December 4, 2003

ROMNEY USHERS IN CHANGES TO AID BUSINESS COMMUNITY

Governor Mitt Romney today celebrated the signing of two new laws that will improve the business climate in Massachusetts by updating the century-old business corporation statute and allowing for the convenience of electronic signatures in the marketplace.

"The Massachusetts Business Corporation Act and the Uniform Electronic Transactions Act will make it much simpler to conduct private sector transactions in the Commonwealth," said Romney.

"These bills represent an important piece of housekeeping for the state’s business community, one that will allow our state to keep pace with new technology and other changes taking place in the world," Romney said.

The new Uniform Electronic Transactions Act will increase efficiency and reduce paperwork and expenses by allowing for electronic transactions and record keeping.

Specifically, the new law permits contracts to be approved using electronic signatures and allows other documents to be signed electronically, which is less cumbersome than written documentation.

Significantly, the new law permits electronic prescriptions for approximately 80 percent of all drugs prescribed in Massachusetts, saving time and making life more convenient for doctors, pharmacists and consumers. The change will also protect seniors and other patients by reducing medical error due to illegible handwriting and dangerous drug interaction.

The Department of Public Health will implement standards for e-prescriptions to prevent abuse.

"Today’s signing paves the way for Massachusetts to move from e-faxing to electronic transmission of prescriptions from physician to pharmacy," said Nancy Leaming, President and CEO of Tufts Health Plan. "This is an example of how government can empower businesses to find solutions that help meet the needs of the public."

The Governor also celebrated the signing of the Business Corporation Act, which replaces a 100-year law that went on the books in 1903, "when Theodore Roosevelt was President and the Red Sox were known as the Boston Pilgrims," Romney noted.

The incorporation statute has not been substantially altered since 1964 even though there have been significant changes in the way business is conducted.

The new law, which affects only companies that are incorporated, does not change how taxes and filing fees are determined and will have no impact on the fees and taxes payable. Highlights include:

· Notices, proxies and consents can be sent electronically;

· Corporations may elect to allow shareholders to act by written consent that is less than unanimous;

· The treatment of derivative shareholder actions is for the first time expressly addressed, in a manner consistent with recent Massachusetts case law;

· The conversion of corporations into other entities, e.g., limited liability companies, and other entities into corporations, is permitted; and

· The rights of creditors and shareholders on the dissolution of a corporation have been addressed in detail in order to provide certainty for all concerned.

"Updating the basic business corporation law of Massachusetts will keep us competitive for seeking business opportunities for the benefit of our economy in the 21st century," said Secretary of State William Francis Galvin. "The new law supports the effort of the Corporations Division to adopt electronic filing and imaging that is in the national forefront of electronic commerce."

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