MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Business and Financial Institutions

By: Senator(s) Robertson

AN ACT TO CREATE THE MISSISSIPPI REGISTRATION OF FOREIGN BUSINESS TRUSTS ACT; TO ENACT A CERTIFICATE OF AUTHORITY, PRESCRIBE THE APPLICATION THEREFOR AND THE ISSUANCE, WITHDRAWAL AND REVOCATION THEREOF; TO ENACT CERTAIN DEFINITIONS; TO PRESCRIBE THE CONSEQUENCES OF TRANSACTING BUSINESS WITHOUT AUTHORITY; TO PRESCRIBE FEES; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following provision shall be codified as Section 79-16-1, Mississippi Code of 1972:

79-16-1. Short title.

This chapter shall be known and may be cited as the "Mississippi Registration of Foreign Business Trusts Act."

SECTION 2. The following provision shall be codified as Section 79-16-3, Mississippi Code of 1972:

79-16-3. Reservation of power to amend or repeal.

The Mississippi Legislature has the power to amend or repeal all or part of this chapter at any time and all foreign business trusts subject to this chapter are governed by the amendment or repeal.

SECTION 3. The following provision shall be codified as Section 79-16-5, Mississippi Code of 1972:

79-16-5. Certificate of authority; necessity of; what constitutes not transacting business.

(1) No foreign business trust shall have the right to transact business in this state until it shall have procured a certificate of authority from the Secretary of State. No foreign business trust shall be entitled to procure a certificate of authority under this chapter to transact in this state any business which a foreign business trust is not permitted to transact in the state or country in which it was created.

(2) The following activities, among others, do not constitute transacting business within the meaning of subsection (1):

(a) Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement thereof or the settlement of claims or disputes.

(b) Maintaining bank accounts;

(c) Maintaining offices or agencies for the transfer, exchange and registration of its securities, or appointing and maintaining trustees or depositaries with relation to its securities;

(d) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, where such orders require acceptance without this state before becoming binding contracts;

(e) Transacting any business in interstate commerce;

(f) Holding meetings of the board of trustees or holders of beneficial interest or carrying on other activities concerning internal affairs;

(g) Selling through independent contractors;

(h) Creating or procuring indebtedness, mortgages and security interests in real and personal property;

(i) Conducting an isolated transaction that is completed within a period of thirty (30) days and not in the course of a number of repeated transactions of a like nature.

(j) Securing or collecting debts or enforcing mortgages and security interests in property securing the debts; or

(k) Owning without more, real or personal property.

(3) The list of activities in subsection (2) is not exhaustive.

SECTION 4. The following provision shall be codified as Section 79-16-7, Mississippi Code of 1972:

79-16-7. Name of foreign business trust.

(1) The name of each foreign business trust as set forth in its certificate of trust must be such as to distinguish it upon the records of the office of the Secretary of State from the name of any corporation, limited partnership, limited liability company, investment trust or limited liability partnership reserved, registered, formed or organized under the laws of the State of Mississippi or qualified to do business or registered as a foreign corporation, foreign limited partnership, foreign limited liability company, foreign investment trust or foreign limited liability partnership in the State of Mississippi; provided, however, that a foreign business trust may register under any name which is not such as to distinguish it upon the records of the office of the Secretary of State from the name of any domestic or foreign corporation, limited partnership, limited liability company, investment trust or limited liability partnership reserved, registered, formed or organized under the laws of the State of Mississippi with the written consent of the other corporation, limited partnership, limited liability company, investment trust or limited liability partnership which written consent shall be filed with the Secretary of State.

(2) The name of each foreign business trust as set forth in its certificate of trust may contain the name of a beneficial owner, a trustee or any other person.

(3) The name of each foreign business trust as set forth in its certificate of trust may contain the following words: "Company," "Association," "Club," "Foundation," "Fund," "Institute," "Society," "Union," "Syndicate," "Limited," or "Trust" or abbreviations of like import.

(4) The exclusive right to the use of a name may be reserved by a foreign business trust in accordance with the Mississippi Business Corporation Act.

SECTION 5. The following provision shall be codified as Section 79-16-9, Mississippi Code of 1972:

79-16-9. Prohibited change of name; penalties.

Whenever a foreign business trust which is authorized to transact business in this state shall change its name to one under which a certificate of authority would not be granted to it on application therefor, the certificate of authority of such foreign business trust shall be suspended and it shall not thereafter transact any business in this state until it has changed its name to a name which is available to it under the laws of this state and obtains a certificate of correction or amendment.

SECTION 6. The following provision shall be codified as Section 79-16-11, Mississippi Code of 1972:

79-16-11. Application for certificate of authority.

(1) A foreign business trust, in order to procure a certificate of authority to transact business in this state, shall make application therefor to the Secretary of State, which application shall set forth:

(a) The name of the foreign business trust and the state or country under the laws of which it is organized;

(b) The date of declaration of trust and the period of duration of the trust;

(c) The address of the principal office of the foreign business trust in the state or country under the laws of which it is organized;

(d) The address of the registered office of the foreign business trust in this state and the name of its registered agent in this state at such address;

(e) The purpose or purposes of the foreign business trust which it proposes to pursue in the transaction of business in this state;

(f) The names and respective addresses of the trustees of the foreign business trust; and

(g) A statement of the aggregate number of shares of beneficial interest which the foreign business trust has authority to issue and the unit value in dollars to be received by the trust for the issuance of each of such shares.

(2) Such application shall be made on forms prescribed and furnished by the Secretary of State and shall be executed by at least one of the trustees.

(3) A business trust shall deliver with the completed application a certificate of existence, or a document of similar import, duly authenticated by the Secretary of State or other official having custody of trust records in the state or country under whose law it is incorporated.

SECTION 7. The following provision shall be codified as Section 79-16-13, Mississippi Code of 1972:

79-16-13. Issuance of certificate of authority.

If the Secretary of State finds that the application for certificate of authority meets the requirements of this chapter and requisite fees as provided in Section 79-16-33, Mississippi Code of 1972, have been paid, he shall:

(a) Endorse on the original the word "Filed" and the month, day and year of the filing thereof;

(b) File in his office the original of the application; and

(c) Issue a certificate of authority to transact business in this state to which he shall affix a copy of the application.

The certificate of authority, together with a copy of the application affixed thereto by the Secretary of State, shall be returned to the business trust or its representative.

SECTION 8. The following provision shall be codified as Section 79-16-15, Mississippi Code of 1972:

79-16-15. Changes and amendments.

If any statement in the application for certificate of authority of a foreign business trust was false when made or any arrangements or other facts described have changed, making the application inaccurate in any respect, the foreign business trust shall promptly file in the office of the Secretary of State a certificate, signed by a trustee, correcting such statement, together with a fee as set forth in Section 79-16-33, Mississippi Code of 1972.

SECTION 9. The following provision shall be codified as Section 79-16-17, Mississippi Code of 1972:

79-16-17. Registered office and registered agent; requirement of maintenance in state.

Each foreign business trust authorized to transact business in this state shall have and continuously maintain in this state:

(a) A registered office which may be, but need not be, the same as its place of business in this state.

(b) A registered agent, which agent may be either an individual resident in this state whose business office is identical with such registered office, or a domestic or foreign corporation, limited partnership, limited liability company, limited liability partnership, or investment trust authorized to transact business in this state, having a business office identical with such registered office.

SECTION 10. The following provision shall be codified as Section 79-16-19, Mississippi Code of 1972:

79-16-19. Registered office and registered agent; change; resignation of registered agent.

A foreign business trust authorized to transact business in this state may change its registered office or change its registered agent, or both, upon filing in the office of the Secretary of State a statement setting forth:

(a) The name of the foreign business trust;

(b) The address of its then registered office;

(c) If the address of its registered office be changed, the address to which the registered office is to be changed;

(d) The name of its then registered agent;

(e) If its registered agent be changed, the name of its successor registered agent;

(f) That the address of its registered office and the address of the business office of its registered agent, as changed, will be identical;

(g) That such change was authorized by resolution duly adopted by its trustees.

Such statement shall be executed by the foreign business trust by at least one (1) of its trustees, and verified and delivered by the Secretary of State. If the Secretary of State finds that such statement conforms to the provisions of this section, he shall file such statement in his office, and upon such filing the change of address of the registered office, or the appointment of new registered agent, or both, as the case may be, shall become effective.

Any registered agent of a foreign business trust may resign as such agent upon filing a written notice thereof, executed in duplicate, with the Secretary of State, who shall forthwith mail a copy thereof to the foreign business trust at its principal office in the state or country under the laws of which it is organized. The appointment of such agent shall terminate upon the expiration of thirty (30) days after receipt of such notice by the Secretary of State.

SECTION 11. The following provision shall be codified as Section 79-16-21, Mississippi Code of 1972:

79-16-21. Service of process.

(1) The registered agent so appointed by a foreign business trust authorized to transact in this state shall be an agent of such foreign business trust upon whom any process, notice or demand required or permitted by law to be served upon the foreign business trust may be served.

(2) A foreign business trust may be served by registered or certified mail, return receipt requested, addressed to a trustee of the foreign business trust at its principal office shown on its application for a certificate of authority if the foreign business trust:

(a) Has no registered agent or its registered agent cannot with reasonable diligence be served;

(b) Has withdrawn from transacting business in the State of Mississippi; or

(c) Has had its certificate of authority revoked.

(3) Service is perfected under subsection (2) at the earliest of:

(a) The date the foreign business trust receives the mail;

(b) The date shown on the return receipt, if signed on behalf of the foreign business trust; or

(c) Five (5) days after its deposit in the United States mail, if mailed postpaid and correctly addressed.

(4) This section does not prescribe the only means, or necessarily the required means, of serving a foreign business trust.

SECTION 12. The following provision shall be codified as Section 79-16-23, Mississippi Code of 1972:

79-16-23. Certificate of withdrawal; application and filing.

(1) A foreign business trust authorized to transact business in this state may withdraw from this state upon procuring from the Secretary of State a certificate of withdrawal. In order to procure such certificate of withdrawal, such foreign business trust shall deliver to the Secretary of State an application for withdrawal, which shall set forth:

(a) The name of the foreign business and the state or country under the laws of which it is organized;

(b) That the foreign business trust is not transacting business in this state;

(c) That the foreign business trust surrenders its authority to transact business in this state;

(d) That the foreign business trust revokes the authority of its registered agent in this state to accept service of process and consents that service of process in any action, suit or proceeding based on a cause of action arising in this state during the time the foreign business trust was authorized to transact business in this state may thereafter be made on such foreign business trust by service thereof on the Secretary of State;

(e) A post office address to which the Secretary of State may mail a copy of any process against the foreign business trust that may be served on him;

(f) A commitment to notify the Secretary of State in the future of any change in its mailing address; or

(g) Such additional information as may be necessary or appropriate in order to enable the Secretary of State to determine and assess any unpaid fees payable by such foreign business trust, and a certificate of the State Tax Commission that the foreign business trust owes no taxes.

(2) The application for withdrawal shall be made on forms prescribed and furnished by the Secretary of State and shall be executed by the trust by at least one (1) of its trustees, or if the foreign business trust is in the hands of a receiver or trustee, shall be executed on behalf of the foreign business trust by such receiver or trustee.

SECTION 13. The following provision shall be codified as Section 79-16-25, Mississippi Code of 1972:

79-16-25. Certificate of withdrawal; issuance.

(1) Application for withdrawal shall be delivered to the Secretary of State. If the Secretary of State finds that such application meets the requirements of this chapter, when all fees and taxes have been paid as by law prescribed, he shall:

(a) Endorse on such application the word "Filed," and the month, day and year of the filing thereof;

(b) File the application in his office; and

(c) Issue a certificate of withdrawal.

(2) The certificate of withdrawal, together with a copy of the application for withdrawal affixed thereto by the Secretary of State, shall be returned to the foreign business trust or its representative. Upon the issuance of such certificate of withdrawal, the authority of the foreign business trust to transact business in this state shall cease.

SECTION 14. The following provision shall be codified as Section 79-16-27, Mississippi Code of 1972:

79-16-27. Certificate of authority; revocation; causes.

(1) The certificate of authority of a foreign business trust to transact business in this state may be revoked by the Secretary of State upon the condition prescribed in this section when:

(a) The foreign business trust has failed to pay any fees prescribed by law when they become due and payable;

(b) The foreign business trust has failed to appoint and maintain a registered agent in this state;

(c) The foreign business trust has failed, after change of its registered office or registered agent, to file in the office of Secretary of State a statement of such change as required by law; or

(d) A misrepresentation has been made of any material matter in an application, report, affidavit or other document submitted by such foreign business trust pursuant to law.

(2) No certificate of authority of a foreign business trust shall be revoked by the Secretary of State unless:

(a) He shall have given the foreign business trust not less than sixty (60) days' notice thereof by mail addressed to its registered office in this state; and

(b) The foreign business trust shall fail prior to revocation to pay such fees, any taxes owed or file the required statement of change of registered agent or registered office, or file such amendment or correct such misrepresentation.

SECTION 15. The following provision shall be codified as Section 79-16-29, Mississippi Code of 1972:

79-16-29. Certificate of authority; revocation procedure.

(1) Upon revoking such certificate of authority, the Secretary of State shall:

(a) Issue a certificate of revocation;

(b) File one (1) of such certificates in his office; and

(c) Mail to such foreign business trust at its registered office in this state a notice of such revocation accompanied by one (1) of such certificates.

(2) Upon issuance of such certificate of revocation, the authority of the foreign business trust to transact business in this state shall cease.

SECTION 16. The following provision shall be codified as Section 79-16-31, Mississippi Code of 1972:

79-16-31. Consequences of transacting business without authority.

(1) A foreign business trust transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority.

(2) The successor to a foreign business trust that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state until the foreign business trust or its successor obtains a certificate of authority.

(3) A court may stay a proceeding commenced by a foreign business trust, its successor or assignee until it determines whether the foreign business trust or its successor requires a certificate of authority. If it so determines, the court may further stay a proceeding until the foreign business trust or its successor obtains a certificate.

(4) A foreign business trust is liable for a civil penalty of Ten Dollars ($10.00) for each day, but not to exceed a total of One Thousand Dollars ($1,000.00) for each year it transacts business in this state without a certificate of authority. The Attorney General may collect all penalties due under this subsection.

(5) Notwithstanding subsections (1) and (2), the failure of a foreign business trust to obtain a certificate of authority does not impair the validity of its acts or prevent it from defending any proceeding in this state.

SECTION 17. The following provision shall be codified as Section 79-16-33, Mississippi Code of 1972:

79-16-33. Fees.

The Secretary of State shall charge and collect from foreign business trust for:

(1) Filing a statement of change of address of registered office or change of registered agent, or both Twenty-five Dollars ($25.00);

(2) Filing an application of a foreign business trust for a certificate of authority to transact business in this state and issuing a certificate of authority, Two Hundred Fifty Dollars ($250.00);

(3) Filing a certificate of correction or amendment of a foreign business trust authorized to transact business in this state, Fifty Dollars ($50.00);

(4) Filing an application for withdrawal of a foreign business trust and issuing a certificate of withdrawal, Twenty-five Dollars ($25.00);

(5) Filing any other statement or report of a foreign business trust, Twenty-five Dollars ($25.00);

(6) For furnishing a certified copy of any document, instrument or paper relating to a foreign business trust, One Dollar ($1.00) per page and Ten Dollars ($10.00) for the certificate and affixing the seal thereto; and

(7) At the time of any service of process on him as resident agent of a foreign business trust, Twenty-five Dollars ($25.00), which amount may be recovered as taxable cost by the party to the suit or action causing such service to be made if such party prevails in the suit or action.

SECTION 18. The following provision shall be codified as Section 79-16-35, Mississippi Code of 1972:

79-16-35. Laws applicable to foreign business trust previously transacting business in state.

(1) Foreign business trusts which are transacting business in this state at the time this law takes effect, for a purpose or purposes for which a foreign business trust might secure such authority under said law, shall, subject to the limitations set forth in their respective certificates of authority, be entitled to all the rights and privileges applicable to foreign business trusts procuring certificates of authority to transact business, and such foreign business trusts shall be subject to all the limitations, restrictions, liabilities and duties prescribed herein for foreign business trusts procuring certificates of authority to transact business in this state.

(2) Within one (1) year from the effective date of this act, all foreign business trust transacting business within the state at the time said act takes effect shall secure a certificate of authority or be subject to the penalties, restrictions and limitations otherwise herein provided.

SECTION 19. This act shall take effect and be in force from and after July 1, 1998.