Corporations Code

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A Criminal Waste Of Space Foments Securities Law Problem

California Court of Appeal Justice William W. Bedsworth writes the popular syndicated column “A Criminal Waste of Space”.  In this month’s column, Justice Bedsworth expounds on the highly improbable case of a man who...more

Benefit Corporation Files For Initial Public Offering

A few years ago, I participated in the drafting of California’s Flexible Purpose Corporation Act, Cal. Corp. Code § 2500 et seq.  In 2014, the legislature changed the name to “Social Purpose Corporations Act”.  SB 1301...more

Officers And The Internal Affairs Doctrine

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court,...more

Grammatical Gender And The General Corporation Law

Many, but not all languages, employ grammatical gender.  Anyone who has studied Spanish or German will know that grammatical gender is essential and can be unrelated to biological sex.  For example, el vestido is a masculine...more

California Amends Code To Authorize Worker Cooperatives

I’ve written in the past about various efforts to create a workers cooperative law here in California.  See Are Worker Cooperatives A “Sea Water Fish In A Freshwater Pond”? and In The Year 2525, If Man Is Still Alive, If...more

California Reverts To Former Securities Anti-Fraud Statute

Readers of this blog will recall my chariness of a 2013 amendment to California’s basic securities anti-fraud statute.  See California Creates Complete Chaos By Rewriting Anti-Fraud Statute, But “We Are Against Fraud Aren’t...more

Assembly Bill 792: Removing the Term “Avoid Speculation” from California’s Statute for Investments of Nonprofit Public Benefit...

Assembly Bill 792 (AB 792) addressing investment standards for nonprofit public benefit and religious corporations was recently signed by Governor Brown in California and becomes effective January 1, 2016. AB 792 will resolve...more

Court Declines To Declare “S” Corporation Shareholders’ Agreement Unenforceable

In general, shareholders of a corporation that has elected to be taxed under Subchapter S of the Internal Revenue Code are taxed on corporate profits regardless of whether the corporation makes any distribution of those...more

When It Comes To Director Compensation, California Is Not Delaware

Yesterday, I wrote about my disagreements with the approach to director compensation adopted by the Delaware Court of Chancery in Calma v. Templeton, 114 A.3d 563 (Del. Ch. 2015) and Seinfeld v. Slager, 2012 Del. Ch. LEXIS...more

Some California General Corporation Law Nonsense

Recently, I gave a brief presentation concerning various provisions of the California General Corporation Law that could apply to corporations incorporated outside of California.  I emphasized that the CGCL defines the terms...more

Court Rules Shareholders May Be Sued In De Facto Dissolution

California Corporations Code Section 2011 provides that causes of action against a dissolved corporation, whether arising before or after dissolution, may be enforced against its shareholders if any of the assets of the...more

Why Foreign Corporations Might Not Care Where You Live

I noticed the following description of California’s principal “pseudo-foreign” corporation statute in a recently filed registration statement: Section 2115(b) of the California Corporations Code imposes certain...more

Another Dubious Assertion Concerning Section 2115

I have often written about numerous provisions of the California Corporations Code that expressly apply to foreign corporations meeting specified tests. The most famous, but not the only, statute of this breed is Section...more

Court Of Appeals Holds No ERISA Preemption Of Section 419(b)

The Ninth Circuit Court of Appeals’ recent holding in Sender v. Franklin Res., Inc., 2015 U.S. App. LEXIS 10113 (9th Cir. Cal. June 16, 2015) is reasonably clear and yet there is much about the case that puzzles...more

Do You Proffer, Profer, or Prefer A Complaint?

Section 10404 of the California Corporations Code provides that corporations for the prevention of cruelty to animals may “proffer a complaint against any person, before any court or magistrate having jurisdiction, for the...more

California’s Bizarre Voting Records Disclosure Requirement

Some statutes are so poorly drafted that one hardly knows where to begin. One such statute is Section 711 of the California Corporations Code. According to the legislature, the purpose of the statute is “to serve the public...more

2015 Nevada Business Entities Law Update

The 78th Session of the Nevada Legislature made a number of changes to provisions of Title 7 of the Nevada Revised Statutes (NRS) governing business entities, including corporations, limited liability companies and limited...more

Should Directors Be Required To Have Valid Passports?

Lately, I’ve had occasion to think about director qualifications. Section 212(b)(4) of the California Corporations Code permits the bylaws to to specify the qualifications of directors.  In Section 141(b),the Delaware General...more

Familiar Features in Pennsylvania’s New Entity Transactions Landscape

Comprehensive amendments to the Pennsylvania Business Corporation Law (“PBCL”) go into effect on July 1, 2015. The amendments repeal many substantive provisions of the PBCL in respect of corporate mergers. These provisions,...more

Court Finds No “Road of Imprudence” or “Chasm of Equity” In Section 25501

Faithful readers of this blog will be familiar with the structure of the California Corporate Securities Law. Part 5 of the CSL (Cal. Corp. Code §§ 25400 – 25404) proscribes various conduct and Part 6 (Cal. Corp. Code §§...more

Why The Wall Street Journal Is Wrong About The Magna Carta

On Saturday, The Wall Street Journal published an article by Daniel Harmann celebrating the 800th anniversary of the Magna Carta. In recognition of this event, this blog has sporadically published translations of portions of...more

Why Locate Your Business in New York?

New York is a great place to live and do business. The state is running an active marketing campaign to let the world know and to attract new business to the state....more

Kyiv Corporate Alert (Ukrainian) On Amending Some Legislative Acts of Ukraine Related to Identification of Ultimate Beneficiaries...

The deadline for the submission of information on beneficial owners of Ukrainian companies registered before 25 November 2014 expires on 25 May 2015. As we have already informed, on 14 October 2014 the Verkhovna Rada...more

Kyiv Corporate Alert On Amending Some Legislative Acts of Ukraine Related to Identification of Ultimate Beneficiaries of Legal...

The deadline for the submission of information on beneficial owners of Ukrainian companies registered before 25 November 2014 expires on 25 May 2015. As we have already informed, on 14 October 2014 the Verkhovna Rada...more

When A Corporation May Not Be A Corporation At All

The California General Corporation Law separately defines “corporation” and “domestic corporation”.   The definition of “domestic corporation” is straightforward, the definition of “corporation” is not.  In most cases, a...more

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