DELIVERABLE GROUP 2 House Legislative Oversight Review of S - PowerPoint PPT Presentation

DELIVERABLE GROUP 2 House Legislative Oversight Review of S ecretary of S tate’s Office 1

Disclaimer: Updates to Program Evaluation Report In the course of preparing the Deliverable Group presentations, some data provided in the original Program Evaluation Report has been corrected. The presentations will reference the corrected data, and the Program Evaluation Report will be updated once the Deliverable Group presentations are concluded. 2

Deliverable Group 2 Divisions Grouped in Deliverable Group 2:  Business Filings  Information Technology  Administration & Internal Operations  Legal Functions Related to Business Filings, Information Technology, Administration, & Internal Operations 3

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Business Filings Division The Business Filings Division files documents for business entities operating in the state, including corporations, limited liability companies, limited partnerships, limited liability partnerships, and other types of business entities. The Division also files Uniform Commercial Code filings. 5

Corporations UCCs Business Filings Legal 6

Required by S .C. Code §§ 33-1-200, -210, -220, -230, Business Corporation Filings -240, -250 Deliverable No. 58 Cust omers: Business Corporat ions Number of Cust omers S erved  The S ecretary of S tate files documents from domestic and foreign in 2017-18: 15,357 corporations as outlined in S .C. Code of Laws Title 33, Chapters 1 through 20. Tot al Employee Equivalents in 2017-18: 0.64  Filings include but are not limited to the following:  Articles of Incorporation  Articles of Amendment  Articles of Correction  Articles of Merger  Articles of Dissolution  Notice of Change of a Registered Office or Registered Agent or Both  Application for a Certificate of Authority to Transact Business Legislat ive Int ent : S implify filing requirement s, minimize paper, and eliminat e disput es bet ween filers and t he S ecret ary of S t at e as t o legal efficacy of document s. (Official 7 Comment , 1988 Act No. 444)

Business Corporation Filings Deliverable No. 58 Number of Business Corporat ion Filings 25,000 21,644 20,000 15,357 14,794 13,453 15,000 10,000 5,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 As of August 1, 2019, t he adopt ion rat e of all online business filings was 77.4% . 8

Required by S .C. Code §§ 33-31-120, -121, -122, Nonprofit Corporation Filings -123, -124, -125 Deliverable No. 59 Cust omers: Nonprofit Corporat ions  Number of Cust omers The S ecretary of S tate files documents from S erved in 2017-18: 5,162 domestic and foreign nonprofit corporations as Tot al Employee outlined in S .C. Code of Laws Title 33, Chapter Equivalent s in 2017-18: 31. 0.22  Filings include but are not limited to the following:  Articles of Incorporation  Articles of Merger  Articles of Dissolution  Application for a Certificate of Authority to Transact Business Legislat ive Int ent : S implify filing requirement s,  Notice of Change of a Registered Office or minimize paper, and eliminat e Registered Agent or Both disput es bet ween filers and t he S ecret ary of S t at e as t o legal efficacy of document s. (Official 9 Comment , 1994 Act No. 384)

Nonprofit Corporation Filings Deliverable No. 59 Number of Nonprofit Corporation Filings 6,000 5,160 5,039 4,969 5,000 4,000 3,519 3,000 2,000 1,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 10

Required by S .C. Code §§ 33-41-1110, -1160, Limited Liability Partnership Filings -1170 Deliverable No. 60 Cust omers: Limit ed Liability Part nerships Number of Cust omers S erved in 2017-18: 524  The S ecretary of S tate files initial and renewal applications for registration as Tot al Employee a limited liability partnership as well as initial and renewal applications for Equivalent s in 2017-18: certificates of authority for foreign limited liability partnerships. 0.06  Registration of an LLP or certificate of authority for a foreign LLP is effective for one year. Out come S ought by Agency* To provide for t he filing of format ion and ot her business document s for limit ed liabilit y part nerships in t he st at e of S out h Carolina. 11 *Legislat ive int ent not expressly st at ed.

Limited Liability Partnership Filings Deliverable No. 60 Number of LLP Filings FY 2015-16 377 FY 2016-17 464 FY 2017-18 524 FY 2018-19 599 0 100 200 300 400 500 600 700 12

Required by S .C. Code §§ 33-42-210, -260, -1630 Limited Partnership Filings Cust omers: Deliverable No. 61 Limit ed Part nerships Number of Cust omers S erved in 2017-18: 400  The S ecretary of S tate files certificates of limited partnership, amendment, Tot al Employee and cancellation pursuant to S .C. Code of Laws Title 33, Chapter 42. Equivalent s in 2017-18: 0.06 Number of LP Filings 700 600 500 400 618 300 601 200 400 362 100 Legislat ive Int ent : Derived from Revised Uniform LP 0 Act and int ended t o modernize FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 Uniform LP Act of 1916 and ret ain special charact er of LPs compared 13 wit h corporat ions. (Comment , 1986 Act . No. 533)

Required by S .C. Code §§ 33-44-202, -206, -207 Limited Liability Company Filings Cust omers: Deliverable No. 62 Limit ed Liability Companies Number of Cust omers  The S ecretary of S tate files documents received from S erved in 2017-18: 63,811 domestic and foreign limited liability companies pursuant to S .C. Code of Laws Title 33, Chapter 44. Tot al Employee Equivalent s in 2017-18:  LLCs are the type of entity with the highest volume 2.38 of filings.  Filings include but are not limited to the following:  Articles of Organization  Amended Articles of Organization  Restated Articles of Organization  Articles of Merger  Articles of Termination  Application for a Certificate of Authority to Transact Business  Notice of Change of a Registered Office or Registered Agent or Both Legislat ive Int ent : S et s fort h default rules t o operate  Articles of Correction an LLC wit hout sophist icated agreements and provide flexibility in modificat ions by privat e 14 agreement. (1996 Act . No 343)

Limited Liability Company Filings Deliverable No. 62 Number of LLC Filings 68,198 63,811 70,000 56,037 60,000 48,268 50,000 40,000 30,000 20,000 10,000 0 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 15

Provided under S .C. Code § 25-1-120 Military Corporation Filings Cust omers: Deliverable No. 63 Milit ary Corporations Number of Cust omers S erved in 2017-18: 0 Tot al Employee Equivalents  S .C. Code of Laws § 25-1-120 provides for the formation in 2017-18: 0.04 (includes employee t ime spent on of military corporations. These entities may be formed by development of Business members of the National Guard of S outh Carolina for the Filings syst em) purpose of social activities and holding property.  These filings are rare. None were filed in FY 2015-16 or 2017-18. S even were filed with the S ecretary of S tate in FY 2016-17. Legislat ive Int ent : Provide for t he makeup of milit ary corporat ions and for t he purposes, programs and funding of milit ary corporat ions. (2005 Act No. 37) 16

Required by S .C. Code §§ 33-36-2220, -230 Corporation Not-for-Profit Filings Cust omers: Deliverable No. 64 Corporat ions Not -for-Profit Number of Cust omers S erved in 2017-18: 0  The S ecretary of S tate files corporation not-for-profit filings pursuant to S .C. Tot al Employee Equivalents Code of Laws Title 33, Chapter 36. in 2017-18: 0.04 (includes employee t ime spent on development of Business  These entities are incorporated for a public purpose and are treated like Filings syst em) special purpose districts. They are authorized to perform local government functions such as water service and/ or sewage treatment, fire protection service, ambulance service, and medical clinic facilities.  Possible filings include articles of incorporation or amendments, or other papers relating to the incorporation, merger, consolidation, or dissolution of a corporation not-for-profit.  No corporation not-for-profit documents have been filed with the S ecretary of S tate during the period covered in the program evaluation report. Legislat ive Int ent : Est ablished t o provide local government funct ions and t reat ed 17 like S PDs for some purposes. (2000 Act . No 404)

Required by S .C. Code § 33-36-1320 Conversion of Corporation Not-for-Profit to a Cust omers: Public S ervice District Corporat ions Not -for- Profit Deliverable No. 65 Number of Cust omers S erved in 2017-18: 0  S .C. Code of Laws Title 33, Chapter 36 also provides that a corporation not- Tot al Employee Equivalent s in 2017-18: for-profit organized for the purpose of providing water services may submit a 0.04 (includes employee petition to the S ecretary of S tate to convert to a public service district. t ime spent on development of Business Filings syst em)  No petitions for conversion to a public service district have been filed during the period covered in the program evaluation report. Legislat ive Int ent : To allow elect ion t o become public bodies for purposes of funding, part icipat ion in a j oint syst em, and lower cost of borrowing money. (2001 18 Act No. 78)