OR Draft Bill 2916 concerning substantial costs and compliance burdens

oregon-leg-update

Oregon Draft Bill # 2916

 

NPRRA using its Legislative Monitoring tool found the following statute in Oregon that you should be aware of if you are a registered agent. It is important that you familiarize yourself with this even if you are not in Oregon as bad legislation can jump from state to state and potentially affect you in the future. The crux of the bill is as follows:

 

Oregon:  Draft bill number 2916 was submitted on 12/12/2016 and is expected to be introduced sometime in 2017.  The bill if enacted in its current form would require licensing of registered agents. This would impose substantial costs and compliance burdens on registered agents and business entities formed or qualified in Oregon.  The primary focus of the bill is commercial registered agents (CRAs) that represent 50 or more entities.   The CRA licensing provisions in this bill include:

 

  • CRA must provide a full set of fingerprints, the full legal names and current street addresses for each of the CRA’s principal owners, members, directors, managers and all employees authorized to accept service of process (SOP);
  • For CRS’s to grant permission to forward said fingerprints to state police and FBI for criminal background checks;
  • There would be a nonrefundable processing fee of $500.00 for each location at which the CRA will accept SOP;
  • The CRA must submit a statement of any change or update to license information with a $100.00 fee.  The CRA must also send a copy of the statement to each represented entity and submit an affidavit of compliance with notification requirement;
  • Provides for a civil penalty of $500.00 for failure to comply with change statement or fingerprint requirements;

 

The bill draft includes a number of regulatory provisions.  The secretary of state (SOS) may deny a license if the SOS finds that the CRA or a principal owner, member, director or manager had a CRA authorization in another state denied, revoked or enjoined for conduct as a registered agent or engaged in conduct that was intended to or likely would deceive or defraud a member of the public.  A licensee may not advertise or market shell, shelf, aged shelf or similar business entities, or advertise or claim that Oregon provides “anonymity”, “secrecy” or “hidden ownership.”  The bill also includes new regulatory requirements and enforcement actions for business entities.  The draft bill:

 

  • Authorizes the SOS to investigate alleged or potential violations of business entity statutes and permits the SOS to seek dissolution or revocation of entities that violate statutes or fail to cooperate with investigations;
  • Permits the Department of Revenue to recommend dissolution of entities that fail to comply with state tax laws;
  • Subjects directors, officers, employees, members and managers of entities to claim for damages from person that suffer ascertainable loss or money or property resulting from knowing dissemination of materially false statement concerning an entity’s finances and operations;
  • Permits the attorney general to enjoin an entity from continuing violation of business entity statutes or to seek judicial dissolution or other relief to protect shareholders or remedy consequences of violations; and
  • Requires corporations and incorporators and LLCs and organizers to file documents declaring whether entity has previously filed or will file a tax return or listing the entity’s beneficial owners.

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