2005 Legislation
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HOUSE BILL NO. 219 – Corporate names, certain prohibited

HOUSE BILL NO. 219

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Bill Status



H0219......................................................by STATE AFFAIRS
CORPORATE NAMES - Amends existing law relating to names of formally
organized business entities and assumed business names to prohibit such
names from falsely implying government affiliation.
                                                                        
02/15    House intro - 1st rdg - to printing
02/16    Rpt prt - to St Aff
02/28    Rpt out - rec d/p - to 2nd rdg
03/01    2nd rdg - to 3rd rdg
03/07    3rd rdg - PASSED - 66-0-4
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Bradford, Chadderdon,
      Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge,
      Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson,
      Jaquet, Kemp, LeFavour, Loertscher, Martinez, Mathews, McGeachin,
      McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart,
      Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali, Sayler,
      Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30),
      Smith(24), Smylie, Snodgrass, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Cannon, Jones, Lake, Stevenson
    Floor Sponsor - Miller
    Title apvd - to Senate
03/08    Senate intro - 1st rdg - to St Aff
03/22    Rpt out - rec d/p - to 2nd rdg
03/23    2nd rdg - to 3rd rdg
03/24    3rd rdg - PASSED - 34-0-0, 1 vacancy
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
      Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- (District 21 seat vacant)
    Floor Sponsor - Stegner
    Title apvd - to House
03/24    To enrol
03/28    Rpt enrol - Sp signed
03/29    Pres signed
03/30    To Governor
04/05    Governor signed
         Session Law Chapter 272
         Effective: 07/01/05

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 219
                                                                        
                                 BY STATE AFFAIRS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO NAMES OF FORMALLY ORGANIZED BUSINESS ENTITIES AND ASSUMED BUSINESS
  3        NAMES; AMENDING SECTION 30-1-401, IDAHO CODE, TO PROHIBIT CORPORATE  NAMES
  4        FROM  FALSELY  IMPLYING  GOVERNMENT AFFILIATION; AMENDING SECTION 30-3-27,
  5        IDAHO CODE, TO PROHIBIT NONPROFIT CORPORATE NAMES  FROM  FALSELY  IMPLYING
  6        GOVERNMENT AFFILIATION AND TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION
  7        53-202,  IDAHO  CODE,  TO  PROHIBIT LIMITED PARTNERSHIP NAMES FROM FALSELY
  8        IMPLYING GOVERNMENT AFFILIATION AND TO MAKE A TECHNICAL CORRECTION; AMEND-
  9        ING SECTION 53-503, IDAHO CODE, TO PROHIBIT ASSUMED  BUSINESS  NAMES  FROM
 10        FALSELY  IMPLYING  GOVERNMENT  AFFILIATION AND TO MAKE A TECHNICAL CORREC-
 11        TION; AND AMENDING SECTION 53-602, IDAHO CODE, TO PROHIBIT LIMITED LIABIL-
 12        ITY COMPANY NAMES FROM FALSELY IMPLYING OR STATING A  GOVERNMENT  AFFILIA-
 13        TION AND TO MAKE TECHNICAL CORRECTIONS.
                                                                        
 14    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 15        SECTION  1.  That Section 30-1-401, Idaho Code, be, and the same is hereby
 16    amended to read as follows:
                                                                        
 17        30-1-401.  CORPORATE NAME. (1) A corporate name:
 18        (a)  Must contain the word "corporation,"  "incorporated,"  "company,"  or
 19        "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words
 20        or  abbreviations  of  like  import in another language; provided however,
 21        that if the word "company" or its abbreviation is used  it  shall  not  be
 22        immediately  preceded by the word "and" or by an abbreviation of or symbol
 23        representing the word "and";
 24        (b)  May not contain  language  falsely  stating  or  implying  government
 25        affiliation or stating or implying that the corporation is organized for a
 26        purpose other than that permitted by section 30-1-301, Idaho Code, and its
 27        articles of incorporation.
 28        (2)  Except  as  authorized  by subsections (3) and (4) of this section, a
 29    corporate name must be distinguishable upon the records of  the  secretary  of
 30    state from:
 31        (a)  The  corporate  name  of  a corporation incorporated or authorized to
 32        transact business in this state;
 33        (b)  A name reserved or registered under  section  30-1-402  or  30-1-403,
 34        Idaho Code, or reserved under section 53-203 or 53-603, Idaho Code;
 35        (c)  The  fictitious  name  adopted by a foreign corporation authorized to
 36        transact business in this state because its real name is unavailable;
 37        (d)  The corporate name of a nonprofit corporation incorporated or  autho-
 38        rized to transact business in this state; and
 39        (e)  The name of any limited partnership, limited liability partnership or
 40        limited  liability company which is organized under the laws of this state
 41        or registered to do business in this state.
 42        (3)  A corporation may apply to the secretary of state  for  authorization
 43    to  use a name that is not distinguishable on his records from one (1) or more
                                                                        
                                           2
                                                                        
  1    of the names described in subsection (2) of this  section.  The  secretary  of
  2    state shall authorize use of the name applied for if:
  3        (a)  The  other corporation, holder of a reserved or registered name, lim-
  4        ited partnership, limited liability partnership or limited liability  com-
  5        pany  consents  to the use in writing and submits an undertaking in a form
  6        satisfactory to the secretary of state to change its name to a  name  that
  7        is  distinguishable  upon  the  records of the secretary of state from the
  8        name of the applying corporation; or
  9        (b)  The applicant delivers to the secretary of state a certified copy  of
 10        the  final  judgment of a court of competent jurisdiction establishing the
 11        applicant's right to use the name applied for in this state.
 12        (4)  A corporation may use the name, including  the  fictitious  name,  of
 13    another  domestic  or foreign corporation or limited liability company that is
 14    used in this state if the other corporation or limited  liability  company  is
 15    organized  or  authorized  to transact business in this state and the proposed
 16    user corporation:
 17        (a)  Has merged with the other corporation or limited liability company;
 18        (b)  Has been formed by reorganization of the other corporation or limited
 19        liability company; or
 20        (c)  Has acquired all or substantially all of the  assets,  including  the
 21        name, of the other corporation or limited liability company.
 22        (5)  This chapter does not control the use of assumed business names, gov-
 23    erned  by "The Assumed Business Names Act of 1997," chapter 5, title 53, Idaho
 24    Code.
 25        (6)  Nothing in this section shall abrogate or limit the law as to  unfair
 26    competition  or  unfair  practice in the use of trade names, nor derogate from
 27    the common law, the principles of equity, or the statutes of this state or  of
 28    the  United  States  with  respect  to  the right to acquire and protect trade
 29    names.
 30        (7)  The assumption of a name in  violation  of  this  section  shall  not
 31    affect  or vitiate the corporate existence, but the courts of this state, hav-
 32    ing equity jurisdiction, may, upon the application of the  state,  or  of  any
 33    person,  unincorporated  association,  or  corporation interested or affected,
 34    enjoin such corporation in  violation  from  doing  business  under  any  name
 35    assumed in violation of this section.
                                                                        
 36        SECTION  2.  That  Section 30-3-27, Idaho Code, be, and the same is hereby
 37    amended to read as follows:
                                                                        
 38        30-3-27.  CORPORATE NAME. The corporate name:
 39        (1)  Shall contain the word "corporation,"  "company,"  "incorporated"  or
 40    "limited," or shall contain an abbreviation of one (1) of such words; provided
 41    however,  that if the word "company" or its abbreviation is used, it shall not
 42    be immediately preceded by the word "and" or by an abbreviation of  or  symbol
 43    representing the word "and."
 44        (2)  Shall  not  contain  any  word  or  phrase which falsely indicates or
 45    implies government affiliation or that it is organized for any  purpose  other
 46    than  one  (1) or more of the purposes contained in its articles of incorpora-
 47    tion.
 48        (3)  Shall be distinguishable on the records of  the  secretary  of  state
 49    from  the  name  of  any  domestic corporation existing under the laws of this
 50    state or any foreign corporation  authorized  to  transact  business  in  this
 51    state, or a name the exclusive right to which is, at the time, reserved in the
 52    manner  provided  in  this  act,  or  the  name of a corporation which has, in
 53    effect, a registration of its corporate name as provided in this  act,  except
                                                                        
                                           3
                                                                        
  1    that  this provision shall not apply if the applicant files with the secretary
  2    of state either of the following:
  3        (a)  The written consent of such other corporation or holder of a reserved
  4        or registered name to use the name which is  not  distinguishable  on  the
  5        records  of the secretary of state, and one (1) or more words are added to
  6        make such name distinguishable from such other name; or
  7        (b)  A certified copy of a final decree of a court of competent  jurisdic-
  8        tion establishing the prior right of the applicant to the use of such name
  9        in this state.
 10        (4)  A corporation with which another corporation, domestic or foreign, is
 11    merged,  or  which is formed by the reorganization or consolidation of one (1)
 12    or more domestic or foreign corporations or upon a sale, lease or other dispo-
 13    sition to or exchange with, a domestic corporation of all or substantially all
 14    the assets of another corporation, domestic or foreign,  including  its  name,
 15    may  have the same name as that used in this state by any of such corporations
 16    if such other corporation was organized under the laws of, or is authorized to
 17    transact business in, this state.
 18        (5)  Nothing in this section shall abrogate or limit the law as to  unfair
 19    competition  or  unfair  practice in the use of trade names, nor derogate from
 20    the common law, the principles of equity, or the statutes of this state or  of
 21    the  United  States  with  respect  to  the right to acquire and protect trade
 22    names.
 23        (6)  The assumption of a name in violation of the provisions of this  sec-
 24    tion  shall  not  affect or vitiate the corporate existence, but the courts of
 25    this state, having equity jurisdiction,  may,  upon  the  application  of  the
 26    state, or of any person, unincorporated association, or corporation interested
 27    or  affected,  enjoin  such corporation in violation from doing business under
 28    any name assumed in violation of the provisions of this section.
                                                                        
 29        SECTION 3.  That Section 53-202, Idaho Code, be, and the  same  is  hereby
 30    amended to read as follows:
                                                                        
 31        53-202.  NAME.  The  name  of each limited partnership as set forth in its
 32    certificate of limited partnership:
 33        (1)  Shall contain the words "limited  partnership"  or  the  abbreviation
 34    "L.P." or "LP";
 35        (2)  May  not  contain the name of a limited partner unless (i) it is also
 36    the name of a general partner or the corporate name  of  a  corporate  general
 37    partner,  or  (ii) the business of the limited partnership had been carried on
 38    under that name before the admission of that limited partner;
 39        (3)  Must be distinguishable on the records of the secretary of state from
 40    the name of any corporation, limited liability company or limited  partnership
 41    organized  under the laws of this state or licensed or registered as a foreign
 42    corporation, limited liability company or limited partnership in  this  state;
 43    and
 44        (4)  May  not contain the following words or abbreviations: "corporation,"
 45    "incorporated," "corp.," "inc.," "limited liability  company,"  "limited  com-
 46    pany," "L.L.C.," "LLC," "L.C." and "LC.".
 47        (5)  Shall not falsely state or imply government affiliation.
                                                                        
 48        SECTION  4.  That  Section  53-503, Idaho Code, be, and the same is hereby
 49    amended to read as follows:
                                                                        
 50        53-503.  DEFINITIONS. When used in this chapter, the terms defined in this
 51    section shall have the following meanings:
                                                                        
                                           4
                                                                        
  1        (1)  "Assumed business name" shall mean:
  2        (a)  Any name other than the true name of any formally organized or regis-
  3        tered entity, under which name the entity holds itself out for the  trans-
  4        action of business in the state of Idaho; or
  5        (b)  Any  name  under  which  any  individual, any group of individuals or
  6        other persons, or any entity other than a formally organized or registered
  7        entity, holds itself out for the transaction of business in the  state  of
  8        Idaho,  if  that name does not include in full the true names of all indi-
  9        viduals and other persons who have a financial interest  in  the  business
 10        which  is  or  may  be  transacted;  which name shall not include words or
 11        abbreviations which falsely state or imply governmental affiliation or the
 12        existence of a formally organized or registered entity.
 13        (2)  "Formally organized or registered entity" shall mean a  legal  entity
 14    which  is created in, authorized to do business in, or given special powers or
 15    privileges by the state of Idaho or the federal government by virtue of filing
 16    its organizational document, application for authority to do business or  reg-
 17    istration  statement  with  the secretary of state, the department of finance,
 18    the department of insurance, or an agency of the federal government,  pursuant
 19    to  law.  Formally organized or registered entities include corporations, lim-
 20    ited liability companies, limited  partnerships,  limited  liability  partner-
 21    ships,  foreign  insurance  companies, credit unions, national banks and other
 22    entities created pursuant to federal law.
 23        (3)  "Foreign," as applied to a formally organized or  registered  entity,
 24    shall  mean organized under the laws of a jurisdiction other than Idaho or the
 25    federal government.
 26        (4)  "Individual" shall mean a natural person.
 27        (5)  "Person" shall mean an individual, a trust or estate, a  partnership,
 28    or a formally organized or registered entity.
 29        (6)  "Transact  business"  shall mean to engage in any commercial or other
 30    activity which is intended to  or  likely  to  produce  a  financial  benefit,
 31    whether  it  is  for  the  purpose  of profit to the person who engages in the
 32    activity or for the purpose of supporting a charitable,  benevolent  or  other
 33    nonprofit function.
 34        (7)  "True name" shall have the following meanings:
 35        (a)  When  applied  to a formally organized or registered entity, the name
 36        by which the entity is identified on its organizational document, applica-
 37        tion for authority to do business or registration statement  which  is  on
 38        file  with  the appropriate governmental entity.  As to a foreign formally
 39        organized or registered entity   which  has  been  required  to  adopt  an
 40        assumed  business  name on its application for authority to do business or
 41        its registration statement as a condition of  obtaining  authority  to  do
 42        business in Idaho, the term "true name" shall include the assumed business
 43        name which appears on the application for authority to do business or reg-
 44        istration statement.
 45        (b)  When  applied to an individual, the name which the individual uses to
 46        bind himself or herself to legal obligations,  or  to  obtain  privileges,
 47        licenses  or benefits from government. The true name will include the sur-
 48        name and some combination of given names  or  initials,  and  may  include
 49        other identifiers such as "Jr.," "3d" or "III.".
                                                                        
 50        SECTION  5.  That  Section  53-602, Idaho Code, be, and the same is hereby
 51    amended to read as follows:
                                                                        
 52        53-602.  NAME. (1) The name of each limited liability company as set forth
 53    in its articles of organization must contain the words "Limited Liability Com-
                                                                        
                                           5
                                                                        
  1    pany" or "Limited Company" or the  abbreviation  "L.L.C.,"  "L.C.,"  "LLC"  or
  2    "LC.".  The word "Limited" may be abbreviated as "Ltd." and the word "Company"
  3    may be abbreviated as "Co." If the limited liability company,  however,  is  a
  4    professional  services limited liability company as defined in section 53-615,
  5    Idaho Code, the name of the limited liability company  as  set  forth  in  the
  6    articles of organization must end with the words "Professional Company" or the
  7    abbreviation "P.L.L.C." or "PLLC.".
  8        (2)  A  limited  liability  company  name  must  be distinguishable on the
  9    records of the secretary of state from:
 10        (a)  The name of any limited liability  company,  limited  partnership  or
 11        corporation  existing under the laws of this state or authorized to trans-
 12        act business in this state; or
 13        (b)  Any name reserved or registered under section 53-603, Idaho Code, the
 14        general corporation laws or the Idaho limited partnership act.
 15        (3)  The provisions of subsection (2) of this section shall not  apply  if
 16    the applicant files with the secretary of state either of the following:
 17        (a)  The written consent of the holder of a reserved or registered name to
 18        use a deceptively similar name if one (1) or more words are added, altered
 19        or  deleted  to  make the name distinguishable from the reserved or regis-
 20        tered name; or
 21        (b)  A certified copy of a final decree of a court of competent  jurisdic-
 22        tion  establishing the prior right of the applicant to the use of the name
 23        in this state.
 24        (4)  A limited liability company name may not contain language stating  or
 25    implying  that  the limited liability company is organized for a purpose other
 26    than that permitted by section 53-605, Idaho Code, and its articles of organi-
 27    zation. The name shall not falsely state or imply government affiliation.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 14916

The intent of this legislation is to prohibit a variety of
business entities from using names which falsely indicate or
imply affiliation with any form of government entity.



                           FISCAL NOTE

There is no fiscal impact.





Contact
Name:  Chuck Goodenough
       Deputy Secretary of State
       Commercial Division 
Phone: 208-334-2301



STATEMENT OF PURPOSE/FISCAL NOTE                      H 219