(iii) Deemed to have commenced its existence on the date the converting association commenced its existence in the jurisdiction in which the converting association was first created, incorporated, formed or otherwise came into existence, except for purposes of determining how the converted association is taxed.

(2) All property of the converting association continues to be vested in the converted association without reversion or impairment, and the conversion shall not constitute a transfer of any of that property.

(3) All debts, obligations and other liabilities of the converting association continue as debts, obligations and other liabilities of the converted association.

(4) Except as provided by law, all of the rights, privileges, immunities and powers of the converting association continue to be vested without change in the converted association.

(5) Liens on the property of the converting association shall not be impaired by the conversion.

(6) A claim existing or an action or a proceeding pending by or against the converting association may be prosecuted to judgment as if the conversion had not taken place, and the name of the converted association may be substituted for the name of the converting association in any pending action or proceeding.

(7) If a converted association is a filing association, its public organic record is effective.

(8) If the converted association is a limited liability partnership or a limited liability limited partnership that is not using the alternative procedure in section 8201(f) (relating to scope), its statement of registration is effective.

(9) If the converted association is an electing partnership, its statement of election is effective.

(10) Any private organic rules of the converted association that are to be in record form and were approved as part of the plan of conversion are effective.

(11) The interests in the converting association are converted or canceled in accordance with and as provided in the plan of conversion, and the interest holders of the converting association are entitled only to the rights provided to them under the plan and to any dissenters rights they have pursuant to section 317 (relating to contractual dissenters rights in entity transactions) or 353(c) (relating to approval of conversion).

(12) Except as otherwise provided in the plan of conversion or organic rules pursuant to section 352(c)

(relating to plan of conversion), the conversion does not constitute and shall not be deemed to result in a change of control of the converting association, and the converted association shall remain under the control of the same persons that controlled the converting association immediately before the conversion.

(b) No other rights.--The conversion does not give rise to any rights:

(1) that a third party would have upon a transfer of assets, merger, dissolution, liquidation or winding up of the converting association, except as provided in subsection

(a)(11); or

(2) that an interest holder or governor would have upon a dissolution, liquidation or winding up of the converting association, except as provided in the organic law or organic rules of the converting association.

(c) New interest holder liability.--When a conversion becomes effective, a person that becomes subject to interest holder liability with respect to a domestic association as a result of the conversion has interest holder liability only to the extent provided by the organic law of the association and only for those debts, obligations and other liabilities that arise after the conversion becomes effective.

(d) Prior interest holder liability.--When a conversion becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic converting association with respect to which the person had interest holder liability is as follows:

(1) The conversion does not discharge any interest holder liability under the organic law of the domestic converting association to the extent the interest holder liability arose before the conversion became effective.

(2) The person does not have interest holder liability under the organic law of the domestic converting association for any debt, obligation or other liability that arises after the conversion becomes effective.

(3) The organic law of the domestic converting association 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.

(4) The person has whatever rights of contribution from any other person as are provided by other law or the organic law or organic rules of the domestic converting association with respect to any interest holder liability preserved under paragraph (1) as if the conversion had not occurred.

(e) Foreign converted association.--When a conversion becomes effective, a foreign association that is the converted association may be served with process in this Commonwealth for the collection and enforcement of any of its debts, obligations and other liabilities in accordance with applicable law.

(f) Association not dissolved.--A conversion does not require a domestic converting association to liquidate, dissolve or wind up its affairs and does not constitute or cause the liquidation or dissolution of the association.

(g) Taxes.--Any taxes, interest, penalties and public accounts of the Commonwealth claimed against the converting association that are settled, assessed or determined prior to or after the conversion shall be the liability of the converted association and, together with interest thereon, shall be a lien against the franchises and property of the converted association.

(h) Cross references.--See sections 416 (relating to withdrawal deemed on certain transactions) and 417 (relating to required withdrawal on certain transactions).
15 Pa.C.S. § 2309 — PA Code / Title 15 / Chapter 23 / Section 2309
Involuntary termination of statutory close corporation status; proceeding to prevent loss of status.
Status: in_force

(a) General rule.--If any event occurs as a result of which the provision included in the articles of a statutory close corporation pursuant to section 2304(a) (relating to additional contents of articles of statutory close corporations) to qualify it as a statutory close corporation has been breached, the status of the business corporation as a statutory close corporation under this chapter shall terminate unless:

(1) Within 30 days after the occurrence of the event or within 30 days after the event has been discovered, whichever is later, the corporation:

(i) Files in the Department of State a statement executed by the corporation setting forth:

(A) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office.

(B) A statement that the provision included in its articles pursuant to section 2304(a) to qualify it as a statutory close corporation has been breached.

(ii) Furnishes a copy of the statement to each shareholder.

(2) The corporation concurrently with the filing of the statement takes such steps as are necessary to correct the situation that threatens its status as a statutory close corporation including, without limitation, the refusal to register the transfer of shares that have been wrongfully transferred as provided by section 2308 (relating to issuance or transfer of shares of a statutory close corporation in breach of qualifying conditions) or initiation of a proceeding under subsection (b).

(b) Proceeding to cure breach.--Upon the application of the corporation or of any shareholder, the court may issue all orders necessary to prevent the corporation from losing its status as a statutory close corporation or to prevent the violation of any provision of the articles permitted by section 2304(b) to be stated in the articles of a statutory close corporation or to restore its status as a statutory close corporation by enjoining or setting aside any act or threatened act on the part of the corporation or a shareholder that would be inconsistent with any of the provisions required or permitted by section 2304 to be stated in the articles of a statutory close corporation unless it is an act approved in accordance with section 2308(d) (relating to exception). The court may enjoin or set aside any transfer or threatened transfer of shares of a statutory close corporation that is contrary to any of the terms of its articles and may enjoin any public offering, as defined in section 2304(a), or threatened public offering of shares of the statutory close corporation.

(c) Notice of cure of breach.--When the situation that threatened the status of the corporation as a statutory close corporation has been remedied and if the corporation has not amended its articles in accordance with section 2307 (relating to voluntary termination of statutory close corporation status by amendment of articles), the corporation shall file in the department a statement executed by the corporation, setting forth:

(1) The name of the corporation and, subject to section 109 (relating to name of commercial registered office provider in lieu of registered address), the address, including street and number, if any, of its registered office.

(2) A statement that no breach of the provision included in its articles pursuant to section 2304(a) exists. Upon the filing of the statement, the status of the corporation as a statutory close corporation under this chapter, if theretofore terminated by reason of subsection (a), shall be restored.

(d) Cross reference.--See section 134 (relating to docketing statement). (Dec. 19, 1990, P.L.834, No.198, eff. imd.) 1990 Amendment. Act 198 amended subsecs. (a) and (c). Cross References. Section 2309 is referred to in section 2306 of this title.