Request By:
H. Howell Brady, Jr., Esq.
General Counsel
Office of Secretary of State
Capitol Building
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, esq., Attorney General; Mark F. Armstrong, Esq., Assistant Attorney General
We are in receipt of your letter in which you ask whether the Kentucky Business Corporation Act, KRS Chapter 271A, permits business corporations incorporated pursuant to its provisions to amend and restate its articles of incorporation in the same document. Your question arises in the following circumstances.
Corporations are incorporated under KRS Chapter 271A upon the filing of articles of incorporation, KRS 271A.270, and the issuance of a Certificate of Incorporation, KRS 271A.275(1)(b). Thereafter, as the need arises, provisions in these articles may be modified by filing articles of amendment, KRS 271A.305. After the original articles have been modified a number of times, it is often convenient to set out its amended and unamended provisions in one document referred to as restated articles of incorporation, KRS 271A.320.
Your question is whether the amendments to the articles of incorporation must be completed and subsequently restated in a separate document or whether the articles of incorporation may be amended and simultaneously restated in one document. Based on the reasoning set out below, it is our opinion that amendments to the articles of incorporation must be effected in documents which are filed separately from restated articles of incorporation. After the amendments are filed, they may be collected and set out in restated articles. Execution of restated articles of incorporation is not, therefore, a legally competent method of amending articles of incorporation.
Prior to the enactment of KRS Chapter 271A, restated articles of incorporation could not be utilized to effect amendments. 1 In 1972, KRS 271A.295(1) and KRS 271A.320 were enacted. The former statute provided:
"Amendments to the articles of incorporation shall be made in the following manner:
(a) The board of directors shall adopt a resolution setting forth the proposed amendment. . . The resolution may incorporate the proposed amendment in restated articles of incorporation which contain a statement that except for the designated amendment the restated articles of incorporation correctly set forth without change the corresponding provisions of the articles of incorporation as theretofore amended, and that the restated articles of incorporation together with the designated amendment supersede the original articles of incorporation and all amendments thereto; . . ." KRS 271A.295(1) (1972), as amended, KRS 271A.295(1) (1976) (emphasis added)
A plain reading of the statute, cf.
Gateway Const. Co. v. Wallbaum, Ky., 356 S.W.2d 247 (1961), reveals a plain legislative intent that articles of incorporation could be amended and restated in the same document. In this regard, we also point out that during the existence of this statute until the amendment of it in 1976, the Secretary of State also interpreted this statute as permitting amendment and restatement in the same document. This interpretation is entitled to great weight, cf.
First Indus. Plan v. Kentucky Bd. of Tax Appeals, Ky., 500 S.W.2d 70 (1973).
In its 1976 session, the General Assembly amended KRS 271A.295(1) (1972) by eliminating the emphasized portion of it, quoted above. We are compelled to conclude that in amending the statute, the legislature had an intention to change it, cf.
Blackburn v. Maxwell Co., Ky., 305 S.W.2d 112 (1957), and to eliminate the right of amendment and restatement in the same document. This is not an unusual result, see 1 G. Hornstein, Corporation Law and Practice § 139.
SUMMARY: We are of the opinion that the amendment to KRS 271A.295(1) enacted in 1976 by the General Assembly by which the provisions for including proposed amendments in restated articles of incorporation was eliminated made restated articles incompetent to effect amendments. Therefore, it is necessary to effect amendments in a document separate from restated articles. Thereafter, the amendments may be collected and set forth in separately executed restated articles of incorporation.
Footnotes
Footnotes
1 "A corporation, where authorized by its board of directors, may restate in a single document the text of its articles of incorporation as amended theretofore, without making any further amendment thereby. Restated articles of incorporation shall be prepared in triplicate originals, certifying the authorization thereof, and shall be signed and acknowledged by the president or a vice-president and the treasurer or secretary, or an assistant treasurer or secretary. " 1966 Ky. Act. C.153, § 5 (codified at KRS 271.121) (repealed 1972 Ky. Act. C. 178 § 165 [effective July 1, 1972]).