Entity Administration Standardization– Posted by Andrew R. Goodrich
At the beginning of this year, Washington State took steps to streamline and standardize a variety of administrative requirements amongst all limited liability entities created under Washington law. Effective January 1, 2016, Washington adopted the “HUB” provisions of the Uniform Business Organizations Code (“UBOC”), national guidelines that change—sometimes significantly—a variety of administrative requirements related to the operation of corporations, limited liability companies, partnerships, and cooperative associations within the state. While the intent of the UBOC is to simplify and standardize these requirements for those tasked with the organizational upkeep of such entities, in the short term these changes may necessitate adjustments to the administrative procedures used to establish, oversee and dissolve entities within Washington.
Technically speaking, UBOC removes many of the separate administrative provisions related to each specific entity type in the Revised Code of Washington (“RCW”) and create a new RCW chapter (§23.95) that consolidates those administrative requirements and makes them universally applicable to business corporations, nonprofit corporations, limited liability partnerships, limited partnerships, limited liability companies, and general cooperative associations.
Some provisions of note:
- Article 2 of the UBOC addresses filing requirements. Entity names must be written in English letters or Arabic or Roman numerals, the filing document may provide for an effective date up to ninety (90) days after the date of filing, and such filing document may be withdrawn by a written statement of withdrawal prior to going into effect. Additionally, this Article provides that the role of the secretary of state is entirely ministerial. In other words, there is no discretion to refuse to file an entity filing that satisfies the filing requirements. Finally, this Article sets out the information required in the report to be filed with the state on an annual basis, and provides the secretary of state the power to determine filing fees.
- Article 3 discusses various naming restrictions, including entity-specific limitations intended to reduce confusion and encourage consistency within entity types.
- Article 4 discusses registered agents. The UBOC permits both commercial and non-commercial registered agents, though each has different filing requirements. This Article also discusses the procedures with respect to changing registered agents or registered agent information, the duties of registered agents, and the procedures for accepting service of process.
- Article 5 sets forth registration requirements for out-of-state entities, and defines in some detail the activities that do not constitute doing business within the state. It also provides the attorney general with the ability to maintain an action to enjoin a foreign entity from doing business within the state in violation of these provisions.
- Finally, Article 6 discusses the ability of the secretary of state to dissolve an entity, and the procedures required of such entity to dispute the dissolution or apply for reinstatement, including recourse to judicial review.
Taken on their own, none of the changes made by the UBOC are significant departures from prior state law or should require undue effort to implement. However, taken together, the changes discussed here may necessitate some modifications to long-standing procedures for entity administration of which you should be aware. For more information about how UBOC may impact your business administration, please feel free to contact me at email@example.com.