Business Law

SS SCS HCS HB 45 – Small business tax relief  Changes the laws regarding the “Big Government Get Off My Back Act” which provides tax relief to certain small businesses.  In its main provisions, the bill:

(1) Specifies that any federal mandate compelling the state to enact, enforce, or administer a federal regulatory program must be subject to authorization through appropriation or statutory enactment;

(2) Extends from four years to five years the restriction on an increase for any state-imposed user fee and the requirement that any state agency proposing a rule must certify that it does not have an adverse impact on small businesses or that it is necessary to protect the life, health, or safety of the public or must exempt any small business from the rule;

(3)Revises the definition of “small business” to include businesses with fewer than 50 employees instead of the current 25; and

(4) Authorizes, for tax years 2011 through 2014, an income tax deduction for a small business for each full-time job created with an annual salary of at least equal to the county average wage as determined by the Department of Economic Development. 

The provisions of the bill regarding the income tax deduction will expire December 31 three years from the effective date. (Signed 7/8/11)

SCS/SB 19 – Corporate franchise tax (See Taxation Law)

HCS SCS SB 366 – Missouri Cooperative Associations Act  Changes the laws regarding the conversion of certain businesses to a different type of entity and establishes the Missouri Cooperative Associations Act.

CONVERSION OF BUSINESSES  Specifies that a limited liability company; statutory trust; business trust or association; real estate investment trust; common-law trust; any other unincorporated business,including a partnership; or a foreign corporation may convert to a Missouri corporation upon executing a certificate of conversion in the Office of the Secretary of State.  A Missouri corporation is also allowed to convert to one of the aforementioned types of entities in the same manner and upon the adoption of a resolution approving the conversion and the approval of its shareholders.All property, obligations, and liabilities must follow the converting entity to the business organization into which it is converting.  The converting entity cannot be required to wind up affairs, pay liabilities, or distribute assets; and the conversion will not constitute a dissolution of the corporation.These provisions cannot be deemed to authorize the conversion of a nonprofit corporation into another entity.  Specifies the amount that the Secretary of State can charge for filing a certificate of conversion to or from a corporation under these provisions.

MISSOURI COOPERATIVE ASSOCIATIONS ACT.  The Missouri Cooperative Associations Act is established which allows a cooperative to be formed and organized to conduct or promote any lawful business or purpose for the mutual welfare of its members.  In its main provisions, the bill:

(1)  Specifies that any cooperative formed under this act will not be subject to the provisions in Sections 357.010 – 357.190 RSMo, relating to cooperative companies;

(2) Specifies that a cooperative will be comprised of members and governed by a board of directors.  Members may be patron or nonpatron members with patron members being those who conduct business with the cooperative;

(3) Allows a cooperative to elect to be structured as a corporation or as a partnership under federal income tax laws;

(4) Specifies that the articles of association may limit a director’s liability except for a breach of the duty of loyalty to the cooperative or its members, intentional misconduct, illegal distributions, and improper benefits;

(5) Allows a cooperative to indemnify persons in certain situations;

(6) Specifies the requirements for the organization of a cooperative including defining organizational purpose, who may organize, cooperative names, elements to be included in the articles of organization and bylaws, and the procedures and requirements for amending the articles and bylaws;

(7) Requires a member to have access to the books and records of the cooperative;

(8) Specifies the requirements governing the actions and liabilities of directors and officers including the number and election procedures for directors, quorum requirements, removal procedures for directors and officers, meeting requirements, limitation of liability, and indemnification procedures;

(9)  Specifies member requirements including membership interests, meetings, voting rights, sale of assets, and contribution agreements; and

(10) Specifies the procedures for merging, consolidating, and dissolving a cooperative. (Signed 7/11/11)