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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
]]]] 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 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