SB 40: Business Entity Amendments - Utah

Introduced → Substitute #1 · 6 edits

MODERATE

The Substitute #1 version of SB 40 makes several refinements to the Business Entity Amendments bill: it changes which statute the Division of Corporations administers (adding consumer protection authority), removes limited liability partnerships from certain registered-agent-related definitions, adds a special effective date clause, and expands the list of existing code sections being repealed as redundant. These are mostly technical corrections and scope clarifications rather than major policy shifts.

SCOPE

The Division of Corporations and Commercial Code now administers Section 63G-7-401 (related to consumer protection) in addition to its other responsibilities, replacing the prior reference to Section 41-12a-505.

Additional existing code sections are now being repealed as redundant, including nonprofit corporation provisions (16-6a-1410 through 16-6a-1518), business corporation provisions (16-10a-1420 through 16-10a-1607), and sections from Title 48 Chapter 5 (48-5-107, 48-5-108, 48-5-204).

DEFINITION

Limited liability partnerships were removed from the definitions of 'appointment of agent' and 'represented entity,' meaning LLPs are no longer treated the same as other filing entities for registered agent purposes under this chapter.

REQUIREMENT

The certificate of existence or registration provision now explicitly covers statements of qualification (used by limited liability partnerships) in addition to public organic records, so certificates can confirm the status of LLPs.

TIMELINE

A special effective date clause was added to the bill's other special clauses, meaning the bill will not take effect immediately upon enactment but on a specified future date.

TECHNICAL

The language for selling or licensing filed records was reworded from 'a copy of each document filed with the division in each medium that is available to the filing office' to 'copies of each filed record in every medium available to the office,' and the fee authority was clarified to specifically cover 'subscription data services and bulk data sales.'

Substitute #3 → Enrolled · 5 edits · Mar 17, 2026

MODERATE

The bill updates the Utah Revised Business Corporation Act to include modern business structures like decentralized autonomous organizations (DAOs) and benefit companies in its definitions. It also clarifies the Division of Corporations' duty to file documents and introduces a specific process for correcting filing errors, including those caused by electronic transmission failures.

Scope change

The scope of the bill has expanded to explicitly include decentralized autonomous organizations and benefit companies under state business entity laws, whereas previously these were not explicitly defined within this chapter.

DEFINITION

Added explicit definitions for 'decentralized autonomous organization' and 'benefit company' to ensure they are treated as recognized business entities under state law.

Expanded the definition of 'bylaws' to include the procedural rules governing decentralized autonomous organizations.

REQUIREMENT

Added a specific provision allowing the correction of entity filings if the electronic transmission to the division was defective.

Added a requirement for the Division to provide a copy of the filed document with an acknowledgment of the filing date and time to the person who submitted it.

ENFORCEMENT

Clarified that the Division's duty to file compliant entity filings is ministerial, meaning the Division must file them without discretion if they meet legal requirements.

Substitute #2 → Substitute #3 · 5 edits

MODERATE

This bill reorganizes Utah's business entity laws by moving specific chapters from Title 48 to the new Title 16 to create a unified 'Provisions Applicable to All Business Entities' framework. It modernizes filing standards, clarifies definitions for various entity types, and updates administrative procedures for the Division of Corporations and Commercial Code.

Scope change

The bill expands the scope of Title 16 to include previously separate uniform acts for partnerships and limited liability companies, creating a single, comprehensive title for all business entities rather than having them scattered across different titles.

SCOPE

Renumbered Title 48, Chapter 1d (Uniform Partnership Act) to Title 16, Chapter 18, and Title 48, Chapter 2e (Uniform Limited Partnership Act) to Title 16, Chapter 19 to consolidate partnership laws.

Renumbered Title 48, Chapter 3a (Uniform Limited Liability Company Act) to Title 16, Chapter 20 to consolidate LLC laws.

DEFINITION

Added a new Title 16, Chapter 1a containing standardized definitions for terms like 'entity,' 'interest holder,' and 'registered agent' applicable to all business entities.

REQUIREMENT

Established new standardized requirements for entity filings, including specific rules for effective dates, withdrawal procedures, and signature requirements.

TECHNICAL

Changed references in the code from 'assumed name' to 'D.B.A.' and updated administrative procedures for the Division of Corporations and Commercial Code.

Substitute #1 → Substitute #2 · 4 edits

MODERATE

This bill reorganizes Utah's business entity laws by moving chapters from Title 48 to Title 16 and updating definitions to include modern business structures like decentralized autonomous organizations. It also clarifies filing requirements, establishes standardized rules for entity formation and amendments, and expands the Division of Corporations' authority to enforce compliance and manage records.

Scope change

The bill expands the scope of the Division of Corporations and Commercial Code to explicitly include administration of new business entity types and clarifies the legal definitions for various entity structures.

DEFINITION

Added definitions for 'decentralized autonomous organization,' 'benefit company,' and 'benefit corporation' to modernize the code.

REQUIREMENT

Established standardized requirements for entity filings, including specific rules for effective dates, withdrawal of filings, and correction of errors.

ENFORCEMENT

Granted the Division of Corporations broader authority to issue cease and desist orders, hold administrative hearings, and impose civil penalties for violations.

TECHNICAL

Renumbered existing statutes from Title 48 to Title 16 to consolidate business entity laws under a single title.

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