The panelists will present an overview of Act 122 of 2022 (signed into law on Nov. 3, 2022), focusing on the more significant changes to Title 15 (Corporations and Unincorporated Associations), including:
- Annual reports [new] and changes to certain other filings with and processes of the Corporations Bureau
- Revisions based on changes in the Delaware General Corporation Law and Model Business Corporation Act BCL – including a new ratification process for certain defective shareholder approvals; a new two-step procedure available for business corporations engaging in a tender offer, followed by a merger; record maintenance using distributed ledger (or “blockchain”) technology as well as other technology by all entities; enhanced ability of entities to act during “emergencies”; and more.
- Revisions based on the endorsement by the Pennsylvania Supreme Court of the ALI Principles of Corporate Governance, including codification of the business judgment rule, with certain conforming and clarifying amendments relating to fiduciary duty; and enhanced guidance addressing the duty of loyalty in transactions among affiliates
Divisions. Although division transactions have been authorized in Pennsylvania law since 1972, their use has substantially increased in the last decade or more. The bill proposes amendments regarding divisions that will improve the usefulness of division transactions.
Registration of foreign entities. The changes the bill proposes regarding the registration of foreign entities clarify certain provisions and also include minor changes relating to the new requirement of annual reports discussed above.
Nonprofit corporations. The policy of Title 15 is to conform the wording of the Nonprofit Corporation Law to the BCL with respect to those subjects where the law for nonprofit corporations and business corporations is intended to be the same. As a result, many of the changes to the BCL being proposed by the bill also require amendments to the corresponding provisions of the Nonprofit Corporation Law.
Recorded at the Business Law Institute 2022 in November 2022.