Kentucky Business Corporation Act
The Kentucky business corporation act is important for companies to understand.3 min read
What Are the Requirements for a Corporate Name?
Every corporation must have a registered agent and a registered office. It also must have one of the following words:
If the original directors are listed in the Articles of Incorporation, they must hold a meeting to finish organizing the corporation by adopting bylaws, appointing officers, and continuing any other business that needs to be brought up in the meeting. If no initial directors are named, the incorporators need to hold a meeting so the directors can be elected. The board of directors or incorporators need to adopt bylaws for the business. These bylaws must include provisions for regulating affairs and managing the company.
The provisions shouldn't be inconsistent with Kentucky laws or with any provisions that are in the Articles of Incorporation. They must include how many shares the corporation is allowed to authorize. It also must set the series and classes of shares, as well as the number of shares that are issued. Every year, a shareholders' meeting must be held.
2015 Amendments and Additions to Kentucky's Business Entity Laws
On April 1, 2015, House Bill 440 was signed into law by Kentucky Gov. Steve Beshear. This 2015 legislation went into effect on June 24, 2015. Revisions were made to chapters 273 and 273A. The governor issued a press release about the bill's changes. It stated that the bill brings the Kentucky law closer to what 15 other states have by enhancing rules regarding local fundraising efforts and Little League teams.
This bill lets nonprofits free participants from obligations and debts from limited liability and file with the secretary of state. The bill also updates corporation laws for technological advances and nonprofits, and lists how nonprofits can use technology such as conference calling and email. The governor stated his approval for the updates by saying it lets organizations focus on their volunteer work instead of paperwork. They can then perform important functions such as raising money for those in need.
How Does Incorporation Begin in Kentucky?
Incorporation in Kentucky starts with the Articles of Incorporation being delivered to the secretary of state to be filed. One or more people can be the incorporator. It's important for the Articles of Incorporation to include the corporation's name, how many shares it can issue, the address of the registered office, and the name of the registered agent. Also required are the names and addresses of every incorporator and the mailing address for the principal office of the corporation.
It can also include all the names and addresses of the initial directors, the reason why the corporation is being put together, the board of directors and shareholders, the liability of shareholders for any debts of the corporation, and what value the classes of shares or authorized shares are.
Who Can Exercise the Powers of the Corporation?
All corporate powers must be handled by the board of directors. The bylaws or Articles of Incorporation might designate the qualifications that are required for the directors. Directors must be elected at every annual meeting, and they can hold special or regular meetings. The quorum of the board of directors is mainly made up of directors.
Kentucky Business Entity Filing Act (BEFA)
The Kentucky Business Entity Filing Act was approved in 2011. It controls a majority of the procedures and processes by which domestic and foreign business entities can interact with the secretary of state's office. While varying business entity acts often contain provisions that talk about common themes — such as required documents that must be filed, registered agent and office qualification, and entity names — there are circumstances where provisions are inconsistent or nonexistent.
The main goal of the Business Entity Filing Act is to establish common rules that apply to a variety of business entities. Practitioners should see a decrease in transaction costs so they won't have to track any nonsensical distinctions between differing acts. This should decrease the overall error rate.
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