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Reminder: Several Changes to North Carolina Law Take Effect January 1, 2014

Don't forget!  Several changes to North Carolina law enacted by the General Assembly in 2013 will become effective on January 1, 2014.

1.  I have written about changes to North Carolina's corporate statute that will become effective January 1, 2014, here. They include:
  • Clarification of the authority of a board of directors to delegate to officers the authority to issue equity in the company. Clarification of the ways in which shareholders meetings can be conducted using newer technology (remote electronic communication).
  • Clear authorization of “force-the-vote” provisions in transactions requiring shareholder approval.
  • Creation of a safe harbor enabling corporations to know with certainty that certain sales of assets do not require shareholder approval. Provision for sister subsidiaries (corporations that are 90% owned by a common parent corporation) to merge with each other using a “short-form” process.
You can read about Senate Bill 239, enacted as Session Law 2013-153, in greater detail here.

2.  Chapter 57C of the General Statutes, which formerly governed limited liability companies, will be replaced by a new Chapter 57D effective January 1.  I wrote about the changes here.  The changes from existing law include the following:
  • Rights and duties of parties under the LLC Act can be modified or waived by an agreement.
  • Members' rights to access certain company information are spelled out in the statute, as are limitations.
  • The statute expressly allows for the appointment of "officials" besides Managers (e.g., President), and the officials need not also be Managers.
  • Provisions regarding contributions and distributions have been simplified.
  • The statute makes explicit the distinction between a purely economic interest in an LLC and a Membership interest (which confers authority).
  • Oral amendments to an operating agreement will not be enforceable if the operating agreement requires that amendments be in writing.
  • Oral agreements between parties to an operating agreement would not affect any inconsistent written provision in the operating agreement to the detriment of non-parties to the operating agreement that relied on the written operating agreement.
  • In the event of a conflict between the operating agreement and the articles of organization, the operating agreement would prevail as to parties to the operating agreement and company officials, and the articles of organization would prevail as to anyone else who reasonably relied on the filed document.
  • Provisions relating to low-profit LLCs were deleted.
  • Specific items governing out-of-state LLCs were made consistent with the treatment of out-of-state corporations under the Business Corporation Act.
The new statute will apply to existing LLCs.  You can read the full text here.

3.  Changes to North Carolina's tax laws also become effective on January 1.  Session Law 2013-316, also known as House Bill 467, or the Tax Reduction Act, can be read in full here

4.  Session Law 2013-403, also known as House Bill 565, amends the Real Estate Appraisers Act.  Changes that become effective on January 1 include new educational requirements.  New applicants for a real estate appraiser license will be required to have an associate's degree, and new applicants for certification as a residential real estate appraiser will be required to have a bachelor's degree.  You can read the full text of the legislation here.

You can see all of the North Carolina legislation that will become effective on January 1, 2014 here.

Best wishes for a prosperous 2014!

sho fia

sho fia

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