ORS Chapter 65 — Nonprofit Corporations

ORS 65.751. Grounds for judicial revocation. (1) A circuit court may revoke the authority of a foreign corporation to transact business in this state: (a) In a proceeding by the Attorney General if the court finds that: (A) The foreign corporation obtained authority to transact business in this state with fraudulent intent, with fraudulent information or in a manner that otherwise indicates fraud; (B) The foreign corporation has exceeded or abused the authority conferred upon the foreign corporation by law; (C) The foreign corporation would have been a public benefit corporation had the foreign corporation been incorporated in this state and the foreign corporations corporate assets are being misapplied or wasted; (D) The foreign corporation would have been a public benefit corporation had the foreign corporation been incorporated in this state and the foreign corporation is no longer able to carry out the foreign corporations purposes; (E) An incorporator, director, officer or agent of the foreign corporation signed a document knowing that the document was false in any material respect with the intent that the document be delivered to the Secretary of State for filing; (F) The foreign corporation has fraudulently solicited money or has fraudulently used the money solicited; or (G) The foreign corporation is a shell entity. For purposes of this subparagraph: (i) A court may find that a foreign corporation is a shell entity if the court determines that the foreign corporation was used or incorporated for an illegal purpose, was used or incorporated to defraud or deceive a person or governmental agency or was used or incorporated to fraudulently conceal any business activity from another person or a governmental agency; and (ii) The Attorney General may make a prima facie showing that a foreign corporation is a shell entity by stating in an affidavit that: (I) The foreign corporation did not provide a name or address required by the Secretary of State, or the name or address the foreign corporation provided was false, fraudulent or inadequate; (II) The foreign corporations application for authority to transact business in this state, a record the foreign corporation must keep under ORS 65.771 or the foreign corporations annual report is false, fraudulent or inadequate; (III) A public body, as defined in ORS 174.109, attempted to communicate with, or serve legal process upon, the foreign corporation at the address or by means of other contact information the foreign corporation provided to the Secretary of State, but the foreign corporation failed to respond; or (IV) The Attorney General has other evidence that shows that the foreign corporation was used or incorporated for an illegal purpose, was used or incorporated to defraud or deceive a person or a governmental agency or was used or incorporated to fraudulently conceal any business activity from another person or governmental agency. (b) Except as provided in the articles of incorporation or bylaws of a foreign corporation that would have been a religious corporation had the foreign corporation been incorporated in this state, in a proceeding by 50 members or members holding five percent or more of the voting power, whichever is less, or by a director or any person specified in the articles of incorporation, if the court finds that: (A) The directors are deadlocked in the management of the corporate affairs, and the members, if any, are unable to break the deadlock; (B) The directors or those in control of the foreign corporation have acted, are acting, or will act in a manner that is illegal, oppressive or fraudulent; (C) The members are deadlocked in voting power and have failed, for a period that includes at least two consecutive annual meeting dates, to elect successors to directors whose terms have expired; (D) The corporate assets are being misapplied or wasted; or (E) The foreign corporation would have been a public benefit corporation or religious corporation had the foreign corporation been incorporated in this state, and is no longer able to carry out the foreign corporations purposes. (c) In a proceeding by a creditor if the court finds that: (A) The creditors claim has been reduced to judgment, the execution on the judgment returned unsatisfied and the foreign corporation is insolvent; or (B) The foreign corporation has admitted in writing that the creditors claim is due and owing and the foreign corporation is insolvent. (2) Before revoking a foreign corporations authority, the court shall consider whether: (a) Reasonable alternatives to revocation of authority exist; (b) Revocation of authority is in the public interest, if the foreign corporation would have been a public benefit corporation had the foreign corporation been incorporated in this state; or (c) Revocation of authority is the best way to protect the interests of members, if the foreign corporation would have been a mutual benefit corporation had the foreign corporation been incorporated in this state. (3) In addition to subjecting a foreign corporation to revocation of the foreign corporations authority to transact business in this state under subsection (1)(a)(G) of this section, a finding that a foreign corporation is a shell entity has the following effects: (a) A court may rebuttably presume that the foreign corporations filings with the Secretary of State constitute a false claim, as defined in ORS 180.750, in any action the Attorney General brings under ORS 180.760 and may award to the Attorney General reasonable attorney fees and the costs of investigation, preparation and litigation if the Attorney General prevails in the action; and (b) A public body, as defined in ORS 174.109, in any proceeding against the foreign corporation, may move to enjoin a director, officer or other person that exercises significant direction or control over the foreign corporation from engaging in commercial activity in this state including, but not limited to, incorporating or organizing an entity in this state. (4) A foreign corporation may affirmatively defend against an allegation that the foreign corporation is a shell entity by showing that the foreign corporation, within 60 days after receiving a request to provide or correct a name, address or other information required for a filing or in an application for authority to transact business in this state, a record the foreign corporation must keep or an annual report, or within 60 days after the date of a request to respond to a communication or service of process, provided or corrected the name, address or other information or responded to the communication or service of process.