Commerce asks Senate to OK fee hikes

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THE Department of Commerce is asking the Senate to pass House Bill 21-19, which will significantly increase fees related to registering corporations amid the most severe economic downturn in CNMI history.

Authored by Rep. Joseph Leepan T. Guerrero, H.B. 21-19 was on the bill calendar during Friday’s Senate session, but senators deferred action on the measure.

However, the Senate allowed Commerce Secretary Mark Rabauliman to testify in support of the bill.

He said there has been an increase in the number of business corporations over the last 22 years, but the existing fee structure at the Registrar of Corporations has not changed to reflect the increase in the cost of services.

“During these past 22 years, we have seen the cost of living [go] up — the minimum wage and the prices of goods and services,” Rabauliman said.

H.B. 21-19 proposes to impose penalties and new fees, and make the following changes to existing fees:

(1)   Articles   of   incorporation from $100 to $250.

(2)   Application   for   reservation of name, notice   of   transfer   of reserved name, from $10 to $50.

(3) Application for registered name, application for renewal of registered name, from $10 to $50.

(4) Corporation’s statement of change   of   registered   agent   or registered office or both, from $10 to $25.

(5)   Agent’s   statement   of change   in   registered   office or resignation, still $10.

(6)   Amended   articles   of incorporation, from $50 to $100.

(7)   Restated   articles   of incorporation, from $50 to $100.

(8)   Articles   of   merger or share exchange, from $50 to $100.

(9)   Articles   of   dissolution, still $50.

(10) Articles of revocation of dissolution, still $50.

 (11)   Application   for reinstatement   following administrative dissolution, from $100 to $250

 (12) Application for certificate of withdrawal from $25 to $50.

 (13) Annual report, $50.

(14)   Articles   of   correction, still $25.

(15) Application for certificate of   existence   or   authorization for good standing, from $10 to $50.

The measure will also impose the following new fees:

(1)     Articles of organization, $250.

(2)     Application for certificate of authority for foreign corporation, $250.

(3)     Application for amended certificate of authority for foreign corporation, $50.

(4)     Non-profit corporation (petition, charter and bylaw), $30.

(5)     Registration of partnership, $100.

(6)     Amended articles of organization, $100.

(7)     Restated articles of incorporation, $100.

(8)     Annual and initial corporation report for domestic, and foreign partnership, $100.

(9)     Service of process (Registrar of Corporations), $200.

(10)   Any other document required or permitted to be filed such as bylaws affidavit, minutes, resolution, amended annual report and amendment, bylaws, operating agreement, stocks, resignation as director/president/vice-president/secretary/treasurer, etc., $50.

(11)   Non-profit corporation report, initial, $10.

(12)   Registered agent form, $50.

(13)   Certificate or certification of document, $20; $1 for additional page for copying.

(14)   Annual subscription for Commonwealth Register, $100.

(15)   Postage fee for Commonwealth Register, $30.

(16)   Uncertified copies of Articles of Inc., bylaws, annual reports, $5 per document; $1 per copy of each additional attachments.

(17)   Expedited service fee, certified research request, i.e., certification request of documents, $150.

(18)   Expedited service fee, business organization document filing, $150.

In addition, the bill will impose the following penalties:

(1)     Penalty for documents received after March 1, i.e. initial reports, annual reports, $250.

(2)     Penalty for annual reports received after March 2 (in addition to $250), $10 per day.

(3)     Penalty for late filing on non-profit corporation report, annual and minutes, $75.

(4)     Penalty for non-profit annual reports received after March 2 (in addition to $75) $5 per day.

Rabauliman said the proposed increases in fees “are fair and reasonable considering all the factors that influence increases in cost of goods and services locally and elsewhere.”

He said fee increases will help  accomplish the Registrar of Corporations’ modernization goals that will “enhance and upgrade” its services to the businesses and the community.

“It would also greatly enhance the other compliance sections such as banking, Small Business Administration and Alcohol, Beverage and Tobacco Control under [the] Department of Commerce,” he added.

In her written comment last year, Saipan Chamber of Commerce president Velma M. Palacios said the new fees proposed in H.B. 21-19 are two or five times higher than the charges levied by Guam.

The fee for articles of incorporation on Guam, for example, is only $100, she added.

She said raising fees will only “discourage entrepreneurship and most negatively impact small businesses owners.”

She said the business sector was still recovering from Super Typhoon Yutu, and tourism had declined since 2018.

“Organizations and entrepreneurs are utilizing their resources to help their businesses recover and employ our residents so the business sector is not in a position to endure fee increases in this current economy,” she said.

Early this year, the CNMI’s only industry, tourism, had to shut down because of the global restrictions triggered by the still ongoing Covid-19 pandemic.

November 2020 pssnewsletter

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