REFERENCE TITLE: corporations; blockchain technology
State of Arizona
House of Representatives
Second Regular Session
amending sections 10‑140 and 44‑7003, Arizona Revised Statutes; relating to corporations.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 10-140, Arizona Revised Statutes, is amended to read:
In chapters 1 through 17 of this title, unless the context otherwise requires:
1. "Acknowledged" or "acknowledgment" means either an acknowledgment pursuant to title 33, chapter 4, article 5 or the signature, without more, of the person or persons signing the instrument, in which case the signature or signatures constitute the affirmation or acknowledgment of the signatory, under penalties of perjury, that the instrument is the act and deed of the signatory and that the facts stated in the instrument are true.
2. "Act of the board of directors" means either:
(a) An act of the majority of the directors present at a duly called meeting at which a quorum is present, unless the act of a greater number is required by chapters 1 through 17 of this title, the articles of incorporation or the bylaws.
(b) Action taken by written consent of the directors in accordance with chapters 1 through 17 of this title.
3. "Act of the shareholders" means either:
(a) An act adopted or rejected by a majority of the votes entitled to be cast by each class of shareholders entitled to vote on the act at a duly called meeting at which a quorum is present, unless a greater number of votes is required by chapters 1 through 17 of this title, the articles of incorporation or the bylaws.
(b) An action taken by written consent of the shareholders in accordance with chapters 1 through 17 of this title.
4. "Address" means a mailing address.
5. "Affiliate" means a person that directly or indirectly, through one or more intermediaries controls, is controlled by or is under common control with the person specified.
6. "Articles of incorporation" means the original or restated articles of incorporation or articles of merger and all amendments to the articles of incorporation or merger and includes amended and restated articles of incorporation and articles of amendment and merger.
7. "Authorized shares" means the shares of all classes that a domestic or foreign corporation is authorized to issue.
8. "Board of directors" means the group of persons vested with the management of the affairs of the corporation irrespective of the name by which the group is designated and includes the governing body or bodies of a water users' association if the articles of incorporation of such water users' association provide for a governing body or bodies denominated other than as a board of directors.
9. "Business day" means a day that is not a Saturday, a Sunday or any other legal holiday in this state.
10. "Bylaws" means the code of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name by which those rules are designated.
11. "Certificate of disclosure" means the certificate of disclosure described in section 10‑202.
12. "Commission" means the Arizona corporation commission.
13. "Conspicuous" means so written that a reasonable person against whom the writing is to operate should have noticed it. For example, printing in italics, boldface or contrasting color or typing in capitals or underlined is conspicuous.
14. "Corporation" or "domestic corporation" means a corporation for profit that is not a foreign corporation and that is incorporated under or subject to chapters 1 through 17 of this title.
15. "Court" means the superior court of this state.
16. "Deliver" includes sending by mail, private courier, fax or electronic transmission.
17. "Delivery" means actual receipt by the person or entity to which directed and for electronic transmissions means receipt as described in section 44‑7015, subsection B.
18. "Dissolved" means the status of a corporation on either:
(a) Effectiveness of articles of dissolution pursuant to section 10‑1403, subsection B or section 10‑1421, subsection B.
(b) A decree pursuant to section 10‑1433, subsection B becoming final.
19. "Distribution" means a direct or indirect transfer of money or other property, except its own shares, or incurrence of indebtedness by a corporation to or for the benefit of its shareholders in respect of any of its shares. A distribution may be in the form of any of the following:
(a) A declaration or payment of a dividend.
(b) Any purchase, redemption or other acquisition of shares.
(c) A distribution of indebtedness.
20. "Effective date of notice" is as prescribed in section 10‑141.
21. "Electronic transmission" means an electronic record as defined in section 44‑7002 that is sent pursuant to section 44‑7015.
22. "Employee" includes an officer but not a director. A director may accept duties that make the director also an employee.
23. "Entity" includes a corporation, foreign corporation, not for profit corporation, profit and not for profit unincorporated association, nonprofit corporation, close corporation, corporation sole or limited liability company, a professional corporation, association or limited liability company, a business trust, estate, partnership, registered limited liability partnership, trust or joint venture, two or more persons having a joint or common economic interest, any person other than an individual and a state, the United States and a foreign government.
24. "Executed by the corporation" means executed by manual or facsimile signature on behalf of the corporation by a duly authorized officer or, if the corporation is in the hands of a receiver or trustee, by the receiver or trustee.
25. "Filing" means the commission completing the following procedure with respect to any document delivered for that purpose:
(a) Determining that the filing fee requirements of section 10‑122 have been satisfied.
(b) Determining that the document appears in all respects to conform to the requirements of chapters 1 through 17 of this title.
(c) On making the determinations, endorsement of the word "filed" with the applicable date on or attached to the document and the return of notice of the filing to the person who delivered the document or the person's representative.
26. "Foreign corporation" means a corporation for profit that is incorporated under a law other than the law of this state.
27. "Governmental subdivision" includes an authority, county, district, municipality and political subdivision.
28. "Includes" and "including" denotes a partial definition.
29. "Individual" includes the estate of an incompetent or deceased individual.
30. "Insolvent" means inability of a corporation to pay its debts as they become due in the usual course of its business.
31. "Known place of business" means the known place of business required to be maintained pursuant to section 10‑501.
32. "Liquidate its assets and business" includes the distribution of assets, the payment of obligations and debts, the discontinuance of business or any one or more of the distribution, payment or discontinuance.
33. "Mail", "to mail" or "have mailed" means to deposit or have deposited a communication in the United States mail with first class or airmail postage prepaid.
34. "Means" denotes an exhaustive definition.
35. "Newspaper" has the meaning set forth in section 39‑201.
36. "Notice" and "notify" are as prescribed in section 10‑141.
37. "Person" includes an individual and entity.
38. "President" means that officer designated as the president in the articles of incorporation or bylaws or, if not so designated, that officer authorized in the articles of incorporation, bylaws or otherwise to perform the functions of the chief executive officer, irrespective of the name by which designated.
39. "Principal office" means the office, in or out of this state, so designated in the annual report where the principal executive offices of a domestic or foreign corporation are located or in any other document executed by the corporation by an officer and delivered to the commission for filing. If an office has not been so designated, principal office means the known place of business of the corporation.
40. "Proceeding" includes a civil suit and a criminal, administrative and investigatory action.
41. "Publish" means to publish in a newspaper of general circulation in the county of the known place of business for three consecutive publications.
42. "Record date" means the date established under chapter 6 or 7 of this title on which a corporation determines the identity of its shareholders and their shareholdings for purposes of chapters 1 through 17 of this title. The determinations shall be made as of the close of business on the record date unless another time for doing so is specified when the record date is fixed.
43. "Secretary" means that officer designated as the secretary in the articles of incorporation or bylaws or that officer authorized in the articles of incorporation, the bylaws or otherwise to perform the functions of secretary, irrespective of the name by which designated.
44. "Shareholder" means the person in whose name shares are registered in the records of a corporation or the beneficial owner of shares to the extent of the rights granted by a nominee certificate on file with a corporation.
45. "Shares" means the units into which the proprietary interests in a corporation are divided.
46. "State", if referring to a part of the United States, includes a state and commonwealth and their agencies and governmental subdivisions and a territory and insular possession of the United States and their agencies and governmental subdivisions.
47. "Subscriber" means a person who subscribes for shares in a corporation, whether before or after incorporation.
48. "Treasurer" means that officer designated as the treasurer in the articles of incorporation or bylaws or that officer authorized in the articles of incorporation or bylaws or otherwise to perform the functions of treasurer, irrespective of the name by which designated.
49. "United States" includes a district, authority, bureau, commission and department and any other agency of the United States.
50. "Vice‑president" means an officer designated as the vice‑president in the articles of incorporation or bylaws or an officer authorized in the articles of incorporation, the bylaws or otherwise to perform the functions of a vice‑president, irrespective of the name by which designated.
51. "Voting group" means all shares of one or more classes or series that under the articles of incorporation or chapters 1 through 17 of this title are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the articles of incorporation or chapters 1 through 17 of this title to vote generally on the matter are for that purpose a single voting group.
52. "Water users' association" means a corporation that operates a federal reclamation project pursuant to a contract with the United States.
53. "Writing" or "written" includes blockchain technology as defined in section 44‑7061.
Sec. 2. Section 44-7003, Arizona Revised Statutes, is amended to read:
A. Except as otherwise provided in subsections B and C of this section, this chapter applies to any electronic record and electronic signature relating to a transaction.
B. For the purposes of this article and articles 2, 3 and 4 of this chapter, this chapter does not apply to a transaction to the extent the transaction is governed by:
1. Title 14 as it relates to the creation and execution of wills, codicils or testamentary trusts.
2. Title 47, other than title 47, chapters 2 and 2A and section 47‑1306 and as otherwise provided in section 44‑7016.
C. Article 5 of this chapter applies only to title 10 and transactions governed by title 47, chapters 2, 2A and 7.
D. This chapter applies to an electronic record or electronic signature otherwise excluded from the application of this chapter under subsection B or C of this section to the extent the record or signature is governed by a law other than those laws described in subsection B or C of this section.
E. Any transaction subject to this chapter is also subject to any other applicable substantive law.