All Roll Calls
Yes: 493 • No: 1
VirginiaHB4392026 Regular SessionHouseWALLET
Virginia Nonstock Corporation Act; numerous revisions to Act, delayed effective date.
Sponsored By: Patrick A. Hope (Democratic)
Signed by Governor
Summary
Virginia Nonstock Corporation Act. Provides for numerous revisions to the Virginia Nonstock Corporation Act. Among other revisions, the bill (i) authorizes certain actions to derive from its bylaws in addition to its articles of incorporation, (ii) makes changes to the process of amending articles of incorporation and bylaws, (iii) authorizes inclusion of an exclusive forum provision in the bylaws, (iv) permits transfer of membership interests, (v) authorizes members to bring derivative proceedings, (vi) permits a court to remove a director in certain circumstances, (vii) provides for abandonment of an amendment or restatement of the articles of incorporation, (viii) extends the current provisions related to mergers to include interest exchanges and to provide for parent-subsidiary mergers, (ix) replaces existing provisions on conversion with provisions based on the Virginia Stock Act, and (x) adds provisions governing charitable corporations and charitable assets, including the authority of the Office of the Attorney General with respect to such. The bill includes technical amendments and has a delayed effective date of January 1, 2027. This bill is identical to SB 246.
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Bill Overview
Analyzed Economic Effects
61 provisions identified: 16 benefits, 5 costs, 40 mixed.
Clearer voting and election dispute protections
Beginning January 1, 2027, proxies last for their stated term, or 11 months if unstated, unless legally irrevocable. Fiduciaries entitled to vote can use proxies unless the articles or bylaws say otherwise. Election inspectors must confirm impartial service in writing and provide a written results report. If inspectors use additional information, they must explain its purpose, source, timing, receipt method, and reliability. Corporations, voting members, and other listed parties can seek expedited court review of votes, leadership changes, and specified office or nomination rights. Cases go to the circuit court where the principal office is located, or the registered office if none is in Virginia. The corporation and people whose rights are contested must be defendants unless they brought the case. Courts can order elections, meetings, injunctions, or other fair relief.
Corporate moves preserve rights and obligations
Beginning January 1, 2027, changing a corporation’s legal home carries over its property, contracts, debts, obligations, and liabilities without interruption. The new governing documents and the plan’s treatment of membership interests take effect. Specified gifts and trust obligations also carry over. When a Virginia corporation moves to another jurisdiction, the State Corporation Commission clerk becomes its agent for receiving legal papers. That route serves proceedings enforcing the rights of members of a Virginia corporation involved in the move.
Merger rights carry over for members
Beginning January 1, 2027, merger survivors receive participating entities’ property and contract rights without separate transfers or impairment. Unless governing documents or law say otherwise, new personal liability from membership applies only to obligations arising after a merger or interest exchange. Earlier liability stays governed by the former entity’s rules, including rights to share liability with others. Unchanged liability tied to the same surviving interests remains, and liability for interests not exchanged is unaffected.
Boards gain limited no-meeting decision options
Beginning January 1, 2027, articles can expressly authorize board action by written consent without unanimous agreement. Approval needs at least the largest of three counts: a majority of serving directors, a quorum, or the meeting approval requirement. Every director must receive written notice describing the action at least 10 business days beforehand. No director can object before the action is taken. This process cannot be used for action requiring member adoption or approval.
Corporations can keep lasting governance agreements
Beginning January 1, 2027, authorized governance agreements in articles or bylaws can last indefinitely unless amended. Written agreements last for the period they state. Written agreements effective before July 1, 2015, last 10 years unless their terms or later amendments say otherwise. Corporations generally need a board to direct and oversee their affairs. An authorized agreement can replace that structure, and the articles or an authorized agreement can limit board authority.
Courts can remove directors for misconduct
Beginning January 1, 2027, a circuit court can remove a director for fraud involving the corporation or its members. Gross abuse of the role or intentional harm to the corporation also qualifies. The court must find removal serves the corporation's best interest after considering the conduct and other remedies. It can also bar reelection for a set period. Members suing on the corporation's behalf must follow the law's rules for those lawsuits.
Directors get clearer quorum and dissent rules
Beginning January 1, 2027, a board's default quorum is a majority of its fixed or prescribed voting-director count. A variable-size board without a prescribed count uses the directors serving immediately before the meeting. Articles or bylaws can lower quorum, but not below one-third of the applicable count. Directors avoid presumed agreement by objecting at the start or on arrival, recording dissent or abstention in minutes, or giving written notice. Written notice must come before adjournment or immediately afterward; directors who voted yes cannot later claim dissent or abstention.
Directors get clearer resignation and replacement rules
Beginning January 1, 2027, directors can resign in writing to the board, chair, president, or secretary. Resignations can take effect later, including after a future event; replacements cannot serve before the vacancy occurs. A person can file a statement with the State Corporation Commission about an incorrect director listing or a resignation. Unless articles or bylaws say otherwise, members or the board can fill vacancies; a majority of remaining directors can act below quorum. Seats elected by a voting group must be filled by that group or its remaining directors.
More meeting options for corporation members
Beginning January 1, 2027, boards can authorize remote member participation, including voting, after verifying identity and providing real-time access. Meetings can be fully remote unless the articles or bylaws require a physical place. Boards can also authorize annual meetings and director or officer elections using only electronic ballots, mail ballots, or both. Members have voting rights only when the articles or bylaws grant them. Physical meetings can be inside or outside Virginia as the bylaws allow; special meetings otherwise default to the principal office. Missing the annual meeting time set by the bylaws does not invalidate corporate action.
More options for corporate member voting
Beginning January 1, 2027, articles or bylaws can authorize member classes to elect some or all directors. They must authorize both the member classes and their election rights; each eligible class votes separately. A person can also provide a member's written consent that takes effect later or upon an event. A specified future time cannot be more than 60 days after the consent is provided. The person must be a member when it takes effect and must not have revoked it.
Charitable gifts survive major corporate changes
Beginning January 1, 2027, gifts and promises follow an entity that continues with a charitable purpose after a major corporate transaction. This includes gifts through wills, grants, and other promised transfers. The express terms of the will or other document still control.
Corporations gain court-approved reorganization options
Beginning January 1, 2027, corporations can carry out federally court-confirmed reorganization plans through more types of corporate filings. Options include amendments, mergers, interest exchanges, domestications, conversions, dissolution, and termination. Court-designated people can file the required documents with the State Corporation Commission before the reorganization's final decree. Applicable filing requirements still apply.
Corporations gain options to change founding documents
Beginning January 1, 2027, a corporation's board can amend its articles before the corporation completes its organization. If there is no board, the incorporators can approve the changes. A nonstock corporation can also abandon an approved amendment or restatement before its certificate takes effect, without another member vote. The board determines how to abandon it. If already filed, a statement of abandonment must reach the State Corporation Commission before the certificate's effective date.
Member approval rights when corporations change states
Beginning January 1, 2027, changes to plans for switching a corporation's governing state follow the plan's approval method. Without a stated method, the original approval method applies. Voting or consenting members must also approve changes to their payment, specified governing documents, or other materially harmful terms. Unless the plan says otherwise, a domestic corporation can cancel before effectiveness without member action, using plan procedures or board-set procedures; foreign corporations follow their governing law. After filing, cancellation requires a statement delivered before effectiveness and a State Corporation Commission certificate of abandonment.
Member protections for mergers and interest exchanges
Beginning January 1, 2027, corporations can acquire specified classes of membership or other eligible ownership interests through interest exchanges. Payment can include interests, securities, obligations, rights, cash, or property; foreign participants' governing law must permit the exchange. Domestic eligible entities without exchange approval procedures can use merger procedures. Unless the plan says otherwise, members required to approve mergers or exchanges must approve specified payment changes, merger charter changes, and other materially harmful changes before effectiveness. New personal liability from a merger or exchange requires separate written consent, except for existing corporate liability on substantially identical or reduced terms.
Corporations can preserve property title records
Beginning January 1, 2027, corporations can record certificates to keep property title records continuous after name changes or corrections. The option also covers mergers, legal-form changes, and moves between jurisdictions. Certificates must be recorded in the local deed books where the corporation owns property. An out-of-state corporation can use a certificate from its home jurisdiction's competent authority instead of obtaining one from Virginia.
Corporate articles limit members’ property claims
Beginning January 1, 2027, members cannot claim a vested property right based only on certain provisions in corporate articles. These include provisions about management, control, capital structure, purpose, or duration. This limits the legal basis members can use to claim such property rights.
Member charges and membership challenge deadlines
Beginning January 1, 2027, nonstock corporations can charge dues, assessments, and fees when their articles or bylaws authorize them. Those documents can set different charges or exemptions by member class, or delegate amounts and collection methods. They can authorize reasonable enforcement, including membership suspension or termination, and set membership-ending procedures or allow resignation. A challenge to suspension or termination must start within one year after it takes effect. Earlier obligations and commitments remain in place.
Corporations face tighter income distribution limits
Beginning January 1, 2027, Virginia nonstock corporations cannot distribute income to members, directors, or officers. The law removes the exception for another nonprofit corporation that is a member or can appoint directors. It keeps the separate statutory exception and exceptions for distributions upon dissolution or final liquidation.
Higher reinstatement fees for Virginia corporate status
Beginning January 1, 2027, domestic and foreign corporations pay $100 rather than $10 to apply for reinstatement. That is a $90 increase per application, paid by the corporation rather than as a household tax. Domestic corporations generally must apply within five years after ceasing to exist and submit required materials and payments. Foreign corporations generally must apply within five years after withdrawal or revocation of their Virginia authority. Statutory exceptions apply, including the foreign-corporation exception for revocation under § 13.1-931(A)(1).
Returning out-of-state corporations need more records
Beginning January 1, 2027, out-of-state corporations seeking restored Virginia business authority must document changes made while their authority was withdrawn or revoked. They must submit authenticated copies of governing-document amendments or corrections and merger, conversion, or jurisdiction-change transactions. Applications must also include any required amended-certificate application and filing fees.
Claimants face deadlines after corporations close
Beginning January 1, 2027, a dissolved corporation's written notice must give known claimants at least 120 days to confirm claims. For claims not fully accepted, the notice must allow at least 180 days to start a court case; missed deadlines bar unaccepted amounts. Corporations can also publish notice once in a newspaper or post it conspicuously on their website for at least 30 days. Covered claims must reach court before the earlier of the usual legal deadline or three years after notice publication. This public-notice rule excludes timely submitted claims the corporation did not act on.
Defense advances with repayment for directors
Beginning January 1, 2027, corporations can advance directors’ defense expenses before a case ends. Directors must sign a promise to repay advances if they are not entitled to coverage. A director can ask the court handling the case, or another court with jurisdiction, for coverage or advances. Courts can grant fair and reasonable relief despite unmet conduct standards, a missing repayment promise, or an adverse liability judgment. After an adverse judgment, relief on that fairness basis covers only case expenses. When courts find entitlement under the specified statutory rights, they must also cover expenses of obtaining that court relief.
Insurance and coverage promises for leaders
Beginning January 1, 2027, corporations can buy insurance for current and former directors and officers, including service elsewhere at their request. Insurance can cover liabilities the corporation cannot directly cover or advance money for. Corporations can promise coverage and advances through articles, bylaws, resolutions, or approved contracts. Extra protection cannot cover willful misconduct or a knowing violation of criminal law. A promise of coverage to the fullest extent allowed by law also includes advances to that extent.
Legal cost protection for corporate leaders
Beginning January 1, 2027, legal-cost coverage includes predecessor entities and service for other entities or benefit plans at the corporation’s request. The definition of liability includes expenses without a reasonableness limit. Corporations can cover directors who meet good-faith and belief standards, or qualify for authorized broader coverage. Approval for a specific case requires a conduct review by disinterested directors, special counsel, or voting members. Coverage in cases brought by or for the corporation generally covers only qualifying expenses; improper personal-benefit judgments are generally excluded. Courts retain power to order coverage under the law. Corporations must cover directors’ expenses after a complete defense victory, unless the articles or bylaws limit that requirement. Officers gain coverage rights and access to court relief on the same basis as directors, subject to limits in the articles.
Member lawsuits gain safeguards and limits
Beginning January 1, 2027, members suing on a corporation’s behalf must meet membership timing rules and fairly represent its interests. They must first send a written demand and generally wait 90 days. The wait ends after an earlier rejection or when delay would cause irreparable harm to the corporation. Settling or ending the case requires court approval, with notice when members face substantial adverse effects. Courts must dismiss at the corporation’s request after a qualified group’s informed, good-faith review finds continuation contrary to corporate interests. The group must give concise reasons, and the law limits challenges through pleadings, evidence gathering, and proof. Qualified disinterested directors or committees can review the case; courts can appoint a disinterested panel at the corporation’s request.
Members and directors gain record access
Beginning January 1, 2027, directors can inspect and copy domestic or foreign nonstock corporation records reasonably related to their duties. Access must occur at a reasonable time and cannot serve another purpose or violate a duty to the corporation. Courts can order access at corporate expense and reimburse application expenses when denial lacked a reasonable basis. Members can request the latest prepared yearly financial statements in writing. Corporations can impose reasonable confidentiality, use, or sharing limits, and reject requests reasonably found improper or not in good faith. After 30 days without a response, members can seek an expedited court order, and courts can award their expenses.
Members can receive copies with charges
Beginning January 1, 2027, corporations can provide record copies by photocopy or another method they choose, including electronic delivery. Members can be charged a reasonable amount covering the cost of providing copies. The charge can be based on estimated costs.
Members get records access with limits
Beginning January 1, 2027, members must send signed inspection demands to the secretary at least 10 business days ahead, up from five. Access includes specified board and committee records, financial ledgers and work papers for the latest annual statements, and member records. For this additional-records category, members need six months of membership and a good-faith, proper-purpose request that clearly identifies directly related records. Court-ordered access also requires that the records protect membership rights and that disclosure not harm the corporation's interests. Courts can award expenses only if members prove refusal lacked a reasonable basis or the corporation imposed unreasonable restrictions.
Moving corporations keeps members' earlier liabilities
Beginning January 1, 2027, members keep personal liability that arose before a foreign corporation becomes a Virginia corporation. The former jurisdiction's law still governs collection, release, and contribution rights for that liability. Earlier liability does not make members responsible for corporate debts arising after the move. Liability created by the move applies only to later obligations.
New governing document rules for homeowner associations
Beginning January 1, 2027, community associations lose an exception allowing certain required provisions only in their bylaws. They must follow the applicable requirements for their articles of incorporation. When association documents conflict, the declaration or condominium documents control member liability for dues, assessments, and fees. Those documents also control membership, resignation, and suspension rules.
Boards gain flexible sizes and terms
Beginning January 1, 2027, articles or bylaws can set board size or let members or directors choose within a stated range. Boards need at least one director; voting members can fix board size and block board changes to that rule. Unless terms are staggered, initial elected directors serve until the first member election meeting, and later elected directors until the next annual meeting. Articles or bylaws can set staggered terms, including terms of different lengths. The law removes the requirement to elect at least three directors annually when cumulative voting is allowed.
Corporate lawsuits face venue and expense rules
Beginning January 1, 2027, bylaws adopted before a case starts can direct internal claims to specified Virginia courts with jurisdiction. They can name additional courts in Virginia or where the principal office is located, but cannot bar Virginia courts or require arbitration. In suits brought for corporations formed elsewhere, home-jurisdiction law generally applies, subject to exceptions and Virginia's convenience as a forum. At a derivative case's end, courts can award plaintiffs expenses when the case substantially benefits the corporation. Courts can instead charge plaintiffs or their lawyers defense expenses for arbitrary, harassing, or bad-faith litigation.
Corporations face updated member notice rules
Beginning January 1, 2027, meeting notices generally go to voting members 10–60 days ahead. Special meetings on amendments, mergers, interest exchanges, domestications, conversions, covered asset sales, or dissolution require 25–60 days' notice. Notices must give the date, time, location if any, and instructions for remote participation. The law removes the newspaper-publication option for meeting notices. When ordinary delivery is impractical, corporations can share notices and other messages through broad public channels, including radio, television, their website, or methods previously identified to members.
Corporations gain board alternatives with limits
Beginning January 1, 2027, authorized member or director agreements can change corporate governance, including eliminating the board. These agreements bind the parties and corporation even when they conflict with other rules in the act. An agreement can limit board powers, but the revised authority no longer covers limits on officers' powers. It can require dissolution at directors' request only when the corporation has no members or no voting members.
Corporations gain emergency powers and protections
Beginning January 1, 2027, qualifying catastrophic events allow corporations to use emergency procedures even when boards or committees can meet. Events include attacks on the United States or business or meeting locations, epidemics, pandemics, national emergency declarations, and principal-office locality declarations. Good-faith actions following active emergency bylaws bind the corporation. Those actions cannot impose liability on directors, officers, employees, or agents, limiting claims against them.
Corporations gain staffing options with limits
Beginning January 1, 2027, board committees can include non-directors but must have at least two directors. Non-directors cannot vote when a committee performs a board function. Committees cannot propose actions to members when the law requires member approval. Boards elect officers, but bylaws or the board can authorize an officer to appoint other officers or assistant officers.
Corporations must spell out member rights
Beginning January 1, 2027, Virginia nonstock corporations must state in their articles whether they have members. The articles must list member classes, qualifications, and rights, including voting rights. The law also allows bylaws to set member classes and rights without prior authorization in the articles. These rules combine required information in the articles with flexibility to set membership rules in the bylaws.
Director independence and opportunity duties change
Beginning January 1, 2027, director independence for specified decisions turns on financial interests and relationships expected to impair objective judgment. For specified expense-advancement and indemnification decisions, the director also cannot be a party to the case. Some circumstances do not, by themselves, defeat independence. Articles can also limit or remove a director's, officer's, or another person's duty to offer specified business opportunities to the corporation first.
Member meeting requests face tighter deadlines
Beginning January 1, 2027, members can withdraw special-meeting demands by written notice to the secretary before the meeting starts. Unless another record date is set, the first signed demand delivered determines which members can demand the meeting. Enough signed demands must reach the secretary within 60 days of the earliest signature on a delivered demand. A special meeting can address only the purposes listed in its notice.
Members and directors get election safeguards
Beginning January 1, 2027, director qualifications cannot depend on duty-related actions or opinions that could impair a director's work. New qualifications cannot apply to an existing nomination or take effect during a director's current term. Members authorized to elect a director can remove that director with or without cause unless the articles or bylaws require cause. Only the group that elected the director can vote on removal, subject to statutory thresholds and cumulative-voting protections. Removal requires a meeting called for that purpose and notice stating that purpose.
Members can act without meeting first
Beginning January 1, 2027, articles or bylaws can allow member action without a meeting or advance notice. Dated consents describing the action must reach the secretary and meet the vote required with all eligible members present and voting. Enough consents must arrive within 60 days of the earliest signature on a delivered consent. Unless another date is fixed, the first delivery sets voter eligibility; required prior board action instead sets it at that day's close. Members can revoke consents before enough unrevoked consents arrive. Within 10 days after enough consents arrive, corporations must notify nonconsenting voters and, when legally required, nonvoting members. Notice must describe the action and include meeting-notice materials; missing notice does not invalidate or delay action or limit court remedies.
Members get voting lists and deadlines
Beginning January 1, 2027, corporations must prepare alphabetical member lists by voting group, with addresses and notice and voting eligibility. Lists become available five business days after meeting notice, at a stated physical location or on a reasonably accessible electronic network. Members can demand inspection and copying in writing at their expense; courts can order refused access at the corporation's expense. Bylaws can set eligibility dates, called record dates; otherwise, the board can set them in advance. A record date cannot precede the meeting or action by more than 70 days. A meeting postponed more than 120 days beyond its original date needs a new record date.
New voting rules for corporation members
Beginning January 1, 2027, most member actions other than director elections pass when yes votes exceed no votes and a quorum exists. Higher required thresholds still apply; abstentions do not count, and separate voting groups can vote at different times. Corporations acting in good faith can accept voting papers from listed representatives, with evidence of authority when requested, or reject doubtful signatures. For members with three or fewer fiduciaries, one can sign for all if the signature appears to represent all. Cumulative voting requires authorization in the articles or bylaws and a clear statement in the meeting notice or proxy statement; the 48-hour member notice option ends.
Boards gain flexibility with member safeguards
Beginning January 1, 2027, boards without voting members can amend articles using the articles’ process or a majority of voting directors. Unless the articles say otherwise, boards can make specified changes, including corporate name changes, without member action. Amendments needing member approval usually require more than two-thirds of votes cast by each voting group. Articles can lower that threshold, but not below a majority of votes cast when the group has a quorum. Boards must recommend approval or explain their lack of recommendation, and can set approval or effective-date conditions. Boards can restate articles, but new changes still need any required member approval. Changes to board quorum or voting bylaws must use the existing rules, and name changes do not affect ongoing proceedings.
Broader mergers with member voting rules
Beginning January 1, 2027, domestic corporations can merge with domestic or foreign corporations and eligible entities. Two or more foreign corporations or eligible entities can also merge to form a Virginia corporation. Foreign participants or survivors must have permission under their governing law. Covered mergers and interest exchanges require a board-adopted plan and usually more than two-thirds of each voting group’s entitled votes. Articles or bylaws can lower that threshold, but not below a majority of votes cast at a meeting with a quorum. Governing documents or the board can require a higher vote, and specified affected classes receive separate votes, subject to exceptions. Boards can approve transactions without member action when no membership interests have been issued, unless the articles or bylaws say otherwise.
Charitable deals protect assets, limit payouts
Beginning January 1, 2027, major entity transactions cannot divert property held in trust or dedicated to charity from its charitable purpose. Exceptions must follow Virginia law governing changes to charitable uses or other protections against diversion. Members and affiliates generally cannot receive direct or indirect financial benefits from these transactions. Another charitable entity can receive a benefit, and reasonable pay for services remains allowed.
Clearer duties and removal for officers
Beginning January 1, 2027, the secretary or another designated officer prepares minutes and maintains and authenticates required corporate records. These assigned duties no longer include custody of the minutes. Officers can resign by written notice to the board, its chair, the appointing officer, or the secretary. If the board or appointing officer accepts a delayed resignation, a successor can be chosen early but must wait to serve. Boards can remove officers with or without cause; appointing officers can too, unless the bylaws or board say otherwise. Other officers need authority from the articles, bylaws, or board to remove someone, and removal preserves contract rights.
Closing corporations must address unpaid claims
Beginning January 1, 2027, directors must pay claims or reasonably provide for payment before distributing liquidation assets, unless articles or bylaws say otherwise. Directors are protected from liability for claims barred or satisfied through the law's dissolution procedures. After following the public-notice process, a dissolved corporation can ask a circuit court to set security for specified claims. It must notify known covered claimants within 10 days after applying. Providing court-ordered security satisfies those obligations and prevents enforcement of covered claims against members who received liquidation assets.
Corporate conversions carry fees and exemptions
Beginning January 1, 2027, corporations pay $100 to file articles converting to an eligible entity, not just a limited liability company. A corporation can avoid its $25 annual registration fee when a listed transaction document takes effect by the fee due date. The State Corporation Commission must issue or file the qualifying document. Listed domestic transactions include domestication and conversion to a foreign eligible entity; the exemption does not cover every transaction.
Corporations can fix invalid actions for $25
Beginning January 1, 2027, nonstock corporations can ratify actions within their powers that were invalid because approval was defective. They must follow board approval, required member approval, notice, filing, and State Corporation Commission review procedures. Ratification validates the original action retroactively and certain later actions taken in reliance on it. Challenges seeking to block or condition ratification must be filed within 120 days of its validation effective time. Filing articles of ratification costs $25 each time.
Corporations can move with member safeguards
Beginning January 1, 2027, corporations can change their legal home to or from Virginia when the relevant governing law permits. Virginia corporations cannot leave if law requires them to remain domestic. Boards seeking member approval must recommend the move or explain a conflict or special reason for not recommending it. For approval at a meeting, every member gets notice and a copy or summary of the plan and resulting governing documents. Approval usually needs more than two-thirds of entitled votes overall and in each separately voting class. Articles or bylaws can change the threshold, but not below a majority of votes cast by each group with a quorum. Boards can require a higher vote. When an outside corporation becomes a Virginia corporation, its existing Virginia foreign-business authority is automatically withdrawn.
Corporations gain asset sale flexibility
Beginning January 1, 2027, corporations can transfer assets to wholly owned entities without member approval unless their articles or bylaws require it. The same exception covers outside-normal-business sales that retain activity supported by at least 33% of consolidated assets, measured at the last fiscal year-end. Other covered sales usually require more than two-thirds of all eligible votes at a meeting with a quorum. The articles can change the threshold, but cannot lower it below a majority of votes cast in each voting group with a quorum. Boards can set conditions for member approval or for the sale to take effect.
Corporations gain options to change form
Beginning January 1, 2027, Virginia corporations and eligible entities can change legal form when their governing laws permit it. Domestic partnerships also qualify with an uncanceled partnership-authority statement or registered limited liability partnership registration filed with the Commission. A Virginia corporation's board must adopt a plan and submit it to voting members, generally recommending approval. With a quorum, approval usually requires more than two-thirds of eligible votes overall and in each voting group; governing documents can lower this, but not below a majority of votes cast in each group with a quorum. Members taking on personal liability must separately consent in writing, and a converting foreign entity's existing Virginia authority or registration ends when conversion takes effect.
Corporations get extensions with added fees
Beginning January 1, 2027, the State Corporation Commission can extend annual report and annual registration fee deadlines by one to 11 months. The registered agent can request an extension, or the Commission can use extensions to spread deadlines throughout the year. Extending a fee deadline adds a prorated assessment for the extension period.
Corporations keep records and protect lists
Beginning January 1, 2027, corporations must keep accounting records supporting financial statements, current governing documents, leadership contacts, and their latest annual report. Corporations with members must retain specified minutes and member communications for three years and keep current member lists alphabetically by class. They need not keep or share email addresses or other electronic contacts, and records can be electronic if convertible to paper within a reasonable time. Without board consent, member lists may be obtained or used only for membership-related purposes, not commercial use or sale or purchase. Soliciting money or property using the list is also barred without consent, except for solicitations solely for votes in a corporate election.
Mergers preserve gifts but limit dissolution rights
Beginning January 1, 2027, a merger does not itself dissolve, terminate, or cancel a party or require winding up. It does not trigger third-party dissolution rights unless governing law or documents provide otherwise. Gifts, grants, bequests, and promises to a nonsurviving entity pass to the survivor when effective or still payable after merger. Trust obligations continue to govern property later transferred to the survivor.
New control over closing corporations
Beginning January 1, 2027, boards can set conditions for member approval of dissolution or for dissolution to take effect. A director or members holding at least 5% of voting power can seek court dissolution over a board deadlock. Members must be unable to break it, and it must threaten irreparable injury or prevent operations that benefit members generally. A court-appointed receiver can sell corporate assets at public or private sale without the former specified court authorization. Courts can switch receivers and custodians between roles without the former express best-interest finding for the corporation, members, and creditors.
Out-of-state corporations get exemptions, agent duties
Beginning January 1, 2027, listed activities alone do not require an out-of-state corporation to obtain Virginia business authority. Examples include financial accounts, orders accepted outside Virginia, property protection, and interstate business. Authorized corporations must continuously keep a Virginia registered office and qualified agent. An individual agent must live in Virginia and be a corporate officer, director, or Virginia State Bar member. A business-entity agent must have Virginia authority, a matching office, and a designated person there for service; it cannot serve as its own agent.
Parent mergers can skip member votes
Beginning January 1, 2027, parents holding at least 90% of each subsidiary voting class can complete specified mergers without subsidiary board or member approval. These include merging a subsidiary into the parent or another subsidiary, or merging the parent into a subsidiary. A domestic corporate parent can also skip its own member vote. Applicable articles or parent governing rules can require approval, and foreign parents or eligible entities need permission under their governing law. The parent must notify each other subsidiary member within 10 days after the merger takes effect.
Closing corporations must certify tax compliance
Beginning January 1, 2027, voluntarily dissolved corporations seeking termination must certify that required Virginia returns are filed and taxes paid. The certification covers the period through the termination statement date, after all assets have been distributed and dissolution remains in place. Corporations can file returns and pay taxes before their normal due dates to complete termination.
Sponsors & Cosponsors
Sponsor
Patrick A. Hope
Democratic • House
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 3/12/2026
Senate amendments agreed to by House
Yes: 98 • No: 0
Senate vote • 3/11/2026
Passed Senate with amendments Block Vote
Yes: 39 • No: 0
Senate vote • 3/11/2026
Passed Senate with amendments Block Vote
Yes: 40 • No: 0
Senate vote • 3/11/2026
Reconsideration of Senate passage agreed to by Senate Block Vote
Yes: 40 • No: 0
Senate vote • 3/11/2026
Commerce and Labor Amendment agreed to
Yes: 0 • No: 0
Senate vote • 3/10/2026
Passed by for the day Block Vote (Voice Vote)
Yes: 0 • No: 0
Senate vote • 3/10/2026
Constitutional reading dispensed Block Vote (on 2nd reading)
Yes: 37 • No: 0
Senate vote • 3/9/2026
Reported from Commerce and Labor with amendments
Yes: 13 • No: 0
House vote • 2/4/2026
Read third time and passed House Block Vote
Yes: 97 • No: 1
House vote • 2/4/2026
Passed House Block Vote
Yes: 98 • No: 0
House vote • 1/29/2026
Reported from Labor and Commerce with substitute
Yes: 22 • No: 0
House vote • 1/27/2026
Subcommittee recommends reporting with substitute
Yes: 9 • No: 0
House vote • 1/20/2026
Referred from General Laws and referred to Labor and Commerce (Voice Vote)
Yes: 0 • No: 0
Actions Timeline
Acts of Assembly Chapter text (CHAP0393)
4/8/2026GovernorApproved by Governor - Chapter 393 (effective 1/1/2027)
4/8/2026GovernorFiscal Impact Statement from State Corporation Commission (HB439)
4/6/2026HouseGovernor's Action Deadline 11:59 p.m., April 13, 2026
3/31/2026GovernorEnrolled Bill communicated to Governor on March 31, 2026
3/31/2026HouseSigned by Speaker
3/31/2026HouseBill text as passed House and Senate (HB439ER)
3/30/2026HouseEnrolled
3/30/2026HouseSigned by President
3/30/2026SenateSenate amendments agreed to by House (98-Y 0-N 0-A)
3/12/2026HousePassed Senate with amendments Block Vote (40-Y 0-N 0-A)
3/11/2026SenateReconsideration of Senate passage agreed to by Senate Block Vote (40-Y 0-N 0-A)
3/11/2026SenatePassed Senate with amendments Block Vote (39-Y 0-N 0-A)
3/11/2026SenateCommerce and Labor Amendment agreed to
3/11/2026SenateEngrossed by Senate as amended
3/11/2026SenateRead third time
3/11/2026SenatePassed by for the day Block Vote (Voice Vote)
3/10/2026SenateConstitutional reading dispensed Block Vote (on 2nd reading) (37-Y 0-N 0-A)
3/10/2026SenateRules suspended
3/10/2026SenateSenate committee offered
3/9/2026SenateReported from Commerce and Labor with amendments (13-Y 0-N)
3/9/2026SenateReferred to Committee on Commerce and Labor
2/5/2026SenateConstitutional reading dispensed (on 1st reading)
2/5/2026SenatePassed House Block Vote (98-Y 0-N 0-A)
2/4/2026HouseReconsideration of passage agreed to by House
2/4/2026House
Bill Text
Chaptered
4/8/2026
Enrolled
3/30/2026
Amendment
3/11/2026
Amendment
3/10/2026
Amendment
3/9/2026
Substitute
1/29/2026
Substitute
1/28/2026
Substitute
1/27/2026
Introduced
1/12/2026
Related Bills
HB5, Employment; paid sick leave, civil penalties.
Employment; paid sick leave; civil penalties; civil actions. Requires one hour of paid sick leave for every 30 hours worked for all employees of private employers and state and local governments, with certain exceptions. The bill requires that employees who are employed and compensated on a fee-for-service basis accrue paid sick leave in accordance with regulations adopted by the Commissioner of Labor and Industry. The bill provides that employees transferred to a separate division or location remain entitled to previously accrued paid sick leave and that employees retain their accrued paid sick leave under any successor employer. The bill allows employers to provide a more generous paid sick leave policy than prescribed by its provisions and specifies that employees, in addition to using paid sick leave for their physical or mental illness or to care for a family member, may use paid sick leave to seek or obtain certain services or to relocate or secure an existing home due to domestic abuse, sexual assault, or stalking. The bill requires the Commissioner to promulgate regulations for the implementation and enforcement of the bill's provisions by July 1, 2027.The bill authorizes the Commissioner, in the case of a knowing violation, to subject an employer to a civil penalty not to exceed $150 for the first violation, $300 for the second violation, and $500 for each successive violation. The Commissioner or Attorney General may commence administrative proceedings or bring a civil action to enforce the bill's provisions. Additionally, the bill authorizes an aggrieved employee to bring a civil action against the employer in which he may recover double the amount of any unpaid sick leave and the amount of any actual damages suffered as the result of the employer's violation. Certain provisions of the bill have a delayed effective date of July 1, 2027. This bill is identical to SB 199.
SB199, Employment; paid sick leave, civil penalties.
Employment; paid sick leave; civil penalties; civil actions. Requires one hour of paid sick leave for every 30 hours worked for all employees of private employers and state and local governments, with certain exceptions. The bill requires that employees who are employed and compensated on a fee-for-service basis accrue paid sick leave in accordance with regulations adopted by the Commissioner of Labor and Industry. The bill provides that employees transferred to a separate division or location remain entitled to previously accrued paid sick leave and that employees retain their accrued paid sick leave under any successor employer. The bill allows employers to provide a more generous paid sick leave policy than prescribed by its provisions and specifies that employees, in addition to using paid sick leave for their physical or mental illness or to care for a family member, may use paid sick leave to seek or obtain certain services or to relocate or secure an existing home due to domestic abuse, sexual assault, or stalking. The bill requires the Commissioner to promulgate regulations for the implementation and enforcement of the bill's provisions by July 1, 2027. The bill authorizes the Commissioner, in the case of a knowing violation, to subject an employer to a civil penalty not to exceed $150 for the first violation, $300 for the second violation, and $500 for each successive violation. The Commissioner or Attorney General may commence administrative proceedings or bring a civil action to enforce the bill's provisions. Additionally, the bill authorizes an aggrieved employee to bring a civil action against the employer in which he may recover double the amount of any unpaid sick leave and the amount of any actual damages suffered as the result of the employer's violation. Certain provisions of the bill have a delayed effective date of July 1, 2027. This bill incorporates SB 372 and is identical to HB 5.
HB95, Va. Residential Landlord and Tenant Act; landlord remedies, noncompliance with rental agreement.
Virginia Residential Landlord and Tenant Act; landlord remedies; noncompliance with rental agreement; payment plan. Requires a landlord who owns more than four rental dwelling units or more than a 10 percent interest in more than four rental dwelling units, before terminating a rental agreement due to nonpayment of rent if the exact amount of rent owed is less than or equal to one month's rent plus any late charges contracted for in the rental agreement and as provided by law, to serve upon such tenant a written notice informing the tenant of the exact amount due and owed and offer the tenant a payment plan under which the tenant must pay the exact amount due and owed in equal monthly installments over a period of the lesser of six months or the time remaining under the rental agreement. The bill prohibits the landlord from charging any additional late fees during the payment plan period in connection with the unpaid rental amount for which the tenant entered into the payment plan so long as the tenant makes timely payments in accordance with the terms of the payment plan. The bill also outlines the remedies a landlord has if a tenant fails to pay the exact amount due and owed or enter into a payment plan within five days of receiving notice or if a tenant enters into a payment plan and after such plan becomes effective fails to pay rent when due or fails to make a payment under the terms of the agreed-upon payment plan. The bill has a delayed effective date of January 1, 2027.
HB1393, Electric utilities; pilot program for energy assistance and weatherization for certain individuals.
Electric utilities; pilot programs for energy assistance and weatherization for certain individuals. Amends annual funding commitments for the purposes of the annual pilot program for energy assistance and weatherization for low-income, elderly, and disabled individuals conducted by Dominion Energy Virginia and Appalachian Power Company. Under the bill, Appalachian Power Company is required to continue its pilot program at no less than $1 million and no greater than $1.5 million annually. Dominion Energy Virginia is required to continue its pilot program at no less than $156 million and no greater than $204 million for the time period beginning July 1, 2026, and ending July 1, 2038. The bill extends the sunset date of such pilot programs from July 1, 2028, to July 1, 2038.The bill also provides that Dominion Energy Virginia may recover costs associated with certain electrical facilities that have been approved by the State Corporation Commission as of December 1, 2033, provided that certain requirements are met and notwithstanding any limitations on such cost recovery in current law. The bill directs Dominion Energy Virginia to propose to the Commission, in any proceeding to determine rates for generation and distribution services commencing after January 1, 2027, and before July 1, 2033, that certain costs related to capacity procurement requirements and distribution infrastructure investments are allocated to the utility's customer class approved to serve customers with a contracted or measured electric demand of 25 megawatts or greater and an anticipated or measured average annual electric load factor of 75 percent or greater. The bill provides that certain customers in manufacturing, industrial, or consumer goods warehousing and distribution activities other than data storage may elect to remain on their existing rate schedule. The bill requires Dominion Energy Virginia, in connection with its first proceeding to determine rates for generation and distribution services commencing after July 1, 2026, to include in its petition to the Commission a proposal to revise its tariff for supplementary, maintenance, or standby service for customers with power plants, effective as of January 1, 2028. The bill provides that the Commission shall only approve such proposal if it determines that such tariff will not adversely affect other retail customers or the utility in a manner contrary to the public interest, and any revised tariff terms shall include protections against stranded cost risks to the utility customer base. Additionally, the bill authorizes Dominion Energy Virginia to file a petition for the securitization of certain deferred fuel costs. The bill requires the Commission, in evaluating certain petitions, to require to the greatest extent it finds in the public interest the use of wages, salaries, benefits, and other remuneration to any mechanic, laborer, or worker employed, retained, or otherwise hired to perform services in connection with a contract contemplated pursuant to such petition at the prevailing wage rate and to the greatest extent practicable, the use of a skilled workforce through registered apprenticeship programs for any authorized demand flexibility programs, utility-related procurement through utility-owned or third-party providers, and an evaluation of other potential opportunities to develop Virginia's skilled workforce by requiring minimum apprenticeship program requirements for such electric generation or energy storage facility work. This bill incorporates HB 634.
HB834, Virginia Residential Landlord and Tenant Act; fire or casualty damage, termination by landlord.
Virginia Residential Landlord and Tenant Act; fire or casualty damage; termination by landlord. Requires a landlord, prior to giving a tenant 21 days' notice of his intention to terminate the rental agreement for a dwelling unit that has been damaged or destroyed by fire or casualty, to (i) make a reasonable effort to meet with the tenant to discuss reasonable alternatives and offer the tenant a substantially similar dwelling unit, if one is available, or (ii) determine that the damage was caused by the tenant's failure to maintain the dwelling unit in accordance with relevant law. Current law allows the landlord to terminate such agreement by giving the tenant 14 days' notice of his intention to terminate on the basis of the landlord's determination that such damage requires the removal of the tenant and that the use of the premises is substantially impaired. The bill requires the landlord, upon receiving a request from the tenant after the tenant has received such notice, to reevaluate the extent of damage and habitability of such dwelling unit unless the landlord has determined that the damage was caused by the tenant's failure to maintain the dwelling unit. The bill has a delayed effective date of January 1, 2027.
HB675, Protection of employees; coercion or threat based on immigration status, civil penalty.
Protection of employees; coercion or threat based on immigration status; civil penalty. Prohibits an employer, including the Commonwealth and its agencies and political subdivisions, from using coercion or issuing a threat to an employee based on immigration status in furtherance of committing a violation of the Virginia Minimum Wage Act or provisions related to the payment of wages. An aggrieved employee is permitted to file a complaint with the Commissioner of Labor and Industry within 180 days of the alleged coercive action or threat. The bill authorizes the Commissioner to investigate such complaints and, if the allegation is substantiated, to impose a civil penalty in the following amounts: (i) up to $5,000 for the first violation, (ii) up to $9,000 for the second violation, and (iii) up to $12,000 for any subsequent violation. The bill provides that any such penalty assessed shall be paid to the Commissioner for deposit into the General Fund. The bill also authorizes the Commissioner to seek injunctive relief as may be necessary for enforcement.