Secretary of state readies business reforms for 2010

TUPELO – More Mississippi business law reforms are on Secretary of State Delbert Hosemann’s plate for 2010.
Hosemann, a corporate attorney before winning public office in 2007, said he sees opportunities for his state to become a leader in more effective regulation.
“Bringing our laws up to national standards is important long term for our business sector,” he said.
Meeting with Daily Journal reporters Thursday, he said his priorities for next year’s Legislature are:
n Limited liability corporation reform.
n Updated Uniform Commercial Code.
n A work-out law for financially troubled businesses.
Mississippi has 98,000 registered limited liability corporations, compared to 55,000 regular corporations, Hosemann noted. They are required to register with the Secretary of State.
“We have no idea how many LLCs are even active,” he said.
LLCs, which offer businesses legal protections and tax advantages, are easy to establish without an attorney, Hosemann said, but there’s no regular reporting or public accountability to assure people who do business with them that they are reliable.
He said his reform proposal will develop a statutory LLC operating agreement, which will have binding authority unless the company drafts its own.
As for the UCC laws, which record liens on property, it’s been some 15 years since major updates have occurred.
One major revision, Hosemann said, will be a Trade Name Bill, to protect businesses’ trade names, which he thinks will appeal to small businesses.
“If you’re a small business, and you’ve generated a lot of good will with your name or slogan over the years, this bill will protect that,” he noted, saying the system will be voluntary.
His Work-Out Bill proposal is aimed at providing a legal process between a financially troubled business and creditors to give that business time to recover without being forced into bankruptcy.
“Businesses need a way to work out difficulties,” Hosemann said. “Creditors realize, many times, that their only chance to get their money is to have you stay in business.”
He said he hopes the bill will get quick attention to help businesses in trouble now.
To reach success with his proposals, Hosemann admitted he may be willing to take controversial voter identification legislation off the table for the 2010 legislative session, which will be dominated by budget problems caused by the sharp decline in state tax revenues.

Contact Patsy R. Brumfield at (662) 678-1596 or patsy.brumfield@djournal.com.

Patsy R. Brumfield/NEMS Daily Journal