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This act was prepared for introduction in South Carolina by a committee of the South Carolina Law Institute. This drafting committee was chaired by Theodore J. Hopkins. The drafting committee members included: Rudolph C. Barnes, Sr., Arthur M. Bjontegard, C. C. Burgess, James R. Burkhard, Preston H. Callison, Shawn M. Flanagan, William L. Ivey, R. Bentz Kirby, E. Crosby Lewis, Andrew B. Marion, Burnett R. Maybank, III, William S. McMaster, Martin C. McWilliams, Jr., C. Pinckney Roberts, Edward C. Roberts, Lester S. Schwartz, Paul J. Ward, Roger A. Way, Jr., David Wheeler, and Mitchell M. Willoughby. References in the South Carolina Reporters' Comments to `the committee' refer to this committee. The South Carolina Reporters' Comments which follow each section were drafted as part of the preparation of this act by Professors Martin C. McWilliams, Jr., and James R. Burkhard of the University of South Carolina School of Law. These South Carolina Reporters' Comments are primarily intended to explain the differences, if any, between the section and the former law, and any differences between the section and the official text of the Revised Model Nonprofit Corporation Act (`Revised Model Nonprofit Corporation Act').

The Official and South Carolina Reporters' Comments are intended to assist those who use and interpret this act to determine the intention of the drafters and the interrelationship between the various sections. As such, the comments serve the same function and purposes as the comments to the Uniform Commercial Code, Title 36, of the 1976 Code. They can be useful particularly in a state like South Carolina because the State does not have a large body of nonprofit corporation case law. The comments are not, however, part of the statutory law and, therefore, are not binding on any court or other adjudicatory body.

Section 33-31-102. Reservation of power of amend or repeal.

The General Assembly of South Carolina has power to amend or repeal all or any part of Chapter 31, Title 33 at any time, and all domestic and foreign corporations subject to Chapter 31 of this title are governed by the amendment or repeal.
OFFICIAL COMMENT

States may amend the Model Act from time to time without violating any rights a corporation has as a result of the Act's statutory provisions. While section 1.02 may not be necessary, it lays to rest concern that cases like Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat) 518 (1819) may have vitality today. That case held that a state could not apply

Exhaustive commentary regarding the power of the State to modify its corporate laws is contained in the Reporters' Comments to Section 33-1-102. Those comments are generally applicable to the authority of South Carolina to modify the charter of any nonprofit corporation. However, the South Carolina Business Corporation Act grants to the legislature the specific authority to promulgate regulations. It was the consensus that any regulations for this South Carolina Nonprofit Corporation Act should be proposed by the appropriate state agency and then submitted to the legislature for its approval, all in accordance with the procedures established in Title 1, Chapter 23 of the 1976 Code.

There is at least one case dealing with the state's reserved power. Epworth Orphanage v. Wilson, County Treas., 185 S.C. 243, 253, 193 S.E. 644 (1937), contains the clear statement, "It cannot be denied that the Legislature has constitutional power to amend and alter charter rights and privileges." In this case, the court indicated that the orphanage's charter, which was granted by an act of the legislature in 1896 was later impliedly amended by additional statutes dealing generally with the taxation of property owned by certain public charities.

However, if the legislature has granted a specific power to a specific corporation by action taken before 1900, nothing in this Chapter 31, Title 33 will specifically modify that power. See Section 33-31-305. There is, of course, a significant difference between a power and the manner in which members act, the board is elected, or other mechanics of the operations of the corporation.

Section 33-31-120. Filing requirements.

(a) A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.

(b) This chapter must require or permit filing the document in the office of the Secretary of State.

(c) The document must contain the information required by this chapter. It may contain other information as well.

(d) The document must be typewritten or printed.

(f) The document must be executed:

(1) by the presiding officer of its board of directors of a domestic or foreign corporation, its president, or by another of its officers;

(2) if directors have not been selected or the corporation has not been formed, by an incorporator; or

(3) if the corporation is in the hands of a receiver, trustee, or other court-appointed fiduciary, by that fiduciary.

(g) The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs. The document may, but need not, contain:

(1) the corporate seal;

(2) an attestation by the Secretary or an assistant secretary; or

(3) an acknowledgement, verification, or proof.

(h) If the Secretary of State has prescribed a mandatory form for a document under Section 33-31-121, the document must be in or on the prescribed form.

(i) The document must be delivered to the office of the Secretary of State for filing and must be accompanied by one exact or conformed copy, except as provided in Sections 33-31-503 and 33-31-1509, the correct filing fee, and any franchise tax, license fee, or penalty required by this chapter or other law.
OFFICIAL COMMENT

Section 1.20 standardizes the filling requirements for all documents required or permitted by the Model Act to be filed with the secretary of state. In a few instances, other sections of the Act impose additional requirements which must also be complied with if the document in question is to be filed. Section 1.20 relates only to documents which the Model Act expressly requires or permits to be filed with the secretary of state; it does not authorize or direct the secretary of state to accept or reject for filing other documents relating to corporations and does not treat documents required or permitted to be filed under other statues.

The purpose of the filing requirements of chapter 1 are:

(1) to simplify the filing requirements by the elimination of formal or technical requirements that serve little purpose,

(2) to minimize the number of pieces of paper to be processed by the secretary of state, and

The requirements of section 1.20 may be summarized as follows:

1. Form

To be eligible for filing, a document must be typed or printed and in the English language (except to the limited extent permitted by section 1.20 (e)). The secretary of state is not authorized to prescribe forms (except to the extent permitted by section 1.21) and as a result may not reject documents on the basis of form (see section 1.25)if they contain the information called for by the specific statutory requirement and meet the minimal formal requirements of this section.

2. Execution

To be filed a document must simply be executed by a corporate officer. . . . No specific corporate officer is designated as the appropriate officer to sign though the signing officer must designate his office or the capacity in which he signs the document. Among the officers who are expressly authorized to sign a document is the . . . [presiding officer] of the board of directors, a choice that may be appropriate if the corporation has a board of directors but not appointed officers. If a corporation has not been formed or has neither officers nor a board of directors, an incorporator may execute the document.

The requirement in earlier versions of the Model Act and in many state statues that documents must be acknowledged or verified as a condition for filing has been eliminated. These requirements serve little purpose in connection with documents filed under corporation statutes. (See in this connection section 1.29, which makes it a criminal offense for any person to sign a document for filing with knowledge that it contains false information.) On the other hand, many organizations, like lenders or title companies, may desire that specific documents include acknowledgements, verifications, or seals; section 1.20(g) therefore provides that the addition of these forms of execution does not affect the eligibility of the document for filing.

3. Contents

A document must be filed by the secretary of state if it contains the information required by the Model Act. The document may contain additional information or statements and their presence is not ground for the secretary of state to reject the document for filing. These documents must be accepted for filing even though the secretary of state believes that the language is illegal or unenforceable. In view of this very limited discretion granted o secretaries of state under this section, section 1.25(d) defines the secretary of state's role as `ministerial' and provides that no

4. Number of Copies

Section 1.20(i) requires that a document filed with the secretary of state must be accompanied by `one exact or conformed copy.' The requirement in early versions of the Model Act and in many state statutes that `duplicate originals' (each being executed as an original document) be submitted has been eliminated. Under section 1.20(i) an `exact' copy is a reproduction of the executed original document by photographic or xerographic process; a `conformed' copy is a copy on which the existence of signatures is entered or noted on the copy. The substitution of exact or conformed copies for duplicate originals reflects advances in the art of office copying machines that permit the routine reproduction of exact copies of executed documents. However, a person submitting `duplicate originals' meets the requirement of this section since the secretary of state may treat the duplicate original as a `conformed copy.' The reasons for requiring an exact or conformed copy of a filed document to accompany the signed original, and the processing of these documents by the secretary of state, are discussed in the Official Comment to Section 1.25.
Official Comment to section 1.20 of the Model Business Corporation Act.
SOUTH CAROLINA REPORTERS' COMMENTS

This provision contains the mechanical requirements for preparing various documents. It is similar to the formerly applicable statute, Section 33-1-200 of the South Carolina Business Corporation Act.
1. Content of forms

This section does not specify the content of any forms. For the substantive requirements of the more commonly used forms please see:

Section 33-31-128 Certificate of existence

Section 33-31-202 Articles of incorporation

Section 33-31-402 Reserved name

Section 33-31-403 Registered name of a foreign corporation

Section 33-31-404 Notice of name change

Section 33-31-502 Change of registered office or registered agent

Section 33-31-505 Notice of change of principal office

Section 33-31-1005 Articles of amendment

Section 33-31-1104 Articles of merger

Section 33-31-1404 Articles of dissolution

Section 33-31-1503 Application for certificate of authority (foreign nonprofit corporation)

Section 33-31-1508 Change of registered office or registered agent of foreign corporation

Section 33-31-1515 Notice of change of principal office

Section 33-31-1520 Application for certificate of withdrawal
A more comprehensive listing of forms filed with the Secretary of State is found in Section 33-31-122.

2. Who may execute documents

The prior law had almost no direction as to who should execute documents that were to be filed for public record. However, prior Section 33-31-20 required the signature of two or more officers or agents to file the "declaration" that a nonprofit corporation was being formed. This new Section 33-31-120 combined with Section 33-31-202(c) modifies this former procedure. Now the articles of incorporation are signed by the incorporators and directors named in the articles.
3. Verification

Although not previously required by statute, the former form "declaration" of incorporation provided for a verification. The verification is now an optional provision. A verification, following former procedure, could specify that each signer:

a. has read and understands the meaning and purport of the statements contained in the document;

b. asserts that the statements are true or he is informed or believes that the statements are true;

c. has signed the document, and, in the case of one signing in a representative capacity, that he has the authority so to sign.
4. Seal

Former Section 33-31-100(7) granted authority for nonprofit corporations to adopt seals. The new law clearly permits a nonprofit corporation to adopt a seal, but its use is purely ceremonial. The use of the seal in no way enhances the efficacy of the document. It has been suggested that out-of-state parties might require that various corporate documents be sealed, but since this is not required by statute, the absence of the seal should cause no problems.

Section 33-31-121. Forms.

(a) The Secretary of State may prescribe and furnish on request forms for:

(1) an application for a certificate of existence;

(2) a foreign corporation's application for a certificate of authority to transact business in South Carolina;

(4) the notice of change of principal office. If the Secretary of State so requires, use of these forms is mandatory.

The Secretary of State through regulation may prescribe a mandatory form with regard to any other forms required or permitted by Chapter 31, Title 33 to be filed in his office. All mandatory forms must comply with the statutory requirements contained in Chapter 31.

(b) The Secretary of State may prescribe and furnish on request forms for other documents required or permitted to be filed by this chapter, but their use is not mandatory.
OFFICIAL COMMENT

As described in the Official Comment to section 1.20, documents are entitled to filing under the Model Act if they meet the substantive and formal requirements of the Act; they may also contain additional information if the person submitting the document so elects. See the Official Comments to sections 1.20 and 1.25. In these circumstances it is not appropriate to vest the secretary of state with general authority to establish mandatory forms for use under the Model Act. Certain types of reports and requests for documents may be processed efficiently only if uniform forms are prescribed by the secretary of state. Certificates of existence, for example, should require specific information located at specific places on the form; similarly, processing of large-volume, largely routine filings is expedited if standardized forms are required. Also, the disclosure requirements of the annual report may be administered on a systematic basis if a standardized form is mandated. Section 1.21(a) recognizes that these considerations for which the secretary of state is authorized to establish mandatory forms.

Section 1.21(b) authorizes (but does not require) the secretary of state to prepare forms suitable for use for other documents required or permitted to be filed under the Act. However, the use of these forms is permissive and cannot be required by the secretary of state. Official Comment to Section 1.21 of the Model Business Corporation Act.
SOUTH CAROLINA REPORTERS' COMMENTS
1. Secretary of State to provide forms

This section provides that the Secretary of State may prescribe certain forms. If he prescribes a form he shall furnish a copy of the form. However, nothing in this section imposes a duty upon the Secretary of State to furnish more than one copy (or a nominal number) upon request therefor.

Although under the prior law of former Chapter 31, Title 33 there was little explicit authority for the Secretary of State to promulgate required or optional forms, the Secretary has developed various forms. Prior law, Section 33-31-20(6) "Written declaration," specifically gave the Secretary of State the authority to require any information he desired to be included in the "declaration" ("articles"). It has been customary to use the forms promulgated by the Secretary of State which formerly included:

a. Declaration and Petition for Incorporation

b. Initial Annual Report of Corporations (Tax Form CL-1)

c. Application for Amendment of Eleemosynary Charter

d. Statement of Dissolution

3. Non-Model Act provision

Different form the Model Act, this Section 33-31-121 permits the Secretary of State to adopt by regulation other mandatory forms. Any such additional form, such as a required articles of incorporation format, will be valid only if it meets all the requirements of this act. The need for standardization is important primarily in regard to simplifying the review process and facilitating the clerical process in of the various applications. The Secretary of State's office will be able to review more quickly and then file documents if standard forms are used. This will save time for South Carolina nonprofit corporations and make the Secretary of State's office more efficient. There is little risk that any additional forms might not be sufficiently flexible to meet a particularly unique need, since Section 33-31-200(c) says that any document to be filed with the Secretary of State may contain any information so desired by the client. By requiring that any future mandatory forms be promulgated through the regulation process, lawyers and affected nonprofit corporations will have an opportunity to raise any concern that the proposed forms might either not meet statutory requirements or might cause practical problems.

Section 33-31-122. Filing, service, and copying fees.

(a) The Secretary of State shall collect the following fees when the documents described in this subsection are delivered for filing:

(1) Articles of incorporation. . . . .$25.00

(2) Application for use of indistinguishable name. . . . .$10.00

(3) Application for reserved name. . . . .$10.00

(4) Notice of transfer of reversed name. . . . .$ 3.00

(5) Application for registered name. . . . .$10.00

(6) Application for renewal of registered name. . . . .$10.00

(7) Corporation's statement of change of registered agent or registered office or both. . . . .$10.00

(9) Agent's statement of resignation. . . . .$ 3.00

(10) Amendment of articles of incorporation. . . . .$10.00

(11) Restatement of articles of incorporation
with amendments. . . . .$10.00

(12) Articles of merger. . . . .$10.00

(13) Articles of dissolution. . . . .$10.00

(14) Articles of revocation of dissolution. . . . .$10.00

(15) Certificate of administrative dissolution. . . . .No fee

(16) Application for reinstatement following administrative dissolution. . . . .$25.00

(17) Certificate of reinstatement. . . . .No fee

(18) Certificate of judicial dissolution. . . . .No fee

(19) Application for certificate of authority. . . . .$10.00

(20) Application for amended certificate of authority. . . . .$10.00

(21) Application for certificate of withdrawal. . . . .$10.00

(22) Certificate of revocation of authority to
transact business. . . . .No fee

(23) Notice of change of principal office. . . . .$10.00

(24) Articles of correction. . . . .$10.00

(25) Application for certificate of existence or authorization. . . . .$10.00

(26) Notification by existing corporation. . . . .$10.00

(27) Irrevocable election to be governed. . . . .$25.00

(28) Any other document required or permitted to be filed by this chapter. . . . .$10.00

(b) The Secretary of State shall collect a fee of ten dollars each time process is served on him under Chapter 31 of this title. The party to a proceeding causing service of process is entitled to recover this fee as costs if he prevails in the proceeding.

(c) The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:

(1) for copying, one dollar for the first page and fifty cents for each additional page; and
(2) two dollars for the certificate.
OFFICIAL COMMENT

Section 1.22 establishes in a single section the filing fees for all documents that may be filed under the Model Act. The dollar amounts for each document should be inserted by each state as it adopts the Act.

Subdivision (9) states that no fee is applicable to filing the resignation of a registered agent. this provision permits a person who is named as a registered agent without his consent, or who agrees to serve as registered agent for a fee and the fee is not paid, to eliminate any reference to himself in the records of the secretary of state without expense.

Subdivision (8) contains a maximum fee for filing a change of address of a registered agent. Since corporation service companies serve as registered agents for thousands of corporations in many jurisdictions, their change of address may require a very large number of filings. Hence, the fee is broadly based on the number of corporations affected but a maximum fee is specified to reflect that as the number of changes increases the cost per change should decrease. Official Comment to Section 1.22 of the Model Business Corporation Act.
SOUTH CAROLINA REPORTERS' COMMENTS
1. Similar to business corporation fees

The new fee schedule is essentially the same as for business corporations. However, the fee for filing the articles, which is the most common fee, has been increased and is a uniform $25.00 charge regardless of the type of corporation. In the past, religious entities paid $3.00 and all others $15.00. Many of these fees are new because there previously had been no statutory authority in the nonprofit laws for the procedures to which the new fees relate.
2. Non-Model Act provisions

South Carolina did not adopt the 1987 Model Act Official Text which recommends a total dollar limit on the fee when an agent who represents multiple corporations changes his office.

Section 33-31-123. Effective date of document.

(a) Except as provided in subsection (b), a document is effective:

(1) at the time of filing on the date it is filed, as evidenced by the Secretary of State's endorsement on the original document; or

(2) at the time specified in the document as its effective time on the date it is filed.

(b) A document may specify a delayed effective time and date and if it does so the document becomes effective at the time and date specified. If a delayed effective date but no time is specified, the document is

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