§ 12:262 — Action by the state to annul, vacate, or forfeit corporate franchise;

§262. Action by the state to annul, vacate, or forfeit corporate franchise;
suspension
A. Except as otherwise provided in this Title or as otherwise provided
by law, the secretary of state may bring an action against any corporation to
procure a judgment annulling, vacating, or forfeiting its articles and franchise
upon the ground that:
(1) The corporate franchise was procured through fraud practiced upon
the state; or
(2) The corporation has continued to abuse authority conferred upon
it; or
(3) The corporation should not have been formed under this Chapter,
or has been formed thereunder without a substantial compliance with the
conditions precedent to incorporation prescribed by this Chapter; or
(4) The corporation has failed to designate and maintain a registered
office, or to designate and maintain a registered agent, under the conditions,
and in the manner, prescribed in this Chapter.
B. If the cause of action is grounded on an act which the corporation
has done or omitted to do which can be corrected by amendment of the articles
or by other corporate action, then such action shall not be instituted or
maintained unless, not less than sixty days prior to the institution of the action,
the corporation has been given notice in writing of the act done or omitted to
be done, which will be urged as the ground for the action, and demand for the
correction thereof, and the corporation has failed, neglected or refused to
correct the same within such sixty-day period.
C. In any such action, which shall be a summary proceeding, the court
may grant the relief asked for, or such other or partial relief as to it seems just
and expedient. If judgment is rendered annulling, vacating or forfeiting the
articles and franchise, such judgment may be set aside at any time within the
time allowed for taking an appeal therefrom, upon a showing that the grounds
for the judgment have been cured.
D.(1) In addition to the other remedies provided by this section, the
secretary of state is authorized to suspend the corporate franchise and the
articles of incorporation of any corporation which has failed to comply,
according to the records of his office, with Paragraph (A)(4) of this Section
and to revoke such suspension where such failure to comply with said
paragraph has been remedied by compliance.
(2) Before the corporate franchise or articles of incorporation are
suspended under the provisions of this Subsection, any corporation having
failed to comply with such paragraph, according to the records of the office of
the secretary of state, shall be notified in writing, certified mail, return receipt
requested, at its last known address, of such noncompliance, and such notice
shall afford any such corporation fifteen days from the receipt of such written
notice, to comply with said paragraph or to show cause why said written notice
should not have been given.
(3) The secretary of state is authorized to hold hearings and take
evidence where the corporation undertakes to show cause why its franchise
and articles of incorporation should not be suspended and to make an order
suspending the franchise and articles of incorporation in the light of such
evidence where such order is justified according to same. Such order shall be
recorded in the archives of his office.
(4) Where notice of noncompliance has been furnished as provided in
this Subsection and no showing or reply has been made within the fifteen day
period herein allowed, it shall be presumed that the corporation has failed to
comply with Paragraph (A)(4) of this Section and the secretary of state may
suspend the franchise and articles of incorporation of any such corporation.
In the event any such corporation thereafter complies with the requirements of
said paragraph, or shows that it was already in compliance with same, the
secretary of state is authorized to revoke any suspension issued by him in
respect to said corporation and to restore same to good standing and record
same in the archives of his office.
(5) Where any order of suspension is made under this Subsection, the
secretary of state shall forward a certified copy thereof to the corporation's last
known address, certified mail, return receipt requested. Similar notice shall be
furnished in the event of revocation of such suspension.

Legislative History

Acts 1968, No. 105, §1. Amended by Acts 1972, No. 601, §1.