United States: Updates To The NH Business Corporation Act

Published in the New Hampshire Bar News.

After 20 years, the law governing the operation of business corporations in New Hampshire – the New Hampshire Business Corporation Act (NHBCA, RSA 293-A) – has undergone a comprehensive update, which will go into effect Jan. 1, 2014.

New Hampshire last engaged in a systematic reworking of its business corporation statute in 1993. The 1993 NHBCA was derived from the Model Business Corporation Act, a model law published by the Committee on Corporate Laws of the Section of Business Law of the American Bar Association. When it was adopted, the 1993 NHBCA was a seen as a comprehensive and progressive business corporation statute. Since 1993, business, and the law governing business corporations, has continued to evolve, and technology has changed the way that business is conducted.

In 2010, an ad hoc committee of the New Hampshire Business and Industry Association, made up of corporate lawyers and accountants, worked with the NH Legislature to develop legislation that updated the NHBCA. The committee agreed that the update should be based on the fourth version of the Model Business Corporation Act and incorporate certain idiosyncrasies of the current NHBCA. The committee believed that this approach would ensure consistency throughout the revised NHBCA.

The Legislature passed the updated NHBCA in 2013. The new statute reflects the current best practices, with regard to the formation, governance and dissolution of business corporations, and acknowledges that we are in an age of electronic communication. The updated NHBCA allows for filings with the Secretary of State to be made electronically (when permitted by the Secretary of State) and allows notices to be delivered electronically, subject to specific guidelines. The changes relating to electronic communications will make the process for filing documents and providing notices more efficient for corporations.

The updated NHBCA includes many efforts to clarify areas where uncertainty previously existed in the current statute. For example, the updated NHBCA provides a bright line test for what constitutes a sale of "all, or substantially all" of a corporation's assets, which would require shareholder approval. This change, and many others found in the updated NHBCA, reflect an effort on the part of the drafters to provide more guidance in areas where ambiguity existed.

The updated NHBCA also makes it easier for corporations and other entities to become domesticated in New Hampshire. The updated NHBCA includes authority for foreign corporations to become New Hampshire corporations by filing a simple set of documents with the Secretary of State. This streamlined process provides a way for out-of-state corporations to become New Hampshire corporations, which previously could only be accomplished through a series of transactions.

Overall, the updated act provides business owners, and the lawyers who counsel them, the best corporate governing statute. The following is a summary of the significant changes contained in the updated NHBCA.

Article 1: General Provisions. Article 1 deals with general filing requirements, the authority of the Secretary of State, definitions, and notices. The changes to Article 1 allow for electronic filing and include a number of additional definitions relating to terms that are used throughout the NHBCA. The changes also require that all notices be in English (Section 1.41(a)) and may be delivered by any method of delivery (Section 1.41(b)).

Article 2: Incorporation. Article 2 deals with the articles of incorporation and bylaws. The changes to Article 2 clarify and expand on the concepts addressed in the current statute.

Article 3: Purposes and Powers of Corporations. Article 3 deals with the corporation's purpose and powers. The changes clarify or simplify the language regarding corporate purpose and ultra-vires activities.

Article 4: Name. Changes to Article 4, which deals with the corporation's name, clarify and simplify the language of Sections 4.02, 4.03 and 4.04 and consolidate Sections 4.03 and 4.04 into Section 4.03. The committee did not address any issues regarding the process of corporate name selection.

Article 5: Office and Agent. Article 5 deals with registered agents and registered officers. The changes to Article 5 allow more types of entities to serve as registered agents.

Article 6: Shares and Distributions. Updates to Article 6 deals, which deals with the issuance of shares and distributions to shareholders, allow for classes of shares and series within classes (Section 6.201) and broaden the terms regarding a corporation's ability to issue options (Section 6.24).

Article 7: Shareholders. The changes to Article 7 clarify the authority of shareholders to hold an annual meeting by written consent (Section 7.01), require that an action by written consent include a date of signature, and clarify the process surrounding a written consent (Section 7.04) and how a meeting of shareholders is to be conducted (Section 7.09). The statute also expressly allows for the appointment of a receiver (Section 7.48).

Article 8: Directors and Officers. The changes to Article 8 broaden the authority to adjust the number of directors (Section 8.03), clarify the requirements regarding filling a vacancy where a director was elected by a voting group (Section 8.10(b)), adjust the director and officer standard of care to be consistent with the current state of the law (Sections 8.30(a) and 8.42(a)), clarify director conflict-of-interest transactions and how to resolve a director conflict-of-interest transaction (Section 8.60-8.63) and codify a safe harbor relating to the business opportunity doctrine (Section 8.70).

Article 9: Domestication and Conversion. Article 9 is a new chapter that permits: a foreign business corporation to convert to a New Hampshire business corporation; a New Hampshire business corporation to convert to a foreign business corporation; a New Hampshire business corporation to convert to a New Hampshire unincorporated entity or a foreign unincorporated entity; a foreign unincorporated entity to convert to a New Hampshire business corporation; or a New Hampshire unincorporated entity to convert to a New Hampshire business corporation.

Article 10: Amendment of Articles of Incorporation and Bylaws. The layout of Article 10 has been reorganized, but this reorganization did not result in any substantive changes to the chapter.

Article 11: Merger and Share Exchange. Changes to Article 11 clarify the requirements for a merger and share exchange.

Article 12: Sale of Assets. Article 12 deals with the sale of assets by a corporation. The changes to Article 12 add a definition of what constitutes a sale of "all, or substantially all" of the corporation's assets and moves to a more objective standard (Section 12.02).

Article 13: Dissenters Rights. Article 13 deals with shareholder rights to and payment for shares. The changes add clarity to several of the broad provisions of Article 13. These changes also provide greater flexibility to limit the scope of appraisal rights for various classes and series of shares.

Article 14: Dissolution. Changes to Article 14 include adjusting the timeframe to bring a claim against a dissolved corporation from five years to three years (Section 14.07), and allow a dissolved corporation to file an application with the Superior Court to determine the amount and form of security to be provided for payment of contingent or other unknown claims (Section 14.08). Overall, the changes add a greater degree of certainty with regard to the dissolution of a corporation.

Article 15: Foreign Corporations. This chapter includes only minor clarifications.

Article 16: Records and Reports. Changes to Article 16 allow the corporation to maintain electronic records (Section 16.01(d)) and the right to receive copies of corporate records by electronic transmission (Section 16.03(b)) and provide for a director's right to inspect the corporation's records (Section 16.05).

Article 17: Transition Provisions. This Article deals with the implementation of the statute, which is intended to go into effect Jan. 1.

Overall, the update to the NHBCA represents a step forward in the administration of business corporations in New Hampshire.

Patrick Closson serves as vice chair of the Corporate Department at McLane, Graf, Raulerson & Middleton and as managing director of the firm's Portsmouth office. He served as chair of the ad hoc committee that led the effort to update the New Hampshire Business Corporation Act. - See more at: http://www.mclane.com/resources/article-detail.aspx?id=998#sthash.lPtHtX5H.dpuf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions