GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION

CHAPTER 400
SENATE BILL 242

AN ACT TO AMEND THE NORTH CAROLINA NONPROFIT CORPORATION ACT AND TO MAKE A CONFORMING AMENDMENT TO THE BUSINESS CORPORATION ACT, AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION.

The General Assembly of North Carolina enacts:

Section 1.  G.S. 55A-5-01 reads as rewritten:
"§ 55A-5-01.  Registered office and registered agent.
(a)	Each corporation shall continuously maintain in this State:
(1)	A registered office that may be the same as any place where it conducts affairs; and
(2)	A registered agent, who shall be:
a.	An individual who resides in this State and whose office is identical with the registered office;
b.	A domestic business or nonprofit corporation whose office is identical with the registered office; or
c.	A foreign business or nonprofit corporation authorized to transact business or conduct affairs in this State whose office is identical with the registered office.
(b)	The sole duty of the registered agent to the corporation is to forward to the corporation at its last known address any notice, process, or demand that is served on the registered agent."
Sec. 2.  G.S. 55A-7-21(c) reads as rewritten:
"(c)	An amendment to the articles of incorporation or bylaws on which members are entitled to vote, the purpose of which is to increase or decrease the number of votes any member is entitled to cast on any member action, shall be approved by the members entitled to vote on that action by a vote that would be sufficient to take the action before the amendment."
Sec. 3.  G.S. 55A-7-23(b) reads as rewritten:
"(b)	An amendment to the articles of incorporation or bylaws on which members are entitled to vote, the purpose of which is to increase or decrease the vote required for any member action, shall be approved by the members entitled to vote on that action by a vote that would be sufficient to take the action before the amendment."
Sec. 4.  G.S. 55A-10-03(a) reads as rewritten:
"(a)	If the corporation has members entitled to vote thereon, then, unless this Chapter, the articles of incorporation, bylaws, the members (acting pursuant to subsection (b) of this section), or the board of directors (acting pursuant to subsection (c) of this section) require a greater vote or voting by class, an amendment to a corporation's articles of incorporation to be adopted shall be approved:
(1)	By the board or in lieu thereof in writing by the number or proportion of members entitled under G.S. 55A-7-02(a)(2) to call a special meeting to consider such amendment;
(2)	By the members entitled to vote thereon by two-thirds of the votes cast or a majority of the votes entitled to be cast on the amendment, whichever is less; and
(3)	In writing by any person or persons whose approval is required by a provision of the articles of incorporation authorized by G.S. 55A-10-30."
Sec. 5.  G.S. 55A-11-01(a) reads as rewritten:
"(a)	Subject to the limitations set forth in G.S. 55A-11-02, one or more nonprofit corporations may merge into another nonprofit corporation, if the plan of merger is approved as provided in G.S. 55A-11-03."
Sec. 6.  G.S. 55A-11-02(a)(4) reads as rewritten:
"(4)	A business or nonprofit corporation other than a charitable or religious corporation, provided that:  (i) on or prior to the effective date of the merger, assets with a value equal to the greater of the fair market value of the net tangible and intangible assets (including goodwill) of the charitable or religious corporation or the fair market value of the charitable or religious corporation if it were to be operated as a business concern are transferred or conveyed to one or more persons who would have received its assets under G.S. 55A-14-03(a)(1) and (2) had it dissolved; (ii) it shall return, transfer or convey any assets held by it upon condition requiring return, transfer or conveyance, which condition occurs by reason of the merger, in accordance with such condition; and (iii) the merger is approved by a majority of directors of the charitable or religious corporation who are not and will not become members or shareholders in or directors, officers, employees, agents, or consultants of the surviving corporation."
Sec. 7.  G.S. 55A-11-06(a) reads as rewritten:
"(a)	Except as provided in G.S. 55A-11-02, one or more foreign nonprofit corporations may merge with one or more domestic nonprofit corporations if:
(1)	The merger is permitted by the law of the state or country under whose law each foreign corporation is incorporated and each foreign corporation complies with that law in effecting the merger;
(2)	The foreign corporation complies with G.S. 55A-11-04 if it is the surviving corporation of the merger; and
(3)	Each domestic nonprofit corporation complies with the applicable provisions of G.S. 55A-11-01 through G.S. 55A-11-03 and, if it is the surviving corporation of the merger, with G.S. 55A-11-04."
Sec. 8.  Article 11 of Chapter 55A of the General Statutes is amended by adding a new section to read:
"§ 55A-11-08.  Merger with business corporation.
(a)	One or more domestic or foreign business corporations may merge with one or more domestic nonprofit corporations if:
(1)	Each domestic business corporation complies with the applicable provisions of G.S. 55-11-01, 55-11-03, and 55-11-04;
(2)	In a merger involving one or more foreign business corporations, the merger is permitted by the law of the state or country under whose law each foreign business corporation is incorporated and each foreign business corporation complies with that law in effecting the merger;
(3)	The domestic or foreign business corporation complies with G.S. 55A-11-04 if it is the surviving corporation; and
(4)	Each domestic nonprofit corporation complies with the applicable provisions of G.S. 55A-11-01 through G.S. 55A-11-03 and, if it is the surviving corporation, with G.S. 55A-11-04.
(b)	Upon the merger taking effect, if the surviving corporation does not have a registered agent in this State, it shall be deemed to have appointed the Secretary of State as its registered agent for service of process in a proceeding to enforce any obligation of a domestic nonprofit corporation party to the merger, until such time as it appoints a registered agent in this State.
(c)	This section does not limit the power of a domestic or foreign business corporation to acquire all or part of the memberships of one or more classes of a domestic nonprofit corporation through a voluntary exchange or otherwise."
Sec. 9.  G.S. 55A-15-20(c) reads as rewritten:
"(c)	If the Secretary of State finds that the application conforms to law, the Secretary of State shall:
(1)	Endorse on the application and an exact or conformed copy thereof the word 'filed', and the hour, day, month, and year of the filing thereof;
(2)	File the application in the Secretary of State's office; 
(3)	Issue a certificate of withdrawal to which the Secretary of State shall affix the exact or conformed copy of the application; and
(4)	Send to the foreign corporation or its representative the certificate of withdrawal together with the exact or conformed copy of the application affixed thereto."
Sec. 10.  G.S. 55A-15-31 is amended by adding the following new subsection to read:
"(f)	The corporation shall not be granted a new certificate of authority until each ground for revocation has been substantially corrected to the reasonable satisfaction of the Secretary of State."
Sec. 11.  Article 15 of Chapter 55A of the General Statutes is amended by adding the following new section to read:
"§ 55A-15-33.  Inapplicability of Administrative Procedure Act.
The Administrative Procedure Act shall not apply to any proceeding or appeal provided for in G.S. 55A-15-30 through G.S. 55A-15-32."
Sec. 12.  G.S. 55A-17-01(b) reads as rewritten:
"(b)	The provisions of this Chapter relating to foreign corporations shall apply to all corporations conducting affairs in this State for purposes for which a corporation might be organized under this Chapter.  A foreign corporation authorized to conduct affairs in this State on July 1, 1994, is subject to this Chapter but is not required to obtain a new certificate of authority to conduct affairs under this Chapter."
Sec. 13.  Article 11 of Chapter 55 of the General Statutes is amended by adding a new section to read:
"§ 55-11-09.  Merger with nonprofit corporation.
(a)	One or more domestic or foreign nonprofit corporations may merge with one or more domestic corporations if:
(1)	Each domestic nonprofit corporation complies with the applicable provisions of G.S. 55A-11-01 through G.S. 55A-11-03;
(2)	In a merger involving one or more foreign nonprofit corporations, the merger is permitted by law of the state or country under whose law each foreign nonprofit corporation is incorporated and each foreign nonprofit corporation complies with that law in effecting the merger;
(3)	The domestic or foreign nonprofit corporation complies with G.S. 55-11-05 if it is the surviving corporation; and
(4)	Each domestic corporation complies with the applicable provisions of G.S. 55-11-01, 55-11-03, and 55-11-04 and, if it is the surviving corporation, with G.S. 55-11-05.
(b)	Upon the merger taking effect, if the domestic or foreign nonprofit corporation is the surviving corporation, then it is deemed:
(1)	To appoint the Secretary of State as its agent for service of process in a proceeding to enforce any obligation or the rights of dissenting shareholders of each domestic corporation party to the merger; and
(2)	To agree that it will promptly pay to the dissenting shareholders of each domestic corporation party to the merger the amount, if any, to which they are entitled under Article 13 of this Chapter.
(c)	This section does not limit the power of a domestic or foreign nonprofit corporation to acquire all or part of the shares of one or more classes or series of a domestic corporation through a voluntary exchange or otherwise."
Sec. 14.  This act becomes effective October 1, 1995.
In the General Assembly read three times and ratified this the 10th day of July, 1995.

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Dennis A. Wicker
President of the Senate

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Harold J. Brubaker
Speaker of the House of Representatives