Maine Legislature, Session 121, LD 1767
Committee Amendment CA_A_H771 (House)
Amends: 13-C MRSA §651, 13-C MRSA §826, 13-C MRSA §833, 13-C MRSA §841, 13-C MRSA §843, 13-C MRSA §1104, 13-C MRSA §1408, 13-C MRSA §1421, 36 MRSA §612

COMMITTEE AMENDMENT "H, to H.P. 1289, L.D. 1767, Bill, "An 
Act 
To 
Amend 
the 
Laws 
Relating 
to 
Corporations, 
Limited 
Partnerships, Limited Liability Companies and Limited Liability 
Partnerships" 
Amend the bill in section 3 in the first line (page 2, line 
in L.D.) by striking out the following: "13-B" and inserting 
in its place the following: 
I 13-B MRSA I 
Further amend the bill in section 3 in that part designated 
"§1113." by inserting after subsection 5 the following: 
I 6. 
Notice to Attorney General in case of public benefit 
corporation. 
In the case of a public benefit corporation. the 
Secretary of State shall notify the Attorney General of the 
administrative dissolution of the corporation under this section. I 
Further amend the bill in section 7 in that part designated 
"§1302." by strik'ing out all of subsection 4 and inserting in its 
place the following: 
'4.--~~-~-At~~~~BeFa~-~~~-e€-~~~-&eBe€i~ 
ee£pe£a~ieB.--~~-&ae-~~-&~-~-~~~-BeBe~i~-~~~~r-~Re 
SeeFe~aFy--&~-~~~-~~~--Re~ify--&ae-~~~r~-~~--e~--~Re 
s~speRsieR-~-~~~r~~~~&~&-a~~ReFi~y-~e-~~1r-&&-ae~iYi~ies 
~RaeF-s~Bsee~ieR-1T' 
Further amend the bill by inserting after section 15 the 
following: 
I Sec. 16. 13-C MRSA §651, sub-§7, as enacted by PL 2001. c. 
640, Pt. A, §2 and affected by Pt. B, §7, is amended to read: 
Page l-LR2593(2) 
COMMITTEE AMENDMENT 
· 
COMMITTEE AMENDMENT .. ft:, to H.P. 1289, L.D. 1767 
7. 
Indebtedness issued as a distribution. 
Indebtedness of 
a corporation, including indebtedness issued as a distribution, 
is not considered a 
liability for purposes of determinations 
under subsection 3 if the terms of the indebtedness provide that 
payment of principal and interest are made only if and to the 
extent that payment of a distribution to shareholders could then 
be made under this section. 
If ~~e indebtedness on those terms 
is 
issued 
as 
a 
distribution, 
each 
payment 
of 
principal 
or 
interest is treated as a distribution, the effect of which is 
measured on the date the payment is actually made. 
Sec. 17. 13-C MRSA §826, as enacted by PL 2001, c. 640, Pt. 
A, §2 and affected by Pt. B, §7, is amended to read: 
§S26. 
Connittees 
1. 
Create committees. 
Unless this Act. 
the articles of 
incorporation or the bylaws provide otherwise, 
a corporation's 
board of directors may create one or more committees and appoint 
one or more members of the corporation's board of directors to 
serve on ~~e~ each of those committees. 
~ae~-eemm~~~ee-m~s~-~ave 
6-e£-me£e-me~£~~-~~~~~~~~~~~~-~ae-ee£~e£a~~ea~s 
Bea£a-e~-a~£ee~e£sT 
2. 
Approval of connittee. 
*~e Unless this Act otherwise 
provides, the creation of a committee and appointment of members 
to a committee must be approved by the greater of: 
A. 
A majority of all the directors in office when the 
action is taken; e£ ~ 
B. 
The number of directors required by the 
articles of incorporation or bylaws to take 
section 825. 
corporation's 
action under 
3. 
Requirements apply to connittees. 
Sections 821 to 825 
apply ~ 
to committees of the board and ~~e~£ to the members of 
such committees. 
4. 
Authority. 
To the extent specified by the corporation's 
board 
of 
directors 
or 
in 
the 
corporation's 
articles 
of 
incorporation or bylaws, except as provided in subsection 5, each 
commi ttee may exercise the authority of the corporation's board 
of directors under section 801. 
5. 
Limits on authority. 
A committee may not: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. if .. to H.P. 1289, L.D. 1767 
A. 
Authorize or approve distributions except according to a 
formula or method or wi thin limits that the corporation's 
board of directors prescribes; 
B. 
Approve or propose to shareholders action that this Act 
requires be approved by shareholders; 
C. 
Fill vacancies on the corporation's board of directors 
or, subject to subsection 7, on any of its committees; or 
~T--AmeRe.--a--()()i:'-po:r.at.-i-(H}-'-&-~-t:-i<l-l-e&-G-~-iae&F~&FaE-iEU:l-~Hf'SHaRt; 
t;e-seet;4:eR-1GGef 
E. 
Adopt, amend or repeal a the corporation's bylawsf~ 
~T---A~~F&ye--a-~~-~--~~--£~~--£e~~4£4R~--shaf'ehelaef' 
appf'eYa;j,f 
GT--~~~~~~-~--app£e¥e--Fea~ai&iE-i&a-~--~~~7--eHeept; 
aeeef'a4:R~--~~--a--fe£m~~a--~---meE-a&a--p£e~€£~bee--~--t;he 
eef'pef'at;4:eR~s-eeaf'a-e~-a4:f'eet;ef'Sf-ef' 
WT--~~-i~-&F-~~-E-&e-~~~~a£€€--G-~-~a~e-~--eeRt;f'aet; 
~ef'-~a~e-ef-~~~-~~~~~~~&~aa&~a-aaa-f'e;j,at;iye 
f'4:~ht;sT-p£e~e£e£€e~-~-~~~~~-&~-a-~~~~--&eF~&-e~ 
Shaf'eST-~~~-~~-E-he-~~-G-~-a4:FeeE-&FS-ffiaY-~~r~-a 
eemm4:t;t;ee-~--a-6eR4&£-~-i~-&~~ieeF-~-~~-eef'pef'at;ieR 
t;e--a&--se--wit;hiR--limit;s--s~ee4:~4:eally--pFesef'4:eea--ey--t;he 
eef'peFat;4:eR~s-eeaFa-e~-a4:f'eet;eFsT 
6. 
Standards of conduct. 
The creation of, delegation of 
authority to or action by a committee does not alone constitute 
compliance by a director with the standards of conduct described 
in section 831. 
7. 
COllW'llittee member alternates. 
A corporation's board of 
directors may appoint one or more directors as alternate members 
of any committee to replace any absent or disqualified members 
during the absence or disqualification. 
Unless the corporation's 
articles 
of 
incorporation 
or 
the 
bylaws 
or 
the 
resolution 
creating the committee provides otherwise, in the event of the 
absence or disqualification of 
a 
member 
of 
a 
committee, 
the 
member or members present at any meeting and not disqualified 
from voting may appoint by unanimous vote another director to act 
in place of the absent or disqualified member. 
Sec. 18. 13-C MRSA §833, as enacted by PL 2001, c. 640, Pt. 
A, §2 and affected by Pt. B, §7, is amended to read: 
S833. Director's liability for unlawful distributions 
COMMITTEE AMENDMENT 
.. 
COMMITTEE AMENDMENT "A" to H.P. 1289, L.D. 1767 
1. 
Personal liability. 
A director who votes for or assents 
to a distribution in excess of what may be authorized and made 
pursuant to section 651, subsection 1 or section 1410, subsection 
1. is personally liable to the corporation for the amount of the 
distribution 
that 
exceeds 
what 
could 
have 
been 
distributed 
without violating section 651, 
subsection 1 or section 1410, 
subsection 1 if the party asserting liability establishes that 
when taking the action the director did not comply with section 
831. 
2. 
Contribution; recoupment. 
A director held liable under 
subsection 1 for an unlawful distribution is entitled to: 
A. 
A contribution from every other 
held 
liable 
under 
subsection 
distribution; and 
director who 
for 
the 
could be 
unlawful 
B. 
Recoupment from each shareholder of the pro rata portion 
of the amount of the unlawful distribution the shareholder 
accepted, knowing the distribution was made in violation of 
section 651, subsection 1 or section 1410, subsection 1. 
3. 
Proceeding to enforce liability; 
2-year period. 
A 
proceeding 
to 
enforce 
the 
liability 
of 
a 
director 
under 
subsection 1 is barred unless it is commenced wi thin 2 years 
after the date 
eR--whieh-~-~~~-~--~£€--ai6~£iB~~ieR--was 
ffieas~Fea-~Re€£-~~~~~,~~-~-e£-~-~-~~~-whieh-tRe 
Yie±atieR--~---seetieR--~,---S~BseetieR--~---eee~FFea--~--tRe 
eeRSe~yeRee-~--aisFe~aFa-~--a-~~~~~~~-iR-~~-eeFpeFatieR~S 
aFtie±e6-e~-iReeFpeFatieRTl 
A. 
On which the effect of the distribution was measured 
under section 651, subsection 5 or 7; 
B. 
As of which the violation of section 651, subsection 1 
occurred as the conseguence of disregard of a restriction in 
the corporation's articles of incorporation; or 
C. 
On 
which the distribution of assets to· shareholders 
under section 1410, subsection 1 was made. 
4. 
Proceeding 
to 
enforce 
contribution 
or 
recoupment; 
one-year period. 
A proceeding to enforce 
a 
contribution or 
recoupment under subsection 2 is barred unless it is commenced 
wi thin one year after the liability of the claimant has been 
finally adjudicated under subsection 1. 
Sec. 19. 13-C MRSA §841, as enacted by PL 2001, c. 640, Pt. 
A, §2 and affected by Pt. B, §7, is amended to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to H.P. 1289, L.D. 1767 
§84l. 
Offices 
1. 
Offices. 
A corporation 
~~S~--Rave has 
the 
eEEieeFs 
Q.f..f~ described in its bylaws or 
appeiR~ee designated by the 
corporation's board of directors in accordance with the bylaws. 
2. 
Appointment 
directors may elect 
the corporation. 
An 
assistant 
officers 
of officers. 
A-Q~Jy-~~~aiB~ee The board of 
individuals to fill one or more offices of 
officer may appoint one or more officers or 
if 
authorized 
by 
the 
bylaws 
or 
the 
corporation's board of directors. 
3. 
Responsibility for minutes and shareholder records. 
The 
bylaws or the corporation's board of directors shall 
eele~a~e 
assign 
to 
one 
of 
the 
officers 
responsibility 
for 
preparing 
minutes of the directors' 
and shareholders' meetings 
and for 
maintaining and authenticating the records of the corporation 
that section 1601, subsections 1 and 3 require to be kept. 
4. 
Multiple 
positions. 
The 
same 
individual 
may 
simultaneously hold more than one office in a corporation. 
Sec. 20. 13-C MRSA §843, sub-§2, as enacted by PL 2001, c. 
640, Pt. A, §2 and affected by Pt. B, §7, is repealed. 
Sec. 21. 13-C MRS A §843, sub-§2-A is enacted to read: 
2-A. 
Basis for reliance. 
In discharging the duties under 
section 842, an officer who does not have knowledge that makes 
reliance unwarranted is entitled to rely on: 
A. 
The performance of properly delegated responsibilities 
by one or more employees of the corporation whom the officer 
reasonably 
believes 
to 
be 
reliable 
and 
competent 
in 
performing the responsibilities delegated: and 
B. 
Information, opinions, reports or statements, including 
financial statements and other financial data, prepared or 
presented by: 
(1) 
One or more employees of the corporation whom the 
officer 
reasonably 
believes 
to 
be 
reliable 
and 
competent in the matters presented: or 
(2) 
Legal counsel, public accountants or other persons 
retained by the corporation as to matters involving 
skills or expertise the officer reasonably believes are 
matters within the particular person's professional or 
COMMITTEE AMENDMENT 
_. 
COMMITTEE AMENDMENT "~,, to H.P. 1289, L.D. 1767 
expert competence or as to which the particular person 
merits confidence. 
Sec. 22. 13-C MRSA §1104, sub-§4, as amended by PL 2003, c. 
344, Pt. B, §98, is further amended to read: 
4. 
Notice of meeting. 
If the plan of merger or share 
exchange 
QBQe£--~His--&Hap~eF is required 
By--~he-~~p&~a~iaB~s 
aF~iele&-af-4£€e£~a£a~iaB to be approved by the shareholders and 
if the approval is to be given at a meeting of shareholders, the 
corporation 
shall 
notify 
each 
shareholder, 
whether 
or 
not 
entitled to vote, of the meeting of shareholders at which the 
plan is to be submitted for approval. 
The notice must state that 
the purpose or one of the purposes of the meeting is to consider 
the plan and must contain or be accompanied by a copy or summary 
of the plan. 
If the corporation is to be merged into an existing 
corporation or eligible entity, the notice also must include or 
be 
accompanied 
by 
a 
copy 
or 
summary 
of 
the 
articles 
of 
incorporation or organizational documents of that corporation or 
eligible entity. 
If the corporation is to be merged into a 
corporation or eligible entity that is to be created pursuant to 
the merger, the notice also must include or be accompanied by a 
copy 
or 
a 
summary 
of 
the 
articles 
of 
incorporation 
or 
organizational 
documents 
of 
the 
new 
corporation 
or eligible 
entity; 
Sec. 23. 13-C MRSA §1408, sub-§3, 1fC, as enacted by PL 200l, 
c. 640, Pt. A, §2 and affected by Pt. B, §7, is amended to read: 
C. 
A claimant whose claim is contingent aB or is based on 
an event occurring after the effective date of dissolution.' 
Further amend the bill by inserting after section 18 the 
following: 
I Sec. 19. 13-C MRSA §1421, sub-§7 is enacted to read: 
7. 
Notice to Superintendent of Financial Institutions in 
case of financial institution or credit union. 
In the case of a 
financial institution authorized to do business in this State or 
a 
credit union authorized to do business in this State, 
as 
defined in Title 9-B, the Secretary of State shall notify the 
Superintendent of Financial Institutions within a reasonable time 
prior to administratively dissolving the financial institution or 
credit union under this section. I 
Further amend the bill in section 27 in that part designated 
"§408-B." by inserting after subsection 7 the following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. p 
.. to H.P. 1289, L.D. 1767 
'8. 
Notice to Superintendent of Financial Institutions in 
case of financial institution or credit union. 
In the case of a 
financial institution authorized to do business in this State or 
a 
credit union authorized to do business in this State, 
as 
defined in Title 9-B, the Secretary of State shall notify the 
Superintendent of Financial Institutions within a reasonable time 
prior to administratively dissolving the financial institution or 
credit union under this section.' 
Further amend the bill in section 44 in that part designated 
"S529-A." in subsection 1 in the 3rd line (page 25, line 15 in 
L.D.) by striking out the following: "of foreign" and inserting 
in its place the following: 'or foreign' 
Further amend the bill in section 47 in that part designated 
"S608-A." in subsection 5 in the last line (page 27, line 31 in 
L.D.) by striking out the following .. Q.Q1..... .. and inserting in its 
place the following: '607; or' 
Further amend the bill in section 47 in that part designated 
"S608-B." by inserting after subsection 6 the following: 
'7. 
Notice to Syperintendent of Financial Institutions in 
case of financial institution or credit union. 
In the case of a 
financial institution authorized to do business in this State or 
a 
credit union authorized to do business in this State, 
as 
defined in Title 9-B, the Secretary of State shall notify the 
Superintendent of Financial Institutions within a reasonable time 
prior to administratively dissolving the financial institution or 
credit union under this section.' 
Further amend the bill in section 51 in that part designated 
"S7l9-A." in subsection 6 in the last line (page 32, line 31 in 
L.D.) by striking out the following: "filing." and inserting in 
its place the following: 'filing;' 
Further amend the bill in section 65 in that part designated 
"§SOS-B." by striking out all of subsection 6 and inserting in 
its place the following: 
'6. 
Protecting limited liability partnership name after 
revocation. 
The name of a limited liability partnership remains 
in 
the 
Secretary 
of 
State's 
record 
of 
limited 
liability 
partnership names 
and is protected for 
a 
period of 
years 
following revocation. 
7. 
Notice to Superintendent of Financial Institutions in 
case of financial institution or credit union. 
In the case of a 
financial institution authorized to do business in this State or 
a 
credit union authorized to do business in this State, 
as 
defined 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to H.P. 1289, L.D. 1767 
in 
Title 
Bt 
the 
Secretary 
of 
State 
shall 
notify 
the 
Superintendent of Financial Institutions within a reasonable time 
prior to revoking the status of a financial institution or credit 
union as a registered limited liability partnership under this 
section. ' 
Further amend the bill by inserting after section 78 the 
following: 
'Sec. 79. 36 MRSA §612, sub-§4, as repealed and replaced by PL 
2003, c. 355, §2 and affected by §§9 and 10, is amended to read: 
4. 
Notice of lien. Each notice of lien, which may be in the 
form of a financing statement, must: 
A. 
Name the owner of the property upon which the lien is 
claimed, if the owner is not the taxpayer and is known to 
the municipality; 
B. 
Provide the residence or business address of the owner, 
if known to the municipality; 
C. 
Provide the taxpayer's name and the taxpayer's residence 
or business address, if known to the municipality, and if 
not otherwise known, the address where the property that is 
being taxed was located on the date the status of such 
taxable property was fixed pursuant to section 502 or 611; 
D. 
Describe the property claimed to be subject to the lien 
in a manner that meets the requirements of Title 11, section 
9-1504; 
E. 
State the amount of tax, accrued interest and costs, as 
of the date on which the municipality sends the notice for 
filing, claimed due the municipality and secured by the lien; 
F. 
State the tax year or years for which the lien is 
claimed; 
G. 
Name the municipality claiming the lien; 
H. 
Set forth the phrase "NOTICE OF 
PERSONAL PROPERTY TAX 
LIEN" in that part of the financing statement otherwise used 
to describe the collateral; 
1. 
and 
Indicate that the notice is filed as a non-UCC filing; 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A 
.. to H.P. 1289, L.D. 1767 
J. 
Indicate that the taxpayer or owner, if an organization, 
has no organizational identification number, regardless of 
whether such a number may exist for that entity. 
~Re Except as provided in this subsection, the notice of lien 
need not contain the information required by Title 11, section 
9-1516, 
subsection (2), paragraph (e), 
subparagraph (iii) 
and 
must 
be 
accepted 
for 
filing 
without 
that 
information 
notwithstanding 
the 
provisions 
of Title 
11, 
section 
9-1520, 
subsection (1). 
A copy of the notice of lien must be given by 
certified mail, 
return receipt requested, 
at the last 
known 
address, to the taxpayer, to the owner, if the owner is not the 
taxpayer, and to any party who has asserted that it holds an 
interest in any of the property that is subject to the lien in an 
authenticated notification received by the municipality within 5 
years prior to the date on which the municipality sends the 
notice of lien for filing, or who has filed a financing statement 
with 
the 
office 
identified 
in 
Title 
11, 
section 
9-1501, 
subsection (1), paragraph (b) that remains effective as of the 
date on which the municipality sends the notice of lien for 
filing. Failure to give notice to any secured party who has a 
perfected 
security 
interest 
prevents 
the 
lien 
from 
taking 
priority over that security interest, but does not otherwise 
affect the validity of the lien.' 
Further amend the 
nonconsecutive 
Part 
consecutively. 
bill by relettering 
letter 
or 
section 
SUMMARY 
or renumbering 
number 
to 
any 
read 
This amendment relocates language governing notification of 
the Attorney General by the Secretary of State when a public 
benefit corporation is being administratively dissolved. 
It also 
corrects a reference to the revocation of a limited liability 
partnership rather than the suspension of a limited liability 
partnership. 
This amendment corrects typographical errors in the bill. 
This amendment requires the Secretary of State to notify the 
Superintendent of Financial Institutions within a reasonable time 
prior to administratively dissolving a financial institution or 
credit union. 
The notification requi~ement is added to the laws 
governing business corporations, 
limited partnerships, 
limited 
liability companies and limited liability partnerships. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT .. A 
.. to H.P. 1289, L.D. 1767 
This 
amendment makes 
the following changes to the Maine 
Business Corporation Act, which is codified in the Maine Revised 
Statutes, Title l3-C. 
It clarifies that the indebtedness referred to in the 2nd 
sentence of the Maine Revised Statutes, Title 13-C, section 651, 
subsection 7 is indebtedness that, by its terms, provides that 
payment of principal and interest are made only if and to the 
extent that payment of a distribution to shareholders could then 
be made under this section. 
Existing section 651, subsection 5 
refers to "other indebtedness," meaning indebtedness other than 
that 
dealt 
with 
under 
section 
651, 
subsection 
7. 
This 
clarification 
is 
consistent 
with 
the 
Official 
Comment 
that 
accompanies the corresponding subsections of the Model Business 
Corporation 
Act, 
which 
was 
prepared 
by 
the 
American 
Bar 
Association. 
The Maine Business Corporation Act, when adopted, did not 
include certain recent changes made to the model act upon which 
it was based. 
1. 
. This 
amendment 
allows 
the 
corporation 
additional 
flexibility in filling board 
committee 
positions 
and 
allows 
boards 
of directors greater 
leeway to delegate decisions 
to 
committees when appropriate. 
2. 
This amendment inserts references to Title 13-C, section 
1410, 
subsection 
in 
order 
to 
make 
the 
Maine 
provisions 
internally consistent and consistent with the model 
act, 
as 
amended. 
It has the effect of applying to distributions on 
dissolution of a corporation the same tests for liability of 
directors 
as 
are 
applied 
to 
other 
distributions, 
such 
as 
dividends. 
3. 
This 
amendment 
clarifies 
who 
may 
elect or 
appoint 
officers and clarifies that one officer will have responsibility 
for records required under sections 1601, subsections 1 and 3. 
This amendment clarifies that an officer is entitled to rely 
on work product or advice of legal counsel, public accountants 
and other professionals. 
This revision is consistent with the 
corresponding section of the model act. 
This 
amendment clarifies that notice to 
shareholders is 
required for approval of a plan of merger or share exchange 
whether 
or 
not 
the 
corporation's 
articles 
of 
incorporation 
address the subject. 
This amendment deletes superfluous language included in the 
Maine Business Corporation Act when it was adopted. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "~,, to H.P. 1289, L.D. 1767 
This amendment deletes the word "on" to make Title 13-C, 
section 1408, subsection 3, paragraph C consistent with related 
section 1409 with respect to contingent claims. 
The word "on" 
does not appear in the Model Business Corporation Act section 
upon which this section was based. 
This amendment clarifies the requirements for filing notices 
of 
personal 
property 
tax 
liens. 
Title 
36, 
section 
612, 
subsection 4 lists specific information that must be part of the 
notice but does not require the notice to include information 
mandated by specific provisions of the Uniform Commercial Code. 
This 
amendment 
provides 
that the listed information must 
be 
included in the notice, 
even if the Uniform Commercial 
Code 
section that the 
law states does 
not apply covers 
the 
same 
information. 
Page ll-LR2593(2) 
COMMITTEE AMENDMENT