North Carolina SB 267: Amend Business Corporations Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 267

Short Title: Amend Business Corporations Act. (Public)
Sponsors: Senators Galey and Sawrey (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 12, 2025
*S267-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO AMEND THE NORTH CAROLINA BUSINESS CORPORATIONS ACT, AS 2
RECOMMENDED BY THE NORTH CAROLINA BAR ASSOCIATION. 3
The General Assembly of North Carolina enacts: 4
5
PART I. PROVIDE FOR OFFICER EXCULPATION 6
SECTION 1. G.S. 55-2-02 reads as rewritten: 7
"§ 55-2-02. Articles of incorporation. 8
... 9
(b) The articles of incorporation may set forth any provision that under this Chapter is 10
required or permitted to be set forth in the bylaws, and may also set forth any or all of the 11
following: 12
(1) The names and addresses of the individuals who are to serve as the initial 13
directors. 14
(2) Provisions not inconsistent with law regarding (i) the purpose or purposes for 15
which the corporation is organized; (ii) managing the business and regulating 16
the affairs of the corporation; (iii) defining, limiting, and regulating the powers 17
of the corporation, its board of directors, and shareholders; (iv) a par value for 18
authorized shares or classes of shares; (v) the imposition of personal liability 19
on shareholders for the debts of the corporation to a specified extent and upon 20
specified conditions; and (vi) any limitation on the duration of the corporation. 21
(3) A provision limiting or eliminating the personal liability of any director 22
arising out of an action whether by or in the right of the corporation or 23
otherwise for monetary damages for breach of any duty as a director. director 24
or limiting or eliminating the personal liability of any officer arising out of an 25
action for monetary damages for breach of any duty as an officer. No such 26
provision shall be effective with respect to (i) acts or omissions that the 27
director or officer at the time of such the breach knew or believed were clearly 28
in conflict with the best interests of the corporation, (ii) in the case of a 29
director, any liability under G.S. 55-8-33, (iii) any transaction from which the 30
director or officer derived an improper personal benefit, or (iv) acts or 31
omissions occurring prior to the date the provisions provision became 32
effective. effective, or (v) in the case of an officer, any claim by or in the right 33
of the corporation. As used herein, in this subdivision, the term "improper 34
personal benefit" does not include a director's reasonable compensation or 35
other reasonable incidental benefit for or on account of his the director's 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 267-First Edition
service as a director, officer, employee, independent contractor, attorney, or 1
consultant of the corporation. A provision permitted by this Chapter in the 2
articles of incorporation, bylaws, or a contract or resolution indemnifying or 3
agreeing to indemnify a director against personal liability shall be is fully 4
effective whether or not there is a provision in the articles of incorporation 5
limiting or eliminating personal liability. 6
(4) A provision limiting or eliminating any duty of a director, an officer, or any 7
other person, to offer the corporation the right to have or participate in one or 8
more specific classes or categories of business opportunities, prior to the 9
pursuit or taking of the opportunity by the director, officer, or other person. 10
(c) The articles of incorporation need not set forth any of the corporate powers 11
enumerated in this Chapter. 12
(d) Articles of incorporation filed to effect the conversion of another business entity 13
pursuant to Article 11A of this Chapter shall also include the statements required by 14
G.S. 55-11A-03(a). 15
(e) For purposes of subdivision (b)(3) of this section, unless the articles of incorporation 16
otherwise provide, "officer" means an individual appointed in accordance with G.S. 55-8-40 as 17
(i) president, chief executive officer, chief operating officer, chief financial officer, chief legal 18
officer, secretary, controller, treasurer, or chief accounting officer of the corporation and (ii) any 19
officer of the corporation designated by resolution of the board of directors as an officer for 20
purposes of subdivision (b)(3) of this section. The board of directors may from time to time by 21
resolution determine that one or more of the officers designated by resolution of the board in 22
accordance with this subsection is no longer an officer for purposes of subdivision (b)(3) of this 23
section, but no such resolution is effective as to an officer, or any act or omission of the officer, 24
prior to the adoption of that resolution." 25
26
PART II. CLARIFY PROVISIONS FOR EMERGENCY BYLAWS AND EMERGENCY 27
POWERS 28
SECTION 2.(a) G.S. 55-2-07 reads as rewritten: 29
"§ 55-2-07. Emergency bylaws. 30
(a) Unless the articles o