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H0222...........................................................by BUSINESS
BUSINESS NAMES - Amends existing law to provide that business entities
filing with the Secretary of State must use names which are distinguishable
on the records of the Secretary of State.
02/12 House intro - 1st rdg - to printing
02/15 Rpt prt - to Bus
02/24 Rpt out - rec d/p - to 2nd rdg
02/25 2nd rdg - to 3rd rdg
02/26 3rd rdg - PASSED - 61-0-9
AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Black, Bruneel,
Callister, Campbell, Chase, Clark, Cuddy, Deal, Denney, Ellsworth,
Field(13), Field(20), Gagner, Geddes, Hadley, Hammond, Hansen(23),
Henbest, Hornbeck, Jaquet, Jones, Judd, Kempton, Kendell, Kunz, Lake,
Limbaugh, Linford, Loertscher, Mader, Marley, McKague, Meyer,
Montgomery, Mortensen, Moyle, Pischner, Pomeroy, Reynolds, Ridinger,
Ringo, Robison, Sali, Schaefer, Sellman, Smith, Smylie, Stevenson,
Stone, Taylor(Taylor), Tilman, Tippets, Watson, Wheeler, Williams,
Zimmermann
NAYS -- None
Absent and excused -- Boe, Crow, Gould, Hansen(29), Kellogg,
Stoicheff, Trail, Wood, Mr Speaker
Floor Sponsor - Hammond
Title apvd - to Senate
03/01 Senate intro - 1st rdg - to Com/HuRes
03/12 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 34-0-1
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Davis, Deide, Dunklin, Frasure, Geddes,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner,
Stennett, Thorne, Twiggs, Wheeler, Whitworth
NAYS--None
Absent and excused--Parry
Floor Sponsor - Crow
Title apvd - to House
03/17 To enrol
03/18 Rpt enrol - Sp signed - Pres signed
03/19 To Governor
03/23 Governor signed
Session Law Chapter 212
Effective: 07/01/99
H0222|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fifth Legislature First Regular Session - 1999IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 222 BY BUSINESS COMMITTEE 1 AN ACT 2 RELATING TO NAMES FILED WITH THE SECRETARY OF STATE BY FORMALLY ORGANIZED 3 BUSINESS ENTITIES; AMENDING SECTION 30-1-401, IDAHO CODE, TO PROVIDE THAT 4 CORPORATIONS MUST USE NAMES WHICH ARE DISTINGUISHABLE ON THE RECORDS OF 5 THE SECRETARY OF STATE, TO CLARIFY LANGUAGE AND TO MAKE A TECHNICAL COR- 6 RECTION; AMENDING SECTION 30-1-403, IDAHO CODE, TO PROVIDE THAT FOREIGN 7 CORPORATIONS MUST REGISTER NAMES WHICH ARE DISTINGUISHABLE ON THE RECORDS 8 OF THE SECRETARY OF STATE; AMENDING SECTION 30-3-27, IDAHO CODE, TO PRO- 9 VIDE THAT NONPROFIT CORPORATIONS MUST USE NAMES WHICH ARE DISTINGUISHABLE 10 ON THE RECORDS OF THE SECRETARY OF STATE AND TO MAKE A TECHNICAL CORREC- 11 TION; AMENDING SECTION 30-3-29, IDAHO CODE, TO PROVIDE THAT FOREIGN NON- 12 PROFIT CORPORATIONS MUST REGISTER NAMES WHICH ARE DISTINGUISHABLE ON THE 13 RECORDS OF THE SECRETARY OF STATE; AMENDING SECTION 53-202, IDAHO CODE, TO 14 PROVIDE THAT LIMITED PARTNERSHIPS MUST USE NAMES WHICH ARE DISTINGUISHABLE 15 ON THE RECORDS OF THE SECRETARY OF STATE; AMENDING SECTION 53-602, IDAHO 16 CODE, TO PROVIDE THAT LIMITED LIABILITY COMPANIES MUST USE NAMES WHICH ARE 17 DISTINGUISHABLE ON THE RECORDS OF THE SECRETARY OF STATE. 18 Be It Enacted by the Legislature of the State of Idaho: 19 SECTION 1. That Section 30-1-401, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 30-1-401. CORPORATE NAME. (1) A corporate name: 22 (a) Must contain the word "corporation," "incorporated," "company," or 23 "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words 24 or abbreviations of like import in another language; provided however, 25 that if the word "company" or its abbreviation is used it shall not be 26 immediately preceded by the word "and" or by an abbreviation of or symbol 27 representing the word "and;" ; 28 (b) May not contain language stating or implying that the corporation is 29 organized for a purpose other than that permitted by section 30-1-301, 30 Idaho Code, and its articles of incorporation. 31 (2) Except as authorized by subsections (3) and (4) of this section, a 32 corporate nameshall not be the same as, or deceptively similar to33must be distinguishable upon the records of the secretary of 34 state from : 35 (a) The corporate name of a corporation incorporated or authorized to 36 transact business in this state; 37 (b) A name reserved or registered under section 30-1-402 or 30-1-403, 38 Idaho Code, or reserved under section 53-203 or 53-603, Idaho Code; 39 (c) The fictitious name adopted by a foreign corporation authorized to 40 transact business in this state because its real name is unavailable; 41 (d) The corporate name of anot-for-profitnonprofit 42 corporation incorporated or authorized to transact business in this 43 state; and 2 1 (e) The name of any limited partnership, limited liability partnership or 2 limited liability company which is organized under the laws of this state 3 or registered to do business in this state. 4 (3) A corporation may apply to the secretary of state for authorization 5 to use a name that isthe same as, or deceptively similar to,6 not distinguishable on his records from one (1) or more of the 7 names described in subsection (2) of this section. The secretary of state 8 shall authorize use of the name applied for if: 9 (a) The other corporation, holder of a reserved or registered name, lim- 10 ited partnership, limited liability partnership or limited liability com- 11 pany consents to the use in writing and submits an undertaking in a 12 form satisfactory to the secretary of state to change its name to a 13 name that isthe same as, or deceptively similar to,14 distinguishable upon the records of the secretary of state from the 15 name of the applying corporation; or 16 (b) The applicant delivers to the secretary of state a certified copy of 17 the final judgment of a court of competent jurisdiction establishing the 18 applicant's right to use the name applied for in this state. 19 (4) A corporation may use the name, including the fictitious name, of 20 another domestic or foreign corporation or limited liability company that is 21 used in this state if the other corporation or limited liability company is 22 organized or authorized to transact business in this state and the proposed 23 user corporation: 24 (a) Has merged with the other corporation or limited liability company; 25 (b) Has been formed by reorganization of the other corporation or limited 26 liability company; or 27 (c) Has acquired all or substantially all of the assets, including the 28 name, of the other corporation or limited liability company. 29 (5) This chapter does not control the use of assumed business names, gov- 30 erned by "The Assumed Business Names Act of 1997," chapter 5, title 53, Idaho 31 Code. 32 (6) Nothing in this section shall abrogate or limit the law as to unfair 33 competition or unfair practice in the use of trade names, nor derogate from 34 the common law, the principles of equity, or the statutes of this state or of 35 the United States with respect to the right to acquire and protect trade 36 names. 37 (7) The assumption of a name in violation of this section shall not 38 affect or vitiate the corporate existence, but the courts of this state, hav- 39 ing equity jurisdiction, may, upon the application of the state, or of any 40 person, unincorporated association, or corporation interested or affected, 41 enjoin such corporation in violation from doing business under any name 42 assumed in violation of this section. 43 SECTION 2. That Section 30-1-403, Idaho Code, be, and the same is hereby 44 amended to read as follows: 45 30-1-403. REGISTERED NAME. (1) A foreign corporation may register its 46 corporate name, or its corporate name with any addition required by section 47 30-1-1506, Idaho Code, if the name isnot the same as or deceptively48similar todistinguishable on the records of the secretary of 49 state from the corporate names that are unavailable under section 50 30-1-401(2), Idaho Code. 51 (2) A foreign corporation registers its corporate name, or its corporate 52 name with any addition required by section 30-1-1506, Idaho Code, by deliver- 53 ing to the secretary of state for filing an application: 3 1 (a) Setting forth its corporate name, or its corporate name with any 2 addition required by section 30-1-1506, Idaho Code, the state or country 3 and date of its incorporation, and a brief description of the nature of 4 the business in which it is engaged; and 5 (b) Accompanied by a certificate of existence, or a document of similar 6 import, from the state or country of incorporation. 7 (3) The name is registered for the applicant's exclusive use upon the 8 effective date of the application. 9 (4) A foreign corporation whose registration is effective may renew it 10 for successive years by delivering to the secretary of state for filing a 11 renewal application, which complies with the requirements of subsection (2) of 12 this section, between October 1 and December 31 of the preceding year. The 13 renewal application when filed renews the registration for the following cal- 14 endar year. 15 (5) A foreign corporation whose registration is effective may thereafter 16 qualify as a foreign corporation under the registered name or consent in writ- 17 ing to the use of that name by a corporation thereafter incorporated under 18 this chapter or by another foreign corporation thereafter authorized to trans- 19 act business in this state. The registration terminates when the domestic cor- 20 poration is incorporated or the foreign corporation qualifies or consents to 21 the qualification of another foreign corporation under the registered name. 22 SECTION 3. That Section 30-3-27, Idaho Code, be, and the same is hereby 23 amended to read as follows: 24 30-3-27. CORPORATE NAME. The corporate name: 25 (1) Shall contain the word "corporation," "company," "incorporated" or 26 "limited," or shall contain an abbreviation of one (1) of such 27 words; provided however, that if the word "company" or its abbreviation is 28 used, it shall not be immediately preceded by the word "and" or by an abbrevi- 29 ation of or symbol representing the word "and." 30 (2) Shall not contain any word or phrase which indicates or implies that 31 it is organized for any purpose other than one (1) or more of the purposes 32 contained in its articles of incorporation. 33 (3) Shallnot be the same as, or deceptively similar to,34 be distinguishable on the records of the secretary of state from 35 the name of any domestic corporation existing under the laws of this state or 36 any foreign corporation authorized to transact business in this state, or a 37 name the exclusive right to which is, at the time, reserved in the manner pro- 38 vided in this act, or the name of a corporation which has, in effect, a regis- 39 tration of its corporate name as provided in this act, except that this provi- 40 sion shall not apply if the applicant files with the secretary of state either 41 of the following: 42 (a) The written consent of such other corporation or holder of a reserved 43 or registered name to use thesame or deceptively similar44 name which is not distinguishable on the records of the secretary of 45 state, and one (1) or more words are added to make such name dis- 46 tinguishable from such other name; or 47 (b) A certified copy of a final decree of a court of competent jurisdic- 48 tion establishing the prior right of the applicant to the use of such name 49 in this state. 50 A corporation with which another corporation, domestic or foreign, is 51 merged, or which is formed by the reorganization or consolidation of one (1) 52 or more domestic or foreign corporations or upon a sale, lease or other dispo- 53 sition to or exchange with, a domestic corporation of all or substantially all 4 1 the assets of another corporation, domestic or foreign, including its name, 2 may have the same name as that used in this state by any of such corporations 3 if such other corporation was organized under the laws of, or is authorized to 4 transact business in, this state. 5 Nothing in this section shall abrogate or limit the law as to unfair com- 6 petition or unfair practice in the use of trade names, nor derogate from the 7 common law, the principles of equity, or the statutes of this state or of the 8 United States with respect to the right to acquire and protect trade names. 9 The assumption of a name in violation of the provisions of this section 10 shall not affect or vitiate the corporate existence, but the courts of this 11 state, having equity jurisdiction, may, upon the application of the state, or 12 of any person, unincorporated association, or corporation interested or 13 affected, enjoin such corporation in violation from doing business under any 14 name assumed in violation of the provisions of this section. 15 SECTION 4. That Section 30-3-29, Idaho Code, be, and the same is hereby 16 amended to read as follows: 17 30-3-29. REGISTERED NAME. Any corporation organized and existing under 18 the laws of any state or territory of the United States may register its cor- 19 porate name under this act, provided its corporate name isnot the same20as, or deceptively similar to,distinguishable on the records of 21 the secretary of state from the name of any domestic corporation exist- 22 ing under the laws of this state, or the name of any foreign corporation 23 authorized to transact business in this state, or any corporate name reserved 24 or registered under this act. 25 Such registration shall be made by filing with the secretary of state: 26 (1) An application for registration executed by the corporation by an 27 officer thereof, setting forth the name of the corporation, the state or ter- 28 ritory under the laws of which it is incorporated, the date of its incorpora- 29 tion, a statement that it is carrying on or doing business, and a brief state- 30 ment of the business in which it is engaged; and 31 (2) A certificate setting forth that such corporation is in good standing 32 under the laws of the state or territory wherein it is organized, executed by 33 the secretary of state of such state or territory or by such other official as 34 may have custody of the records pertaining to corporations; and 35 (3) Paying to the secretary of state a registration fee in the amount of 36 ten dollars ($10.00). 37 Such registration shall be effective until the close of the calendar year 38 in which the application for registration is filed. 39 SECTION 5. That Section 53-202, Idaho Code, be, and the same is hereby 40 amended to read as follows: 41 53-202. NAME. The name of each limited partnership as set forth in its 42 certificate of limited partnership: 43 (1) Shall contain the words "limited partnership" or the abbreviation 44 "L.P." or "LP"; 45 (2) May not contain the name of a limited partner unless (i) it is also 46 the name of a general partner or the corporate name of a corporate general 47 partner, or (ii) the business of the limited partnership had been carried on 48 under that name before the admission of that limited partner; 49 (3)May not be the same as, or deceptively similar to,50 Must be distinguishable on the records of the secretary of state from 51 the name of any corporation, limited liability company or limited partnership 5 1 organized under the laws of this state or licensed or registered as a foreign 2 corporation, limited liability company or limited partnership in this state; 3 and 4 (4) May not contain the following words or abbreviations: "corporation," 5 "incorporated," "corp.," "inc.," "limited liability company," "limited com- 6 pany," "L.L.C.," "LLC," "L.C." and "LC". 7 SECTION 6. That Section 53-602, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 53-602. NAME. (1) The name of each limited liability company as set forth 10 in its articles of organization must contain the words "Limited Liability Com- 11 pany" or "Limited Company" or the abbreviation "L.L.C.," "L.C.," "LLC" or 12 "LC". The word "Limited" may be abbreviated as "Ltd." and the word "Company" 13 may be abbreviated as "Co." If the limited liability company, however, is a 14 professional services limited liability company as defined in section 53-615, 15 Idaho Code, the name of the limited liability company as set forth in the 16 articles of organization must end with the words "Professional Company" or the 17 abbreviation "P.L.L.C." or "PLLC". 18 (2) A limited liability company namemay not be the same as or19deceptively similar tomust be distinguishable on the records of 20 the secretary of state from : 21 (a) The name of any limited liability company, limited partnership or 22 corporation existing under the laws of this state or authorized to trans- 23 act business in this state; or 24 (b) Any name reserved or registered under section 53-603, Idaho Code, the 25 general corporation laws or the Idaho limited partnership act. 26 (3) The provisions of subsection (2) of this section shall not apply if 27 the applicant files with the secretary of state either of the following: 28 (a) The written consent of the holder of a reserved or registered name to 29 use a deceptively similar name if one (1) or more words are added, altered 30 or deleted to make the name distinguishable from the reserved or regis- 31 tered name; or 32 (b) A certified copy of a final decree of a court of competent jurisdic- 33 tion establishing the prior right of the applicant to the use of the name 34 in this state.
STATEMENT OF PURPOSE
RS08850
The purpose of this bill is to enact a provision found in
the Model Business Corporation Law that was not included when the
otherwise comprehensive revisions were done in 1997. The
provision involves the selection of corporate names. Because the
availability of corporate names is tied closely to name
availability for nonprofit corporations as well as limited
liability companies and limited partnerships, these statutes are
also proposed to be amended.
If enacted, the language in this bill (adopted from
Delaware) will change the standards under which the Secretary of
State accepts and rejects names being filed for various business
entities. The laws now require, somewhat vaguely, that the
Secretary of State reject a name if it is "the same as or
deceptively similar to" the name of another business entity filed
in the Secretary of State's records.
The standard under the proposed legislation would allow the
Secretary of State to accept and file a corporate name as long as
the name is "distinguishable on the records of the secretary of
state." What this means is that as long as the staff in the
Secretary of State's Office can tell, in their experience, the
name of one business from another, then the new name will be
allowed.
FISCAL NOTE
Large blocks of staff time are spent on a daily basis
dealing with name availability for various business entities, but
the amount of time spent daily, and the savings which should
result from these changes, are not capable of being quantified.
CONTACT: Chuck Goodenough
Deputy Secretary of State, Commercial Affairs
(208) 334-2301
STATEMENT OF PURPOSE/ FISCAL NOTE
BILL NO. H 222